A two-and-a-half-year investigation into organized retail theft in San Francisco has led to arrest warrants for five individuals and two criminal indictments.
The investigation, which was known as “Operation Focus Lens,” was prompted by a series of thefts at Macy’s Union Square location in December 2018. That resulted in investigators uncovering a major organized retail theft ring with international ties. The multiagency investigation was led by the office San Francisco district attorney Chesa Boudin. To date, about $2 million in suspected stolen property has been recovered.
Two individuals have been arrested and there are arrest warrants for three others. The accused are facing such charges as organized retail theft, grand theft, possession of stolen property and money laundering.
One of the individuals, who is now in custody, Rodolfo Castillo, had been seen stealing more than $7,500 worth of merchandise including a shipment box full of shoes and a rack of clothing, over the course of three visits to Macy’s, according to press material provided by Boudin’s office.
After Castillo was arrested, he admitted to stealing merchandise to sell it to the owners of Camera Heaven. After the San Francisco district attorney’s office and officials from the San Francisco Police Department monitored Camera Heaven’s owners David Tran and Yanxia Xie, they determined that the couple was selling stolen goods through their store, at flea markets and overseas.
In turn, that investigation caused investigators to partner with the U.S. Postal Inspection Service to identify an internal fencer, Nate Pham. An arrest warrant for Pham, who is based in Vietnam, has been issued.
Macy’s senior director of external communications Andrea Schwartz said Wednesday, “We value our partnerships with local law enforcement and government agencies. Organized retail theft has been an ongoing issue, and we are pleased to see the progress made through Operation Focus Lens.”
Organized retail crime is increasingly a problem for stores well beyond San Francisco’s city limits. Earlier this week, California Gov. Gavin Newsom announced the “Real PublicSafety Plan” legislation that would include $255 million in grants for local law enforcement to boost police presence at retail areas over the next three years. There would also be $18 million earmarked for a tram of special investigators and prosecutors in the state to focus on organized theft crime rings.
Organized retail crime costs retailers an average of $700,000 per $1 billion in sales, according to the National Retail Federation. Whether in-store heists or e-commerce fraudsters, organized retail crime has escalated since the pandemic took hold. In addition to San Francisco, other major cities like Chicago, Minneapolis, Portland, Ore., and Los Angeles have experienced upswings in organized retail crime.
Seventy-five percent of retailers saw an increase in organized retail crime last year, according to the NRF’s 2020 Organized Retail Crime survey. Some of that overall increase can be attributed to the shift in online sales last year, according to Tony Sheppard, director of loss prevention solutions at ThinkLP. Criminals have taken advantage of online channels liquidate stolen merchandise, among other things.
In addition, some thieves have taken advantage of the buy online, pick up in store option that many retailers introduced during the pandemic. That has become “a popular channel for theft,” according to the NRF.
Operation Focus Lens also resulted in the discovery of another organized retail ring that had been operated out of a storefront, called Fashion Exchange. That has since been dismantled. San Francisco’s assistant district attorney Conrad del Rosario secured indictments for possession of stolen property at the Criminal Grandy Juey for Fashion Exchange’s owners Deanna Klinkovich and Florya Pavlichenko. That case is pending before the San Francisco Superior Court.
A spokesman for the San Francisco Police Department deferred any comment Wednesday to Boudin’s office. Representatives in Boudin’s office did not respond to requests for further comment Wednesday.
Operation Focus Lens sprang from “Operation Wrecking Ball,” which was also led by the district attorney’s office and had focused on stolen merchandise in the Seventh and Market Streets area. Operation Wrecking Ball is an ongoing investigation and has resulted in the recovery of $750,000 in stolen merchandise from Bay Area retailers. Earlier this month, Rodolfo Ivan Urbana Osejo was arrested for possession of stolen property as part of that investigation. There are two other arrest warrants that are outstanding.
Boudin’s office is also working on a handful or so of other investigations with state and federal agencies to try to dismantle other organized retail theft fencers.
During one weekend late last month, a series of thefts happened at Burberry and Bloomingdale’s and in some of San Francisco’s other designer boutiques. At that time, Boudin faced criticism from some for reportedly not persecuting thieves. In video footage of the criminal acts, there appeared to be organized groups of thieves that struck designer stores in the San Francisco Bay Area, including a Louis Vuitton store. Similar break-ins occurred in select stores in Los Angeles. Afterward, Newsom vowed there would be a crackdown on organized retail theft rings.