“I’m Stealing This Formula To Feed My Baby — And By Feed I Mean Fund, and By Baby, I Mean Hezbollah”
“Woman Arrested For Stealing Baby Formula.” Such a headline naturally causes an emotional reaction. What kind of monster arrests a woman trying to feed her baby? This kind of misdemeanor theft is what City Attorney Pete Holmes recently described in a letter to Seattle City Council, when he described his desire to avoid prosecuting “crimes that appeared to be committed out of survival necessity; for example, no city prosecutor is interested in sending an impoverished new parent to jail for stealing baby food.”
Markup on each can of baby formula is high, so that the average price for feeding a first year baby is between $1,200 and $1,500 on average. However, decades of research have shown that a mother’s own breast milk is superior. This created a focal point recently in South America. In 2018 Ecuador planned to introduce a U.N. resolution to promote breast feeding and limit the aggressive marketing of breast milk substitutes. Lobbyists and Ambassadors threatened Ecuador with punishing trade measures, and even to withdraw military aid from the country. Baby Formula is a $70 Billion dollar industry. Big enough to impact relationships between entire nations.
It’s also often kept in a locked cabinet at grocery stores. Is this an indicator of how many desperate moms are swiping a can for their hungry babies? Hardly.
Beneath the opportunistic shoplifter who steals for their own personal use is a much larger, more organized market for stolen goods. Baby Formula has long been a highly desirable target for sophisticated organized theft rings, with profits going to organized crime. Retailers refer to this as ORC. Organized Retail Crime costs stores $30 billion dollars a year. Between the rising thresholds for felony crimes, and increasingly well orchestrated heists, stores are often left feeling helpless in the face of a crime wave. With the current pandemic challenges added on top, it’s a shoplifter’s paradise in many places.
The thefts start with “boosters,” shoplifters who steal in large quantities to sell on the black market. The boosters are given lists of what to steal, and often paid pennies on the dollar. They then take the merchandise to a “fence,” a reseller who will buy the merchandise and sell it again. This can be tempting to smaller mom and pop stores who don’t get the bulk manufacturer discount that big box stores get.
Selling the merchandise online is often more profitable, and adds a further layer of anonymity from the theft. As an example, one gang in Texas made $44 million in 18 months by selling formula that had been stolen and repackaged.
The situation is hardly a win-win for customers who want to pay less. The Subcommittee on Crime, Terrorism, and Homeland Security found that “infant formula, over-the-counter medications, and other health and beauty items… may be potentially expired, repackaged, or improperly stored or handled before reaching the consumer.” Baby formula is also used as filler to expand the volume of cocaine and heroin.
Still. So what if the billionaire companies get ripped off? This may be the reasoning for some.
A recent trend has been for crime bosses to target the homeless and drug addicted to do their shoplifting. This combines the organized methods of a theft ring with an unlimited source of unaccountable manpower, victimizing the most desperate people in society. Small businesses can’t fight that on their own. Some notable examples:
- One large operation using this method was busted by the FBI in Washington state after it had gained $10 million in 6 years. They had also recruited delivery drivers, with the US Post Office, UPS, and Amazon playing an unwitting part in the scheme. The ringleader of this group was also the focus of a seperate child pornography investigation. This case is currently being prosecuted.
- A jury in Philadelphia found that the theft of 3,618 bottles of formula, along with other merchandise, was orchestrated by La Cosa Nostra, the Sicilian Mafia.
- An Australian woman named Lie Ke oversaw a syndicate in Australia that bought stolen formula. One thief was paid $4,000 per week before a raid by authorities seized 4,000 tins of formula bound for China.
- Sameh Khaled Danhach ran a multi-million dollar, multi-state operation that sold stolen formula, medicine, and beauty supplies using shell corporations. His booster workforce consisted of undocumented immigrants.
- A multi-state investigation named Operation Blackbird resulted in felony charges against 40 people, seizing $2.7 million in stolen goods. $1 million of it was stolen baby formula. This expanded into the discovery of 8 additional fencing operations with Middle-Eastern ownership.
- Robert Mueller testified to the Senate Committee on Intelligence that “Middle Eastern criminal enterprises involved in the organized theft and resale of infant formula pose not only an economic threat, but a public health threat to infants, and a potential source of material support to a terrorist organization.”
- Dr. Matthew Levitt, Director of Terrorism Studies at the the Washington Institute for Near East Policy testified to the US Senate that in addition to funding themselves by trafficking narcotics inside the US, terrorist groups like Hezbollah and Hamas were being investigated for a variety of criminal enterprises including the stealing and reselling of baby formula, food stamp fraud, and scams involving grocery coupons, welfare claims, credit cards, and even unlicensed t-shirts sales.
Where does that leave that mom with the stroller in the grocery store? First, if she’s a paying customer, then she pays the price to cover all of the above.
Second, if she can’t pay, community resources like WIC, SNAP, Food Banks, and manufacturer Patient Assistance programs are available, and have the benefit of not delivering product that has been in the custody of organized crime.
Third, has anyone checked to see if there’s actually a baby in that stroller?
