Sunday, July 03, 2011

Scrap metal thefts rise despite steep penalties for theft: Best deterrent is business regulation

For years, Grits has blasted the legislative impulse to increase criminal penalties as the solution to every purported problem, and one of the best examples of how that strategy often fails to achieve its goals may be found in the case of scrap metal thefts. In 2007, the Texas Legislature made theft of any quantity of copper, aluminum or bronze a state jail felony. Counterintuitively, though, soon thereafter metal thefts skyrocketed with the rise of copper and other commodity prices. Many such thieves are homeless people who may risk their lives to steal a few pounds of copper, and as soon as one is arrested, someone else sprouts up to take their place.

By contrast, Grits has maintained that crime prevention efforts would get much more bang for the buck by going after scrap metal vendors instead of boosting penalties only on those who sell to them. In Austin last week, KVUE reports that police finally sought to address that portion of the equation, which is a far more manageable task. There are hundreds of potential copper thieves in the city (it's often a crime of opportunity), but only nine vendors in Austin who buy wholesale copper, reports the TV station. And when APD brought them scrap metal that should have raised red flags, none of them passed the test:
For the first time, APD officers began going undercover this spring, trying to resell copper to local metal recycling businesses.
It wasn’t just any copper officers showed up with. Officers presented busses, heavy copper plates used solely on cell phone towers.  The busses along with telephone cable wiring were featured in photographs in fliers sent out to every local metal recycling business almost a month before the special sting operation.
When undercover officers went out, they were surprised when seven out of the nine metal recycling businesses they visited in Austin actually bought the same type of copper that police warned them could be stolen.
“My goal is not to cause problems for the metal shops or pawn shops to cost them more money to do the things that we need, but when these guys see everyday how many victims we have, I've got no choice,” added Sgt. Socha.
Seven of the businesses were fined for non-compliance. Two other businesses received tickets for not informing police about the potentially stolen copper, which is now a requirement under a new city ordinance.
So of the nine businesses, seven were fined and two were given Class C tickets under a new city ordinance. But consider: Any average person bringing in a penny's worth of stolen scrap copper for recycling would be guilty of a state jail felony. So one party in the transaction is a felon, under Texas law, while their partner in the exchange faces virtually no liability at all. That inequity assures scrap thefts will continue.

Boosting penalties for the poorest among us - and most copper thieves are a pretty sad and marginal lot - won't solve this problem because market forces are more powerful than criminal laws when it comes to influencing human behavior. As long as buyers exist for stolen scrap metal and copper prices are high, state-jail felony prosecutions of sellers won't be a great deterrent. By contrast, there are only a handful of scap metal purchasers in any given city, and these type of undercover stings are the best way to reduce the practice.

That said, it's remarkable that nobody in Austin was charged with anything higher than a Class C misdemeanor, since theoretically anyone fencing stolen goods should be subject to more serious criminal penalties. On the prosecutors' user forum a few years back, prosecutor Ted Wilson described an undercover sting in Houston that secured more serious charges against the wholesalers:
Undercover police officers would go to scrap metal dealers posing as employees of an air conditioning company. They told the operators of several scrap metal places that they wanted to sell the coils from air conditioning units. But, they would ask if the dealer ever did business with the company that hey "purportedly" worked for. They didn't want someone from their company or thier boss to show up while they were trying to sell the coils. They made it clear that they were stealing the coils from their employer and wanted cash for the copper in the coils. All of this was recorded. They wouldn''t arrest anyone at that time but just sell them the coils. After they visited several places on more than one occasion each selling "stolen" coils to them the officers then met with me and I drafted search warrants of each location for documentation of the purchase of the items. Texas law requires that they document the purchases. In every purchase, the owners of the scrap metal dealership would fill out a receipt, as required by Texas law, but they put in phony names and dates, which we could substantiate from the taped recordings of the purchase.

On the day that they wanted to run the search warrants, we got a large spool with several thousands of dollars worth of copper. The officers would go to the first place, tell the people the spool was stolen, the owners would buy it anyway, and the officers would arrest them for felony theft based on the value of the large spool that they just "bought". Then they ran the search warrant at the location for the records and other documents that I put in the warrant.
Scrap dealers caught in the Houston sting would be eligible for much more serious criminal penalties for fencing stolen goods, while in Austin police openly declare their "goal is not to cause problems for the metal shops or pawn shops." What an unusual declaration: What other criminal actors can you imagine police saying they don't want to cause problems? And meanwhile, the dealers' partners in the transactions are routinely prosecuted to the fullest extent of the law. Enforcement fails in this case because law enforcement only targets one party in the transaction - the thieves themselves - but ignores malfeasance by a more privileged class of monied criminals for whom police don't want to cause trouble.

Scrap dealers are the key to stopping metal theft because they're easier to target and subject to regulation. If they refused to purchase stolen goods, thieves wouldn't have a market for their wares and thefts would soon stop. But then, why solve problems with the law when making it dysfunctional serves as a virtual full-employment act for police and prosecutors? There are a near infinite number of potential metal thieves compared to just a handful of dealers, so focusing enforcement exclusively on small-time street-level thefts - while giving their dealer-partners a wink and a slap on the wrist - ensures the problem will persist.

As is often the case with such specialized enhancements, business regulation, not criminal penalties, would be the most sensible way to reduce this problem. Dealers must keep logs of scrap metal sales and if regulators focused on vetting their customers in a more systematic fashion, those buying stolen goods could be easily detected. By contrast, this sting by Austin police is the first time the city has pursued the demand side of the equation after years of arresting their suppliers. It's so obviously the smarter approach, it amazes me that it's taken this long for Austin PD to pursue it.

See related Grits posts:


Anonymous said...

Classic example of white collar crime and the failure of police to deal with it in a similar manner to lower socioeconomic crime - and many of the copper thieves are real low on the socioeconomic scale!

The usual complaint made by local police is that, "We don't have the resources" yet even when they do, they still fail to protect the public from these business criminals.

Anonymous said...

This is just number 200 (or is it 800) in the argument that criminals shouldn't be held accountable. While there is a bit of merit in each little story, the cumulative effect of them all seems to be designed to remove responsibility for the criminal and/or to set up an assumption of innocence. In every case (maybe its actually been 1,200 or 2,000 stories) the beleaguered and bewildered criminal is not considered to be all that responsible for his own actions.

Even when he is released from prison, others are responsible for rehabilitating him (ever as he is allowed or expected to vigorously resist all such efforts!). Such is the reasoning of the liberal. Maybe its been 4,000 or even 10,000 of these little same looking cookie-cutter stories. They seem to be as prevasive as graffiti.

Gritsforbreakfast said...

12:43, where in this story does it say "criminals shouldn't be held accountable"? Please quote the specific part you're referencing.

In fact, I thought it was the Austin PD in this story who considered the "bewildered criminal ... not ... responsible for his own actions." After all, they're the ones who think fencing stolen property merits at most a Class C ticket. I never argued against prosecuting thieves, I only pointed out that focusing solely on that and ignoring the buyers will inevitably fail, which must be empirically evident from the rise in scrap metal thefts after the penalties were increased.

Finally, I fail to see how this story involves an "assumption of innocence." The issue here isn't 'innocence' but practicality. What is the best way to reduce scrap metal theft? IMO ignoring or soft-pedaling the role of dealers - which is the cops' doing, not mine - hardly can be considered to reduce crime.

Anonymous said...

Okay, 12:43, by your post and your logic I must assume you are a soft on crime liberal. You seem to be advocating that those who knowingly participate in criminal activity, i.e. buying stolen goods should not be held accountable. Isn't that what you're saying? So, 12:43 you obviously are a soft on crime and criminal coddling liberal, aren't you?

I used to consider myself a conservative but am now more of a libertarian. It never ceases to amaze me how may so called "conservative" refuse to apply any intelligence or logic to criminal justice issues. Unfortunately, a lot of people from both ideolgical sides lack the ability to think for themselves and just reflexively adopt whatever stance they think best suits the ideology they want to espouse. These types of comments only make you look stupid.

Anonymous said...

OK, so scrap metal crime increases because the economy gets bad. That doesn't mean that the penalties don't work. It just means that tougher times cause more people to take risks. And, businesses are supposed to refrain from buying scrap because it "might be" stolen? Where is the logic in that? If they want buss plates from cell towers to not be a scrap commodity, they need to mark them with the company name like they did with bronze oilfield valves.

Gritsforbreakfast said...

@6:25: Scrap metal theft increased before the economy collapsed. The driver was rising copper prices, not a lack of jobs.

Anonymous said...

Rising copper prices or a collapsing economy - what's the difference? Both scenarios will make people take chances they might not ordinarily take.

The point is, that if they want to "theft proof" certain forms of scrap, they can. And, they can do it without putting the burden on the scrap buyer, and forcing him to turn down a buy because it "might" be stolen. They have been doing it with oilfield components for decades.

Anonymous said...


"Forcing him to turn down a buy?" You got to be kidding me. Reminds me of all the hardware store owners in the sinsemilla triangle loading up on PVC pipe in the spring to supply the dope gardeners. Everyone of them was profitting off of the dopers. One clown sold his boat to a doper who used his profits to make the down payment. He got to lose the boat to the government because it was proven (by his onw admission) that he knew the source of the money. He was as much (or as little depending on your world view) guilty as the grower.

No different than Miami banks laundrying cartel money ("We didn't know its source, your Honor").

As for the the copper devices being labeled? Kind of new technology unlike the hundred years of experience oil companies have in dealing with oil field theives.

Don't want crime? Don't contribute to it. :~)

Anonymous said...

Perhaps it's time to follow Washington State's lead and use some of their laws:

We can not buy anything from anyone under the age of 18.
You must show current, valid, government issued picture I.D.
If the material is defined as "commercial metal property" (see note at bottom of page) then you MUST be
able to provide written documentation that you are the legal owner, or are authorized by a business to sell
the material you possess. Or have a "commercial account" set up with the scrap metal business.
We must issue you a non-transferable* CHECK for any scrap sales valued at $30.00 or more.
Washington State says we also must HOLD THAT CHECK for a 10-Day period.
The check must be mailed to a street address. NO P.O. Boxes!
We can no longer buy ANY beer kegs from you. Only breweries, and keg manufactures.
We can no longer buy ANY burnt wire, at all. UNLESS YOU PROVIDE DOCUMENTATION of a 'legal burn'.
We now must be the judge if you are under intoxicating liquor or high on drugs. If so, we are not allowed to buy from you.
You must sign a declaration, in front of a witness that states the material your selling is not stolen.**
We must report to the police anything you sell that looks to be suspicious, stolen, lost, or borrowed w/o permission.
Anyone with the following charges on their criminal record within the past 10 years:

Any crimes involving drugs.
Any crimes involving burglary.
Any crimes involving robbery.
Any crimes involving theft.
Any "Possession of" or "Receiving of" Stolen Property.
Any "manufacturing, delivering, or possessing with intent to deliver methamphetamine, or possession
of ephedrine or any of it's salts or isomers, or salts of isomers, pseudo ephedrine, or any of it's salts,
or isomers, or salts of isomers, or anhydrous ammonia with intent to manufacture methamphetamine"
Whether the person is acting in his or her behalf, or as the agent of another.

Anonymous said...

Let's make more felons so we insure more crime in the future. It is good for the prison business though, but tough on tax payers. It is a hell of a lot easier to police 9 junk dealers vs God knows how many potential copper thieves. There are always a pack of self righteous people who want to lock up the lower class folks while letting the white shoe boys slide. If a hand full of criminals, I mean businesses, were not buying stolen copper there wouldn't be much of a market for it. I bet if receiving stolen copper carried a state jail felony it would be damn hard to sell scrap copper in Texas. Just a second, isn't receiving stolen goods a felony already? Raid the junk yards with the swat teams and lock up the kingpins of copper!


Anonymous said...

When the economy gets bad people tend to do the scrap metal thing legally or illegally. In the county I live in theres alot of stealing copper. They use to scrape the plastic off the copper next door and I've had to chase off others off my property. Because of the empty lot next door I've been asked if the property is for sale. Yea right.

On the commenter who mentions on his long list if you ever been convicted....I've been convicted of a drug crime so if I was to try to sell junk metal off my property on which I need to get rid of eventually,should I be refused too?

Anonymous said...

To help the American economy buy Made in USA instead of Maybe if there were more jobs out there maybe certain people would be working instead of stealing metals.

Gritsforbreakfast said...

9:46, that may be a good idea, but I don't see that the possibility mitigates knowingly buying property that's very likely stolen. Certainly despite the practice you mention, for example, it's still a crime to buy and fence oilfield equipment.

11:48, I agree with 2:58 that I don't see why drug crimes are on the WA no-sell list. Many of the other suggestions make sense, though.

Anonymous said...

"Classic example of white collar crime and the failure of police to deal with it in a similar manner to lower socioeconomic crime - and many of the copper thieves are real low on the socioeconomic scale!"

Scrap metal dealer = White collar?
I'm not sure what Texan (or any American) scrap metal dealers look like, but none of the ones I have ever seen in my country had a white collar...

Anonymous said...

Laws don't stop crime.

Pi said...

Grits, you are wonderful for the dose of reality you bring to policing and criminal justice in Austin.

Leslie forever had a cardboard sign which read, Did you ever notice how the police and the criminals are alike: they both only pick on the vulnerable.

Whether hiding behind the corporate form, or even in plain sight as your example demonstrates, businesses are overwhelmingly given a free ride for their criminal conduct. Just look at the number of prosecutions in the aftermath of the subprime meltdown and allied securitization frauds.

So Grits, I see there in the comments section that John Bradley doesn't approve of you. Well my gosh, considering the source, that's a straight ticket to heaven for you.

Unknown said...

If I hadn't been working with scrap metals calgary companies lately, I wouldn't have known that scrap metal theft could be valuable. You wouldn't think that people could make money off of scrap metal, or what you would use them for.