Assembly Budget Subcommittee No. 6 on Public Safety

All right. We like to call subcommittee number six on public safety to order. We do have some announcements on the order of the oversight retail theft committee. Panel one will be now panel two. Panel two will now be panel one to go first to make way for those that can participate. And then panel three will still stay. Panel three. So sorry about that. Good afternoon. And today marks the first Subcommittee hearing on public safety for this budget Cycle 2024-2025.

And as sub chair, I prioritize today's discussion on organized retail theft to focus specifically on the resources provided as part of the 2022 budget act and to hear about strategies from our law enforcement partners. I want to ensure that the spending meets the goals of improved community safety, and as the funding has only been released less than six months ago, we will need some time to evaluate the impact.

I want to thank the governor and the speaker and the pro tem for proposing these resources and for their leadership on these issues. Based on conversations with our law enforcement partners, many of these thefts and break ins have ties to criminal gangs, crews involving very high dollar amounts, and in certain instances, actors from outside of California,

our law enforcement partners are having to use technology and other creative strategies to address the evolving crime of retail theft. In addition, addressing this problem isn't a one agency solution.

The collaboration and partnership needed to address organized retail theft speaks to the complexities and cooperation needed to investigate and prosecute these crimes. We will hear from our panelists on the various strategies they are using, how organized retail theft has evolved, and what this subcommittee should consider as we continue to think of budget solutions to address this problem. One last thing I want to note before we start this hearing.

While much discussion and media attention has been focused on organized retail theft these last few years, I also want to highlight some areas that this committee will continue to look into. One of those areas deals with Native American communities facing critical challenges due to the lack of sufficient resources to address missing and murdered indigenous women and indigenous persons on Indian reservations and tribal communities.

Also, we want to look at the insufficient reentry services and housing resources for victims of crime and prevention programs for our youth are also critical. I look forward to discussing these issues moving forward in this calendar year. I want to thank our panelists for participating in our hearing today, some of whom got on planes to get here early.

And we also have a panelist joining us virtually from the Los Angeles area at this time we do want to move forward and announce our first panel, which is now is panel two will go first. So our first panel will be our panel on coordination and collaboration. We have panelists Banyon Hutter, senior Vice President of Security, Health and Technology from the Caruso areas, Caruso Management Eugene Kim, Lieutenant, Beverly Hills Police Department. Manny Navares, sergeant from the California Highway Patrol.

Michael Redding, Special Assistant Attorney General Department of Justice, and Stefan Woolery, Director of Bureau of Investigations from Department of Justice. If you could please take some seats and if we could check our technology and start with our panelist, Banyon Hutter.

Can you hear me?

Yes.

Perfect. I appreciate the time today and making it the opportunity to come in remotely, and I apologize that I'm not there in person. However, this is an extremely important topic that we are continuing to deal with on our end, and something, at least from the retail side, is of the utmost importance to us. I am with Caruso.

We oversee 18 branded properties here in Southern California, including a number of assets that are not branded. We support the business entities and the retailers within our properties.

It's usually about 261 different retailers that exist within our properties across the board. And I'm a Member of a variety of different boards and committees. The FBI Temperguard program. I'm the Chairman for Lot Orca, overseeing the organized Retail Crime Association in LA. I'm part of the LAPD Foundation Board, LAFD foundation board, and collaborate with a multitude of different agencies.

I think what I want to start off on and just talk about is what we've seen from a retailer specific session over the past 10 years or so, which is we've seen an evolution, and a significant one in that when it comes to actions across our properties and our portfolio dealing with our retailers, these were usually before opportunistic crimes. What we saw in 2014 and subsequent years.

But what we've seen, especially over the past several years, are we've seen really sophisticated operations moving in from outside of the states and from other countries as well. They have employed not only more brazen actions and aggressive tactics, but they've also employed technology based applications to circumvent some things like access control systems at our properties in a variety of different areas in order to gain access to areas in which they normally would not have them.

What we've also seen is we've seen an evolution of centralized and decentralized networks. We've seen groups that you may have heard of this terminology before, the spider and the starfish 10 years ago, we saw what was initially considered the spider where you had a single organism that had eight legs that would reach out and touch a multitude of different entities. And now what we're seeing across the board is what was more commonly referred to as a decentralized network of the starfish.

They collectively work for an organization. There is no one head. You go after one group or one apparatus of that group, and the other one continues to live on. They continue to coordinate their efforts across the board, and it is causing a tremendous amount of work and resources and dedicated efforts in order to deal with those types of actions.

For example, what I want to talk about really is taking kind of a national look, a local look, and a more specific look to our properties and how it's impacted us over the years. It was an estimated there would be a $95 billion, on a national level loss in retail crime from last year. And what it ended up being is almost $118 billion that was put out by the National Retail Federation. And those numbers are recently published.

So you're looking at what was estimated as 95 billion, which is actually a 12% increase from the previous year. And it ended at 115 billion well above what was predicted, even with the recent trends that are ongoing. And if you look at California and how that impacts us, it almost went up 27% comparatively to estimates in California the previous year before at our properties. I'll take one and I'll go really micro.

We have a Nordstrom at our property at the Grove, one of our flagship properties in LA. In 2019, we had 16 retail thefts that fell under the purview of what was going on within the city itself. In 2023, we ended up with 228. That's a 1300% increase over the past several years just at one of our assets, at one of our major retailers across the board.

And that's an estimated annual net loss of $3 million a year from that one retailer, which I think anybody that would hear those numbers understand what that means, would understand it's probably not in their best interest to continuing business in these types of areas, knowing that they're getting hit on that significant of a level, even with all the investments they've made there. From a city standpoint, I think it's important to understand, too. In 2014, there were 4,885 retail crime reports, and in 2023, there were 11,945.

That's an increase of 144% over that nine year span. And that comes directly from the LA crime statistics and the data that's provided there. So those trends mean that we have to be more collaborative and we have to lean forward and partner with our law enforcement groups in ways that we have never done before.

I work directly with LAPD, LASD, CHP, Glendale PD, Burbank PD, Beverly Hills PD, Ventura County Sheriff's, FBI, and Department of Homeland Security, and a number of operational measures and tasks, some that touch on organized retail crime and some that don't. But they all have intersections across the people that are committing these crimes, which I think is important for everybody to take a moment and realize and just settle in on is these people committing these crimes are not just committing organized retail crime and leaving.

They have their evolving situations that are implicated in other criminal tasks that exist in this world. Some of the ways that we have coordinated and what we've done, especially since the ORC group has stood up, and some of the ways that we partner with our law enforcement partners themselves. And why is it important to have this partnership when something happens? Having law enforcement understand what our capabilities are, what we have at their disposal, how those things can be relayed and the quality of information.

Meaning, is it good information, is it sanitized data or not? And how that can be used has a huge impact on forensically understanding what happened during an incident and or how to prevent those incidents from happening elsewhere. In August 8th of 2023, we had 31 people rush into the YSL store, located the Americana brand during broad daylight hours.

It was 03:31 p.m. All 31 of them were in and out in less than a minute and conducted almost $480,000 worth of loss from that store in less than a minute's worth of time. Because of our collaboration and the coordination and the systems and technologies that we have in place, within half an hour, we were able to have all of that data, all of the information, facial shots, profiles, vehicle makes, models.

We were able to get the data off people's phones that connected to our routers, our Wi Fi or Bluetooth systems. We had our license plate recognition systems and our object recognition systems and all of that data available and in the hands of Glendale PD. So they could immediately start working on that case and immediately push that out to all of the other agencies in those areas that may be looking to prevent similar actions from occurring, which is critically essential.

It may happen in one place, but making sure it's not a reoccurring issue is the other side of the coin there and why the collaboration is so important. Some of the challenges that we continue to face in private security and our retail locations are the quick releases of personnel and the reoffenses and these people, these are real criminals. But the essential role of data sharing and technology in combating organized retail crime is what's most essential.

Every single data point that we have is a singular piece to the puzzle that another law enforcement agency could be needing in order to close one of their cases or identify somebody who has committed a crime somewhere else, or follow up on a case that's ongoing and could lead to additional charges for that individual to hopefully hold them accountable for other people that have been victims of these crimes before. Private security is a force multiplier here in California, and it is across the entire nation.

In 2022, it was estimated there are only 76,000 sworn personnel in California, law enforcement personnel. It was also estimated in the same time frame that there are just under 200,000 security officers in the State of California. That's additional 200,000 people that can eyes, ears, and that can support the efforts of those law enforcement partners in the event something happens, whether it's preventative or it's observational, and making sure that those people have that information and those personnel can react and respond accordingly.

Some of the most effective data sharing strategies that we have in standing up these real time command centers and what we're building with these partners and those individuals you'll speak to after me today are leveraging those technologies that we talked about earlier.

The high definition camera systems, the LPR readers, the recognition systems, object facial gate, making sure that the router information and the WiFi information, the Bluetooth data is all available for our detectives and these people that are actively working these cases to have accessibility to.

And the great news is almost every property, every retailer, every asset that is out there has one or more of these options available to them just as part of their standard forensic setups. What the essential part of that is, is taking that information and tying it directly into our law enforcement partners, which we've started to do here with these organized retail crime task forces. And the success that we've seen across the board stands apparent. Itself.

A perfect example of that success is out of the 31 people that ran into the YSL store last year in August, we have more than 28 of them identified, and most of them have been apprehended under those cases.

Several others are still under observation, and they've all led back to a cascading effect of additional criminal actions that other agencies and other departments are working on that would not have been identified if it wasn't for the creation of this task force and the monies that were allocated in order to manage it.

So one of the things that I think I want to talk about is just the importance of the crucial role that these partnerships exist, how we collaborate collectively together, and that this is just the first step in this direction. And while it's focused on organized retail crime, the cascading effect that it has across the board on other actions and other criminal events is going to be transformative.

And it's critically important that we continue to see this program supported, and it's critically important that we see it funded as a long term measure to ensure that these collaboration efforts are ongoing. Thank you.

Well, thank you for that insightfulness in your testimony. Next, we're going to be able to move to Mr. Eugene Kim, Lieutenant, Beverly Hills Police Department.

Good afternoon. My name is Eugene Kim, and I'm a police lieutenant with the Beverly Hills Police Department. I've worked in law enforcement for over 20 years and have been fortunate enough to have spent the majority of my career leading investigations and training some of the best and brightest men and women in law enforcement.

I've worked on multiple task forces over the years, and my goal today is to highlight some areas where we can improve our efforts in combating organized retail theft.

I currently oversee our Real Time Watch Center program, or RTWC, in short. Our RTWC is operated 24 hours a day with over 2400 video cameras and nearly 100 automated license plate readers, both fixed and mobile, on every marked police vehicle. What sets us apart in our daily operations is the high level of investigative effort that is put into every field arrest and subsequent investigation by our department.

One of the goals of our real time watch center is not just to record the crime or to react to it, but to prevent it. Last year, one of our retailers fell victim to an ORT smash and grab incident that resulted in hundreds of thousands of dollars in losses. Our detectives immediately began working on the case and were able to generate multiple suspects and identify some of their corresponding vehicles.

This vehicle information was put back into our Real Time Watch Center in case the suspects decided to return. Weeks later, at 03:30 a.m. One of the vehicles returned to Beverly Hills, along with multiple other loaded vehicles in tow. Through the RTWC video, we were able to watch these suspects and stop them before they committed their next window smash. Many of the vehicles fled that night, when we took enforcement action.

We also chose to alert other agencies in our general region that we knew that had large shopping centers that could fall victim, and we were able to also stop and avert smash and grabs at some of their stores that night as well. The creation and thoughtful utilization of real time watch centers can be extremely effective at combating ORT through precise investigations and strategic enforcement. One of the major challenges in law enforcement statewide is information sharing.

Agency A in Northern California could make an arrest where the driver of a car had illegal possession of a firearm, while at the same time agency B in Southern California will be investigating a window smash ORT incident involving the same vehicle on a different date. It is likely that neither agency will know that they are running parallel criminal investigations. As the individual investigations develop, each agency will likely have something that the other one will need.

As a department, we want to maximize efficiency and at the same time make sure we hold those who commit criminal acts accountable under the law. We were the first agency in our region to use investigative deconfliction as an effective tool in furthering our cases. Much of our arrest information is submitted to the Regional Information Sharing system, or RIS. This includes field arrests and new information or leads developed by our detectives.

In the last year, we've had over 500 entries, many of which have yielded investigative leads with other police departments in our area. RIS is divided into six nationwide regions. Our nation is the Western States Information Network, or WSIN. This system is used statewide in Northern California and in Southern California under the San Diego Law Enforcement Coordination Center, or LECC, and the Los Angeles Regional Criminal Information Clearinghouse, or LA Clear.

Over the last few years, other agencies have also followed our lead and we have discovered time and time again that it's very common for multiple law enforcement agencies throughout the state to be conducting investigations on the same suspects. RIS has proven to be a highly effective communication tool for our investigators. RIS is federally funded through the US Department of Justice. It's free for us in California and also it's available today to all law enforcement.

Use of investigative deconfliction can connect ORT cases not just from within the State of California, but nationwide. It's also an officer safety tool, as one jurisdiction could be investigating a suspect for a property crime, but not know that another jurisdiction is investigating the same suspect for a far more heinous and violent crime. One of the benefits of using investigative deconfliction is the potential of presenting multiple cases to the local district attorney or to the office of the attorney general.

It helps demonstrate the Organized Component of Organized Retail Theft and the repeated regional nature of these crimes through hard evidence that can easily be presented by prosecutors. Another underutilized investigative tool exists in the gap between private retailers and law enforcement. The retail space at any given time sits on an enormous amount of data on suspects involved in organized retail theft, this information may or may not reach law enforcement.

To combat this, various retailers and law enforcement agencies have come together to create informal Organized Retail Crime Associations, also known as ORCA groups. Groups like San Diego ORCA, LA ORCA, Inland Empire ORCA meet regularly to trade case information and contact information. To bridge that gap, another effective communication method is the creation of controlled access websites for law enforcement and private retailers.

I've been in contact with the administrators at risk, and they have recently created a platform where both law enforcement and private retail establishments can safely exchange information to try and identify and stop organized retail theft. Another tool that helps bring the information to law enforcement is leads online.

This is a new private vendor platform that houses secondhand dealer transactional data, much like the state cap system for secondhand pawn dealers, but on a nationwide scale.

This system uploads hundreds of thousands of transactions every day, allowing investigators to identify where suspects may be liquidating their high end stolen merchandise. During a trial period of this platform, our detectives were able to locate stolen goods from one of our major theft cases in San Francisco at a high end secondhand store that we never would have found otherwise. But with all this being said, placement of technology alone is not going to solve all of our problems.

It's the people that leverage the technology to make their investigations more efficient and effective that ultimately make everything come together. An underutilized training and development tool is the Cal DOJ Advanced Training Center. I personally benefited many times from this training center, and I fully see its potential value to all of law enforcement. I would ask for creation of a multiday, standardized course in the investigation of ORT crimes.

This course would include the right vendors and their technology platforms, and the introduction of the best and brightest instructors in criminal investigations. The goal is to standardize ORT investigations throughout the state and to bring the best technology and instruction to any agency willing to send their staff to this course. The state has shown that they are serious about ORT, and they have been very generous in funding to back it up.

What I want to do today is to highlight some avenues where we can do even more with what we have and to be even more efficient in our daily operations. California has always led the way in law enforcement nationwide. We have some of the best and brightest right here in our backyard. I'm confident that with your support and continued desire to improve our state, that we can work together and do great things together. Thank you very much.

Thank you so much for your testimony. Next we'll have Manny Navarez, sergeant from the California High Patrol.

Good afternoon. First and foremost, I want to thank Mr. Chair and the Committee for Having me, or allowing me to be present and provide a testimony on what the CHP does to combat ORAc. My name is Manny Navares. I am a sergeant with the California Highway Patrol's Golden Gate Division, Organized Retail Crime Task Force. We are based out of the San Francisco Bay Area. And just to give you a little background, Golden Gate Division encompasses 12 area offices in nine counties.

So to have myself and four investigators cover that area is quite a wide area to cover. In order to combat retail crime, we utilize two strategies. One is a covert undercover arrest operation that we call a blitz operation. And then the second strategy we use, or we utilize is a long term strategy to identify and dismantle some of the fencing operations. So the bliss operation is typically an undercover operation targeting a retailer.

We work hand in hand, side by side with the retail industry and our partners in law enforcement. We identify those that are going into the store to commit a theft, and our goal is to apprehend them as they come out of the store. The main purpose for apprehending them is to hold them accountable for the theft.

Not only are we able to curtail additional theft by us being present, but we also serve as a deterrent to those that are going to continue the process of targeting that retailer on that date. It has become very public. The public and of course, the shoppers see us there taking people into custody. We have positive feedback from the employees and Members of the community because we are out there showing that we are going to take a stand against organized retail crime.

The second tactic that we use is we work tirelessly to identify and dismantle fencing operations. These fencing operations are taking place in normal neighborhoods, storefront operations, as well as ecommerce, and also swap meets.

Typically in these fencing operations, when we identify and dismantle one of the fencing operations, we identify a storage facility where we identify where the products that were being stored. To identify this issue and to address it, we work side by side with the retailers.

Just because of the amount of property that we locate and recover. They work with us to identify it and to confirm that it is in fact stolen. By dismantling these fencing operations, we sever a critical link in the chain of criminal activity. And what that means is we have the fencing operation that is profiting from the stolen property. They are pulling the stolen property back on the black market.

And by taking that fence out of the equation, we simply cause the boosters or the thieves a little bit of an inconvenience because now they don't have anywhere to push the stolen property. In order to conduct some of these operations, we have day to day tasks that we fulfill at our Department. They include reviewing online reports that are submitted through our web portal.

Our web portal is located on the California high Patrol's webpage, and that information can be submitted by a Member of the retailer as well as a Member of the public. And those portals help us identify new investigations or identify new locations of interest or any issues that we might find out on the field. Additionally, we review case referrals by the retail industry. The retail industry will typically refer a case to us.

We did conflict with the allied agencies, and we may take up on that case to follow up on it. Our investigators work hard. They conduct surveillance. They conduct leads utilizing some of the available technology. And through that technology, we identify some of these blitz operations, and then some of the illicit fencing operations, and then the blitz operations.

And most recently, our investigators, especially in Golden Gate division, have been tasked with providing training to our patrol officers to be able to comfortably identify some of these indicators of retail theft. That has proven successful, because now we have patrol officers making thousands of enforcement stops, and through those enforcement stops, they're identifying stolen property and people possessing stolen property, and they are making more arrest.

And as recent as September 23, the Board of State and Commission corrections, or BSCC, awarded approximately 38 law enforcement agencies additional funding to combat organized retail crime. What that means for us is that we are now being tasked with helping some of these agencies and providing additional resources to combat organized retail crime and to provide them with the direction and guidance to move forward. In 2024 alone, so far, we have provided presentations to six venues statewide.

Some of those venues include training facilities, but the most common one or the most recent one we did. We provided a training venue to the Contra Costa County Chiefs of Police, where we discuss our department's goal, our background in organized retail crime, our ongoing investigations techniques to combat retail crime, and, of course, our contact information so that if Contra Costa wanted to come out and get some assistance on some of their issues, they can come to us directly.

In order to do this, we work hard with our stakeholders. We meet with our stakeholders to identify solutions in reducing organized retail crime, identify recent trends and practices, and disseminate actionable intelligence.

I think collaboration really is key to our success. Organized retail crime suspects traverse various jurisdictions. They cross multiple counties throughout the state, and identifying has become a challenge. This creates challenges not only to law enforcement, but to CHP and the retailers.

Our stakeholders will include law enforcement agencies, district attorneys from our state, counties, our state and counties, our Legislator, our retailers, ecommerce and small businesses. Our task force Members also participate in quarterly and sometimes monthly meetings with our stakeholders, and we use that to share intelligence and identify additional investigative leads to some of our cases. Some of our challenges some of our challenges that we are still dealing with are sophisticated criminal networks.

Organized criminal networks groups operate in a well organized criminal networks, making it challenging to identify and dismantle them. The CHP is learning that most of the stolen merchandise is quickly sold, which is making it harder for us to track and recover. The second one is the sheer amount of evidence and product that we are recovering.

The amount of product that we are recovering just makes it incredibly challenging for us to process and then store out at our local facilities and then jurisdictional complexities organized retail crime often crosses jurisdictional county boundaries, and collaborating with CHP divisions and our law enforcement agencies is key to our success.

And then, of course, prosecution may be the most challenging when trying to reduce retail theft. The CHP and allied agencies have been working hard to identify and arrest persons and groups involved in ORC.

However, a lot of the crimes that occur in most of these counties are not being prosecuted because some of the Das would only prosecute crimes that are being prosecuted in their counties. What that leads us to do is it leads us to file cases with some of these other counties on an individual basis. What we would like to see is to have some of the DA's take on a vertical prosecution role, to be able to identify and prosecute multiple cases under one umbrella.

And we have been working with the DA's office to address that. During some of the interviews that we do with some of our suspects, we are constantly told that they continue to do ORC because it is very profitable and there are no recourses. On one occasion, during a blitz operation, one suspect that we detained told us that she wanted her ticket because she has somewhere to be.

She knew that because committing a crime under ORC statues was not going to give her any punishment, she wanted to be on her way. The CHP's organized retail crime task force has been engaged in cultivating partnerships with most of our county Das, specifically in our Golden Gate division, where we have nine Das that we have to address. That has been successful because we are now enhancing cooperation and we can now streamline the filing process with some of our counties.

We no longer have to upload a report or a case via a web portal. We now have a face to face contact with some of our Das. One of the questions that was asked to me is, how do I measure success? And in order for me to measure success, I would like to touch on a recent investigation that we've conducted. It was a statewide investigation that began in early 2022. The investigation began in 2022 by the Homeland Security Investigations Unit, or Department.

And this investigation was targeting a group of young ladies who were traversing all counties in California, stealing product from Ulta and Sephora. During the course of the investigation, HSI reached out to our Valley Division Investigations Unit, which is based out of Sacramento, and we identified up to 12 young ladies responsible for the theft. Ulta and Sephora reported that the theft impacted them in the area of $700,000 in losses when Golden Gate Division took lead in the investigation.

We work with some of our allied agencies, including the Al Grove Police Department, Sacramento Police Department, Coma Police Department, and of course, HSi. And we learned that some of these young ladies had been arrested before and some of their phones were being held in evidence. So our unit was able to go over some of the data along with our crime analyst based out of here, Valley Division in Sacramento, and we were able to pinpoint some of the thefts.

What we learned early on is that these young ladies had committed 250 thefts, not only in California, but our neighboring states, and they impacted 18 counties here in California alone. Through this hard work and dedication and collaboration, we were able to identify two fencing operations in California. One of those operations was in the City of Colton and one operation was down in. I apologize for that.

Bonsall, California. That stands within our Border Division CHP and our Southern Division CHP. Border Division covers the southern division, mostly San Diego, and then our Southern Division covers the LA region. Having known that these illegal fencing operations were taking place in those areas, we now work side by side with our other CHP partner owners to identify and conduct additional follow up.

On December 6 of last year, we executed search warrants at both of those addresses and we recovered approximately over 9,000 stolen items with a value of just under $400,000. Additionally, we arrested the two fencing operations and booked them into San Diego County Jail for those charges. Notably in this investigation was overseen by the Department of Justice and the Attorney General's Office.

Just two weeks ago, identified nine suspects being charged with well over 200 counts, 200 counts of felony theft, grand theft, and of course, organized retail crime. This investigation just goes to show some of the points that I just discussed, especially with collaboration partnerships and of course, addressing all our stakeholders. In order to identify over 9,000 stolen items, we had to work with our retail partners. They had to be out there. They had to work with us and carry the majority of the load.

Partnerships is what led to that investigation. The Attorney General's Office and the CHP just two weeks ago announced that investigation. And by having the attorney general's prosecute that investigation, it is a form of putting people on notice that if you're going to continue to steal or continue to move items to the black market, that you are going to be held accountable because there's nowhere that you're going to be able to hide. The CHP and our allied partners are going to go after these fencing operations.

And that is how I measure success. The simple fact that we identified the fencing operations, dismantled these two fencing operations, and collaborated with all our partners in law enforcement and of course, the Attorney General's Office. There are some other things that I want to just address as well. According to the National Retail Federation, organized retail crime is not slowing down. We have been working diligently, we have been working hard, but it is on the rise.

The last speaker just mentioned some of the stats, so I'm not going to go over them. But also I'd like to report that according to the National Retail Federation's recent report, they also noted that cargo theft was on the rise. Cargo theft alone is on the same side as organized retail theft. The difference between cargo theft and organized retail crime is that the cargo is typically stolen while it is in transport or to a destination, whether it be from a storing warehouse to the retailer.

It is intercepted, and that's where it is stolen. But it is still a form of organized retail crime. Cargo theft in 2019 increased by 84% as compared to 2021. In 2021, Cargo theft accounted for 21% of California's theft statewide or through the nation. That is, out of 1,285 incidents, California had 21% of cargo theft stolen. Also, it is worth noting that in 2021, the Union Pacific Railroad Company reported 160% annual increase in rail theft. That is up from the previous year of 2020.

The one thing that's also most notably the retailer, according to the retailers and law enforcement alone, is going to be the increase in violent crimes. In regards to organized retail crime, many retailers have reported an increase in violence and aggression. Associated crimes groups have been reported to use threats and acts of violence. And some of the reports that I have personally seen include video surveillance of the lookout, usually displaying a firearm or a knife, at either one of the employees that tries to intervene.

In April 2023, a woman shot and killed a Home Depot loss prevention agent at a Pleasanton store here in California. I've had the pleasure of working with that young man on one of our cases. It was sad to see, but that is what is happening now at some of the retail stores. If you try to intervene, people are becoming a little more violent. It is worth noting that organized retail crime does not work alone. There are other crimes associated with organized retail crime.

A lot of these groups are using stolen cars. They're carrying handguns, they're carrying knives. They are being more violent. And organized retail crime is also associated to drug trafficking, human trafficking, and money laundering, just to start. So with that, I'll leave it up to for any questions.

Thank you so much for your testimony. Next we'll move to Michael Redding, special assistant Attorney General from the Department of Justice.

Great. Good afternoon, Mr. Chairman, Members of the Committee. Thank you very much for inviting us here. We're happy to be here. And on behalf of the Attorney General. Exactly. Excited to be here. In a spirit of collaboration, I'm going to try and build on the remarks of my colleagues up here, and then I'm also going to talk a little bit about. I'm on this panel and the next panel. I have a childcare issue, so I might consolidate my remarks.

So to talk about both. First in terms of coordination and collaboration, and also Director Woolery here. The Director of the Bureau of Investigation will also be talking from California Department of Justice. But in terms of collaboration and coordination, many of what you've heard DOJ is either a part of, is organizing, is running. The theory, in short, is we're trying to increase the number of touch points that we have.

So we're making sure that we have DAGs on all of these different task forces, that we have special agents that are either running or part of these different task forces. So that when we get to a point where this becomes a California DOJ case, we're there and ready to take the case. CalDOJ is focused on the most serious, the most violent, the most high dollar thefts that we can find. That's the role that we play.

Some of the issues that the sergeant mentioned, as far as cross jurisdictional issues, CalDOJ does not have those. We have jurisdiction to file any case, bring multiple cases from different counties in, and that's the kind of thing that we're doing. So in terms of coordination and collaboration, again, increasing touch points, making sure that we're there, that we can get those cases, and that we find the right cases. What we have found is that if we investigate the resources, we're going to build a bigger case.

We haven't found the bottom of the barrel yet. We haven't started getting to a point where we've found all the people who are committing organized retail theft. Likewise, in this ULTA case that we were discussing, that's a case of trying to find as much as we can, meaning I don't think we got to the point where we said, well, we've found all the theft. We get to the point where we say that's what we can prove.

That's the information that we've gathered. Exactly like we talked about, data sharing. Again, CalDOJ is involved and in many cases, running some of that data sharing, and we're working together as a force multiplier. So we're trying to be on all of these task forces in all of these places so that we can, again, bring to bear the resources that we've been very thankful to have from you all and from the Governor, in terms of going back to the first panel, in terms of investment and.

Exactly, maybe I should have reorganized them, because now I'm realizing it does feel a little bit out of order. What CalDOJ is focused on is investigations through the division of law enforcement prosecutions, through our special prosecution and eCrime sections. And those are the two affirmative prosecution sections that we have that are addressing these cases and then collaborations. And that's with DAs, that's with our law enforcement partners, and that's with the retailers and the marketplaces.

And when I say that, what I mean is exactly, these touch points being on the different task forces, making sure that we have both formal and informal collaboration with everybody. And then last summer, the Attorney General announced first of its kind agreement with the retailers and the marketplaces, wherein everybody came to certain agreements about the type of work and the work that they were going to do on their own. The retailers agreed to report cases of organized retail crime, to invest resources to identify, make sure that they've got video cameras, that they're reporting everything quickly, and make sure that they're dedicating resources to this problem.

And then the online marketplaces likewise committed that they would have dedicated staff to addressing organized retail crime using their platforms, that they would have affirmative detection efforts, so they would be monitoring their sites to try and identify and report retail crime, and that they would be partnering with the retailers to share what information they could with everybody. Again, those are the details of the agreement.

But stepping back for a moment, the idea was that exactly as the message has been said today, it's going to take collaboration, it's going to take partnership, it's going to take leadership to get the biggest picture and to get the clearest identification of everything that's going on. Again, that was seven or eight months ago now. I can't report on exactly the details of what we've seen since then because some of this turns into investigations which are ongoing.

But suffice it to say that that has been productive, and we're very happy to have everybody on board in those investigations. Finally, I'll just say that's who's doing it. Investigators, prosecutors, and then collaborating with the retailers and marketplaces. And then just to touch on them very briefly, the cases that we're looking at, high value, span the country and span the globe. And then in certain occasions, and not all of them, but certain occasions, violence.

So high value, the ULTA case, what we're able to prove is lower than this. But what we announced two weeks ago, the Attorney General announced that the estimate was around $8 million across the country. Again, not all of that is filed in the case. The cases span the globe. A DOJ investigated unprosecuted cases that we filed in 2021, about $200,000. California, New Mexico, Oklahoma, Washington. We're currently in the process of extraditing those folks from Romania.

And then again, not every case, but because of the import of those cases, sometimes violent cases. Again, DOJ investigated and prosecuted case that we announced just this past January, violent robberies at Target and Walmart in Los Angeles, Orange County, San Bernardino, San Diego, and Ventura. Excuse me, we announced the sentencing and the lead defendant in that case, was recently sentenced to six years in CDCR.

So, to sum it all up, the Attorney General believes that solving this problem is going to take hard work, partnership and collaboration and leadership. And for our part, that's what we're trying to bring. We believe in, as my colleague will mention, vertical prosecutions and trying to seek those investments.

Thank you so much for that testimony. Next we'll move to Stephen Woolery, Director of Bureau of Investigations, Department of Justice.

Good afternoon, Chairman Ramos and honorable Members of this Committee. Greetings from the California Department of Justice's Bureau of Investigation. My name is Stephen Woolery and I am the Director for the Bureau of Investigation. It is indeed an honor to be here today to discuss the important topic of how DOJ is addressing the organized retail crime threat in the Golden State. Organized retail crime, or ORC, is not just shoplifting.

The distinction between ORC and shoplifting typically, shoplifting involves an individual or individuals who steal for personal consumption or use. ORC pertains to large scale, coordinated, targeted, and planned thefts involving retail crime groups who operate across jurisdictions and internationally. For example, in January of last year, the LA ORCE team and the Special Prosecution Section secured felony convictions against a five member violent organized retail theft ring in Southern California.

In another ongoing ORCE case, this investigation targeted a jewelry theft crime group or is targeting this crime group, and they are consistently using violence during the Commission of these offenses. DOJ's ORCE teams are located in Los Angeles and the Bay Area. Each team is made up of agents and analysts and professional staff. Essentially, there are two eight-man teams, one team for the north and one team for the south.

The ORCE program's approach to combating organized retail crime, essentially, we use the enterprise theory of investigation, or ETI. This is a unique resource for us to use to attack ORCE because ETI is the standard investigative model that the FBI uses in conducting investigations targeting organized retail crime. And I just so happen to know a little bit about ETI because I'm a retired Senior Executive from the FBI, retired out of the Los Angeles FBI office.

I did 21 years in the FBI, and I've been with DOJ for three years. ORCE strives to first understand the retail crime group's criminal behavior rather than just focusing on just individual participants and specific criminal acts. By understanding the relationships of its members within the organization, ORCE can target the command and control, or the organizers. ORCE, utilizing ETI to conduct investigations, optimizes ORCE's limited resources by focusing on the worst of the worst. Ultimately, ORCE investigations are multi defendant, multi jurisdiction and extraordinarily impactful.

Additionally, ORCE, there are requirements for ORCE to investigate and eventually for the criminal section in the AG's office to prosecute. These thresholds comprise the following. The investigation has to have over $100,000 in confirmed losses. There must be multiple suspects and it must involve multiple jurisdictions, which also includes looking into investigations beyond the actual retail theft.

So looking into financial aspects, looking into money laundering, each one of the ORCE teams works collaboratively with my white collar investigative teams because there's some complexities here that once we uncover them, we want to follow those threats wherever they go. We want to look at the entire ecosystem of a retail theft ring, which includes boosters, organizers, fences. ORCE also strives to investigate money laundering, fraud, return fraud, identity theft carried out by the retail crime group.

ORCE also investigates historical investigations where the suspects commit targeted retail crime in multiple jurisdictions in California and they either flee the state or they flee the country. ORCE strives to hold these retail crime groups accountable for the crimes committed in California, and retail associations and retailers are especially excited about ORCE's engagement on investigating these traveling retail crime groups.

ORCE teams are uniquely positioned to work ORCE matters through the use of DOJ's vertical prosecution model the vertical prosecution model is a best practice as our agents and DAGs tandemly successfully work organically within DOJ. This often results in not only successful prosecutions, but the establishment of bona fides amongst the agent deputy Attorney General teams, which lead to greater collaboration between the investigator and the prosecutor in future investigations. It was mentioned earlier the RISSNET or the regional information Sharing System Network.

There are three intelligence centers located in California. One is in San Diego, one is in LA and the other one is here in Sacramento. The LA and the Sacramento Intelligence Centers are staffed by DOJ, so we know very well we have lots of success stories to talk about how DOJ is facilitating the information sharing environment when it comes to organized retail crime groups.

These RISSNET centers provide real time sharing of tips and leads and investigative information amongst California's law enforcement community, which is the largest law enforcement community for a state in the United States. This sharing environment has been particularly useful connecting the dots regarding the identification and multi jurisdictional aspects of how retail crime groups operate in California. Keep in mind the ORCE program is a startup program with temporary funding which will sunset. It's scheduled to sunset in 2025.

However, highlighting some of the work from the LA ORCE team, they have already secured three felony convictions in a relatively short period of time. That investigation involved a five member organized retail crime group using violence or threats of violence during the commission of their threats. ORCE groups are evolving to be more violent during the commission of the crime. According to the, everyone keeps quoting, the retail Federation 2023 study.

But in that study, respondents reported that they saw a 53% increase in violence from organized retail crime groups. Commensurately, ORCE has ORCE investigations involving the use of violence and threats of violence. Smash and grab related violence continues as well. We see that splashed on the television news quite often. I wanted to touch a little bit on the transnational organized retail crime groups and what those investigations look like.

The ORCE team in LA has partnered with the Department of Homeland Security, Homeland Security Investigations, in addition to other law enforcement agencies, to investigate international organized crime groups. When it comes to retail crime, partnering with HSI demonstrates that ORCE and HSI are laser focused on holding those accountable who engage in ORCE in California and then flee the state or the country. The prevalence of Chilean organized crime groups also demonstrates that ORCE's concern with international travelers that are engaged in ORCE.

In California, ORCE leadership has been approached by multiple retailers, alerting the ORCE team to Romani or Romanian national crews and South American crews. In fact, ORCE's first criminal filing involved a Romani national crew that fled not only the state but the country. We are currently in the final stages for the issuance of provisional warrants for the two suspects who fled to Romania. ORCE is also investigating an organized retail crime group who returned to their home state of Michigan after committing numerous retail thefts. in California.

Efforts are underway to prepare criminal filings for these Michigan based suspects. As I close writ large, ORCE is much more than just a local or California problem. I want to echo what has been messaged amongst these distinguished panelists that relationships between our agencies is a criticality in terms of doing this work. These groups, they travel across states, counties, you name it. And if we're not talking about it and sharing information, then we're not being good stewards of the funds that you all give us.

Lastly, it takes time and an investment of funding for those partnerships to mature and to build the expertise in the area of organized retail crime for greatest impact. Partnerships are the key to all law enforcement operations combating ORCE. Thank you and I'm happy to take any questions at this time.

Thank you. Thank you so much for all of your testimony. And certainly I'm not sure if we have still the gentleman from LA, but I want to open it up to my colleagues here on this panel on this dais to see if they have any questions or comments?

Yeah, I have a really big question. And that has to do with the conviction piece. Is there any kind of metric that we can look to for the actual conviction? I mean, identifying these people is important, but it's only a step because part of the prevention is stopping reoffenders, and that's a very powerful piece that seems to be absent.

So I'm wondering if you could give me some kind of assurance that this investment is not only recovering the items, but we're holding people to some modicum of being accountable for that kind. I mean, he talked about the repeat offenders, and it's well known that they don't have any fear of reoffending. We got to stop that. Do we have any kind of numbers to show how many convictions and what those convictions look like? That's my question.

You're looking at me. So I'm assuming you're asking.

Well, you're the DOJ guy, right?

I'm the DOJ guy. There's two of us up here, but yes. So it's a good question. Asking numbers that we have on reoffending. I don't have that now. I can take a look and see if we have that. I don't think that we do in terms of specific reoffends, specific reoffending. I mean, what I can tell you.

How about convictions at all.

Yeah, I can tell you what theft convictions we have. Again, not right now, but that's something that we can look into.

I am highly interested in that. I am highly interested in the conviction piece because we have some partners throughout this state, happen to be one in my part of the region that I represent who is not a good partner in filing cases. That's a problem. And that's part of the problem that needs to be addressed, maybe through public policy. And that's why I'm highly interested in that because we want to be a partner. I think we all want to be.

You talk about partners being a key, but we need partnerships so that we can get results. That's what we want. We don't need to be playing this banter that seems to be so popular in this institution of just talk, talk, talk. What's happening? What's happening is deplorable. It's embarrassing, and we need results. And I'm thankful to hear some of the good things that are happening. But one of the ways you get results are convictions. And everybody doesn't want to talk about that.

It's time to talk about it. And because it's the only thing that really stops this from blowing up and starts to whittle it down, because we've all known that it's a known fact throughout history that a small percentage of the population account for a large percentage of the criminal conduct. That is true in this area as well.

So if we can actually start to convict some of these people and take them off our roads and able to conduct these reoffending circumstances, that will result in an approved circumstance. Exactly how much, I don't know, but it's time to start doing that because there's hesitation to hold people accountable, and we got to get over that.

And I'll just say very briefly that there's no hesitation from the Attorney General. What I've talked about today is the cases that we are focused on, and I think you're exactly right. We need everybody to do their part. We're focused on these higher level cases, cases that take time, that take significant investment and investigation, because that's the role that we play. That's the training that our prosecutors have. That's the training that our agents have.

We also rely on local DAs taking these cases and taking it seriously. I didn't mention that at the top, but that's my background was I served as a state and federal prosecutor for the better part of a decade, and that's what we did. So I will go and get you the numbers on how many convictions, assuming I can, but I think I can. How many convictions for different general types of theft, petty theft, grand theft, robbery, et cetera. But the bottom line is the Attorney General absolutely agrees with you. We need to continue to do this work. Prosecution and accountability has always been a part of the equation.

Thank you.

Thank you. Assemblymember Lackey, part of this panel or this panel was meant for coordination and collaboration, and we talked a little bit about that. But I wanted to talk with the lieutenant from Beverly Hills, too, that talked about sharing the information with those outside of the jurisdiction has been an area that has caused preventative things from happening. Retail theft, smash and grabs, those types of things. Can you talk a little bit more about that and how those resources are used not just within one organization agency, but throughout the whole state?

Sure. Yes, sir. There's a couple of different variations where this type of information sharing can occur. There's your more typical information sharing that happens between law enforcement agencies. Mr. Woolery had mentioned briefly talking about deconfliction and finding out who else is looking at a similar target. So, for example, Sergeant Alvarez was in the Bay Area. We're down here in Southern California.

When we identify that there's a similar touch point, we're going to make that call immediately, and he is going to tell me what he has, I'm going to tell him what we have, and we're going to start collaborating. It doesn't make sense, efficiency wise, during a criminal investigation to try and reattempt, to reinvent that wheel. And this is how these relationships occur.

And then ultimately, when we take our, let's just say for sake of argument, three cases, to get three cases, put it together with his seven cases, and then we go forward with prosecution. I would much rather be in a position where we're presenting a case with 10 incidents that is easily presentable in a court of law through solid evidence and something that is demonstrable up on a board instead of my singular three cases.

And this is the approach that we take, and this is strictly for law enforcement. Now, in the other area that I highlighted in my written statement where I brought up the coordination know, as you've heard from some of my esteemed partners here, the coordination component between law enforcement and retailers, this is where things can get very interesting because retailers, as Mr. Hutter also said, also maintain a very large database of information.

It is not uncommon for them to have their own internal reports with license plates, names, photos, other critical data that ultimately needs to come to us. And this is where these different platforms where we can share information online. Online is ideal because it can happen anywhere. We don't have to have a special meeting, a hosted meeting where 100 people have to come together. We can do it all online.

And we're leveraging technology to make things more efficient and to transmit that information back and forth, then when you layer on some of the abilities that all of the agencies in the State of California are now going to be able to do with this organized retail theft grant and what is to come in the future, it really changes the landscape. Know, today it's organized crime, but ultimately it's going to change the landscape of criminal investigation long after all of us are gone. And I'm very hopeful for that. I hope that answers your question, sir.

It does. And you also brought up a system, regional system. I believe it was risk.

Yes, sir.

Yeah. The different dollars through this Budget Committee and the budget that's there, does that help elevate that collection of data to start to be more proactive to some of these different criminal cases that are.

Going on, the usage of the funding, where that's going to come into play is going to be the training to get that word out there. As I mentioned, Cal DOJ has just an incredible program under their ATC advanced training center, and they have all kinds of different training courses that they have.

If we were able to create a systematic training, a multi day systematic training course available to California law enforcement, get everyone on the same sheet of music instead of having multiple individual meetings throughout the state. Know, word of mouth through different know. Hey, this guy's really good at it. This guy's really good at it.

Let's get all the best people in the same room at one time, and let's just train everyone and get everyone on the same sheet of music so we're all moving in the same direction together in the most efficient manner possible.

Thank you. Thank you for. And, Lieutenant Nirvarez, you mentioned about going after those that are fencing these products and how that's having an impact on retail theft and those doing that. But we also heard from Mr. Bannon Hutter that those that are doing the retail theft that we're talking about here today is like a cell where one gets caught, another one pops up. So how do we keep combating that? And you also mentioned about prosecution in some counties versus other counties is more open to the prosecution versus others.

I can start with prosecution. Excuse me. I have long ties in Santa Clara County, for example. I worked as an auto theft investigator for many years there. So prosecution for me started with identifying a group of boosters, for example. Those are individuals that go out and steal the merchandise at the demand of the fencing.

My goal in the beginning was to identify the boosters and then hopefully have an instance in Santa Clara County, because I know that Santa Clara County was prosecuting or doing vertical prosecution under a different code section. So that was one goal that I had. Now that I am reaching out to some of the other counties, some of the remaining counties, we are looking at some other agencies not willing to relinquish those cases. So they are now being tasked or challenging some of the other counties.

For example, in Alameda County, who was not filing any of our investigations because of this new BSCC grant, they are now taking some of our cases and doing the vertical prosecution. So we now have two different counties not necessarily battling for the investigation, but looking or trying to defy who has a best interest in that investigation. So that is kind of working on our behalf. Just to chime in a little bit, on the prior topic of sharing information, there is a platform called Aurora.

Aurora allows some of the retailers to input some of the information regarding some of the retail devs, and they would typically not only put in the identified suspects or the identified vehicles, but they would also cross reference with other investigations. So, for example, if I want to assign an investigation to one of my Members, I will look at Aurora, query that license plate, and then I can tell you that maybe Beverly Hills PD is looking at it as well and we start that collaboration process.

Thank you. Thank you for that. And Director WOOLERY, you talked about how retail theft, Smash and Grab is now evolving right into other states but also other nations. So forward looking. And I heard from each and every that this has to be also something that we all stay diligent on, that it can't be just one time having a hearing, funding is there and then it goes away because the problem will continue to escalate.

So there has to be long term also stability and looking at trying to curb these things as it continues to evolve. Can you talk a little bit more about how that is evolving? Because you mentioned that your average citizen could turn on the TV and see the smashing grass people walking in talked about Alta tying it down into Colton area, which an area that we know very well.

But now what is it that when you turn on the TV to see now how it's escalating, how it's evolving into other nations, other areas within the United States and the world?

So that's a great question, Chairman. I want to highlight that. It's really about opportunity. Right. So I'll direct your attention back to the summer unrest of 2020. And a lot of what evolved from First Amendment protected activity ended up taking the shape of what we now know as these smash and grabs. Right. And it's a soft target. And the more that this proliferates, meaning it was mentioned that there's repeat offenders, recidivists.

The more that they can get away with it, then they then become inspired, they then inspire others. And before you know it, you've got street crews that they're over here doing the open air drug market stuff. They're over here doing human trafficking and what have you. Then they've got crews that see it quite lucrative to go do smash and grabs, the typical hoodies and the COVID of night. And all that creates anonymity, and it just proliferates.

So what we're looking at, maybe it started out from something else, but it's certainly become a point of opportunity for the criminal. I'll just say those who are of the mindset to need to break the law, to earn money and what have you, you might have folks that would have never thought five years ago that they'd be doing smash and grabs or that they'd be doing robberies and burglaries. We got these 459 crews all over the state that are robbing dispensaries.

Well, we didn't have dispensaries five years ago. Right. So there's really an opportunistic spirit within this. I'll just say troubled minds, those that are getting into trouble this way, that it's purely opportunistic. And I've said it, or I've heard it said that we must start collaborating because a lot of these crews are cross. There's crosswalk between other types of organized crime and now retail crime. Organized retail crime is one of many on the menu that they can choose from depending on what they need.

So the way it's evolved from outside the country, I think that information is being shared in a way that maybe hasn't in the past. Because some of these south American burglary and retail theft crews, they've been coming to Southern California for a decade. I mean, they've been around, but I think because of all the information sharing, I think know we're starting to understand the tactics, the techniques and the practices.

The TTPs in these organizations, they operate with a little bit of impunity, but mostly anonymity because we don't know who they are. They come and do their deeds and then they leave. And then another crew comes and they leave. So it's really a challenge. It really takes the feds to sort of help us understand they're borders, but they're not right, because we know that folks can travel just about anywhere in the free world. So it really behooves us to continue the partners at this table.

And of course, I'm speaking for California, but some of these groups, they're just coming through California, going to other states know, doing their thing in California and leaving to go back to their home country. And as long as we're alerted to it and we're standing at the ready, we're blending authorities and resources. And thank you between you and the governor's office for the appropriation in 2223. I hope that appropriation continues because we are really making some progress. The honorable Committee Member mentioned convictions.

DOJ is all about convictions. We would rather build a case. We'd rather build a conspiracy. We don't care about that arrest or that conviction right now. We want cooperation. We want to learn more about this criminal conspiracy, this organized retail group. And we want to arrest all of them. We want to convict all of them. Sometimes we have to wait to do that conviction because we're still building the case, we're still working with our partners, we're still blinging authorities and resources to understand the threat group.

But convictions, I would submit to you, is that's our greatest impact, is when we have convictions. So just stand by.

Thank you. Thank you for all of your testimony. But I do want to just highlight before we dismiss in transmission into panel one, that will become panel two, transition into that. A lot of the statements also that was made is that these retail thefts, smash and grabs, are getting more violent. I think there was a statistic that was thrown out there at 53% increase in violence with all these different criminal activity that's going on.

And we know that that's only going to escalate even higher as some see it as an opportunity that might not have been thinking about this some time back. So we want to still stay diligent on these issues, on the prosecution aspect of it, what counties are doing, but also supporting the Department of Justice and making sure that we are keeping our feet to the fire on those areas and looking at the data resource, making sure that people do truly understand what's going on.

And if it is happening in several counties versus just one county, then we should be able to build that prosecution here in the State of California. So I want to thank you all for taking the time to be here and thank you for taking the time. And I know you have to now go and deal with family, which family comes first. So by all means, thank you so much.

Thank you, Chairman.

We're going to now transition into panel two, which is investments to address organized retail theft. Katie Howard, Executive Director, board of state and community sections. Mark Stainbrook, chief, Beverly Hills Police Department, and Jason Cavett, captain, California Highway Patrol.

Good afternoon, Mr. Chair and members of the committee. It's a pleasure to be here. I'm Katie Howard with the BSCC. You'd like me to kick off?

Excellent. Jennifer had asked me to give, like, a 32nd overview of what the BSCC does. If I may, just to set at the context. So, the BSCC is an independent statutory entity. Our board is right now a 13 member board, most of the members appointed by the Governor, one by the judicial branch, two by the legislature. We'll have two new members coming on the board, two new statutory slots effective in July, and the agency has a wide range of responsibilities.

Yes, please.

So I wanted to just say a little bit about that before jumping into the ORT grant topic. So, the agency was first established in the 1940s to conduct inspections of county jails and also to establish the regulations for the operation of county jails, both the operational and the physical plant minimum standards for jails. Over the years, a whole lot of additional responsibilities have been added to the BSCC.

Like I said, we promulgate the regulations for minimum standards, and we review and revise those regulations every other year. We also set the training standards for local correctional staff, and we administer just a ton of grants. Over the last five years, the Governor and the Legislature have really increased that aspect of our work very, very significantly, and I take pride in that. It's really important work. The largest single grant that we administer is the organized retail theft grant.

We have a host of others, both federally funded. Most are state funded, including the California Violence Intervention and Prevention Grant, MMIP, Missing and Murdered Indigenous People, which we'll be talking about more next week. Proposition 47, which focuses on mental health and substance use disorder treatment for people involved in the criminal justice system. The Adult Reentry Grant, Prop 64, and a whole bunch more. But the grant that is on everybody's mind today is the Organized Retail Theft Grant.

And there are two aspects to the grant that came to the BSCC. It was initiated by the Governor and strongly supported by the legislature. So in 2022, this two part grant, the organized retail theft prevention, and the vertical prosecution component, reflected a really significant investment on the part of the State of California, and it's evidence of the state's commitment to enhancing public safety and addressing this issue of concern called organized retail theft. You hear a lot of different kinds of acronyms.

We call it ORT in my shop. So the ORT prevention grant provided $242.3 million over three years, and then the ORT vertical prosecution grant provided about $28 million out to the field. These were competitive grants and the response to this RFP, which went out last year, was higher than we've seen compared to anything in a super long time. We received 114 proposals total. And those applications? I'm speaking of the ORT prevention grant.

Now, the eligible applicants were local police departments, sheriff's offices and probation departments, and the agency could either apply as an individual agency or in a multi agency approach. So there were two different size categories for which they could apply. In terms of the funding available, it was up to 15.6 million for large scale projects or 6.1 million for medium scale projects. And the grant funding goes out over a three year grant period. We did put all of the funding out in the field last year.

I know there's a whole lot of interest that keeps being conveyed to us and to the governor's office about. There still is a lot of interest and unmet need out there in the field, but the funding that was provided in 2022 has all gone out. The grants were awarded at the September 2023 board meeting, and the grant started in 2023.

I want to mention just a few of the kinds of issues that came in on the proposals in terms of the context and the data that were shared in the proposals. San Jose, for example, reported a 95% increase in grand theft shoplift between 2021 and 22. This one, I think, is interesting because I don't think we've heard about catalytic converter theft yet today. That's another big one. The ORT prevention grant addresses retail theft, cargo theft and auto theft.

So, in the City of Chula Vista, there were 995 reports of vehicle thefts and 180 reports of catalytic converter thefts in the year prior to their application. Just an interesting little data point. So the grantees will be using the funds for many of the kinds of activities that were on the last panel. These real time watch centers and integrated time centers are a super important aspect of combating ORT. Lots of information to share.

I had a great conversation with Beverly Hills earlier, and I'm aware that the Elk Grove PD, they did not apply for a grant because they're doing really well on this. But they've already made themselves available as a resource for these real time information centers, which we'll be hearing more about today. So the agencies who receive the ORT prevention grant are forming dedicated task forces. They're targeting ORT operations at key hotspot locations. They're doing a lot of outreach to both retailers and the community.

Of course, they're hiring additional officers, and much of these grants will be used for the purchase and installation of advanced surveillance technology, which is really important part of this, too. So what's happening to date? We did a survey in January. We sent a survey out to all of the ORT grantees. We got nearly 100% response rate on that. And I think all the grantees are really keenly aware of just how interested the legislature is in all of this.

And I'm going to come to your question about convictions in a moment. Mr. Lackey. So all kinds of operations have already been conducted. As I mentioned, these grants just began last October. I appreciated your comment at the outset, saying there's work underway. We'll have a lot more to report in the coming months and years, of course, but it was interesting to see that already. The grantees who responded to the survey said there have been over 900 arrests under their ORT grants so far.

You can imagine the kinds of work that's underway, hiring new people, buying equipment, those sorts of things. The grant funding will also be used to fund overtime, operations, training, the real time information centers, which I'm hearing are called arctics. So lots of different Alphabet soup to play with here. On the ORT vertical prosecution grants, 13 counties received the ORT vertical prosecution grant. All this information is in your handout that we provided. So the vertical prosecution grants are. Everyone's aware of what a vertical prosecution approach is.

That's when a single team handles the case from the beginning part of the investigation, all the way through to conviction. I just texted my office as your question came up and said, are we asking the vertical prosecution grantees to report on convictions? And we are in our data collection. We will be specifically asking for information about convictions and on the ORT prevention. We're asking for information on arrests. So we will be providing regular information to the legislature as that comes in.

So the District Attorney's offices have gotten to work right away to begin hiring staff, forming their vertical prosecution teams, and so on. So I feel like there's a whole lot of work underway. I'm happy to answer any questions that you may have, and I really appreciate you having the BSCC here today.

Thank you so much for that overview, but also, I know there'll be questions at the end. Next, we'll move on to Mark Stainbrook, chief, Beverly Hills Police Department.

Thank you, Mr. Chairman, and thank you for having this hearing and the opportunity to address organized retail theft with the committee. I have been the chief of the Beverly Hills Police Department for two years. On the night I was sworn in, the City of Beverly Hills suffered the tragic murder of Mrs. Jacqueline Avant, during a failed burglary attempt. While the murder does not have a specific nexus to organize retail theft, it highlights the increase in violent and property crime in the city and the LA region.

Afterwards, our Police Department mobilized technology and other resources to reduce violent crime and property crime, including organized retail theft. Beverly Hills is one of the most premier shopping destinations, centered on Rodeo Drive and encompassing an area known as the Golden Triangle. Many, well, high end national and international brands are represented in that area. However, most businesses are not owned by corporations, but are individually and family owned. Over the last four years, organized retail thefts have quadrupled in the city.

Occasionally, these thefts turned to robberies due to the physical force or threats used by the suspects, so organized retail theft can become violent. Anyone who gets in the way of these perpetrators is potentially subjected to violence. As you may have seen on the news, we have been subjected to the so called smash and grab crimes where multiple suspects use tools, heavy objects or even vehicles to break through store windows and doors and then run inside and steal as much as possible.

In March 2022, a widely reported smash and grab of a jewelry store on Beverly Drive resulted in the loss of millions of dollars. Fortunately, due to diligent police work, all of the suspects were caught and most received federal prison time. And I mention this because we have found that working with our federal law enforcement partners and using federal interstate commerce laws such as the Hobbes Act, is very effective in securing serious prison time for these offenses. Beverly Hills is a national and international tourist destination.

Videos of these crimes in the media and on social media damage the reputation of Beverly Hills and of California. Tourists want to avoid places they perceive as unsafe and where disorder and chaos reign. After speaking to the Beverly Hills Conference and Visitors Bureau and the Chamber of Commerce, they have both mentioned calls and emails asking if Beverly Hills and the Los Angeles region is safe. The perception is that it is not.

This causes the loss in revenue which hurts the city and the state, ultimately due to the loss of many millions of dollars in sales tax and transient occupancy taxes which affect both business and jobs. It slows our economic growth and drives retailers away from investing in California or drives them from the state due to the rise in crime. The Beverly Hills Police Department built one of the nation's first real time watch centers.

The heart of this system is 2400 cameras that are monitored 24/7 by trained security contractors, which we refer to as virtual patrol officers or VPOs. The cameras are high resolution, many are pan, tilt, zoom, and they are all recorded and the recordings are stored for 13 months, surrounding the city and parts of the business district are going on 100 fixed automated license plate readers, which give us an early indicator of when criminals are coming into the city.

We know that when wanted or stolen vehicles go into Beverly Hills, the occupants are usually there to commit additional crimes. Since the inception of the real time watch center, we have recovered over 200 stolen vehicles, which is approximately double our average annual rate. We fly drones over Beverly Hills 12 hours a day, mirroring our peak crime times as dictated by our temporal crime data. And if you come into Beverly Hills, we put up a big sign saying police drone in use. So everyone knows.

Over 100 agencies so far have visited our real time watch center. And although we started this before the grant, many have indicated they will use grant funding to start their own real time watch centers. Additionally, we have a system called "Live 911," which allows us to quickly geolocate callers and have the camera operators and drones promptly respond to the victim's location. We call this concept virtual time on scene, which is before a patrol unit can get to a call.

The camera and drone operators are already there, virtually on scene, within seconds, directing our patrol units to the victim, the suspect and or suspects or vehicles. The result is that we have an excellent capture rate of suspects, all backed up by videos of their actions and the actions of our officers. And we call this precision policing, because we're not casting a wide net, but we're going very precisely to what we know are the criminals. Just a little show and tell.

When you get arrested in Beverly Hills, before you leave, we give you this little card and it says,"Do not commit crime in Beverly Hills." And it shows all of our technology and explains that it will be used to catch you and prosecute you to the fullest extent of the law. And on the back, it has resources on how to get mental health help, job placement, housing, drug and alcohol placement.

All those kind of resources that for someone who wants to stop committing crime and start participating in ambient society, we capture many of the suspects in the actor immediately after the crime. If they do get away. We have multiple video angles of vehicles, descriptions, descriptions of the suspect, and this gives us a significant advantage when investigating open cases and filing for vertical prosecution. Our trove of information often assists other agencies in solving their crimes.

And as Lieutenant Kim mentioned, we try to put as much information as we can into information sharing systems, so other agencies can see that having the ability to capture most suspects in their vehicles on video has also made us a regional hub of information sharing for other agencies. The groups that commit organized retail theft in Beverly Hills also hit other high end stores throughout the state.

We can often identify suspects and vehicles involved in multiple crimes across the region because criminals often conduct reconnaissance before committing the crime. If their vehicles have already been entered into law enforcement databases, our ALPRs alert us to those vehicles and we can preempt a crime and provide additional information to other investigating agencies. We host a high tech crime unit with assigned detectives from UCLA, Santa Monica, and Culver City police departments. This allows us to be an information sharing hub other cities are considering joining.

LAPD recently assigned a detective to us, and we provide one detective to their regional ORT task force. I cannot emphasize enough the importance of information sharing due to the cross jurisdictional challenges organized retail theft presents. I want to thank you for providing the ORT Grant. We intend to continue to add cameras and ALPRs to reduce our gaps in coverage.

We are hiring additional virtual patrol officers just to monitor our business districts, and we are testing technology to ingest private cameras into our system so we can see retailers cameras in real time. We want to continue to grow as a regional coordinator of information, we have also trained a sergeant and an officer on crime prevention through environmental design so they can work with retailers to improve their exterior and interior store security.

One challenge with corporate retailers is that they must follow corporate policy, and sometimes local stores cannot implement our recommendations. My three recommendations for the committee are first, please encourage, enable, and Fund better law enforcement information sharing. Second, the proper and lawful use of technology such as cameras, drones, and ALPRs is a game changer and can make law enforcement more effective, efficient, and fair in the appropriate apprehension and conviction of criminals.

Lastly, our laws have been weakened over the last 10 years, which has allowed crime to flourish. We need the tools to keep repeat offenders and career criminals in prison and the programs to help those willing to rehabilitate to do so. Thank you.

Thank you so much for your testimony. Next, we'll move to Jason Cavett, captain with the California Highway Patrol.

Good afternoon, Chair and committee members, and thank you for the invite today. My name is Jason Cavett. I'm a captain with the California High Patrol and the commander of the Field Support Section. As the commander of the field support section, I oversee the department's ORC task forces as it relates to administrative and investigative support. You may ask, what did the CHP getting into the organized retail crime, and what are we doing here?

Well, the California State Legislature recognized organized retail theft as an increase in concern back in 2018. And in that same year, September 2018, Governor Brown at the time signed Assembly Bill 1065 requiring the California High Patrol, in coordination with the California Department of Justice, to convene a regional property crimes task force to assist local law enforcement with logistical support and other law enforcement resources, including not limited to, personnel and equipment.

Governor Newsom signed Assembly Bill 331 in July of 2021, which authorized the Organized Retail Crime Task Force to remain in effect until January 12026 and committed unprecedented resources to expand the organized retail crime task force and increase the safety and security of California communities. To that end, the CHP created three regional task forces, one in our Bay Area, which is our Golden Gate Division, one in Southern California, which is our LA area, and then Border Division, which is down the San Diego area.

We also hired two retired annuitants to provide statewide coordination and four crime analysts to provide analytical and supplemental investigation support, which are housed here at field support section for the organized retail crime units to bolster law enforcement resources in the fight against organized retail crime, ORC and support affected businesses. The CHP has been receiving $6 million annually in the 2023 through the 24-25 budget year, and ongoing resources will be provided for totaling $15 million annually.

This increase in funding allowed the CHP to expand its ORCTF operations into the Sacramento and San Joaquin valleys, which is our Valley Division and our central division offices, and provide much needed assistance to allied agencies as well as the underserved retailers in those communities. The CHP teams are each comprised of a sergeant and a certain number of investigators and, depending on the task force, some support staff as well.

When a case gets big or for certain operations, we use teams that supplement our teams from personnel from our Investigative Services unit, our cargo Theft Introduction program, introduction program and other specialized units as needed. In August of 2023, in response to recent large scale organized thefts in the Los Angeles area, the CHP recently added additional personnel to its already established Los Angeles Area Regional Task Force and is now comprised of two sergeants and 11 investigators.

The organized Retail Crime Task Force's regional teams, as well as associated investigators in the Sacramento and San Joaquin Valley areas, conduct comprehensive investigations of organized retail crime groups, boosters and fences, and collaborate with our allied agencies, retailers and loss prevention to conduct proactive operations.

Since the inception of the Organized Retail Crime Task Force back in October of 2019 until January of 2024, the CHP has been involved in over 2200 investigations, which led to the arrest of over 2200 suspects, the recovery of nearly 750,000 stolen items at an estimated value of over $41 million. CHB has never measured our success as it relates to the prosecution of cases, but typically after a case is filed with a District Attorney, we don't necessarily continue to track the case to its adjudication.

However, due to recent inquiries and the interest in that aspect, we will be trying to track those things as they go through into the future. In addition to the funding provided to the CHP for the Organized Retail Crime Task Forces, Governor Newsom allocated the BSCC grants in upwards of 240,000,000 to our allied agencies and nearly 30 million to the district attorneys to help in prosecution.

With the allocation of additional funding for the local law enforcement agencies and district attorneys going along with enacted regulation and funding provided to the CHP, we anticipate making a significant difference in combating retail theft, but it will take some time. Although we are optimistic with the tools and funding we have been provided, there are areas that could be improved upon to help combat retail theft, which Governor Newsom addressed in his 2024-25 budget proposal.

In that proposal, he included an additional 373.5 million in general funds over four years to bolster local law enforcement efforts to address retail theft and to expand and make permanent CHP's retail crime task forces. In addition, Governor Newsom requested new legislation to address retail theft. As we've talked about, and many panel members up here have already talked about, organized retail crime has become very sophisticated over the past several years.

It's no longer viewed as someone trying to steal to provide for their family or get milk for their children. These organized retail crime groups often operate as well organized criminal networks. Organized criminal crime suspects frequently traverse various jurisdictions across county lines while targeting numerous retailers. And Sergeant Navarros talked about a couple of different things earlier in his testimony.

But some of the things that we're seeing regarding the trends that we're seeing are obviously the ones that get a lot of the press, the grab and go, the flash robberies, smash and grabs, but we're also seeing point of sale register fraud, we're seeing some return fraud. And obviously, there was also comment made about cargo theft. And obviously, the flash robberies and the smash and grab takeovers at retail stores have been the high profile ones that get all the media attention.

Officer Navarro has already talked about the different type of operations that the CHP conducts with the blitz operations and then the long term investigations and, let's see, designed to take down those operations or multiple boosters. And I stand ready to answer any questions that you may have. Thank you.

Thank you so much for your testimony and the panelists that are here on panel two. That was previously panel one. Any comments? Discussion from my colleagues from the dais.

Yeah, I had a quick question. Is the CHP involved very much in the investigating aspect of the fencing component? Because it seems to me like that's a very interesting aspect, because it seems like these items have very little value unless they're resold. And so I wondered if you have any data or any kind of information as it relates to the fencing aspect.

I don't have any data with me offhand, but what specifically are you looking for? And I can bring that back to the committee later.

The level of success that they might be having in finding these operations that are redistributing these stolen goods, that's actually.

One of the challenges, is really trying to. So part of the field support section, we do a lot of tracking as far as the stats go, and we provide a lot of talking points for what we're doing as a department, and we really try to figure out what can we track, what are the successes, what are the failures, where can we improve and those types of things. But I can definitely try to figure out how successful we are when finding those fences.

But really it becomes a case by case. We found this fence. What are we not finding that we should be finding? It really becomes a difficult thing to track.

Yeah, I apologize, because I do know that that would be very difficult to track, but I do think that we should try to figure out some kind of way to identify, because it seems to me like that is the real huge challenge in this whole adventure, is the resale piece because it has very little value as an item itself until it's resold.

Absolutely.

And it seems like that would be probably the more difficult aspect, but also the very critical aspect of trying to figure out how they're recovering all these funds, these illicit funds.

Absolutely.

Thank you. And thank you for all your testimony here today following back up with the BSCC and looking at the arrest convictions that Assemblymember Lackey talked about. But also, I know you're going to get that information back to us, but within those grants and in those criteria that's there. Could you also talk about the average time that those that are incarcerated for this criminal activity are actually serving?

Because it's one thing to have a lot of arrests, but it's another to find out if they're being incarcerated or what type of punishment is there for them moving forward within that type of activity. That goes back to some of the prosecution, some of the things that we know needs to be done. Can that also be added into that or some information coming back on that component of it.

I'm happy to carry the question back to our research team. I don't know how possible that would be to do right off the top of my head, so I can certainly commit to looking into it and letting you know.

Thank you. And also we could put that to the regions where some of these grants are being awarded to find out then is the county moving forward on some of those prosecution, are we running to that, that barrier that we heard earlier on a panel and even within this panel itself? Thank you for that. Chief, when you talked about the real time watch centers that was put on with the funding from the department's general fund, or was that also through grants?

Initially, we funded that through the department. However, now that we do have, we received a $4.5 million grant. We do intend to expand some of those resources, test new technology, and we're really committed to being more of a regional hub of information in the west Los Angeles, Los Angeles region, because Beverly Hills is such a target. And obviously, they used to ask the bank robber, why do you rob banks? Because that's where the money is similar. Beverly Hills. Why would you come to Hills?

There's great opportunity in getting really expensive items that are stolen. So we do intend to expand the capabilities of the real time watch center with the grant, but we also want to be a place where people can come and see what we've done. Well, what were the challenges, some of the mistakes we made and be able to start their own real time watch centers, because we believe that in sharing that information, it's all going to make us much better.

And the technology will never replace people, but what it does is make the officers in the field very much more effective, efficient, and really focused on the right criminals at the right time. So I think that's why we've been very effective, and we appreciate the funding through the grant.

Do you think that funding in that type of aspect for real time watch centers would be a proactive approach to the retail theft?

Oh, absolutely. The retail theft and many other crimes as well. But especially what I explain to cities, because I'll just be honest, they'll say, well, you're from Beverly Hills, you can afford all this. The technology is getting less and less expensive and getting better and better, and you don't have to use it. Everywhere you look at your crime data, you look on a map and show where the problems are. You analyze kind of where criminals come in and out of the city, for example.

That's maybe where you put your ALPRs, put your cameras in strategic locations use drones at strategic times and you use them all in concert. Every one of those technologies is great in of itself, but when you use them together, it's very powerful and it gives the person, the officer in the field, a whole backing behind them. So they know exactly where to go and exactly what car to stop or what person to interdict. So it's very effective.

And then take that, and not only the investigative side of it all, the video and everything you have for evidence, but you take that to court as very powerful because they can see the crime take place all the way from when the person is caught and then the case is filed. That has a lot of data with it. It's also very challenging because it has a lot of data with it.

And so there are challenges with as much data that we have coming in through the video cameras. But on the other hand, it's invaluable when you're trying to backtrack a crime and figure out that, say, the person that was robbed in LA, they were actually coming out of a restaurant in Beverly Hills and someone followed them off to Los Angeles and robbed them there. And there's not much information in that side of the town.

But when they backtrack it back to Beverly Hills and they say, I was at a restaurant in Beverly Hills, or vice versa, then we're able to share that data and that information and ultimately make an arrest and get a thank you.

And just one more follow up question. You mentioned the use of drones, and we've heard throughout this discussion here today to this point, that things are evolving. The criminal aspect is evolving into international rings and even more sophistication within those perpetrating this crime is law enforcement also now tasked with evolving to meet that evolving aspect on the criminal aspect to now with the law enforcement aspect.

So evolving into more needs for drones, for data, for those things that might not come to the top of your mind when we talk about criminal elements and trying to help curb some of.

These things as retail theft, so on, the drones. Drones are first of all, very effective and very efficient when you compare them, for example, to helicopters, which also annoy people with the. And all of those kind of things. And so for a very small price, you can do a lot of the same things with a drone.

For example, it doesn't come without its challenges, but essentially any department can fly a drone and have the funding to fly a drone because it's very inexpensive, but they can't afford a helicopter. On the other hand, we're seeing criminals use high tech capability too we've seen criminals use drones, so now you have to think about counter drone capability. We've seen them use other kind of just off the shelf cameras, jammers, all kinds of different things to interdict our efforts to try to stop them.

So we're always playing this game of who can use technology first and most effectively. But I really believe that in Beverly Hills, we're what I call "policing 2030." Everybody in the next 10 years will be using drones, cameras, ALPRs, live 911, those type of systems. Because just like we went to body cameras, and it gives you one perspective. Our officers are on drone cameras, they're on street level cameras, then they have their body cam and they have their vehicle cameras.

So we capture multiple, multiple different angles of the crime. And we also are able to make sure our officers are doing the right things. And we can use them for training or debriefing or refuting claims. Or if we have to discipline an officer, showing that an officer did something wrong for the justice piece of that, that's effective as well. So there's a lot of good things about it. And I always like to brag, we had 66,000 calls for service last year.

We only had 31 citizen complaints and none were sustained. And I think that's because the officers realize they're on camera every day as well. And then the suspects realize it when they're caught. And we take them to jail and they go to court and they go, "oh, my gosh, all that was caught on video." So that's a very powerful statement.

Thank you for that. And also thank you for sharing with us the material you hand out to those that when they leave Beverly Hills, they see all the resources that law enforcement has, but also resources for the individual that if they need mental health resources, any of those other areas that they have a card to go to. So thank you for.

Be happy to give you one.

Captain Cavett, you talked about those and the tasks that the CHP has now been engaged in with the retail theft, the boosting the fencing. But you also talked about personnel location and relocation. You talked earlier about sending some more personnel down to the LA area, right? Or was it the Oakland area? And how is that decision made? Is it based on a spike that you see or with the collaboration of what you're hearing from agencies that are from the area, how is that decision being made?

So hybrid is somewhat unique in the sense that we have our commissioner who's in charge of the department as a whole. But our department is so spread out that we have different chiefs in charge of different geographical locations within our department. And those chiefs have a little bit of latitude as far as where they redistribute their own officers. And the one I talked about, where they increased their task force by a sergeant and additional investigators, that was in the LA area for their LA task force.

And based off of conversations and crimes that was occurring in the LA area, they decided to increase their numbers for that task force itself. When it comes to resources and expanding to the valley Division and the Central Division, it's still a work in progress, getting officers and investigators into those roles, but those are handled in those specific divisions with guidance and recommendations and funding coming from the state.

Thank you. You also mentioned about funding that went to the, I believe, towards the district attorneys for prosecution. How is that vetting out? As far as those dollars being spent that way for that prosecution component.

How is it being. I'm not understanding the question.

So if I understand it right, the dollars came from the state to CHP to look at those areas where retail theft is going on, but there was also dollars allocated that you mentioned to the district attorneys in the state for prosecuting those crimes. I guess that's the matrix that I'm looking for.

On that, I was just kind of highlighting the funds that are necessary for us to really make a dent in this whole process. Right. I touched specifically on the funds that were allocated to the high patrol to combat retail crime, but also the funds issued by BSCC.

So he was speaking of our grants.

Maybe the question is going towards yourself.

Sure. Absolutely. So the vertical prosecution grant was also made available last year, and in September, we awarded almost $25 million out to 13 district attorneys. There is a handout here. I see Jennifer has it across a good geographic representation of the state. And so those 13 DA's offices will be forming vertical prosecution teams, and they're getting started on that. And we'll be getting regular information and updates from those DAs on the progress they're making toward addressing organized retail theft.

Okay, thank you. Thank you so much for that, and thank you for being here with us today on this panel and bringing up this much needed information. And certainly, if you leave the cards, we'll go ahead and pass them out. Thank you so much.

Thank you.

As we transition to panel three.

We will be moving to panel three. What does the data tell us about organized retail theft in California? We have Thomas Nosewicz, legal Director, Committee on revision of the Penal Code, and Rick Owen, Senior Staff Council, Committee on revision of the Penal Code.

Thank you, Chair Ramos, and good afternoon. Good evening. I'm Tom Nosewicz, as you said, the Legal Director of the Committee on Revision of the Penal Code. And I'm here with my colleague Rick Owen, who's senior staff counsel for the Committee. Thank you so much for having us here, and thanks to the staff as well, for all the help they've given us in helping prepare for today. I just wanted to talk very briefly about what the Committee on the Penal Code is.

It's a relatively new entity, and then I'll turn to the data and go through it as quickly as I can, and obviously, feel free to stop us at any point along the way if any questions come up. So the Committee on Revision of the Penal Code is a state entity that was created by the Legislature to make recommendations about all aspects of criminal law in the state. There are seven folks on the Committee, including someone from the Assembly here.

The Committee's goal is to make recommendations that improve public safety while reducing unnecessary incarceration and improving equity. The staff is very small. It's on the legal side. You're seeing two thirds of the staff right now. So we're a relatively small entity, but we've received a lot of support from the Legislature, particularly in working with researchers at UC Berkeley, at something called the California Policy lab. So we're very happy to present the data we have here today.

And I just want to make sure we're known as a resource for yourself and all your colleagues for any data, research, anything we can provide on public safety issues, as you all work on these issues. But I want to turn to the data today. The Committee tries to make its recommendations as data driven as possible. And so I want to walk through some overall crime trends in California and then have a particular focus on offenses that occur in retail settings.

So we have a colorful handout here that I'll sort of use to guide the remarks, and I'll give a little bit of background, the data first. So this is all data from the California Department of Justice, which collects reports from every law enforcement agency in the state about crimes that are known to that law enforcement agency. So this is not purporting to be every offense that happens in the state.

It's ones that are known to law enforcement, either typically through someone calling or they learn about it through some other way, and we're able to go back decades with this data. And that's sort of what's on page one here. We look at overall violent and property crime rates for the entire state, which is that dotted black line. I know there's a lot of colors here, and I'll address those in a second. But violent crime and property crime, and the rate is per 100,000 people.

So we can look at different regions to control per population and sort of do apples to apples the big picture story here is that both violent and property crime are at historic lows and are down significantly from the highs in the in particular, violent crime is half of what it was at its peak rate in 1992, and property crime is 66% lower than it was at its peak in 1980. So I think that context is important whenever we talk about public safety issues.

And now the colored lines are different regions, how those rates were over time, obviously not going to go through each of those here, but I think the takeaway here is that this is the story statewide is that with some variation in timing and details, but every part of the state has seen these drops in crime over time and again. I can provide more details on particular cities, counties, whatever is helpful to the Committee or yourself. Chair Ramos, just feel free to follow up with us.

Now, page two looks at offenses that occur in retail settings, and there are three here that are relevant. It's a little bit complicated about what kind of conclusions we can draw from it. So the three offenses are shoplifting, non residential burglary and commercial robbery. And the chart on page two here shows just the statewide rates from 1985 to 2022 for those three offenses. And we see the same story that we saw on page one, which is these offenses are all down significantly from their heights.

And of course, we see that the burglary and shoplifting, there's just more of those than there are robberies in the state. And then I'm going to zoom in a little bit on each of those offenses and just talk about what the data shows and what it doesn't show. So page three has a shoplifting rate in California from 2010 to 2022. And a brief aside, the reason we stop at 2022 is because that's when the data stops.

There's about at least a six month delay in getting data from the Department of Justice. So we won't have 2023 data until this summer, and then we won't have 2024 until next summer. So unfortunately, we have to deal with these delays. So that's why we stop at 2022. So the shoplifting rate is shown on page three. The headline here is that it's 7% lower in 2022 than it was before the pandemic. So the shoplifting rate is lower than it was before COVID started.

And shoplifting is taking something from a store, regardless of value. So this covers sort of speaks for itself, shoplifting. Unfortunately, burglary and robbery, which are on the next pages, are a little bit more complicated. And that takes us to page four, which is commercial robbery. So robbery is a violent offense. It is when you take something and you use force or fear to take it. And the data here shows commercial robbery, which is robberies that are done at a commercial establishment.

Now, this includes both retail stores, gas stations, convenience stores, but also other commercial places like restaurants, hotels, and places like that. So it's not limited just to retail stores. We cannot extract from the data that DOJ provides, just robberies at retail stores. No one can do that because they group all these things together in sort of a commercial category.

But with those caveats there, we can see that the commercial robbery rate in 2022 was higher, about 8% higher than it was in 2019, but about where it was in 2017. And as you can see, looking at the graphics, the chart, there's some variation year to year, but it's significantly lower than it was, too, in the 1990s. Okay, almost done on the charts. Last one is on page five here, and this is non residential burglary. So burglary is a kind of a funky offense.

It's one they like to use in law school exams to trick people up. And burglary is entering a structure with the intent to commit a theft or felony. So, basically, breaking in somewhere and then non residential burglary are burglaries of places that aren't houses. So just like with commercial robbery, this includes stores, but it also includes offices, storage facilities, warehouses, anything that isn't a home.

And we see in 2022 that the non residential burglary rate is the highest it's been since 2008, but it's half the rate it was in 1995. And we see, unlike shoplifting and commercial robbery, this rate actually increased during the pandemic. Sort of makes sense. More places are closed, more opportunities for places to break into that would have otherwise been open. So that is a little bit about what the data shows on these offenses that can occur in retail establishments.

I think the headline is the one offense that is limited to resale establishments. Shoplifting in 2022 was down compared to what it was pre pandemic. And so now my colleague Rick will talk a little bit about what data we have, and mostly what we don't have, unfortunately, about organized retail crime.

Yes. Thank you. So the Legislature created organized retail theft as a specific offense, penal code Section 490.4, that could lead to arrest and prosecution just beginning in 2019. And the organized retail theft offense, it allows charging not only when two or more people steal items with the intent to resell them, but also when two or more people purchase or possess property that they know is stolen or work together to carry out a plan to commit organized retail theft.

So the statute that the Legislature created is actually very broad. Data on organized retail theft is limited, and that's because whether a theft is part of an organized crime is usually something that's determined after investigation by law enforcement and is something that usually is unknown at the time that the crime is reported to the police. This means that unlike other crime categories like shoplifting, burglary, and robbery, there is no data that tracks reports of organized retail theft in California.

However, using data maintained by the California Department of Justice, we are able to see how many people were arrested and convicted of the specific organized retail theft offense. In the first three and a half years since it's been created, there were a little more than 2300 such arrests and about 150 convictions under California's organized retail theft statute. Keep in mind that these numbers were likely impacted by the Covid-19 pandemic, during which we generally saw fewer arrests and convictions.

Outside of the data from the Department of Justice, there does not appear to be any reliable measurement of the frequency of organized retail theft. Thank you, and I'm happy to answer your questions.

Thank you so much for that. So on some of the data, I know we started off going back to 85 and then looking at the trends. What about prior to that? I mean, does it show a long term trend where crime escalated, come back down and keeps going? And if that's the case, what part of the cycle do you think we're in now?

That's exactly what the data shows, is that starting around the 60s and 70s, we saw increases in crime rates. The reasons we started 85 in this presentation is that's what DOJ makes most readily accessible for the individual offenses. So I think everyone is. There's papers and books written about the historic crime reduction and why it happened and how sustainable is it. And I think everyone is surprised that we've been at these Low levels, particularly for violent crime, for so long.

Covid-19 caused so much disruption to everyone and everything that we did see some rises, particularly in homicide during that time, those things are starting to come down. So if I could predict this with any certainty, I'd be probably someone investing in the stock market or something. But I think based on what we've seen in 2023 and bits and pieces here, I think we're going to sort of see crime go back to that equilibrium we had before the pandemic.

Pandemic not so much back in some of the historical data to where it would peak and start to grow and then come back down in the cycle. Therefore, keep moving.

I think we had these big peaks, and we've gone down, down. We've kind of flattened out. I think, hopefully.

Do you think a peak is coming?

I don't think a peak is coming. I think we had some increases during COVID and I think we're coming down from those that could have been coming. So there might be something similar that disruptive.

Then the shoplifting rates. We've seen that in some of those numbers, right. That we see in 2022, we've seen a spike in that in 2015, 2017. So just looking at the data, right. And seeing what's there and seeing these trends, right. That's pretty much historical, right. You could predict some measurement of what we're in store for. Then you see in the commercial robbery rate in 2022. 2017 figures 8% higher in there.

Non residential burglary is that's basically places that are being burglarized without a living inhabitant in it. Right. So that's your warehouses or whatever, rather than a home or somebody sleeping there.

Yes, exactly. There's a separate category for residential burglary that would cover homes and that would cover inhabited places. So there could be people in a non residential burglary. But I think most of the time those offenses try to happen when nobody's around.

There was a comment of 53% increase in violent crime. Do you think violent crime is on the rise?

Well, I think that comment was taken from a survey done by a trade organization about retail theft. And I would really want to know who was asked that question. How was the question phrased? Because something that open ended is violent. Has there been increase in violence? I think is going to be, to some extent, in the eye of the beholder. But what the data shows is that there was an increase in violent crime during the Covid-19 pandemic, and it's starting to come down.

And even with that increase, though, we are still at half of what the rate was at. Its at its peak in the not so distant history in the 1990s.

Does the data historical data, because we're still waiting for the data to come in. For now. Does it take into account the comments that international components are playing within some of the crime sprees here in the State of California and maybe probably the nation?

Yes and no, I guess, is the question chair. These crime categories were created literally 100 years ago. So the crime categories leave a lot of stuff out. They leave out a lot of sex offenses. They leave out drug offenses. They leave out simple assaults. They leave out wage theft, they leave out white collar crimes. So we're working with a framework that is a century old.

So it doesn't take into account the motivation for the offense, typically, or where the person is from or anything about the characteristics of the person who committed the offense. Now, there is a new crime system called NIBRS and I won't get more into the weeds unless you want to.

That's just coming now.

That should have some more of that information. So this is a very basic system that wasn't really built to do those types of things.

That's great. Thank you for the data. And certainly we'd like to follow up with you and seeing the projections from the longer aspect of it from the beginning, see the spikes up and down and see where we're at. But it'd be interesting to take all this information that these panelists brought up and try to plug that into some of the information that we're collecting. One is it is violent crime on the rise?

And if it is, is it more from internal or is it from outside of the State of California? People coming in, right, conducting whatever they're doing and then fleeing back to their own countries. So it causes it to escalate, but where does it really lie? Certainly there was another component that we talked about, and Beverly Hills chief of police hands out a card right on the stuff that they have, the drones, but also on the back, the mental health component, the resources.

So tying into some of these numbers, too, has that also been successful? Because that is part of the equation. Right. Trying to curb some of this activity, that someone might see an opportunity to get involved in some of these statistics here, but also trying to curb it. Proactiveness. Proactiveness to the retail theft, but also proactiveness to the individual thinking they have to go to that type of level within their own lives, getting the resources they need.

So seeing how those correlate with one another as far as maybe could even be on a data chart or how we measure that component of it.

Yeah. You want to talk about lead a little bit?

Sure. Yeah. I think that card is actually extremely helpful because it addresses two points. Which is the first is that I think what deters crime is kind of the surety that if I commit this crime, I'm going to get caught if people believe that that is an effective deterrent. So by that Police Department showing, look, we have all these measures in place to catch you if you commit a crime here that is helpful. The other side of it is the resources and providing those resources.

And I think one of the programs that the Penal Code Committee has studied is law enforcement assisted diversion. With that program, instead of taking a person to jail after arrest, the police officers connect that person directly with a community based service provider to provide them the services that they need.

And the BSCC has endorsed a study, or issued a study, an independent study of the lead program, and found that it was very effective in reducing recidivism by instead of participating in this traditional court process where a person is arrested and they're prosecuted and they're going through the traditional system. If you actually connect them with services, that actually leads to much lower recidivism rates.

So that's something that the Penal Code Committee has endorsed and has supported, that the Legislature should invest more in programs like lead, that instead of relying on a traditional criminal system that get people the services that they need to reduce recidivism.

Well, thank you. Thank you for that. When I was on the county Board of Supervisors, San Bernardino County, we moved forward within the sheriff's Department and supported it at the board level with a division called Hope, bringing out resources to those that are homeless on the streets of the resources that were available in San Bernardino. county. And we've seen that some partaked in those resources and were able to get the help they needed.

So I'm definitely engaged in that and eager to learn more about that component of it. We are talking about retail theft, and we all know that it is a situation in the State of California. Do we know what's really driving it? Do we know how to combat it? I mean, that's why these hearings are being done, so we could get all these issues and options on the table, at least in front of the state Legislature. We do know that it is a problem.

If it wasn't a problem, the Governor wouldn't have put $343,000,000 in the budget to move forward with the CHP and other local agencies there. But we also want to make sure that we're not losing the humanity component of it to ensure that we're being proactive one to the retail thefts that are going on. But we're also being proactive to making sure that an individual has resources they need before they get to that point that's there.

But there's a new component, at least in my mind, that's coming forward, and that's the international organized criminal element that's coming and basically preying on the situation itself. So pulling all those layers back brings all the data that comes forward. So I definitely would be open to further discussion, especially around this program that we're hearing about now.

But this is a problem that is plaguing the State of California and how do we combat it by listening to the different views that have been present in this panel today. So I want to thank you for your hard work and your data collection on it, and I do want to follow up with you on some more components of it. Thank you so much.

Absolutely.

Thank you very much.

Now we're going to move to public comment. For those that are here's. All right, please state your name and you have up to 1 minute.

Good afternoon, chair and Members of the Committee. My name is Ed Little and I'm with Californians for Safety and Justice. We represent over 50,000 crime survivors in California over the last several years. As discussed today, law enforcement has received hundreds of millions of dollars specifically focused on addressing retail theft, while at that time investing much less for funding for victims. As a group that organizes crime survivors, we know that resources for victims promotes healing safety and stops cycles of crime.

That is why this year we are asking for the Legislature to reject the governor's proposal to delay the funding for flexible cash assistance for survivors of crime grant program. Thank you for your time.

Thank you. Thank you.

Good early evening. Carmen Nicole Cox with ACLU California Action. And Mr. Little left a few seconds on the table, so I'm going to go ahead and grab those up. So listening to today's hearing, what struck me is that there appears to be a difference in vocabulary between how law enforcement defines public safety and how the community that pays their salaries define public safety.

Today, what we heard was that law enforcement envisions community safety as secret mass surveillance, night vision goggles, wiretapping, drones, stakeouts, and other investigative approaches. Meanwhile, community members and also punishment after the fact punishment. Meanwhile, community members lives are much more nuanced. Yes, they want people to refrain from stealing, keep your hands off my stuff, and they want their loved ones, especially their children, their queer family members, their neighbors who need mental health treatment to receive the services they need to make healthy decisions.

Community has never said public safety is about the punishment that cops feel their loved ones deserved. Deserve. As we all know, most property theft is fueled by poverty and deficit of basic resources. People with stable housing where the lights are on and there's food in the fridge and employment is reliable and there's culturally competent health care that is accessible are not engaging in retail theft, organized or otherwise.

That is why community has supported reforms, because history has made clear we cannot arrest our way out of the symptoms of poverty. To the contrary, entanglement with the criminal legal system leads to greater health, education, and economic deficits. Mr. Chair, community calls on the State of California to please prioritize investment in true public safety.

That means whether you are when we think about community and what they envision for public safety, whether you're young or wise or Latino or white or rich or poor or self employed or public servants, community members want greater investment in prevention, not after the fact punishment. For the average community Member, safety is prosperity. It's mental wellness. It's physical health. It's full employment, it's quality and culturally inclusive education. Please put our limited dollars in programs that keep underemployed Californians from becoming unhoused Californians.

Finally, in a nation where individuals have a right to counsel for the offenses that are at issue here in this hearing, we cannot funnel more money into prosecution while reducing funding for indigent defense. This is a highway to due process violations, wrongful convictions, expensive exonerations, and widening racial disparities. We should not invest in injustice. Thank you.

Thank you for your comments.

Good evening. Natasha Minsker, on behalf of Smart Justice California. First, we'd like to echo the need for more funding for victim services. California is not doing enough to support victims. Second, smart Justice California strongly supports law enforcement assisted diversion. This is a great way for California to invest in solutions that work to address people's needs and respond to the retail theft issue. Third, we strongly support you to consider funding the JData data collection system.

Chair Ramos, you've been very interested in what the data shows and the gaps in the data. The JData system is a Bill that was approved by the Legislature, signed by the Governor, that would create a comprehensive data system to answer these questions, and we need to start the funding process so that we actually have the information. Last, smart houses California supports public defender funding. We believe public defenders are first responders.

They are the people that first interact with someone who's been arrested in their moment of need, in their greatest moment of crisis. Public defenders are critical to due process, and they're also critical to helping people stabilize and move their lives in the right direction, to getting people mental health counseling and the support they need to be the kind of community members we need. Thank you for your time, and this is a great hearing.

Thank you. Thank you for your comments. Any other public comment? Going once. Well, thank you all for attending. Thank you all for your public comment. This concludes sub six Public Safety Committee.