The New York Police Department (NYPD) arrested 41 people in connection with a massive retail crime operation that stole and resold millions of dollars in goods across luxury apparel and accessories, cosmetics, over-the-counter medications and more.
The Organized Crime Task Force (OCTF) and the NYPD’s Grand Larceny Division worked together on a three-year joint investigation to take down the burglary operation. Through the investigation, law enforcement seized more than $3.8 million worth of stolen retail items from the enterprise’s alleged kingpin, Roni Rubinov, more than 550 stolen gift and cash cards, and more than $300,000 in cash.
This marks the second major organized crime bust in two months, with an Illinois man convicted of operating a $20 million ring in April.
New York Attorney General Letitia James and New York City Mayor Eric Adams announced the takedown on Thursday.
“[Rubinov] created a network to systematically steal goods from numerous retailers in New York City. They purchased and then resold them for profit on an eBay storefront. At the top of his chain were 11 people that manage Rubinov’s day-to-day operations at his direction,” James said during the press conference. “Generally purchased for 6 to 8 percent of their retail value, and stolen cosmetics and pharmaceutical items at a rate of one to $2 per item depending upon the brand these items were stolen from stores such as Bloomingdale’s, Macy’s, Neiman Marcus, Nordstrom Rack, Duane Reade, CVS and Sephora seven days a week.”
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The defendants are being charged with enterprise corruption, money laundering, criminal possession of stolen property, scheme to defraud and conspiracy.
“Today we are showing that New York City will not tolerate crime—street crime, retail crime, or organized crime,” Mayor Adams said in a statement. “Public safety is the prerequisite to prosperity, and so we want to be clear that we will investigate, arrest, and prosecute criminals when they break the law. This wasn’t just shoplifting, but people going into stores and clearing off shelves as part of an organized crime ring. This massive retail-theft scheme affected every level of our economy, from department stores to big chains to independent businesses—all of whom were already impacted by the Covid-19 pandemic. I want to thank Attorney General James for her partnership, the NYPD and all our partners for working to make New York safer, stronger and more prosperous.”
Through electronic and physical surveillance, analysis of financial records, and other investigative tools, OCTF found that since 2017, Rubinov and two of his alleged managers Yuriy Khodzhandiyev and Rafik Israilov, have been directing career thieves, also known as “boosters,” to steal specific merchandise and gift cards from retailers.
Rubinov and his managers then purchased the stolen goods for fractions of the retail price and resold them for profit on an eBay store called Treasure-Deals-USA.
The boosters brought stolen property to Rubinov’s legitimate businesses, New Liberty Loans Pawn Shop and Romanov Gold Buyers, where five of Rubinov’s employees would purchase the stolen items. Rubinov regularly provided his employees with cash to pay for the stolen property, which was allocated to promote the ongoing procurement of stolen property.
Since 2017, the Treasure Steals USA Operation has sold more than $1.3 million of stolen property to unknowing buyers through Rubinov’s eBay store.
Gift cards for Amazon, Home Depot, Walgreens, Visa, Apple iTunes, Modell’s, Lowe’s, Kmart, American Express and Pottery Barn were among the 550 stolen and recovered.
OCTF alleges that Rubinov laundered the illicit proceeds from the sale of stolen property through his PayPal account and subsequently through one of his bank accounts.
Of the 41 suspects arrested, 40 face up to eight to 25 years in prison.
“Organized retail crime goes well beyond the obvious financial loss for retailers,” said Melissa O’Connor, president and CEO, Retail Council of New York State. “This activity has become a serious community safety issue and, unfortunately, it has gotten more prevalent over time. I want to thank Attorney General Letitia James for holding these crime syndicates accountable to the full extent of the law. This sends a bold message to those who continue to engage in unlawful and dangerous acts in local stores throughout the state. Our top priority is the safety of our employees and customers. We will continue to work with the Office of the Attorney General, lawmakers, prosecutors, and law enforcement agencies to further our shared goal of safer communities.”
New York, like many major U.S. cities, has seen a rise in retail crime incidents since the start of the Covid-19 pandemic. Earlier this month, five thieves stole $24,700 worth of designer handbags from a Rebag store in Manhattan’s Soho district, according to the NYPD. Two years earlier, burglars stole $375,000 worth of goods from the same store.
In February, seven thieves made off with $498,000 in luxury goods from another high-end consignment store, The RealReal in Manhattan’s Upper East Side. That same month, shoplifters stole $48,300 worth of luxury goods from a Celine boutique that was previously hit in a $1.5 million heist two years ago. Another N.Y.-based designer boutique, Designer Revival, has been a frequent target, having $150,000 in merchandise stolen from the store in the past two years.
Chicago woman apprehended after Nordstrom robbery
Chicago, San Francisco and Los Angeles have also seen a rise in “smash-and-grab” robberies. In Chicago, prosecutors charged a woman with two counts of felony retail theft and two counts of aggravated fleeing and eluding after allegedly stealing merchandise from a Nordstrom store last week.
On the evening of May 17, prosecutors say Asia Spann entered the store, and stole clothing that was valued over $1,200 before fleeing in a Mazda. Following a getaway pursuit with several law enforcement agencies and a police helicopter, Spann was taken into custody after fleeing from the vehicle on foot.
Spann’s next court appearance is scheduled for July 13.
The theft comes shortly after Illinois Governor J.B. Pritzker signed a new bill into law that raises penalties on retail theft statewide.
The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act, or HB 1091, would allow the Illinois Attorney General to charge those who knowingly commit organized retail theft valued at $300 or more with a Class 3 felony offense.
People who engage in retail theft from one or more establishment could be found guilty of a Class 2 felony under the new law, which goes into effect Jan. 1, 2023.
The statewide act shares the same name as the federal INFORM Consumers Act that was introduced in the U.S. Senate last March. That bill has yet to be put to a vote. If enacted, it would require online marketplaces to collect and verify basic business information from sellers before they are permitted to sell online.
Retail thefts spike 26 percent in average value
And as government seeks answers to the retail crime problem, one firm is crunching the numbers so the industry can better understand the issue.
As many as 166,745 shoplifters were apprehended in 2021, down 16.2 percent from the year prior, according to a survey from loss prevention consulting service Jack L. Hayes International.
Yet despite authorities nabbing fewer offenders, more than $196 million was recovered, up 6.1 percent from 2020 totals. The value of goods recovered averaged $1,178.57, up 26.6 percent from 2020 averages of $930.88—indicating that criminals are getting away with larger heists.
“Survey respondents noted the pandemic environment, staff safety, lower police response and higher risks as some of the reasons for less shoplifter apprehensions,” Mark R. Doyle, president of Jack L. Hayes International Inc., said in a statement.
Jack L. Hayes International released the results of its 34th Annual Retail Theft Survey on Thursday, reporting on more than 200,000 shoplifters and dishonest employee apprehensions in 2021 by 25 large retailers.
The retail crime isn’t just limited to shoplifters—dishonest employees are following suit. In 2021, 37,659 store employees were apprehended, up 6 percent year over year. More than $44 million was recovered from these employees in 2021, up 29.9 percent from 2020 totals.