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Property Crime and Pawnshops: Correlation or Coincidence?

Research, investigative efforts and media analysis in one Florida community are indicating that an unchecked pawn industry contributes to the rate of property crime.

May 01, 2000  |  by Asst. Chief James T. Hurley, Fort Lauderdale (Fla)

 It is the nature of a free society to produce business opportunities for those willing to take a risk.  It appears, however, that the pawn industry, already a prosperous niche market in Florida, had its sights set on creating a blueprint for guaranteed success.

When pawn lobbyists convinced a Florida Sate senator to sponsor the 1996 Florida Pawnbroking Act, it appeared to many law enforcement officials that regulation of the industry was being significantly compromised.  In fact, the industry was already being viewed as a major contributor to property crime in Florida, although no empirical research was available to support the correlation between pawnshops and property crime.

Although most owners and operators of pawnshops conduct business according to the "letter of the law," this review may be seen as a philosophical indictment of the entire pawn industry from a law enforcement perspective.  It may be true that thousands of people benefit from legitimate transactions.  However, industry-driven growth on a national level, aided by "pawn friendly" legislation on the state level, may be causing more harm than good in communities struggling to reduce crime.

Seed for Growth Planted

In 1988, some of the financial risk was removed for pawnbrokers, and the groundwork secured for expansion of the industry, when four pawnshops used the city of Fort Lauderdale in federal court.  The pawnshops were tied of having police officers remove stolen property from their shelves and return it to crime victims, without being able to recover their initial investment.

Unfortunately for law enforcement, the judge sided with the pawnshops, ruling that pawnbrokers no longer had to surrender stolen property upon demand.  The South Florida law enforcement community has been playing catch-up ever since.

During the past decade, cities in South Florida have reported burglary and larceny rates that rank among the worst in the country.  The local media have consistently labeled Fort Lauderdale as a "Top 10" crime city, citing Uniform Crime Report statistics as documented evidence that the "Venice of America" is no longer a safe place to live.  Interestingly, the pawn industry thrived as the crime rate soared, until there are now more pawnshops in Florida (1,300) than in any other state.

Recipe for Pawnshops' Success

It appears that the pawn industry understood and capitalized on the three most significant factors involved in their success.

First, it is obvious that law enforcement in South Florida had done a relatively poor job of monitoring activity at pawnshops, connecting information to unsolved criminal cases, arresting those responsible for property crime.  Rather than take a "byte" out of crime, most agencies seemed willing to wait for the necessary computer solution.  (A delay that has proven costly!)

Second, the most consistently lucrative merchandise, jewelry, is also the most difficult to track.  Gold chains, gems, watches, and family heirlooms of all types are brought and sold without interference from victims, and often sold to metal recyclers and lost forever.

Last, and perhaps most importantly, however, ahs been the need to educate potential victims about taking reasonable and responsible precautions.  A 1997 study in Fort Lauderdale revealed that of all serialized property that is stolen in burglary offenses, actual serial numbers are reported to the Police Department in less than 10 percent of the cases.

A photograph of jewelry and other personal property is even more rare.  Subsequently, it has been easy for the pawn industry to claim that they don't deal in stolen property.

While some police departments are publicly limiting their investigations of property crimes, citing obvious frustration and the tremendous strain on resources, many visionaries, like Jim Jordan of the Boston Police Department, see crime prevention as a strategic goal for law enforcement.

Future efforts in the area of crime prevention should emphasize the importance of citizen responsibility.

In recent years, the sheer volume of pawn transactions handled by the Fort Lauderdale P.D. rendered the antiquated computer system unworkable.  Almost 70 percent of all pawn transactions were manually entered and filed away for "visual inspection."  More importantly, the information was not timely, and could not be manipulated by computerized programs designed to flush out stolen property, frequent pawners, career criminals, or wanted persons.

In 1995, the police department wrote a comprehensive local ordinance to correct these problems, and to secure the necessary funding for appropriate computerization of both the police department and the pawnshops.  Unfortunately, the effort was short-lived, as law enforcement was blindsided by the 1996 Florida Pawnbroking Act.

Florida's Pawnbroking Act

Billed by its sponsor as "a tool for law enforcement," the Florida Pawnbroking Act passed through the state legislature without debate, and became law on Oct. 1, 1996.  A more careful examination of the law, however, revealed several surprises.

For example, the law created an exemption from Florida's "home rule" process, making it impossible for local jurisdictions to enact stricter pawnshop ordinances, and a "public records" exemption, so that crime victims, or the media, could no longer gain access to pawn transaction records.

The law also decreased the required holding periods for items pawned or sold, from 30 days to 15 days, creating a serious burden on police detectives, already unable to gain a firm handle on the problem.  In addition, it forced crime victims to file suit to recover their stolen property, which, for most victims, meant buying it back from pawnshops.  Few victims are happy with the idea of suing both the pawnshop and the pawner, who may well have stolen their property in the first place.

Proponents of the law argued that the Pawnbroking Act provided some benefits to law enforcement.  For example, it required mandatory thumbprint on all pawn transactions, provided for background checks on prospective pawnshop owners, and shifted responsibility for regulating the industry to Florida's Department of Agriculture and Consumer Services, which has the ability to revoke a pawnshop license, but is generally limited to issuing fines.

However, those favoring the law failed to mention that most jurisdictions already had appropriate ordinances which required that the pawner leave a thumbprint, or that the requirement was actually removed from the state statue by legislators only two years earlier, pushed, no doubt, by an industry aware of what specific physical evidence might reveal.  And, while the law did deny anyone convicted of a felony (within 10 years) from owning a pawnshop, it did nothing about those working in the pawnships, and actually dropped several misdemeanor and civil provisions contained in the previous statute.

A recent "sting" operation highlights the most glaring and frustrating aspect of policing the pawn industry, and demonstrates how insulated the industry has become.  Shabbily dressed undercover detectives pushed a shopping cart to a local pawnshop and tried to unload a new computer monitor, which they referred to as a television set.  The detective offered the "homeless camp" as their local address, and produced a department of corrections inmate card as required identification (the lamination was folder at the corner and the photograph was loose).

The detectives made it obvious that they did not know what they were offering for sale, and said that they had just "gotten" it.  When asked if the property belonged to them, they paused and looked at each other, before saying "yeah."  The case was presented for prosecution and declined.  Pawnshops, it was decided, need only follow the letter of the law, regardless of how obvious the situation.  If the pawner claims ownership of the property, the deal is done.

As a result of this decision, important changes to the sate's "dealing in stolen property" statutes are now being considered.

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