KLEIN CALLS ON FEDS IN BATTLE WITH THEFT
Byline: CAROL EMERT
WASHINGTON — Calvin Klein Cosmetics is leading a rally to get federal forces to halt the cargo theft in southern Florida that is costing businesses of all kinds an estimated $100 million at wholesale annually.
Bottled fragrances, which Miami theft rings reportedly refer to as “liquid gold,” have become the second largest target of port-area thieves, following only computer parts, according to Al Checkett, Klein’s senior director of corporate security, who is organizing the antitheft effort.
About $1 million of Calvin Klein Cosmetics product has been stolen over the last two years, Checkett said, including an October 1993 incident in which five gunmen broke into a port-area warehouse, pistol-whipped an employee and stole $400,000 worth of fragrance.
The fragrance was manufactured in New Jersey and was on its way to Latin American shelves.
No Calvin Klein merchandise stolen in southern Florida has ever been recovered, and no arrests have been made, Checkett said.
“The FBI, Metro-Dade police and Customs all are doing their jobs with manpower restrictions and equipment restrictions,” he said. “In order to do their job effectively, they need [more] support.”
Although Calvin Klein does not own the stolen scents — they have already been sold to distributors by the time they reach the dock — the thefts are of concern to the company because it does not want the product to find its way into the gray market, and because distributors could become reluctant to purchase the goods in the first place.
Checkett took Klein’s case to four Floridian members of the U.S. Congress: Sens. Connie Mack (R) and Bob Graham (D) and Reps. E. Clay Shaw (R) and Carrie Meek (D).
It was not difficult to convince them that Miami International Airport, the Port of Miami and Port Everglades would start losing business soon if the plundering continued. Checkett mentioned the Bahamas as a possible alternative to the Miami area.
The lawmakers then lobbied U.S. Attorney General Janet Reno, a southern Florida native, and convinced her to form a task force dedicated full-time to breaking up the theft rings. She announced in October that the U.S. Attorney for Florida, Kendall Coffey, would head the task force.
Other task force members include exporters, insurance companies, shippers, the U.S. Customs Service, the FBI, the Metro-Dade Police Department and the state attorney general’s office.
As a first step, the business members of the group in March will present their ideas on how to combat the problem. They intend to recommend that the involved agencies set up a joint database to track stolen shipments and that personnel be allotted from each agency to work together, Checkett noted.
The sticking point, as always, is funding. In an era of shrinking federal budgets, finding resources in Washington is by no means a certainty.
The Florida lawmakers have promised to try to include money in upcoming appropriations bills, Checkett said. In the meantime, Calvin Klein is planning to lobby hard, and Checkett hopes other companies will join the battle.
Meek and Shaw have offered to host a Congressional hearing on the matter, but Checkett said he would see how the funding effort goes before requesting a hearing. It has not yet been determined how much money will be needed for the task force, according to Meek staff member Guy Forchion.
Checkett argued that the federal government has a responsibility to protect cargo as it pushes for more free trade, particularly in Latin America.
“If we don’t stop this, and [the Clinton] Administration asks for continued trade through Florida, the problem is going to grow,” Checkett said.
Sgt. Eloy Nunez of the Metro-Dade Police Department’s special investigations division concurred that more money is needed to effectively combat the banditry, which has been growing rapidly over the last few years and has taken on more urgency with recent evidence that it is spreading to Orlando and Orange County.
Members of the Metro-Dade Police Department have already held preliminary meetings to talk about how they can work with the task force, and the police are discussing with Customs and airport security how to link their crime-tracking computer systems, Nunez said. But federal funding is needed if personnel are to be assigned full-time to the task, he said.
While some small-time pilfering does take place on the docks and import-area warehouses, the primary perpetrators are members of international distribution rings, Nunez said.
“The Mafia may have some links here, but we’ve found [mainly] some loosely organized groups with individuals that surface and resurface,” he said.
People involved in the transportation process are often partners in the crimes, such as customs brokers who alter shipping documents or truckers who participate in fake hijackings, Nunez said, adding, “More and more, it’s inside jobs.”
Leaving little to chance, most of the thieves already have buyers ready and waiting for the shipments — some in the U.S. and some abroad — he added.
Checkett said customs officials in the United Kingdom have lately reported a sharp increase in the number of Calvin Klein Cosmetics shipments from Miami, although the company sends its U.K.-bound goods through New York.
This trend indicates diversion to the U.K. of shipments bound for Latin America, he said.
Another company participating in the Miami task force is Giorgio Beverly Hills, which loses about 5 percent of its product annually to theft and has been the victim of several sophisticated cargo thefts, said Jeffrey Ten, vice president of international sales.
Last fall, a Giorgio shipping container sent through Miami arrived in Brazil full of sand, Ten said. The sand had been measured carefully to weigh exactly the same amount as the fragrance so that the switch was not detected.
The shipment arrived in Brazil several weeks after leaving California, where the fragrances are manufactured, and it is impossible to say where the diversion happened, Ten said.
“Maybe it was stolen en route to Miami by truck,” he said. “Maybe during the unloading of the container. Who knows?”
Several years ago, a truck carrying $500,000 worth of Giorgio fragrances was hijacked in the Carolinas, Ten added. “The truck stopped at a truck stop, the driver came out and his trailer was gone,” he said.
As with Calvin Klein, no Giorgio goods have ever been recovered, and no arrests have ever been made, Ten said.
But contrary to Klein’s situation, cargo losses are Giorgio’s because the company generally maintains ownership of its product until it reaches its final destination.
Insurance has covered all of the company’s losses, Ten said, but Checkett noted that some insurance companies are considering dropping their coverage of cargo passing through southern Florida.
While purloined goods account for a relatively small percentage of Giorgio’s sales, Ten noted, “The major problem is the gray market, and this is one way [merchandise] gets into the gray market.
“It’s a double whammy in our industry; you’ve got the theft, and then [parallel imports] damage the image and the reputation of the business, which is more costly than the actual loss,” he continued.
Ten noted that most of these thefts are committed in September and October in preparation for holiday shopping.
The Miami task force hopes to replicate the success of a Los Angeles task force that has been combating cargo theft since January 1990. The Cargo Criminal Apprehension Team, nicknamed Cargo CATS, has recovered stolen property of various kinds worth $95 million wholesale since its inception, according to Lt. Jack Jordan of the L.A. County Sheriff’s Department.
The 15 members of Cargo CATS, which include personnel on loan from the sheriff’s office, the FBI, the California Highway Patrol, the Vernon Police Department and the Port of Los Angeles, have made 650 arrests, resulting in more than 300 convictions to date. They helped reduce the amount of stolen cargo from the area to approximately $74 million in 1994 from $110 million in 1993, Jordan said. — Fairchild News Service