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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)

Media Investigation

Faced with rising crime rates, and the dilemma created by passage of the Florida Pawnbroking Act, the Fort Lauderdale P.D. encouraged the Fort Lauderdale Sun-Sentinel to conduct an unbiased study of the relationship between property crime and the pawn industry.

The resulting investigative report by Scott Glover and Evelyn Larrubia provided a great deal of insight into the pawn industry.  By studying 1995 pawn data supplied by the police department, the reporters found that of the 50 most frequent pawners, 39 had criminal records in Florida, and almost all of the convictions were for burglary or cocaine charges.  The relationship between property crime and drug addiction has long been established.

The report also revealed that the legislation was actually written by the pawn industry, which may account for why the law favored the pawnshops.  Some items that benefited the industry were often disguised as "tough law."  For example, by having the interest rate established by state legislatures, the pawn industry may have been trying to protect against additional federal lawsuits, similar to those in Hawaii and Georgia.

In those states the pawn industry had come under scrutiny for charging interest rates considered too high; the presiding judge in Hawaii calling the 240 percent annual rate "oppressive."  Pawnshops in Florida, exempt from state usury laws, were not previously subjected to a rate cap.  The new law imposed a "restriction" on pawnshops for the first time, allowing them to earn up to 300 percent annual interest on pawned merchandise.

By comparison, New York State, which has only 50 pawnshops, allows pawnshops to charge just 36 percent annual interest.

Reaction

Response to the Sun-Sentinel series was overwhelming, as readers expressed outrage over reports of burglary victims being forced to buy back their stolen property back from pawn dealers, and unemployed frequent pawners who repeatedly delivered expensive items to pawnshops.  Local governments and the law enforcement community were even more vocal.  In fact, the evidence produced by the Sun-Sentinel report was so intriguing that CBS News' 60 Minutes reporter Mike Wallace produced a segment on Florida's pawn industry, which aired in December, 1997.  Columnist Fred Grimm of the Miami Herald referred to pawnshops as "the crackheads' ATM," and compared straight-faced pawnbrokers to cigarette manufacturing executives.

Correlation or Coincidence?

The information about frequent pawners, documented by the Sun-Sentinel, is a compelling argument to support the theory that the pawn industry contributes to the rate of property crime.  Even so, new evidence is being examined.  By the end of 1997 all of the pawnshops in Fort Lauderdale, and most throughout Boward County, were supplying transaction data on a weekly basis, which was downloaded into a central computer at the Broward Sheriff's Office.  Law enforcement agencies can access the data electronically.

With this new advantage, Fort Lauderdale Det. Jack Gee began looking more closely at the relationship between active property criminals and area pawnshops.  Of those criminals who are placed on "house arrest" in Broward County, most are convicted of property crimes or narcotics violations.

In a study by the Fort Lauderdale P.D., the Broward Sheriff's Office and the department of corrections, it was determined that more than 2,700 people in Broward County are currently sentenced to some form of community control, many of them on house arrest.  By checking those on house arrest against the automated pawn database, detectives found, not surprisingly, that many offenders ignore the conditions mandated by the courts, routinely visiting pawnshops.  As a result of this probe, more than 300 persons originally on house arrest are now serving real time in the state prison system.  Perhaps equally appalling, more than 20,000 criminals, many placed on house arrest in recent years, have absconded and are now considered fugitives.  Unfortunately, this much-needed alternative to prison seems to have backfired.  The evidence suggests that those most responsible for Fort Lauderdale's high crime rate are able to continue to victimize our citizens, even after being convicted!

The reality of stolen property being disposed of by "associates" of thieves is a completely different issue, and creates an additional challenge for law enforcement.  It is also important to consider that the pawn industry often points to their cousins, the flea markets, swapshops and secondhand dealers, as deserving of scrutiny.  They are probably right!  The Tactical Operations Multi-agency Cargo Anti-Theft task force (TOMCAT), formed in 1996, estimates that cargo theft amounts to $10 million in merchandise a month in South Florida, although they believe that much of the property is being shipped out of the country.

Many criminal cases have been made against organized groups of shoplifters, known to use the local flea markets and swapshops to unload stolen merchandise.  In addition, counterfeit merchandise is another significant problem associated with this business, which operates without a great deal of regulation.

Conclusion

All of Fort Lauderdale's pawnshops are now computerized, the transaction data is downloaded weekly to a central computer at the Broward Sheriff's Office, and local law enforcement agencies can access the data electronically.  As a result, arrests for property crimes have increased dramatically, and more and more stolen property is being recovered.

The state legislation introduced some positive changes to the Pawnbroking Act during the 1997 legislative session.  New laws are also being considered to address perceived problems with the swapshops and flea markets.

The Florida Enforcement Recovery Unit, a statewide group of burglary and pawn unit detectives, continues to press for reform, while the 2000 Florida Legislature now appears poised to mandate the creation of a statewide pawn database for use by law enforcement.

However, the real challenge remains with local law enforcement agencies.

Meanwhile, the revolving door of justice may lead through a pawnshop.

Assistant Chief Hurley is in his 20th year with the Fort Lauderdale Police Department.  This is his first contribution to POLICE.  He has also been published in the FBI Law Enforcement Bulletin.

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Tags: Property Crimes, Pawnshops


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