March/April 2007
Scrapyard buyers and scale operators are learning how to recognize suspicious material and suspicious sellers—and what to do when they face them—to avoid becoming unwitting accomplices to metal thieves.
Randy Katz knew something fishy was going on when he saw the three boys coming down the street. Pushing a grocery cart full of brand new copper tubing, the boys entered City Scrap and Salvage Co., Katz's Akron, Ohio, scrapyard, intending to sell their material. The police, who had followed the boys in, were fairly certain the copper was stolen, but because no one had reported it missing, and the tubing contained no marks to indicate its origins, they couldn't arrest the boys for stealing it. The kids didn't get away scot-free, though, Katz remembers. "We read in the paper later that week that three individuals had been arrested for stealing a shopping cart," he says.
As the wave of metal theft that began to rise last spring has continued unabated, yard owners such as Katz have taken matters into their own hands, developing systems to identify potentially stolen materials and counter the individuals who are attempting to sell them. As metals prices fluctuate, thieves find new things to steal and new ways to steal them, and scrapyard owners and employees adjust their tactics accordingly. They scrutinize individuals as closely as the materials they are selling, decide when to buy the material or call the authorities, and even cooperate in the capture and prosecution of the criminals.
What's Hot, What's Not
Manhole covers. Guardrails. Street signs. Brand-new copper pipes. All of these materials are red-flag items for scale operators and retail buyers, and yet they could all just as easily be legitimate. Fred Seidenberg, president of Mid-Carolina Steel & Recycling (Columbia, S.C.), recalls a few years ago, when the local transportation department held an auction of old items, including automobiles and signs. When his yard began receiving old highway signs as scrap, he assumed the sellers had purchased them at the auction.
"One day we had some investigators come in asking if we'd bought any highway signs in large quantities lately," Seidenberg says. "I said yes, we had just baled them up and still had them out back." The signs had been stolen by three individuals who had cut holes in the fence surrounding the DOT warehouse.
Scrapyard workers are quickly learning the types of materials of which they should be wary. Small quantities of brand-new materials, for example, and municipal items arriving in unmarked vehicles are both cause for suspicion—but not ironclad proof that the material was stolen. Indeed, it's difficult to distinguish strip copper wire from a utility company from strip copper wire that came from an electrician or demolition project. Because it can be so difficult to discern stolen from legitimate items, buyers are also focusing on the sellers, particularly those who are not regular suppliers, for clues. Seidenberg encourages his employees to look for people who are fidgety, nervous, or sweating. "If you feel strange, you need to ask questions," Seidenberg says. "I was telling one of my scale guys, it's like at the airport. We need to learn to profile people."
When Don Reith, City Scrap's nonferrous foreman, receives an item he suspects is hot, he calls Katz up to the office. "We'll simply ask [the sellers] where they got it," Reith says. "If they can't give us a legitimate place, we won't buy it at all."
Asking questions is also the practice at OmniSource Corp.'s Fort Wayne, Ind., facility. Joel Squadrito, a Fort Wayne police detective who works at the yard in his off hours, remembers observing an unmarked pickup truck filled with hundreds of pounds of heavy-duty copper wire entering the yard. "It was the type of wire that you would normally see at a power supply station," Squadrito says. "The individuals had no markings on their coats or on their vehicle, so I approached them after the transaction." The men told Squadrito they worked for a commercial electrical company for which they were dropping off the materials. "I couldn't confirm it right away, but five minutes later one of the men called the president of his company on his cell phone," he remembers, confirming that the sellers were legit. The company's president later called Squadrito and thanked him for making the inquiry—he had been a victim of job site theft in the past.
Deterrent Tactics
Certain practices can make a facility less attractive to those who are looking to unload stolen scrap. Solomon Metals Corp. (Lynn, Mass.) hasn't had problems with stolen materials, and President Steve Solomon suspects that's because the company doesn't pay cash. "The criminals don't try to sell their stuff here because they will have to take a check," he says.
OmniSource, which issues cash payments, deters thieves in other ways. "We have a sophisticated digital camera system at our yard," says Jeff Wilke, the company's director of environment, health, and safety. "We get a video of the people coming to get their cash, [and] a camera in the parking lot [gets] a picture of their car. We have it all saved on tapes that we hold for weeks in case we get a hot tip."
Video surveillance and paying by check are two of several tactics ReMA lists in a set of recommended practices for minimizing the risks of purchasing stolen materials. Another recommended practice is collecting identifying information about each seller, such as driver's license and license plate number. To further deter those trying to sell stolen material, ReMA has partnered with the National Crime Prevention Council to produce a sign for members to display at their facilities. The sign features McGruff the Crime Dog and states "Photo Identification Required for All Transactions." (Get the recommended practices and a downloadable copy of the sign by going to www.isri.org and clicking on "Materials Theft" in the left menu.)
To Buy, or Not to Buy?
There's no consensus about what a scrapyard should do when someone wants to sell it potentially stolen scrap: just say no and send the seller away, or purchase the material, call the police, and look for its rightful owner? "The law enforcement community is divided in the advice [it has] given to our members," says Steve Hirsch, ReMA's associate counsel and director of state and local programs. He and other ReMA staffers have been working with law enforcement agencies at the state and local levels "to see if there is a consistent bit of advice that we can give our members," he says.
Some yards purchase the material and alert the authorities or try to track down the owners. If, after a certain period of time, no one claims the material or there's no way to prove it's been stolen, they go ahead and process it. This approach has a couple of risks, Hirsch warns. If the material really was stolen, the buyers "could be charged with receiving stolen property," he says. That's a rare occurrence, but Hirsch recalls some sting operations in which undercover police officers attempted to sell material a yard ought to know might be stolen, such as manhole covers, bleacher parts, or obvious municipal or utility materials. "Employees of some recyclers have been arrested during sting operations," he says.
City Scrap's positive relationship with the police and Akron city council gives it the leeway to purchase suspicious items that come in, Katz says, provided that the yard gets the proper identification. "The local police tell us to get the customer's license plate and ID number, write the check, and buy anything that comes in, and we're okay."
Another risk is that if a yard purchases material that someone else lawfully owns, the rightful owner can claim the property without providing compensation. In many cases, Hirsch says, when the material is still valuable to the original owners, they'll compensate the recycler for what it paid "simply because they're happy to get their property back." Yards also might be able to apply for "victims of crime" funding, but sometimes they just have to take losses when stolen property is reclaimed.
When Mid-Carolina Steel & Recycling intercepted and returned a large load of demolition-site copper to the contractor from which it was stolen, police investigators promised Seidenberg they would help him get his money back from the crime's perpetrator. "One of the guys agreed to work on a payment plan to reimburse us for the copper," Seidenberg remembers. "He made three or four payments and then declared personal bankruptcy. We lost close to $6,000 on that deal." One consolation is that a return might garner police accolades and positive media attention that generate business in the long run.
If the risks seem too high, a yard might choose to reject material that appears stolen. But that has its risks, too. Ironically, a few law enforcement agencies consider it a criminal act not to buy the material, Hirsch says. "It seems fairly unusual, but in a couple cases, the law enforcement agency says that in turning the suspicious seller away, the yard was helping the thief and thwarting a police investigation, aiding and abetting the person who stole the property," he says. He doesn't know of any yard workers that were formally charged with aiding and abetting, he says, but the yard still ends up with "the local law enforcement agency being upset at the recycler for doing what the agency considered the wrong thing."
Know When to Hold 'Em
Whether a yard buys questionable material or not, it must follow any "tag-and-hold" requirements that apply in its state or municipality, which usually mandate tagging over-the-scale material with certain information about its seller and holding it without processing for 3 to 30 days, depending on the jurisdiction. Seidenberg says his operation often has to sit on material it has purchased so that police can investigate, and that's happening more frequently over the past two years than ever before.
"We'll get calls from the sheriff's department two or three times a week about materials stolen in the area," he says. "It just takes more time. We sit with them, look for the items, tag them, answer questions. We can't bale the material, so we just put it in the corner for three or four weeks until the police determine whether or not it's legitimate."
The wait can be frustrating if the material appears stolen, but from an unknown source. "If the customers do not report that material has been stolen from them, we don't know who to contact," Katz says. "We had some copper pipe that came in the other day that still had the UPC symbols on it, as if it had just come out of the store. We knew it had definitely been stolen, but the police didn't know who to contact. They had no idea who it was stolen from."
Hirsch says tag-and-hold legislation is of questionable value in reducing metals theft or identifying thieves, and states and localities often implement it when their leaders don't fully understand how scrap businesses operate and try to regulate them like pawnshops. "There is a huge difference between small, readily identifiable items and whole truckloads of undifferentiated metal material," he says, and that "there is no real way to put it aside, to identify it, to preserve it in individual piles." If local council members or police officers were to visit a scrapyard, observe its operations, and talk with the owners, they would better understand the yard's processes and challenges and not offer such impractical and ineffective suggestions, he says.
Joining Forces
More yards are extending such invitations to the police in particular, working with their local authorities to respond to the growing materials theft problem.
To get word out of metals thefts in the Fort Wayne area, OmniSource uses ReMA theft alerts as well as a response system it developed in conjunction with the police department. Having an off-duty police officer working for the facility helps, too. When someone reports a theft to the police, "normally I'll get a call from another detective sergeant that handles property crime," Squadrito says. "He'll give me information about stolen material, and I immediately call Jeff [Wilke]. We will then send out an alert to the other scales and retail establishments in the area to be on the lookout for the materials and suspicious subjects."
Squadrito is working with both OmniSource and the Fort Wayne Police Department to develop an antitheft retail training program that will teach buyers and scale operators to recognize suspicious items and take certain steps in transactions involving such items. Eventually, he says, an employee working at the retail plant will generate a suspicious activity report describing the transaction, turning the report over to the police if he encounters something that doesn't seem right. "It will give us good lead information for a follow-up criminal investigation," he says.
To help to identify suspicious materials that City Scrap intercepts, Katz has begun talking with the local police on a regular basis, as well as taking calls from customers who are reporting thefts themselves. "We've even gotten new accounts that way," he says. "An account will have something stolen, and I will issue the theft alert in our area. We're providing a service." Katz also was instrumental in the launch of ReMA's national Theft Alert system.
Scrapyards have many good reasons to reach out to local law enforcement, Hirsch says. "Oftentimes, the yards themselves are victims of theft and [they] should want a good relationship with the police to ensure a quick reaction when they report the crime." Further, he says, local legislators turn to the police for suggestions on how to deal with metals theft issues. The more that scrapyards work with the police, the more likely it is that their government leaders will develop effective laws.
Fighting Crime
Scrapyards' cooperation with police and prosecutors have helped get materials thieves off the streets. Though some yards share stories of creative ways they've held suspected thieves at their sites until the police can arrive, that's a practice Hirsch would like to discourage. You never know when someone has a gun, he says, and holding someone against his or her will is illegal. But practices such as keeping a record of the purchase transaction and a photocopy of the buyer's personal identification can help police can make an arrest.
In the case of Mid-Carolina's purchase of stolen highway signs, for instance, investigators were able to set up a sting that resulted in the individuals' arrest, due largely to the fact that Seidenberg had the individuals' driver's license information, knew that he would be able to recognize the thieves, and still had the stolen goods on his property. In other cases he has supplied character witnesses and video evidence of individuals selling stolen materials. Katz testified in a case involving a stolen stainless steel holding tank his operation had purchased. "I had to testify that we received the material and wrote the check. It was quite a process," he says.
Despite the outlay in time and money it might require to help in such prosecutions, it's the right thing to do, Wilke says. "If we want the laws to be effective, [and] we want our employees and the public to know that we're doing the right thing for the company and for the community, we need to step up to the plate and make sure that we're going to follow through. Give the time, give the information, and, if needed, show up in court. This sends a clear message to the employees and to the community: We aren't going to put up with this."
Lindsay Holst is assistant editor of Scrap.
Scrapyard buyers and scale operators are learning how to recognize suspicious material and suspicious sellers—and what to do when they face them—to avoid becoming unwitting accomplices to metal thieves.