and 22, 1969,3 to further illuminate its findings, assess its recommendations, and gather additional information on the nature and scope of the problem. It was a major recommendation of those hearings that your committee conduct further indepth study of crime against small business. It was determined that such further investigation "should begin by examining thefts of goods that enter the distribution net work. It should then examine theft from warehouses and terminals." + Following this recommendation, your committee held a series of hearings focused upon thefts of goods moving through different modes of transportation and the following reports, based upon those hearings, were issued thereon: AIR CARGO THEFT "The Impact of Crime on Small Business-Part II," report of the Select Committee on Small Business. U.S. Senate, on effect of cargo loss and theft in air commerce, based on hearings before the committee, May 23 and July 22, 1969, 91st Congress, 1st Session, Senate Report No. 91-162, Part II. MARITIME CARGO THEFT "The Impact of Crime on Small Business-Part III," report of the Select Committee on Small Business, U.S. Senate, on effect of cargo loss and theft in maritime commerce, based on hearings before the committee, July 23, 1969 and June 24, 1970. 91st Congress, 2d Session, Senate Report No. 91-1547. TRUCK CARGO THEFT "The Impact of Crime on Small Business-Part IV," report of the Select Committee on Small Business, U.S. Senate, on effect of cargo loss, theft, and hijacking in the trucking industry, based on hearings before the committee, June 25, 1970, and June 8, 1971. 92d Congress, 2d Session, Senate Report No. 92-839. RAILROAD CARGO THEFT "The Impact of Crime on Small Business-Part V," report of the Select Committee on Small Business, U.S. Senate, on effect of cargo loss and theft in rail commerce, based on a hearing before the committee, June 9, 1971. 93d Congress, 1st Session. Senate Report No. 93-276. In each case it was found that thefts within these transportation industries represented major sources of business loss. At the same time, however, each set of hearings also revealed the distinct inability of both industry representatives and law enforcement officials to de 3 U.S. Congress, Senate. Select Committee on Small Business. Impact of Crime on Small Business-1969, Part 1. Hearings before the Select Committee on Small Business on the impact of crime on small business, May 21, 22. 23, and July 22, 1969. 91st Congress, 1st Session, 376 pp. The Impact of Crime on Small Business-Part I, report of the Select Committee on Small Business, U.S. Senate, based on hearings before the committee, May 21 and 22, 1969. 91st Congress, 1st session, Senate Report 91-612, p. 18. scribe precisely the extent of losses sustained or to indicate the points at which those losses occurred. In addition, generally poor and unsystematic reporting of thefts by industry, combined with overlapping jurisdictional responsibilities of law enforcement agencies, presented a picture of staggering theft being ineffectively dealt with and responded to by responsible authorities. Also emerging from the series of hearings conducted by your committee regarding thefts of goods in transit, was the prominent role of the criminal receiver and the redistribution system he manages in making such thefts profitable. For example, in a statement before your committee during its hearings on the effect of cargo loss and theft in maritime commerce, Mr. William Sirignano, Executive Director and General Counsel of the Waterfront Commission of New York Harbor, noted the following: ... the stolen goods are put into commerce by the underworld in competition with legitimate business, oftentimes in competition with the very owners of stolen property. All of this is in addition to the degeneration of the moral climate of the community resulting from unchecked criminality.5 Similarly, Carl McDowel, Executive Vice President, American Institute of Marine Underwriters, cited a report stating: The most disturbing aspect of the large scale thefts is the suspecion that much of the loot moves through channels of 'legitimate business.' Professional thieves have established substantial footholds in many manufacturing, distributive and merchandise industries. The pattern of thefts on the waterfront has also indicated that container loads are not stolen unless the thieves have sound knowledge of the commodity or product, and have means for an immediate outlet for its disposal." During your committee's hearings regarding the effect of cargo loss, theft, and hijacking in the trucking industry, Mr. Gilbert H. Meyer, Chief Special Agent, American Insurance Association, told your committee: ... I think that many of these things are stolen for order [It is very difficult to penetrate the veil of secrecy sur- 5 U.S. Congress, Senate, Select Committee on Small Business, Impact of Crime on Small Business-1969-70, Part 2. Hearings before the Select Committee on Small Business on the impact of crime on small business, July 23, 1969 and June 24, 1970. 91st Congress, 1st and 2d Sessions, at p. 397. Ibid., p. 487. S. Rept. 93-1318-2 I think that law enforcement has not developed sufficient criminal intelligence concerning the activities of these people who are engaged in this activity. There is a lack of information concerning their activities and people who participate. We are faced with a problem of having a weak link in the chain. The organized criminals do not participate in the actual stickup. They hire people to go out and do these jobs. The participant is paid off as soon as the job is accomplished. He delivers the truck to an intermediary. The intermediary then delivers it to a warehouse. From the warehouse, it is disposed of and put into the channels of disposition." It was statements like those of Messrs. Sirignano, McDowell and Meyer and of others as well, relating to the importance of property redistribution systems and to the potential involvement of organized crime in those systems, that led your committee to focus its attention directly on that part of the theft microcosm. Your committee's focus on criminal redistribution systems began with a committee report issued in October 1972,8 defining the problem area and assessing current efforts with regard to the criminal receiver. It was found that indeed very little information existed concerning criminal receivers. In fact your committee noted with dismay: The relatively little research and published material that is available on the distribution of stolen property is astonishing in view of its vital criminal function."" In addition little evidence was found of extensive law enforcement activity directed to the fence, with the bulk of resources being devoted exclusively to thieves. Your committee's original report recommended the holding of public hearings into illegal distribution systems and the manner in which the activities of the criminal receiver exact a heavy burden on both small business and ultimately upon the American consumer. Your committee proceeded with this recommendation upon the following assumptions: 10 1. That fences play a vital role in the successful completion of a crime involving a major theft. Without the fence, the theft is a meaningless act. 2. That stolen goods eventually reach a legitimate marketplace. The magnitude of theft is so great that the only reasonable outlet must be to legitimate consumers. 3. That the illegal distribution system from the thief to the marketplace must adversely affect legitimate business enterprises such as storage companies, transporters, manu 7 U.S. Congress, Senate. Select Committee on Small Business. Impact of Crime on Small Business-1970-71, Part 3 (Cargo Theft-Trucking Industry). Hearings before the Select Committee on Small Business on the impact of crime on small business (cargo thefttrucking industry), June 25, 1970 and June 8, 1971. 91st Congress, 2d Session and 92d Congress, 1st Session, at p. 635. An Analysis of Criminal Redistribution Systems and Their Economic Impact on Small Business, Staff Report prepared for the Select Committee on Small Business, U.S. Senate, 92nd Congress, 2nd session, Committee Print, October 26, 1972. Ibid., p. 2. 10 Ibid., p. 3. facturers, wholesalers, retailers, lending institutions, and Briefly, your committee found that the problems earlier revealed by its cargo theft hearings relating to the lack of reliable data, to jurisdictional disputes and overlaps and to ineffective industry and officials responses to theft were only exacerbated where the criminal receiver was concerned. This latter crime figure remains little understood and present efforts to combat his activities are inadequate. At the same time your committee believes that its original assumptions remain valid. This report is designed, then, to summarize your committee's findings and to propose an action program with regard to the criminal receiver. Your committee's work has made clear that much more remains to be done in this area and it is hoped that this report can assist those with whom that responsibility will rest. II. GENERAL BACKGROUND OF THE CRIME OF CRIMINAL RECEIVING OF STOLEN PROPERTY (FENCING) AND OF THE COMMITTEE'S HEARINGS ON THIS SUBJECT A. A HISTORICAL PERSPECTIVE Your committee learned soon after embarking upon its inquiry into criminal receivers and receiving operations that it was not engaged in the investigation of a new crime area. In fact, the dilemmas presented by this crime figure had been experienced and struggled with by others several centuries ago. A paper included in your committee's original report, for example, stressed the historical legacy of the receiver by focusing upon the career of the 17th century British master fence, Jonathan Wild."1 The illusiveness of that criminal to the judicial machinery of his time, as well as his exacting control over British theft, bore striking resemblance to the manner in which the contemporary American fence was being described to your committee. Robert Earl Barnes, a convicted professional thief, in a letter written to your committee, expressed it this way: A thief who steals merchandise is like bread without yeast, no good, as just as yeast is an essential element in the making of good bread, the 'fence' is the essential element in any accomplished act of thievery whenever mechandise is involved. When the thief is apprehended; is prosecuted; is convicted; is incarcerated for stealing the merchandise regardless of what type of theft was involved, the 'fence' just sits back for a few days until he gets himself another thief to do his dirty work for him. Law enforcement officials have to realize that the actual stealer of the merchandise, is not the individual who makes 11 See "No Questions Asked: A Consideration of the History of Criminal Receiving," Duncan Chappell and Marilyn Walsh, in supra., note 8, at Appendix I, pp. 21-30. all the great profits from its sale, but the true profiteer is the Still, the "fence" is the most underrated criminal within the underworld.12 Further probing into the history of criminal receiving revealed that your committee's investigation of criminal redistribution systems was not the first such undertaking by a legislative body. On the contrary, the British Parliament, concerned about a rampant theft problem in and around the port of London, formed the Committee of 1770 to review the state of English law and its enforcement at that time. One of the more prominent witnesses to appear before the Committee of 1770 was Sir John Fielding, who testified that London's increased burglary and robbery rates could be attributed to the existence of numerous criminal receivers providing immediate outlets for the proceeds of theft." 13 Parliament, however, failed to respond to Fielding's suggestions for more systematic enforcement against the fence; and Patrick Colquhoun, writing nearly thirty years later, indicated the results of this inaction in a forceful indictment of the criminal receivers he observed: In contemplating the characters of all these different classes of delinquents (that is Thieves, Robbers, Cheats, and Swindlers), there can be little hesitation in pronouncing the Receivers to be the most mischievous of the whole; inasmuch as without the aid they afford, in purchasing and concealing every species of property stolen or fraudulently obtained, Thieves, Robbers, and Swindlers,... must quit the trade, as unproductive and hazardous in the extreme. Nothing therefore can be more just than the old observation, "that if there were no Receivers there would be no Thieves."Deprive a thief of a sale and ready market for his goods and he is undone.14 Colquhoun's work had a contemporary ring to your committee as did his description of the theft problem on the wharves of the River Thames in 1795. What was most revealing, however, was the realization that the "old" adage, "if there were no fences, there would be no theives," was an "old" observation even in Colquhoun's time. If the receiver had been for so long recognized as a significant crime figure, why then did information about him seem so illusive to ac 1. Mr. Barnes' letter was originally received in November 1972; the text of his comments was published in Criminal Redistribution Systems and Their Economic Impact on Small Business, Part 1, 264 pp. Hearings before the Select Committee on Small Business, U.S. Senate, on the effect of criminal redistribution (fencing) systems, May 1 and 2, 1973. 93d Congress, 1st session, at pp. 158-163; cite at p. 159. 13 The minutes of the evidence and proceedings of this committee are reported in the Journal of the House of Commons, vol. 32, pp. 784, 798, 874, 878-883. 14 Patrick Colquhoun, A Treatise on the Police of the Metropolis, reprint of the seventh London edition, 1806 (Montclair, N.J., Patterson Smith, 1969), at p. 289. |