This is from the Bureau of National Affairs, and outlines their thoughts from yesterdays congressional hearing on ORC. I was pleased that the issues of resources and productive partnerships were highlighted.
Agents Say Resources, Not New Rules Key to Combating Fencing on Websites
Federal law enforcement agents told the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security Nov. 5 that online services are cooperating with their efforts to combat online sales of stolen property by organized crime groups, and that they do not need new procedural authority to ensure compliance with requests for information in connection with their investigations.
The National Retail Federation has estimated that organized retail crime and the sale of stolen products online, otherwise known as “e-fencing,” costs companies billions annually and also deprives states of considerable tax revenues.
Three bills introduced in early 2009 as part of an effort to target the offense (S. 470, H.R. 1173, and H.R. 1166) would create record-keeping and fraud investigation rules for online services that enable users to sell products. Companies like eBay have complained they unfairly single out online businesses and invade legitimate online sellers’ privacy rights.
Rep. Lamar Smith (R-Texas) and Rep. Robert Goodlatte (R-Va.) introduced a fourth bill targeting organized retail crime Nov. 3 (H.R. 4011). The proposal would target transferors, sellers, and other participants in online sales of stolen products, but would not codify new requirements for online services.
“We need to make sure that legitimate online businesses like eBay and craigslist and a whole host of other online businesses are accommodated in the sense that we need to find ways that they can cooperate with law enforcement without having legislative requirements that are too intrusive in terms of their business model,” Goodlatte said.
Law Enforcement Praises Service Cooperation
“Organized retail crime is a huge and growing problem,” Goodlatte said. Not only are companies incurring substantial losses from stolen products, but in many cases the proceeds are being used to fund other criminal and terrorist activities, he said.
Agents from the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement, the U.S. Secret Service, and U.S. Postal Inspection Service told the subcommittee that online services are cooperating with law enforcement efforts, and that federal agencies do not need additional procedural authority to obtain information from them.
“Do you have enough authority under present criminal law procedure to open an investigation and proceed?” Rep. Robert Scott (D-Va.) chairman of the subcommittee, asked. “Do you need any new laws on the books from a procedural perspective to investigate?”
David J. Johnson, section chief of the FBI’s violent crime section of its criminal investigation division, answering on behalf of himself and not the FBI, said “the existing laws on the books, whether it’s Title 18 U.S.C. §§ 2314, 2315, or the conspiracy statutes or the money laundering statutes or even the RICO statute provide adequate criminal remedies.”
“Based on my limited interaction with auction sites, they have been cooperative with the FBI and have given us the assistance we have requested,” Johnson said. “The level of cooperation between state and federal law enforcement and the private sector has been outstanding.”
Janice Ayala, deputy assistant director of ICE’s office of investigations, said that online services like eBay have systems in place to monitor their services for sales of stolen products, and are working closely with federal and state law enforcement to address the issue.
John R. Large, special agent in charge of the Secret Service’s criminal investigations division, said that online services have also worked with his agency to successfully investigate and prosecute several organized cybercrime groups.
“So it seems like criminal laws are enough, the procedures are enough, the problem seems to be resources. So if we want to do something, we need to get you the resources,” Scott responded.
Four Pending E-Fencing Bills
As part of an effort to address e-fencing, lawmakers introduced three bills in early 2009.
Sen. Richard Durbin’s (D-Ill.) S. 470 would require online services to investigate reports of stolen product sales, suspend sellers who are engaged in suspicious activities, and keep records of all complaints and reports for three years.
Online services would also be required to collect and retain information about “high volume sellers,” The bill would expose services to civil penalties for failure to comply with those requirements, and criminal penalties for knowing violations.
Scott’s H.R. 1166 would require online services to disclose contact information for high-volume sellers to parties who have reported stolen products to law enforcement. It would also place a duty on services to determine whether their users’ sales are lawful, and impose criminal penalties for services that knowingly participate in the sale of stolen products by providing an internet marketplace.
H.R. 1173, introduced by Rep. Brad Ellsworth (D-Ind.), would prohibit “facilitation of organized retail crime,” and require online services to remove sales of suspected stolen products when presented with credible evidence.
Services would also be required to maintain a record of those investigations and information about high-volume sellers for three years. The bill provides that any property used, in any manner or part, to facilitate organized retail crime would be subject to civil forfeiture, and would create a civil cause of action against any operator of a Web marketplace for damages and injunctive relief.
The fourth bill does not have requirements for online services. H.R. 4011, would establish criminal penalties for the transport, transmission, or transfer in interstate or foreign commerce any goods, wares, or merchandise worth more than $1,000, for sale online, knowing they were stolen. It would also criminalize the bartering or selling of stolen merchandise worth at least $1,000, knowing the products are stolen, converted, or taken by fraud; and establish a multi-jurisdictional task force to initiate investigations of organized retail theft
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