LPRC - CrimeScience – The Weekly Review – Episode 163 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: October 13, 2023

IMPACT 2023 was a huge success, this week our hosts discuss a recap of the record setting event! Also this week, a look at the situation in Israel, as well as the domestic response. The hosts also go into a recap of the latest AP/LP news and key quotes from industry leaders. Listen in to learn more! Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 163 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio appeared first on Loss Prevention Research Council.

Hi, everyone, and welcome to Crime Science. In this podcast, we explore the science of crime and the practical application of this science for loss prevention and asset protection practitioners as well as other professionals. Welcome, everybody, to another episode of Crime Science, the podcast. This is the latest in our weekly update series, and I'm joined byony nofrio and tom mehan and our producer diego rodriguez and uh yes i have a horse voice and uh this has persisted for about five days now um but we're coming out of a another in this case 19th lprc impact conference 2019th LPRC Impact Conference. So far, the reviews have been, I don't know about off the charts, but the best, if not one of the best, that those that have attended or participated in multiple impacts

and in multiple other LP conferences over the years. And we're very grateful for those comments. We're still looking for suggestions and ideas to enhance the content, the takeaways, the experience itself. But I heard good comments, whether it was this is the best place, the best food at conferences to the venue, the venue stay on campus stay in Gainesville. We love going to the labs. We love experiencing that. We love going to the swamp, the stadium, and having a tailgate party together and celebrate

the industry and relax for a few minutes as everybody works together to reduce theft, fraud, and violence. But the content, always, always the content that, you know, now we've, thanks to greatly increased membership, the fact we've grown by over 30 corporations in the last nine months, and very grateful to the LPRC Innovate program, the advisory panel, where we've got some major sponsors there that have enabled us to grow our team by four researchers. And because of some more growth there on the Innovate advisory panel, we're going to be adding two more to our research team. That gives us the capability to do high quality work, to become more and more capable. And this is important to work across our interior lab spaces and then across our six outdoor or field areas simultaneously, not have to work

sequentially and take a year or six months or two years to roll out what all is greatly and critically needed by our membership. So that's all happening. Impact, and we've talked about this before, is a major part, but not the only part, of the Law Extension Research Council, the LPRC, in that LPRC works on a continuum because crime and loss continue to evolve, grow, spread, take on new forms. But there are always new challenges. And so we've got to work together year round. And so the six working groups we got on on theft, on fraud, on violence, on supply chain, on analytics, organized retail crime, and so on. They're all designed to get the best and the brightest from the retailers.

The practitioners get in there. Law enforcement investigators get in there and executives. Obviously, we've got the technology people that are putting together the solution sets from now 125 solution partners in addition to the 88 and ready to grow here by the way 88 retail corporations uh saturated across the united states even canada europe and australia new zealand and get together monthly with researchers from our team and go through what's going on, what needs to be done, and then focusing research that's either online or situated in one or more of the six field initiatives that are taking flight, as well as other areas. So it's just really amazing and heartening to see this

here in our 23rd year, what's going on. And we invite any and everybody that's listening to participate more. If you're a member, if you're not, to look strongly into being a member and contact us at operations at lpresearch.org. Talk a little bit about, you know, as I'm recording this, this Tuesday morning here in early October, you know, the whatever the war in Israel with Hamas invading into Israel and taking hostages and some of the door to door murders and things going on there. and things going on there. And it's still unsettled. There's still the terrorists, the militants moving through Israel, mostly now, I think, being corralled by the Israeli Defense Force. But the point is, as we look at our action model here, the framework that we're using together, which was highlighted at impact, we had posters everywhere, every slide deck that was there, all the discussions centered around. And even our amazing, hilarious co-hosts, our MCs,

were wearing bow ties with that on there. And that is before, during, and after event, the bow tie model, the five zones of influence, and then was front and center. And the idea of affect, detect, and connect affect offender decisions earlier and more definitively detect offenders as they threaten and go kinetic that individual or crew so that we can affect them, so we can form a better response as things are moving our way. And, of course, the connect, excuse me, part of that, where we're talking about strategic share, where we have multi-source and sensor, multi-partners putting data into a central repository from all different formats. It's agnostic you can belong to many of the commercial groups or have your

own in-house version of reporting and sharing can come in there and be shared so that is mission critical and of course the tactical share under connect where we're looking at warn and inform with radios and apps and things see each other during the heat of the moment. All this comes together to form that operational framework and to help us set up and test propositions, test research needs. What are those research questions that you all have, that we have to help you in that format? And as we look at what's going on in Israel right now, as I'm recording this episode,

is obviously a very significant breakdown on the detect part that when you have hundreds and hundreds of actors, in this case, red actors, we'll use our terms since we have the green actors, good. The red actor is that individual out to harm or victimize another or group or a place fail to detect that their intentions their capabilities um generally much less specifically as far as uh what where and when and and hopefully even how um what is very significant particularly with the group that's oriented the best in the world technologically armed to the teeth online from a space from the air from the sea you know obviously electronically and digitally as I mentioned online but also communications and every other way that you can imagine,

even human intelligence with informants and undercover and so on going on, that training sites were set up and that this thing went off in the way that it did. And so this is not a criticism, but a critique. And I think a learning point for us, because it's such a deadly situation there. And certainly, certainly hasn't yet been on that kind of scale in the U.S. other than September 11th. But in the retail environments, we have and continue to have mass shootings, armed robberies, barricade in place, threats, rapes, abductions, murders in retail and on retail environments, riots, looting, burning, and things like that. We've just had in Philadelphia a very, very, very significant looting event there. So we have our hands full. And so are there lessons learned

that on the DTEK side in in this case as far as as well as the effect because we're trying to convince people not to do this to not collaborate or be able to collaborate and much less execute so we're taking a strong look on our team at that as well as any other situation we can come up with debriefingiefing on the horror as far as this most recent active shooting in the Dollar General store that's 90 minutes from our lab and our team, how they first went to a family dollar, that individual, that shooter, he then next went to an historic black college, and then he went to Dollar General and began killing. So we're trying to break down and understand that type of situation as well and understand what we can do to affect offenders, detect offenders,

and connect with each other to do the first two and do something about it. So just stay tuned, if you will. But that's what impacted. It's sort of a culmination of what's been learned and what's been shared and what's been accomplished to initiate those five zones, single and double talked about at the end of each session and the end of the event. Now, here are things that are planned way in. We had polling, people telling us what we need to do to continue on anti-theft, anti-fraud, anti-violence, and even safety measures that we can do. What's the research and development need? What area? Who can participate? Who can provide locations? Who can provide data? Who can provide people to help us execute and collect and analyze what we need to get it done? We had great planning with the National Retail Federation. You see that we're coming up on an event in Washington, DC,

where dozens of organized retail crime leaders will come in, show video, be lobbying the legislators, the lawmakers and their staffs, and the government across the board to help them much more much better understand what's going on and how this type of crime is for real is not just costly financially but costly to individuals that want to or have been exposed to it that are working there that want to be there and what's going

on to tax bases and what's happening locally with this as far as avoidance behavior and losing key parts of a community's ecosystem in other words their retail environment so that's going on at the same time we've got the Retail Industry Leaders Association RELA going across the country getting prosecutors into stores looking at video and understanding the problem as well so that they're not as reluctant or don't understand or think that somehow property crime is different than crimes against people because property crime is a crime against a person and very often includes the creation of fear, intentional creation of fear and use of force, that's violence. And the violence is instrumental and used to steal, to intimidate, to defraud.

So we don't want to overly play this, but we want to have our eyes wide open, our heads clear, that we've got a readily explainable and understandable and actionable framework that people move through place and time and individual or crew to harm another, to steal, to defraud, to attack. And so that we can detect earlier and more definitively that we can't connect and share what we know over time is going on in patterns and trends as well as individual plans and actions. So that's what I've got to talk about this morning on LPRC's Crime Science, the podcast broadcasting here from the University of Florida in Gainesville. I'm going to go ahead and turn it over to Tony D'Onofrio. Tony, take it away. Thank you, Reid. I want to first congratulate you,

Chad, and the entire Loss Prevention Research Council team for the excellent 2023 edition of the IMPACT Conference. Amazing the crowd and also the great engagement. Love the passion, including from Mike Lamb, who said correctly that it is time that we take our stores back against crime. Retail crime is indeed a major challenge right now and in that spirit let me focus my portion this week on a major article from the Investors Business Daily specifically on this topic. As they wrote, retail theft losses swelled to just over $112 billion in 2022, up 19% from nearly $94 billion the year before. Those somber numbers from the 2023 National Retail Security Survey were released in late September by the loss prevention research

council and the national retail federation. Retailers are cutting back store hours and increasing security measures and response. Many are closing key locations. That comes at a cost to company performance, shareholders, and the communities they serve. Employees feel uneasy, customers experience more friction, while being left with fewer resources and purchasing options. Everything points to a continuing increase in retail crime, said Corey Law, senior research scientist

at the Laws Prevention Research Council. senior research scientists at the Loss Prevention Research Council. In 2023, a survey of 117 retail brands found that 88% reported shop leaders had grown more aggressive and violent than a year earlier. As for the perpetrators of organized retail crime, or ORC for short, 67% of respondents said they'd grown even more violent and aggressive, compounding on increased violence from previous years. Retailers are seeing unprecedented levels of theft, coupled with rampant crime in their stores and the situation is only becoming more dire, wrote David Johnston, vice president of asset protection

and retail operations at the NRF. Far beyond the financial impact of these crimes, the violence that concerns oversafety continues to be a priority for all retailers, regardless of size and category. Losses from theft are a historical high, CEO Eric Nordstrom said in a Nordstrom August earnings call, and he added, and I'd say we find it unacceptable and it needs to be addressed on a variety of fronts. Target CEO Brian Cornell noted retail theft and organized crime are growing problems. The discount chain said it saw a 120% increase in theft incidents involving violence or threats of violence during the first five months of 2023. A May Target warned that inventory shrink will reduce profits by more than $500 million compared to last year.

Target said it invested heavily to prevent theft and organized retail crime before the decision, including adding security team members using third-party security and implementing theft deterrent tools, such as additional locking cases. Target also partnered with Homeland Security Investigation. Nordstrom closed its flagship San Francisco store at the Westfield San Francisco Center on August 27. That followed closure of the nearby Nordstrom Rack in July. The dynamics of the downtown San Francisco market

have changed dramatically, said Jamie Nordstrom, chief store officer, who told the media after the May announcement. The company still has 16 Nordstrom and Rack stores in San Francisco Bay Area. The Westfield Mall is a statement to the Washington Post's blame for the closure of the deteriorating situation in downtown San Francisco, as well as the unsafe conditions for customers, retailers and employees.

REI announced plans in April to close one of its best-performing stores in downtown Portland, Oregon, citing shoplifting and higher crime. The outdoor retailer spent more than $800,000 on extra security in 2022, it told MarketWatch. A representative said REI also dealt with an unsuccessful lease, renewable negotiations, and the security investments were not sustainable. Whole Foods closed its flagship store in downtown San Francisco in April after opening the location in March 2022. If we feel we can ensure the safety of our team members in the store,

we will evaluate reopening of our 3D location, a Whole Foods spokesman said in a statement. Walmart CEO Doug McMillan warned CNBC last December that stores would close if theft doesn't slow. Walmart closed four Chicago stores in April, signing annual losses in the tens of millions of dollars, but did not specifically mention theft. In total, Walmart has announced plans to shutter 22 stores in 14 states and Washington, D.C. through mid-July. Still, the retailer opened over 120 stores in the past year through Q2. Every bit of research shows that a small portion of the offending population is responsible for the majority of the incidents, said Corey Lowe from the Loss Prevention Research Council. He cited one retailer's case management system that reported 10% of the unknown offenders were responsible for 90% of their losses.

were responsible for 90% of their losses. The more sophisticated rings work on a defined task within an established hierarchy with a ring leader to orchestrate operations similar to rocketeering enterprises, according to the NRF. About 45% of organized retail crime groups use online marketplaces for resale based on the NRF and K2 database of known offenders and available fencing information. Some sites are taking preventive measures. By the end of 2021, Amazon.com required that all new sellers to pass in-person verification to operate in major markets. As of December 2021, eBay requires

sellers to provide personally identifying information. Organized retail crimes favor large national retailers and big-box chains, according to the latest NRF and K2 Integrity Organized Retail Crime Report. They largely target everyday consumer goods with a favorable mix of monetary value and ease of test for resale. That's what NRF data shows. Some 81% of 116 identified organized retail crime groups exclusively steal general consumer goods.

The most targeted items that remain steady in our assets include apparel, health and beauty products, infant supplies, accessories, houseware, home improvement products, toys, and laundry products. Brand names are more popular than generics. products. Brand names are more popular than generics. Organized retail crime is less likely to target luxury goods, likely to enhance security, according to the NRF and K2 report. Only about 11% of the known organized retail crime groups study targeted luxury products. Organized retail crime will remain a top priority, the NRF wrote. Expenditures against retail theft have factored into construction budgets, merchandising budgets, information technology, and staffing and training budgets.

This is an enormously important and expensive effort for the retail industry. The continued growth of organized retail crime and the damage it causes to communities dictate that something needs to be done. Again, this is a great article. There's a lot more in it. I would encourage you to find it. You can actually find it on my website under podcasts. Also, you can find it in the notes. The problem of retail shrink is real. And I also want to remind everybody that great work is being done at the Loss Prevention Research Council to help combat this. So join us and follow and listen to our podcast. And with

that, let me turn it over to Tom. Well you Tony and thank you Reed and we're taping today it's October 10th so wanted to start with just some of the events that are occurring in Israel so on Saturday there was you a an attack on Israel there's a lot of information about this, and I'm not going to get too far into that, but the attack on Israel was somewhat unforeseen. What I would encourage everybody who's following this is to make sure that when you're looking at your news sources, that you're reading everything and validating the news source. There is a tremendous amount of video and misinformation that I've seen out there that is somewhat inaccurate.

There, unfortunately, at this point, about a thousand confirmed casualties and several kidnappings. And social media really polarizes the situation more than it already is because you have a tremendous amount of video and information being spread. And some of that, at least the video I've seen, is real video. But there is also some video that ends up being mixed in that is older or from different conflicts. up being mixed in that is older or from different conflicts. So obviously it's a very tragic situation and the folks involved are, in my thoughts, wanting to kind of switch gears to the impact throughout the world. We often talk about here civil unrest. There were protests in Washington, D.C., San Diego, New York City, Miami and Denver last night and pretty large scale protests both for and against Israel. And I think when we look at some of the chatter online, these are all at this point somewhat organized in the sense that they're being planned tonight on the 10th.

There is a fairly large gathering at the U.N. to show support of Israel. There's expected to be several thousand people there. The mayor Adams of New York City and the governor of New York will be there speaking. So we need to stay vigilant and pay very close attention to some of these events. While they've been relatively peaceful, there was some very, very small pockets of violence in these events where protesters were clashing. It's also important to note that throughout the world, there have been fairly large protests around both for and against Israel. Australia and Sydney, there was a very large protest. There's quite a bit of video of it that was pro-Palestine. There was actually ISIS members or ISIS flags at that protest.

So this is a very complex situation. I would encourage everyone who's a member of the LPRC to pop into the FusionNet to see where planned protests are, to look at what potential disruptions there could be. As always, the unfortunate part here is peaceful protests can become violent with just a few bad actors in those protests or with bad actors trying to take advantage of this. Additionally, something that often happens when these events occur, you have scammers or bad actors going out to try to collect funds that aren't really going to the folks affected. So I think it's very, very important to be mindful of those things when we're looking at it. We'll continue to monitor the situation. And I think the next 10 days will be fairly volatile. There'll be a lot going on. I'd also encourage you to look at your risk strategies. If you're a retailer,

look at your risk strategy and understand what your geopolitical risk portfolio looks like. Look at things of where your partners operate and if will there be supply chain disruptions, what your employee population looks like and what their feelings are. This is a very, very tricky situation from geopolitical risk, but this isn't necessarily about you from a business standpoint getting involved in taking sides as much as having a plan that what the potential disruption will be Especially being that we're already Globally and economically are fragile. We have still an active war in the Ukraine going on, as well as pockets of pretty significant civil disturbances throughout the world.

And when you have multiple events like that occurring, it's really important to stay tuned. We expect similar levels of protest activity throughout the week. throughout the week will stay involved. Switching gears, which is kind of another topic that has come up because of Hamas and the terrorist connection or the terrorist organization is that there have been reports, and I'd like to say at this point, they're unconfirmed, although I don't like to use that statement. I think it's important to say this of active of active terrorist cells being monitored throughout the globe and within the U.S. is actually unconfirmed reports that while this is a very loose statement, that there will 100 percent be a terrorist event in the next 14 months. And in the United States. When I read that, I wonder where that comes from.

And again, it's unconfirmed. We'll continue to look at that. There was an attempted mass shooting yesterday in the 9th in Germany at a synagogue. So I think it's extremely, extremely important to stay vigilant and aware of the potential for this type of activity to occur. an arrest made of a 23 year old in Nevada with weapons that was targeting a synagogue and LGBT communities. And so it's important. In May, there was another arrest in New Jersey. So there continues to be this active or potentially active threat of both domestic and foreign terror throughout the United States. So, again, we will continue to update here on the podcast. If we see more confirmed information or information that is viable, we'll make sure that it gets out here on the podcast. Switching gears a little bit to cybersecurity and risk. There's been a lot of chatter globally about Snap, so Snapchat and the ability to keep safeguard children.

So I think what we're going to see is a continued talk about that. They're under, Snap is under investigation in the UK over possible privacy risks related to its AI chat use between 13 and 17 year olds. So in the United States, there's protection around anybody under 13 needs to have parental permission to use most of the social media apps, hard to validate. So there's this push to validate age, but that requires a whole bunch of privacy controls, a whole bunch of things to occur in the EU. It's much,

much more tighter net in the UK. So we're seeing that there, there are things occurring right now globally that we may see here in the United States. So if you have children and they're using social media, we talk about this all the time, make sure you're having a conversation with your children about the dangers and the risks, both from a cybersecurity standpoint or from just a, a, a safety standpoint of the potential for information to get out.

But I think it's, it's, it goes without saying that with all of the things going on, the social media really plays a whole, a whole different approach when you have events that are occurring globally and you have children involved. So quite, quite a bit of concern that we need to to be aware of. And I think with AI and social media, children have access to just about anything today. Like children have access to just about anything today. So keeping in mind that, I'd also recommend both with adults and children having a conversation of making sure that before you react to something you see on social media to validate the news source.

I mean, there was a video that was going around that was appeared to be CNN. It wasn't with some misinformation just recently. So it's very, very important, both as an adult and a child, I think with children, they're a little bit more susceptible to this, to have the conversation of just don't believe everything you see on Snapchat, TikTok, Instagram, and go ahead and validate it. Take the 15 or 30 seconds to ask an adult or actually look at what the occurring information is and is it accurate. Last but certainly not least there's been a report of Vietnam trying to hack US government officials so this was on The Washington Post, CNN, The Hill messages the hill messages. This was pretty much on every global news that was there. And so what

basically was occurring is the Vietnamese government, according to these reports, and government agents tried to lure U.S. government officials and journalists through Twitter X or X posts to click on a link and have malicious software downloaded to their devices so the spies used the social network X used to be called Twitter. They used information to try to get them to click and visit websites that, excuse me, that would have allowed spyware to be downloaded on their devices to activate both their cameras and their microphones and steal information. and steal information. This continues to be the thing that when we talk about cyber risk and the dependency that we all have on devices

and technology, including myself, what the risk is here. These reports state that while these attempts occurred, that there's no reason to believe that they were able to actually get into anybody's um anybody's devices but the the simple fact that if you have a government-backed attack uh the the likelihood of the sophistication being remarkably higher than a private group is real uh government-backed attacks in some states

have endless resources if you think about government and technology. So we often talk about these non-government groups that are hacking groups who are highly sophisticated, but when you get into government-based attacks, they're generally extremely sophisticated, extremely targeted. I think that this is, while this is a newer story, generally extremely sophisticated, extremely targeted.

I think that this is, while this is a newer story, this has actually happened back in 2020. So although in 2020, they were using commercially available spyware. So I think there's a lot to learn here about diplomacy and where we sit from a cybersecurity standpoint. I often say that in the United States, there is an attack on a device approximately every eight seconds. And it's probably more than that. That's just what we know. So we all need to stay vigilant and make sure that whether you're a government official or not, that you're very mindful of what you click on, where you go, how you patch your devices.

And this is not, you know, this is not a ploy to say, hey, don't use your device. It's just be mindful of it. I think of a government if it's a government backed attack, you need to do everything that occurs. Excuse me. The one of the articles was which was from The Washington Post. Looking at my notes. Sorry. Really had some insider information from the White House. had some insider information from the White House. While they did not disclose who it was, the official who spoke said that 50 U.S. officials serving abroad were known to have been targeted previously with commercial spyware back in 2020. So that is, you know, that was another confirmed. And I think it's important here that this is a very direct, direct execution. This isn't when you read these articles and you read these intelligence parts, this isn't we think it was Vietnam. It was. So we'll continue

to monitor the situation. We'll continue to monitor all the risk. And just another reminder, if you're not, if your organization and you're, you are a member of the LPRC and your organization is not involved in the fusion net to understand active threats and active events, I would encourage you to get in touch with myself. speak to Diego, Reed, Tony, any of us or anybody at the LPRC to get you involved in the fusion net so that you can get information for active threats that are occurring. And with that, I will turn it back over to Tony and Reed. All right. Well, thanks so much, Tom, for that information, Tom, especially on our fusion net, what you did as far as helping us set that alert up regarding some of the Palestinian demonstrations in the United States and Australia and Europe that are coming close to, if not prolifically, excuse me, affecting retail environments as well, or other gathering places that we're all working hard to provide better protection. I even had

gotten a text last night about a demonstration on the University of Florida campus that had to be cleared quickly. There were some things being said and done that were frightening people and were potentially volatile. So I want to thank each and every one of you out there listening. And we do want your critiques, operations at lpresearch.org. Go to our website, lpresearch.org. Let us know what you need, what you think, how we can improve and get better. We're here. So everybody stay safe and stay in touch. Thanks for listening to the Crime Science Podcast, presented by the Loss Prevention Research Council. If you enjoyed today's episode, you can find more crime science episodes and valuable information at lpresearch.org. The content provided in the Crime Science Podcast

is for informational purposes only and is not a substitute for legal, financial, or other advice. Views expressed by guests of the Crime Science Podcast are those of the authors and do not reflect the opinions or positions of the Loss Prevention Research Council.