Organized retail theft ring that targeted Macy's, other retailers is charged in New York
- Two New Yorkers were charged with possessing more than $1 million in stolen goods and reselling them through their business in Midtown Manhattan, New York authorities said.
- About $212,000 of the merchandise was stolen from Macy's, while the remaining came from CVS, Rite Aid, Walgreens-owned Duane Reade and other retailers, according to Manhattan District Attorney Alvin Bragg.
- The charges come as retailers such as Target and Ulta increasingly cite theft as a growing problem at their stores.
A New York beauty store just blocks away from the Empire State Building resold more than $1 million worth of goods that had been stolen from Macy's and a slew of other retailers, authorities said Wednesday.
Two New Yorkers were charged with possessing more than $1 million in stolen goods and reselling them through their business, Rehana's Cosmetics, a perfume and cosmetics store in Midtown Manhattan, the borough's district attorney Alvin Bragg said at a press conference.
About $212,000 of the merchandise was stolen from Macy's, while the remaining came from CVS, Rite Aid, Walgreens and Walgreens-owned Duane Reade, Ulta, Victoria's Secret, Bath & Body Works and the NHL Shop, Bragg said.
"Through our investigation, we found that Rehana's Cosmetics was well-known to shoplifters, who would willingly bring them stolen items," Bragg said. "We allege that created a motive for shoplifters to steal, and thus that the defendants, we allege, were drivers of crime."
Rehana's Cosmetics, Bragg alleged, claimed to be a "beauty and perfume store," but was instead found to have hundreds of boxes filled with products not typically found at such stores, including designer purses, over-the-counter medications, kitchenware and more. He said the defendants obtained the stolen items from shoplifters for the purpose of reselling.
"The root cause we allege here is greed," Bragg said. "They were doing this to make money. This is the motive that is old as time."
The charges come as retailers such as Target and Ulta increasingly cite theft as a growing problem at their stores. In March, a monthslong CNBC investigation showed how police broke up an organized retail crime ring that stole millions in cosmetics from Ulta stores and resold them on Amazon.
Dan Petrousek, senior vice president of loss prevention at Ulta, told CNBC in a statement that retailers, law enforcement and prosecutors must "work together to investigate and apprehend the criminals involved" in order to have a "meaningful impact on organized retail crime."
"Ulta Beauty is proud of the work done by our ORC investigative team, who partnered with local authorities and other retailers to bring this investigation to a close," the statement said. "We remain committed to disrupting these criminal enterprises nationwide and ensuring the safety of our stores and communities."
While Bragg was unable to give a specific number when asked how many stores are believed to be engaging in similar operations, he noted that there have been "far too many assaults" on employees at stores that have experienced theft.
"By using a multi-pronged prosecution strategy, we can make a lasting dent in retail theft that will keep our store employees safe, cut off the incentives to steal and resell stolen goods and allow our retail sector to thrive," he said.
In a statement to CNBC, a Macy's spokesperson said, "We appreciate the work of law enforcement and the Manhattan District Attorney's Office and defer any comments about the case to them."
A spokesperson for CVS said the drugstore is "grateful" for the work of the Manhattan District Attorney's office.
"Our partnerships with law enforcement are integral to our efforts to prevent organized retail crime (ORC) rings from stealing and then selling stolen goods online. We look forward to continuing our strong partnership with the DA's Office as we work to combat ORC across New York City," the spokesperson said.
A Walgreens spokesperson told CNBC earlier this year that the chain is taking steps to "safely deter theft" and "deliver the best patient and customer experience."
The other retailers alleged to have stolen goods included in the bust did not immediately respond to CNBC's request for comment.