Cargo theft looms as railroad problem

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Westbound stacks on the BNSF Clovis Sub glide through Mountainair, N.M., and begin their descent to Abo Canyon and Belen. Jan.1, 2013. BNSF Railway Police recently busted a ring of cargo thieves in this area.
William P. Diven
ALBUQUERQUE, New Mexico — While the public fixates on burning oil trains and security agencies contemplate terror attacks, a criminal underclass continues to do what it does best: steal railroad cargo.

A tip of the iceberg is the arrest last month of two people alleged to have plundered BNSF Railway trains in rural New Mexico. BNSF Railway police investigated the thefts in Torrance County and were joined in raiding an Albuquerque home by local police and federal agents from the Department of Homeland Security.

BNSF spokesman Joe Sloan told Trains News Wire the investigation is continuing and that no information beyond a written statement is being released. That statement said several burglaries prompted a month-long investigation and that additional arrests are possible.

Homeland Security got involved only after it appeared one suspect was in the country illegally and in possession of stolen firearms. He is now in federal custody on weapons charges.

Albuquerque news media say that crooks stole as much as $200,000 in televisions and laptop computers, but Sloan said that figure didn't come from BNSF. Local police deferred to the railroad for comment.

The New Mexico case pales in comparison to the December roundup in New Jersey of 10 alleged members of a theft ring that called itself the "Conrail Boyz." The gang dates to the 1990s when Conrail operated much of the rail system in the Northeast before being divided between Norfolk Southern and CSX Transportation in 1999.

Conrail survives today only as the operator for joint NS-CSX locations. NS referred questions about cargo thefts and the Conrail Boyz to the Hudson County Prosecutor's Office, which has not responded to a query from Trains News Wire. CSX also did not respond to a request for comment.

According to news accounts, gang members studied railroad operating practices and rode trains for miles cutting locks on shipping containers while looking for high-end merchandise like sneakers, watches, liquor, and electronics. The stolen goods were then pitched from slow-moving trains or offloaded when the trains stopped.

Law enforcement broke up the gang once before with 24 arrests in 2003. At the time, and after millions of dollars in losses stretching back at least a decade, the Conrail Boyz were described as the largest criminal gang ever to target railroads.

One theft involved a phony pickup order that let a gang member drive a container out of a Jersey City rail yard making off with more than 17,000 Sony PlayStations valued at $5 million. Gang members also reportedly used radios to impersonate rail workers and find out the sidings where particular trains would be stopping.
Not surprisingly, railroads are reluctant to discuss anything related to security let alone losses from cargo thefts. Surprisingly, though, no one has a handle on how big the problem of cargo thefts in general actually is.

"You'll see estimates of a couple hundred million to billions," said Frank Scafidi, a former FBI special agent and current West Coast public affairs director for the National Insurance Crime Bureau. "We really don't know.

"Not only are railroad companies reluctant to talk about it, but everybody with a hand in it. Nobody likes to talk about what the potential loss is or what the losses are. From the insurance side, we understand that."

The lack of data is slowly changing after the insurance industry, citing a provision in the 2005 revision of the USA PATRIOT Act, prodded the FBI to add cargo thefts to its Uniform Crime Reporting system. But recently published crime data from 2013 shows only seven states submitting data from a relative handful of local jurisdictions.

Now the effort is on to get local agencies to file reports and submit data to the UCR to help define the problem and the best places to apply resources, Scafidi added. It is generally accepted that warehouses are the primary source of cargo thefts followed by trucks parked or in transit, he said.

Crime data shows 83 agencies in the seven states reporting 189 incidents with total losses of $12 million. Barely $2 million of the cargo was recovered.

How many of those thefts involved railroads is not known. Data collection also is complicated by larger railroads having their own police departments and by being self-insured don't belong to organizations like the insurance crime bureau.

The FBI cites as one success the Memphis Cargo Theft Task Force that involves its special agents, the U.S. Marshals Service and local and state law enforcement. While the task force, one of seven in the country at last report, focuses on trucks and warehouses, thefts from trains also are part of the mix.

"Crew leaders know where to find willing buyers, too – from small mom and pop stores who don’t ask questions when they buy at prices below wholesale to online merchants who may or may not know they are purchasing stolen goods," the FBI said in a 2012 report on the task force. Cargo theft is a multibillion-dollar problem with the costs of lost merchandise and disrupted supply chains passed on to consumers, the bureau said.

The recent bust of the Conrail Boyz included alleged affiliates who were fencing the stolen property from stores in Jersey City.

"When things are stolen, eventually the effect of that is prices are going to go up on products," Special Agent Conrad Straube, who coordinated the Memphis task force, says in an FBI podcast. "Whether shoes are stolen, pharmaceuticals are stolen, tires are stolen, somebody has to end up paying for that."

Memphis-area thefts of truckloads of pharmaceuticals dropped by more than three-quarters and recoveries more than doubled after the industry formed its own coalition, began working with law enforcement and took actions of its own like adding GPS tracking to trailers, the FBI said.
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