March/April 2006
High metal prices have led to rampant scrap thefts. Fortunately, recyclers, ISRI, and authorities are taking unprecedented steps to address the problem.
By Chris Munford
Thieves took steel playground equipment and a brass bell from schools in Oregon. They stole 30-foot-tall aluminum light poles in Maryland—more than 130 in Baltimore alone, at last count.
In Illinois, they targeted roof-mounted commercial air conditioners, making off with copper coils. They knocked out telephone service to portions of Washington state when they cut a fiber-optic cable, thinking it contained copper wire. They raided sprinkler heads in Colorado public parks to get mixed-brass parts.
In New York, criminals entered the basements of occupied buildings to remove plumbing pipes. They took stainless steel public sculptures in Kentucky and copper gutters from a college campus in Connecticut. They stole spools of special high-temperature wire from an international airport in Texas and hauled off manhole covers in Indiana.
On a daily (or nightly) basis, thieves are taking guardrails from roadways, metal siding from buildings, bronze plaques from cemeteries, and copper or steel wire from scores of places across the country.
The problem of metal theft is ever-present because there's always money to be made from metals. Rarely before, though, has there been so much money to be made. One Midwest recycler recently observed that thieves are stealing metal for the same reason the infamous Willie Sutton said he robbed banks—because that's where the money is.
To be sure, both ferrous and nonferrous metals are experiencing lofty prices. This trend is part of a global boom in commodities after years of relatively low prices. Key factors behind this trend are globalization and strong economic growth in key nations such as the United States, China, and those in Europe. What's more, demand for many metals has outpaced new mine supply for years, putting greater pressure on scrap supplies. These conditions have, in short, created the perfect conditions for metal thefts.
Identifying the Targets
In today's hot market, all types of ferrous and nonferrous metals are vulnerable, and the perpetrators are as varied as the materials they steal. Some thieves are addicts who resort to crimes of opportunity—like metal theft—to get cash. Other thieves are highly organized and efficient criminals. Some operate in teams. Others are employees or contractors of the victimized companies.
The metals that thieves most often seek tend to have three attributes:
- Their metal type is readily identifiable.
- They are typically used in pure or nearly pure form.
- They are widely available and accessible in everyday applications.
For those reasons, aluminum, copper, and brass—which is typically about two-thirds copper—have been among the most stolen metals. Thieves also target steels, especially stainless varieties, because they're widely used, often kept in unguarded locations, and readily available in many forms. Lead, though less valuable than aluminum and copper, is being stolen because it can easily be procured in the form of lead-acid batteries and because its heavy weight can yield a decent return for thieves.
In the past, many metals were largely immune from small-scale theft because they offered little financial payback. Stealing manhole covers or curbside recyclables, for instance, would have seemed ridiculous years ago when scrap iron was worth a penny or two a pound and aluminum was worth as little as 20 cents a pound.
Times have changed. Ferrous and nonferrous metals are now worth five to 10 times—or more—what they were worth just a few years ago.
Of course, all metals aren't vulnerable to theft to the same degree. For instance, zinc is now nearly as valuable as aluminum, and nickel is worth three times more than copper, but zinc and nickel are rarely used in their pure forms. Both are normally applied in thin coatings or alloyed with other metals, often in relatively small amounts. Nickel is most readily available in stainless products, in which it typically constitutes only 8 percent of the steel. Brass contains as much as 33 percent zinc, but it's mainly valuable for its copper content. Die castings can contain larger percentages of zinc but are specialized products in relatively limited supply. Most zinc is used in steel galvanizing, in which just a few pounds of zinc coat a ton of carbon steel.
Regardless of the metals targeted, there's a lot of money at stake these days. Some recyclers report that incursions into their yards and small-scale thefts from within their operations have become chronic. Thieves are becoming ever more brazen and organized, particularly when scrap is in transit. In one recent incident, thieves hijacked a truckload of copper at a rest stop. A trailer of aluminum billets went missing in Houston around the same time. In Indiana, someone stole a truck containing 32,000 pounds of brass over the New Year's holiday.
The rash of scrap thefts has put recyclers in a difficult position. Many find themselves trying to maintain their incoming supply while guarding against accepting stolen material, protecting their existing inventory from theft, and engaging in cooperative crime-fighting efforts with other recyclers and law enforcement officials. It isn't an easy juggling act.
In general, scrap recyclers must address scrap thefts on two fronts: First, they must protect themselves from having their own material stolen—either from employees pilfering material or outside parties breaking in and taking scrap. Second, they must protect themselves from inadvertently buying stolen material over the scale.
An Ounce of Prevention
To prevent thieves—internal or external—from stealing scrap from their facilities, recyclers are largely turning to technology.
Freedom Metals Inc. (Louisville, Ky.) has installed security cameras and additional lights throughout its facility, says Bruce Blue, president. This equipment enables the firm to videotape all comings and goings, 24 hours a day. The company then saves the videotape for 30 to 60 days in case it needs the footage for investigations.
Similarly, at Bruno's Iron & Metal (Fresno, Calif.), the owner monitors his yard online from home by means of mounted cameras that he can rotate 360 degrees at the touch of a computer mouse. High-intensity sodium-lamp lights in the yard enhance the cameras' vision. Within months of installation, the system reportedly resulted in multiple arrests of would-be thieves, one of whom was caught using a company forklift to load contraband onto a truck.
Though video security cameras are increasingly popular in scrap operations, not all recyclers are sold on the idea. The equipment can be pricey, though recyclers must weigh the equipment's cost against their potential savings from averting thefts. In addition, the resolution of many video cameras leaves something to be desired, says Mark Lewon of Utah Metal Works Inc. (Salt Lake City), who adds that he doesn't have the time to review video footage each day, searching for evidence of thefts.
Aside from cameras and lights, many recyclers now routinely install motion detectors and perimeter alarm systems that use laser-beam sensors. The systems send an alarm—usually silent—when the beam is broken. Such systems often go undetected by thieves and can earn their keep quickly. Lewon, for one, says his perimeter alarms went off about 50 times in one four-month period in 2005. Though animals and blowing material caused some of the alarms, "the vast majority were caused by somebody entering the yard," he says. (In fact, the company is now prosecuting an individual who might have caused many of the alarms.) Beyond its laser-beam sensors, Utah Metal Works has relied on tried-and-true crime-prevention methods such as beefed-up fencing, barbed wire, and security-service patrols.
Freedom Metals has also taken other theft-deterrence measures, such as never leaving loaded trailers outside the yard and keeping its gates closed at all times, Bruce Blue notes. Inside, the firm uses trucks to block loaded trailers or places a roll-off container sideways behind the trailers. It also tried fifth-wheel locks made of cast iron but found that the locks sometimes cracked. The firm is even considering the high-tech—and high-cost—solution of putting a global positioning system inside each trailer so it can be tracked if stolen, Blue says.
Avoiding Stolen Scrap
Recyclers also are taking steps to identify incoming stolen material and, ultimately, avoid purchasing it. Scrap operators know it's illegal to intentionally purchase stolen material. They also recognize the potential out-of-pocket losses they might suffer by unwittingly buying such material. If the material's rightful owner or local authorities find the stolen goods in a recycler's yard, they can reclaim it without reimbursing the recycler, Lewon says. "Sometimes," he notes, "after securing your promise to testify in court against the thief, the rightful owner might give you back what you paid for the material—but usually that isn't the case." In this way, recyclers can quickly become victims of stolen scrap.
The scrap industry as a whole is also a victim of the negative stereotype that it provides a home for "hot" material. "Newspaper headlines around the country have accused scrap facilities of being fences for stolen material," Lewon asserts. "People have described the industry as being built on such scrap." Though neither statement is true, "it only takes a few 'bad apples' to ruin the industry's reputation as hardworking and honest," he says.
Here's what some recyclers are doing to protect themselves and the industry.
Inspection Breeds Detection: To identify suspicious material, scrap operators are stepping up their visual inspections of inbound loads. Sometimes it's easy to detect questionable items; many times it is not. Unless the material has marks that identify its source or unless it's automatically suspect—such as manhole covers or bronze cemetery plaques—stolen material can easily look like or be mistaken for legitimate scrap.
Scrap metal from demolition, for example, can be indistinguishable from metal stolen from an occupied building. New-looking material, such as lengths of rebar or copper tube, might be stolen or simply off-spec material, leftovers from a contracting job, or surplus. Thieves also can alter, damage, or even process stolen material to make it look like legal scrap. That explains why practiced metal thieves often remove identifying packaging, cut stolen metal into smaller pieces, or pull wire off spools.
Scrutinizing Suppliers: Another line of defense for recyclers is focusing greater scrutiny on their suppliers, principally their over-the-scale customers. Lewon advises fellow scrap operators to "know your customers" and ask, "What's wrong with this picture?" whenever a customer or his or her material raises suspicions.
As a protective measure, some recyclers scan and store suppliers' driver's licenses and license plate numbers, information on the type of material delivered, and other data. Some localities, in fact, require recyclers to obtain this type of customer information.
Other recyclers have simply opted to stop buying scrap from certain types of customers. Freedom Metals, for one, no longer buys from so-called pushcart vendors at the request of local police officials.
Spreading the Word: It would be easier for recyclers to avoid buying stolen scrap if they had descriptions of missing material, wouldn't it? That's precisely the idea behind the alert systems ReMA and some recyclers offer.
This crime-busting tool isn't new, though the technology has changed. As far back as the late 1980s, ReMA faxed notices of scrap thefts to members in the affected regions. Now the association continues its Scrap Theft Alerts via e-mail.
The program works like this: Whenever ReMA learns of a major scrap theft, it sends an e-mail notice to members in the area. The alerts include a description of the stolen material, serial numbers and photos (when available), and contact information for local or state law enforcement officials. The industry has recovered stolen metal through this network.
In the same vein, Randy Katz, vice president and secretary of City Scrap & Salvage Co. (Akron, Ohio), sends e-mail alerts about stolen material to about 75 ReMA members in the northern Ohio region. "The scrap e-mail system really works," he says. "One of my e-mail recipients just caught someone the other day trying to sell stolen metal."
Working With the Authorities: Recyclers are also working with local and state law enforcement officials in the battle against stolen scrap. Swapping information is one of the most critical and most common cooperative efforts between recyclers and authorities. Ideally, law enforcement entities inform scrap operators in their region whenever material is stolen. Similarly, recyclers contact the authorities when they encounter suspicious material or suffer a scrap theft within their own operations.
In many cases, scrap thefts have been detected and suspects taken into custody thanks to alert recyclers. In one incident last year, employees at Liberty Iron & Metal Co. (Erie, Pa.) helped police 400 miles away in Philadelphia bust a ring of thieves that had managed to steal $75,000 in copper from a metal sales company. The victimized firm said it might never have uncovered the thefts, which were orchestrated by two of its workers, if not for Liberty's efforts.
At Freedom Metals, if its employees have doubts about any incoming material, they fax information to the police, noting the supplier's name, address, driver's license number, and license plate number, as well as a description of the load. The local authorities call the firm back about 15 percent of the time to follow up on suspect material, Bruce Blue says.
City Scrap & Salvage also works closely with its local authorities. "We get along real well with the law enforcement agencies here," Randy Katz notes. "They're keeping us better posted now than in the past. There's a lot of collaboration."
Recently the firm partnered with local authorities to catch a thief who stole aluminum radiators from its facility. "We informed the police about the theft," Katz explains, "and the person was apprehended trying to sell the radiators to a scrapyard on the other side of town." This was an easy case, he adds, because the material had been sheared, which meant it "could only have come from a scrapyard." In the end, the suspect pled guilty.
Offering another anecdote, Katz tells how several individuals aroused suspicion when they tried to sell copper coils to City Scrap. The distinctive material—and the fact that the individuals offered no identification—made Katz suspicious. "Something just wasn't right," he says. "Then the customer called us, and we knew the stuff was stolen." Katz contacted the authorities, but he then had to stall the suspects. "We invited them in, chatted with them, even gave them some hot chocolate," he says. The individuals were subsequently arrested.
Utah Metal Works is equally quick to call local law enforcement when it suspects metal has been stolen—partly to protect its own position and partly to ensure that the stolen material is identified and returned, whenever possible, to its rightful owner, Mark Lewon says.
Lewon has been less impressed, however, by the response he's seen from his local law enforcement officials. "I received some 310 stainless steel that I knew was stolen, but I didn't know from where," he relates. "I did what I could—I called law enforcement." Now, about 18 months later, he hasn't heard back from the authorities. "I guess they're still checking it out," he says.
To be fair, Lewon concedes that scrap thefts can be "way down the list" of priorities for overburdened authorities. Also, "we have so many jurisdictions out here in Utah," he says. "In other regions, the recycling area serviced is a lot smaller than our area. When we see stolen material, it's liable to be from Idaho, Montana, or Wyoming." That fact makes it harder for Utah Metal Works to collaborate with the various law enforcement agencies that might need to be involved.
Though relations between scrap recyclers and law enforcement officials are predominantly positive, problems do sometimes arise. According to Lewon, some local authorities fine scrap operators for "false alarms" given by perimeter alarm systems. The system might have detected an intruder, but unless authorities find evidence of a break-in—such as a broken lock on a gate or a battered-down fence—they might assume the alarm was false, Lewon says. After the authorities deem a certain number of alarms false, they can fine the business using the alarm system. In another recent case, a recycler in Ohio was arrested and charged with failing to keep proper records of the company's suppliers.
The Government Factor
The recent spate of scrap thefts has brought varied—and sometimes detrimental—reactions from government legislators and regulators. In Wichita, Kan., police want the city council to further regulate various aspects of recycling. Proposed regulations call for increased inspections at recycling facilities and a new requirement for recyclers to hold purchased metal for a designated period so police can determine if it's stolen. Another proposal would require recyclers to obtain fingerprints of all scrap suppliers. Local recyclers have publicly opposed some of these proposals as overly burdensome and unnecessary.
On the other hand, recyclers point out that the lax sentencing of scrap thieves might be inhibiting theft prevention. In many cases, thieves are prosecuted on misdemeanor or trespassing charges. In other cases, the value of stolen goods is limited to scrap that police find in the thieves' possession—often minimal compared with the amount actually taken or discarded while suspects tried to evade arrest. Plus, many thieves receive probation rather than jail time, and financial penalties can be light.
Though scrap thefts won't disappear—especially as long as prices remain high—the unprecedented cooperation among recyclers, ISRI, and law enforcement authorities can help mitigate the problem. Beyond that, quick thinking, information sharing, and vigilance by recyclers have proved to be the most effective responses. •
Chris Munford is a writer based in New Jersey.
High metal prices have led to rampant scrap thefts. Fortunately, recyclers, ISRI, and authorities are taking unprecedented steps to address the problem.