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December 14, 2015
Growers are not the only ones making money from tree nuts in California.
Savvy criminals with the ability to access public databases and create legitimate looking shipping documents have found ways to steal truckloads of processed tree nuts worth millions of dollars.
Tulare County Sheriff Mike Boudreaux says the crimes extend beyond his county and suggest much more than an opportunity crime.
“These are very organized and intricate crimes,” Boudreaux said.
Law enforcement and agricultural industry representatives held a hastily-called summit in Visalia, Calif. in early December to discuss what some admit was as surprising as it was appalling.
Roger Isom, president of the Fresno-based Western Agricultural Processors Association (WAPA) admitted what he learned in the two weeks ahead of the meeting shocked and surprised him.
“This is not your local two-bit theft,” said Isom. “We’re talking a few million dollars in losses.”
WAPA and the American Pistachio Growers Association called the meeting after word began to get out that a sophisticated crime ring was hitting nut processors in California.
So far the nut thefts seem to be affecting California processors; as of early December Arizona processors and handlers had not reported incidents there, according to one industry official.
Using shipping information from Department of Transportation database resources, thieves are able to steal trucking company information and use it to drive off with truckloads of processed nuts worth upwards of $500,000 per load.
Two Central Valley pistachio companies – Setton Farms and Horizon Nut Company – reported multiple loads of product stolen with what appeared to be legitimate shipping documents. Others, including Hughson Nut Company, an almond processor near Modesto, have had similar incidents in the past couple years.
In November, a single load of pistachio kernels valued at almost $500,000 was stolen from Horizon Nut Company in Tulare after a trucker presented what appeared to be legitimate paperwork. That load was never recovered.
About the same time a processor of cashews in Fresno had six loads stolen before officials caught on.
Boudreaux says methods employed by thieves generally do not raise any flags as to the nefarious nature of the transaction. In many cases it’s not until days later when the nut processor receives a call from a legitimate buyer as to the location of their shipment that the theft is then discovered.
Thieves can target high-value loads through legitimate sources used by the transportation industry, according to Matt Calkins, a detective with the Butte County Sheriff’s Department.
Thieves are able to easily access the information they need online for these crimes. Requests for trucks to ship loads, carrier information to include permit numbers and insurance information are available online for syndicates to use for nefarious purposes.
Forged documents are created to accept these loads. Pre-paid “burner phones” are also used and their phone numbers incorporated into shipping documents to mask the crime. Once the theft takes place these phones are typically turned off and discarded.
While the paperwork may appear legitimate, Boudreaux says drivers involved can be diverted one the shipment is in transport.
According to Sam Wadhwani, chief executive officer of Transit Risk Management in Long Beach, Calif., the propensity of thieves is to take loads immediately before or after the weekend.
In some cases law enforcement has tracked stolen shipments through the Port of Los Angeles, but not before at least some of the product was already shipped.
In other cases, Boudreaux says authorities learned that loads originally destined for locations in New Mexico and Washington were diverted to southern California. Some cases included thieves working with brokers and truck drivers, who were then paid in cash to deliver a load of nuts to a given location.
Boudreaux says some of the stolen nuts were exported to foreign countries.
Because tree nuts are a high-value commodity and difficult to trace, Calkins says they’re an easy target for thieves. Moreover, because of relatively light sentencing for those convicted of cargo theft, Calkins says deterrence is difficult.
Federal prosecution can happen if the cargo travels across state lines, but if it remains in California sentencing typically does not include state prison time.
Concerned nut processors and other industry officials filled a conference room in Visalia in early December to hear from law enforcement, private investigators and insurance agents about the crimes. Along with stories of how the crimes took place, officials offered industry representatives tips and protocols they could employ to help protect themselves from future thefts.
Isom said when word first went out about the meeting he was expecting less than 50 people would attend because of the short notice. On meeting day there were about 160 pre-registered for the emergency summit, which not only pleased Isom, but suggested the problem was much larger than first suspected.
“I think the focus is on nuts right now but we need to look at other crops too,” said Isom.
Andrew Howe, general manager of Horizon Nut Company admits processors need to learn more to protect themselves against cargo thefts, and that informational meetings like this are helpful.
Howe said he learned much from the event and will work to employ safeguards to protect Horizon Nut Company.
“Had we known a common theme or thread ahead of time we might have been able to stop these,” Howe said.
One of those common themes Howe said he later learned was a single broker who law enforcement said was connected with four stolen loads.
Even then Howe admits knowing whether the load was targeted by thieves would have been tough because the driver had legitimate-looking paperwork. Sheriff Boudreaux says that makes it more difficult for law enforcement during an enforcement stop to determine ownership of the product, much less detect if the goods are stolen.
Howe said the theft of nuts from Horizon Nut Company was discovered after the load was shipped and a transportation broker called to inform them that the paperwork they had was likely fraudulent.
Patrick Braddock, logistics manager of Setton Farms in Terra Bella, said in each of the cases where they had loads of pistachios stolen they were presented with legitimate-looking shipping documents.
Braddock was not the sole person at the summit from Setton Farms. Several of the other companies represented in the room had multiple officials at the event because of the importance of the issue.
Sheriff Boudreaux says handlers can call law enforcement if any “red flags” appear when confronted with questionable shipping papers.
Braddock said the summit gave him new ideas Setton Farms can employ to better protect themselves in the future. Others surveyed in the room agreed, saying they would return to their companies with ideas that could be employed internally.
The goal, according to Braddock, is to create what he calls “roadblocks” to reduce the risk of theft. Those can include asking more questions of truck drivers and being more diligent to inspect shipping documents and the information on them.
Other measures discussed in the room included collecting photographs and a thumb print of the driver prior to releasing the load.
The nut thefts aren’t new. Butch Coburn of Hughson Nut Company said they had two loads of pasteurized nuts they custom-processed stolen in a similar manner. Since then Hughson nut has employed various protocols to safeguard their almonds.
Jason Baldwin, chief operating officer with Perfect Pac in Kerman, Calif. shared some of his company’s protocols that could make it more difficult for such crimes to occur. He said his goals are not to hurt the legitimate trucking companies out there, but “at the end of the day we’re trying to protect the grower.”
Isom says he realizes the embarrassing nature of the thefts but encourages companies to share information with WAPA and work closely with law enforcement so other processors can develop protocols to protect themselves.
“This meeting is only the beginning of our efforts to help our members,” Isom says.
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