LANSING, MICH. (July 9, 2:30 p.m. ET) — Law enforcement agents have charged four
The Michigan Attorney General's Criminal Division said the group was involved in a suspected racketeering operation. They allegedly stole plastic pallets used by the automotive industry from industrial yards and fenced them through legitimate and illegitimate businesses.
According to court documents, the group operated through two companies, Rags to Riches (RTR) Sales Inc. in
The group fenced the pallets, many of them to businesses who thought they were dealing with a legitimate distributor, or sold them to recyclers as regrind, said Joy Yearout, a spokeswoman for the Attorney General, by phone.
Over several years, the group stole pallets and containers from approximately 70 businesses in Southeast Michigan, and may have started branching out to businesses in
Neither Yearout nor Goralski would disclose the names of companies affected by the thefts.
Law enforcement agents seized approximately 1,400 pallets and shipping crates, valued at $300-$500 apiece, from two warehouses in
“This particular group stole an excess of millions of dollars over the last couple of years,” Goralski said.
The four suspects – Damian Massa, David Wendler, and husband and wife James Tabor and Zaklina Tabor — face 27 criminal charges, including conducting a criminal enterprise, conspiracy, and receiving and concealing stolen property.
If convicted, they could each pay thousands of dollars in fines and face up to 20 years in prison.
“This was an expansive, complicated scheme to defraud companies. That's what led to these charges,” Yearout said.
The four suspects were the leaders of a large pallet theft operation, a criminal enterprise, Goralski said.
The investigation is still ongoing, but in the next few weeks, charges will likely be filed against other members of the operation, he said.
Pallet theft operations have also been uncovered in
The auto industry spends tens of millions of dollars each year buying plastic pallets and reusable containers, but typically, plants don't track pallets as rigorously as they do parts, said Jim Zamjhan, program manager of supply chain for the Automotive Industry Action Group.
“It's hard taking inventory of these things. They don't stand still long enough,” he said in a recent phone interview.
The industry is aware of the problem and knows that it's time to do something about it, he added, pointing to the recent crackdown as evidence that the industry is “stepping up.”
AIAG, based in
Goralski recommended that businesses “secure those pallets better than you are.”
Pallets and crates are generally stored outside, sometimes in unlocked or unfenced lots, and appear to be easily accessible, he said. The less secure a yard is, the easier it is for things to be stolen, he added.
Businesses that have never experienced a theft might not even realize it's a problem, he said.
“You'd just think it was common sense – why steal something so large that's hard to steal?”
He suggested that businesses start fencing yards, installing cameras, or bringing pallets inside.