Chuck Grassley, Iowa officials examine retail theft’s role in drug trade

CEDAR RAPIDS — The illegal fentanyl trade runs through China, Mexico — and, unwittingly, Home Depot.

Iowa Republican U.S. Sen. Chuck Grassley sat down Thursday with national retail leaders and local, state and federal law enforcement officials in Cedar Rapids for a roundtable discussion about how retail theft is fueling the illicit drug trade.

Grassley called the shady financial ties and “disturbing link” between organized retail theft and Mexican drug cartels fueling drug overdose deaths in the United States a “rude awakening.”

“Our communities are caught in a harmful cycle where workers and businesses are robbed, sometimes violently, to advance money-laundering schemes that enable drug cartels to send poison right back to those same communities,” Grassley said.

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Organized retail crime refers to large-scale retail theft and fraud by groups of professional shoplifters who conspire to steal and resell stolen merchandise.

“I want to be very clear, we’re not talking about petty shoplifting,” said Scott Glenn, vice president of asset protection with Home Depot. “Not theft for need, but theft for greed, and in many cases to fund ongoing criminal enterprises. This is large scale, multi-jurisdictional activity that’s carefully choreographed.”

Glenn and law enforcement officials said the growth of online shopping has allowed criminals to quickly find ways resell stolen merchandise on online marketplaces.

International money launderers are increasingly using stolen products from retail crime rings to move proceeds from U.S.-based drug sales back to cartels in Mexico to fund additional violent criminal activity — such as human trafficking, gun smuggling and narcotics — in Iowa and elsewhere, said Steve Cagen, assistant director of U.S. Homeland Security Investigations.

“Organized retail crime poses a serious threat to local communities and retailers,” enabling Chinese organizations that have become the preferred money launders of Mexican cartels trafficking in deadly fentanyl, Cagen said.

In one case, Glenn said cash from the black market sale of stolen Home Depot products in Little Rock, Ark., was used to purchase large quantities of fentanyl to be resold in the same region as the original thefts.

Organized retail crime cost Iowa businesses an estimated $1.38 billion and $68 million in lost tax revenue in 2021, according to the U.S. Chamber of Commerce. That same year, 446 Iowans were lost to drug overdose, with the vast majority involving fentanyl, according to the Centers for Disease Control and Prevention. That’s up from 419 in 2020 and 350 in 2019.

Last year, 485 drug overdose deaths were reported in the state during the 12-month period ending in October 2022, according to the CDC.

‘It’s everywhere’

Ryan Moore, assistant director of the Iowa Division of Narcotics and Enforcement within the Iowa Department of Public Safety, said cartels are operating in Iowa and drug seizures are mounting because of it.

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Moore mentioned a case from last summer where authorities seized more than 100 pounds of methamphetamine and more than 40,000 fentanyl pills from a “drug stash house” in Waterloo used as “a distribution point” by an individual who cooperated with authorities and “linked it straight back to” a Mexican cartel.

“It’s everywhere,” Moore said of the illicit drug trade in Iowa, noting a recent case from southeast Iowa where authorities arrested an individual in a town of 1,000 people who was responsible for about 500 pounds of meth being shipped out of Mexico to Iowa.

Cedar Rapids Police Capt. Cody Estling said local law enforcement are seizing larger quantities of methamphetamine and fentanyl. Where a one ounce seizure of drugs used to be significant 10 years ago, police are now seizing pounds’ worth, he said.

“An our local dealers often have direct contacts with people in those southern border states,” Estling said. “So they’re able to bring more efficiently and more directly product to our community and distribute it here locally. So with that comes the higher volume.”

Fentanyl is an extremely powerful, cheap opioid that dealers often mix in with other drugs. Illicit fentanyl differs from legal fentanyl used to treat pain in cancer patients.

The majority of illicit fentanyl is mass-produced in Mexico, along with methamphetamine, using chemicals from China before being pressed into pills or mixed with other counterfeit pills made to look like Xanax, Adderall or oxycodone, Moore said. The counterfeit drugs are then sold to unaware buyers who overdose.

Moore said Iowans will continue to see the rise of methamphetamine and fentanyl in communities until the southwest border is secured and Mexican drug trafficking organizations are dealt with more aggressively and prosecuted more extensively.

Store thefts getting more brazen, violent

Glenn said organized retail crime is on an “alarming rise” and leading to more brazen and more violent attacks in retail stores and centers throughout the country.

He played video surveillance footage of individuals assaulting and knocking over employees and brandishing firearms and knives while stealing pallets and carts full of power tools and other products. And he said he received a call Wednesday night from an employee reporting a customer had been stabbed by a shoplifter tied to an organized crime ring.

Glenn said retailers, including Home Depot, are devoting considerable resources to boost loss prevention efforts, including increased security personnel, placing products behind locked cases and using data analysis tools.

Panelists push support for legislation

Glenn and other panelists urged support for legislation to broaden statutes dealing with organized retail theft and give more resources to law enforcement. Glenn said he also would like to see stiffer penalties and a reduction in felony thresholds for retail theft.

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Grassley, a senior member of the Senate Judiciary Committee, reintroduced legislation earlier this year with Sen. Catherine Cortez Masto, a Democrat from Nevada, that would establish and fund a center to combat organized retail crime within the U.S. Department of Homeland Security. It would also create new tools to assist in federal investigations and prosecution of organized retail crime, and help recover lost goods and proceeds.

“These complex crimes require a collaborative response, and I’m grateful to have voices at all levels of law enforcement and retail leaders working together to prevent crime and save lives,” Grassley said.

Comments: (319) 398-8499; tom.barton@thegazette.com