SCRAPYARD BUYERS AND SCALE OPERATORS ARE LEARNING
HOW TO RECOGNIZE SUSPICIOUS MATERIAL AND SUSPICIOUS SELLERS—
AND WHAT TO DO WHEN THEY FACE THEM—TO AVOID BECOMING
UNWITTING ACCOMPLICES TO METAL THIEVES.
BY LINDSAY HOLST
R
andy Katz knew something
fishy was going on when he
saw the three boys coming
down the street. Pushing a
grocery cart full of brand-new copper
tubing, the boys entered City Scrap &
Salvage Co., Katz’s Akron, Ohio, scrapyard, intending to sell their material.
The police, who had followed the
boys in, were fairly certain the copper
was stolen, but because no one had
reported it missing and because the
tubing contained no marks to indicate
its origins, they couldn’t arrest the boys
for stealing it. The kids didn’t get away
scot-free, though, Katz remembers. “We
read in the paper later that week that
three individuals had been arrested for
stealing a shopping cart,” he says.
The wave of metal thefts that began
early last year has continued unabated,
forcing yard owners such as Katz to
take matters into their own hands,
developing systems to identify potentially stolen material and counter the
individuals who are attempting to sell
it. As metal prices fluctuate, thieves
find new items to steal and new ways
to steal them, and scrapyard owners
and employees adjust their tactics
accordingly. They scrutinize individuals as closely as the materials they are
selling, decide when to buy the material or call the authorities, and even
cooperate in the capture and prosecution of the criminals.
WHAT’S HOT, WHAT’S NOT
Manhole covers. Guardrails. Street
signs. Brand-new copper pipes. All of
these materials are red-flag items for
scale operators and retail buyers, and
yet they could all just as easily be
legitimate. Fred Seidenberg, president
of Mid-Carolina Steel & Recycling
146 _ Scrap _ MARCH/APRIL 2007
www.scrap.org
www.scrap.org
Because it can be so difficult
to discern stolen items from
legitimate ones, buyers are
focusing on the sellers—
particularly those who are not
regular suppliers—for clues.
(Columbia, S.C.), recalls a few years
ago, when the local transportation
department held an auction of old
items, including automobiles and
signs. When his yard began receiving
old highway signs as scrap, he
assumed the sellers had purchased
them at the auction.
“One day we had some investigators come in asking if we’d bought any
highway signs in large quantities
lately,” Seidenberg says. “I said yes,
we had just baled them up and still
had them out back.” The signs had
been stolen by three individuals who
had cut holes in the fence surrounding
the DOT warehouse.
Scrapyard workers are quickly
learning the types of materials that are
most likely to be stolen. Small quantities of brand-new materials, for example, and municipal items arriving in
non-municipal vehicles are both cause
for suspicion—but not ironclad proof
that the material was stolen. Indeed,
it’s difficult to distinguish copper wire
from a utility company from copper
wire that came from an electrician or
demolition project. Because it can be
so difficult to discern stolen items
from legitimate ones, buyers are focusing on the sellers—particularly those
who are not regular suppliers—for
clues. Seidenberg encourages his
employees to look for people who are
fidgety, nervous, or sweating. “If you
feel strange, you need to ask questions,” he says. “I was telling one of
my scale guys, it’s like at the airport.
We need to learn to profile people.”
When Don Reith, City Scrap’s nonferrous foreman, receives an item he
suspects is hot, he calls Katz up to the
office. “We’ll simply ask [the sellers]
where they got it,” Reith says. “If they
can’t give us a legitimate place, we
won’t buy it at all.”
Asking questions is also the practice
at OmniSource Corp.’s Fort Wayne, Ind.,
facility. Joel Squadrito, a Fort Wayne
police detective who works at the yard
in his off hours, remembers observing
an unmarked pickup truck filled with
hundreds of pounds of heavy-duty copper wire entering the yard. “It was the
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type of wire that you would normally
see at a power supply station,”
Squadrito says. “The individuals had no
markings on their coats or on their vehicle, so I approached them after the
transaction.” The men told Squadrito
they worked for a commercial electrical
company for which they were dropping
off the materials. “I couldn’t confirm it
right away, but five minutes later one of
the men called the president of his company on his cell phone,” he remembers,
confirming that the sellers were legit.
The company’s president later called
Squadrito and thanked him for making
the inquiry—he had been a victim of
job-site theft in the past.
DETERRENT TACTICS
Certain practices can make a facility
less attractive to those who are looking
to unload stolen scrap. Solomon
Metals Corp. (Lynn, Mass.) hasn’t had
problems with stolen materials, and
President Steve Solomon suspects
that’s because the company doesn’t
pay cash. “The criminals don’t try to
sell their stuff here because they will
have to take a check,” he says.
OmniSource, which issues cash
payments, deters thieves in other
ways. “We have a sophisticated digital
camera system at our yard,” says Jeff
Wilke, the company’s director of environment, health, and safety. “We get a
video of the people coming to get their
cash, and a camera in the parking lot
gets a picture of their car. We have it
all saved on tapes that we hold for
weeks in case we get a hot tip.”
Video surveillance and paying by
check are two of several tactics ISRI
lists in a set of recommended practices
for minimizing the risks of purchasing
stolen materials. Another recommended practice is collecting identifying information about each seller, such
as driver’s license and license plate
number. To further deter those trying to
sell stolen material, ISRI has partnered
with the National Crime Prevention
Council to produce a sign for members
to display at their facilities. The sign
features McGruff the Crime Dog® and
states “Photo Identification Required
for All Transactions.” (Get the recom-
mended practices and a downloadable
copy of the sign by going to www.isri.
org and clicking on “Materials Theft”
in the left menu.)
TO BUY, OR NOT TO BUY?
There’s no consensus about what a
scrapyard should do when someone
wants to sell it potentially stolen scrap:
just say no and send the seller away, or
purchase the material, call the police,
and look for its rightful owner? “The
law enforcement community is divided
in the advice [it has] given to our members,” says Steve Hirsch, ISRI’s associate counsel and director of state and
local programs. He and other ISRI staff
have been working with law enforcement agencies at the state and local
levels “to see if there is a consistent
bit of advice that we can give our
members,” he says.
Some yards purchase the material
and alert the authorities or try to track
down the owners. If, after a certain
period of time, no one claims the material or there’s no way to prove it has
been stolen, they go ahead and process
it. This approach has a couple of risks,
Hirsch warns. If the material really was
stolen, the buyers “could be charged
with receiving stolen property,” he says.
That’s a rare occurrence, but Hirsch
recalls some sting operations in which
undercover police officers attempted
to sell material a yard ought to know
might be stolen, such as manhole covers, bleacher parts, or obvious municipal or utility materials. “Employees of
some recyclers have been arrested dur-
ISRI members can indicate they collect identifying
information from sellers with a poster featuring
McGruff the Crime Dog®, the mascot of the
National Crime Prevention Council.
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ing sting operations,” he says.
City Scrap’s positive relationship
with the police and Akron city council
gives it the leeway to purchase suspicious items that come in, Katz says,
provided that the yard gets the proper
identification. “The local police tell us
to get the customer’s license plate and
ID number, write the check, and buy
anything that comes in, and we’re OK.”
Another risk is that if a yard purchases material that someone else lawfully owns, the rightful owner can
claim the property without providing
compensation. In many cases, Hirsch
says, when the material is still valuable
to the original owners, they’ll compensate the recycler for what it paid “simply because they’re happy to get their
property back.” Yards also might be
able to apply for “victims of crime”
funding, but sometimes they just have
to take losses when stolen property is
reclaimed.
When Mid-Carolina Steel & Recycling intercepted and returned a large
load of demolition-site copper to the
contractor from which it was stolen,
police investigators promised Seidenberg they would help him get his money
back from the crime’s perpetrators. “One
of the guys agreed to work on a payment
plan to reimburse us for the copper,”
Seidenberg remembers. “He made three
or four payments and then declared personal bankruptcy. We lost close to
$6,000 on that deal.” One consolation is
that a return might garner police accolades and positive media attention that
generate business in the long run.
If the risks seem too high, a yard
might choose to reject material that
appears stolen. But that has its risks,
too. Ironically, a few law enforcement
agencies consider it a criminal act not
to buy the material, Hirsch says. “It
seems fairly unusual, but in a couple
of cases, the law enforcement agency
says that in turning the suspicious
seller away, the yard was helping the
thief and thwarting a police investigation, aiding and abetting the person
who stole the property,” he says. He
doesn’t know of any yard workers that
were formally charged with aiding and
abetting, he says, but the yard still
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To identify suspicious materials that City Scrap intercepts, Randy
Katz talks with the local police on a regular basis and takes calls
from customers who are reporting thefts themselves.
ends up with “the local law enforcement agency being upset at the recycler for doing what the agency considered the wrong thing.”
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152 _ Scrap _ MARCH/APRIL 2007
Whether a yard buys questionable
material or not, it must follow any
“tag-and-hold” requirements that
apply in its municipality or state,
which usually mandate tagging overthe-scale material with certain information about its seller and holding it
without processing for three to 30
days, depending on the jurisdiction.
Seidenberg says his operation often
has to sit on material it has purchased
so that police can investigate, and that
has happened more frequently over
the past two years than ever before.
“We’ll get calls from the sheriff’s
department two or three times a week
about materials stolen in the area,” he
says. “It just takes more time. We sit
with them, look for the items, tag them,
answer questions. We can’t bale the
material, so we just put it in the corner
for three or four weeks until the police
determine whether or not it’s legitimate.”
The wait can be frustrating if the
material appears stolen, but from an
unknown source. “If the customers do
not report that material has been stolen
from them, we don’t know who to contact,” Katz says. “We had some copper
pipe that came in the other day that still
had the UPC symbols on it, as if it had
just come out of the store. We knew it
had definitely been stolen, but the police
didn’t know who to contact. They had
no idea who it was stolen from.”
Hirsch says tag-and-hold legislation
is of questionable value in reducing
metal thefts or identifying thieves.
States and localities often implement
it when their leaders don’t fully understand how scrap businesses operate
and try to regulate them like pawnshops. “There is a huge difference
between small, readily identifiable
items and whole truckloads of undifferentiated metal material,” he says. In
the latter case, “there is no real way to
put it aside, identify it, or preserve it in
individual piles.” If local council members or police officers were to visit a
scrapyard, observe its operations, and
talk with the owners, they would better
understand the yard’s processes and
challenges and not offer such impractical and ineffective suggestions, he says.
JOINING FORCES
More yards are extending such tour
invitations to the police in particular,
working with their local authorities to
address the metal theft problem.
To get word out about metal thefts
in the Fort Wayne area, OmniSource
uses ISRI’s theft alerts as well as a
response system it developed in conjunction with the police department.
Having an off-duty police officer working for the facility helps, too. When
someone reports a theft to the police,
“normally I’ll get a call from another
detective sergeant that handles property crime,” Squadrito says. “He’ll give
me information about stolen material,
and I immediately call Jeff [Wilke]. We
will then send out an alert to the other
scales and retail establishments in the
area to be on the lookout for the materials and suspicious subjects.”
Squadrito is working with both
OmniSource and the Fort Wayne
Police Department to develop an
antitheft retail training program that
will teach buyers and scale operators
to recognize suspicious items and take
certain steps in transactions involving
such items. Eventually, he says, an
employee working at the retail plant
will generate a suspicious-activity
report describing the transaction, turning the report over to the police if he
encounters something that doesn’t
seem right. “It will give us good lead
information for a follow-up criminal
investigation,” he says.
www.scrap.org
To identify suspicious materials
that City Scrap intercepts, Katz talks
with the local police on a regular basis
and takes calls from customers who
are reporting thefts themselves. “We’ve
even gotten new accounts that way,”
he says. “An account will have something stolen, and I will issue the theft
alert in our area. We’re providing a
service.” Katz also was instrumental
in the launch of ISRI’s national Theft
Alert system.
Scrapyards have many good reasons
to reach out to local law enforcement,
Hirsch says. “Oftentimes, the yards
themselves are victims of theft, and they
should want a good relationship with
the police to ensure a quick reaction
when they report the crime.” Further, he
says, local legislators turn to the police
for suggestions on how to deal with
metal theft issues. The more that scrapyards work with the police, the more
likely it is that their government leaders
will develop effective laws.
FIGHTING CRIME
Scrapyards’ cooperation with police
and prosecutors has helped get material thieves off the streets. Though
some yards share stories of creative
ways they’ve held suspected thieves
at their sites until the police arrived,
that’s a practice Hirsch would like to
discourage. You never know when
someone has a gun, he says, and holding someone against his or her will is
illegal. But practices such as keeping
a record of the purchase transaction
and a photocopy of the buyer’s personal identification can help police
make an arrest.
In the case of Mid-Carolina’s purchase of stolen highway signs, for
instance, investigators set up a sting
that resulted in the individuals’ arrest,
largely because Seidenberg had the
individuals’ driver’s license information, knew that he would be able to
recognize the thieves, and still had the
stolen goods on his property. In other
cases he has supplied character witnesses and video evidence of individuals selling stolen materials. Katz testified in a case involving a stolen
stainless steel holding tank his operation had purchased. “I had to testify
that we received the material and
wrote the check. It was quite a process,” he says.
Despite the outlay in time and money
it might require to help in such prosecutions, it’s the right thing to do, Wilke
says. “If we want the laws to be effective,
and if we want our employees and the
public to know we’re doing the right
thing for the company and for the community, we need to step up to the plate
and make sure we’re going to follow
through. Give the time, give the information, and, if needed, show up in court.
This sends a clear message to the
employees and to the community: We
S
aren’t going to put up with this.”
Lindsay Holst is assistant editor of Scrap.
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154 _ Scrap _ MARCH/APRIL 2007
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