The North Carolina General Assembly recently passed S.L. 2022-30 (S 766) which increases the penalties for organized retail theft, provides additional penalties for damage to property or assault of a person during the commission of organized retail theft, and clarifies the procedure for the return of seized property to the lawful owner. The new criminal provisions go into effect on December 1, 2022 and apply to offenses committed on or after that date.
What is Organized Retail Theft?
Organized retail crime typically refers to large-scale retail theft and fraud by organized groups. The primary objective of these professional crime rings is to steal retail products from retail organizations for financial gain rather than for personal use.
Criminals can commit organized retail theft in several different ways. One common method is a flash robbery (otherwise known as a smash and grab attack). During a flash robbery, a group of people meet at a planned location, grab as much merchandise as possible, and flee the scene. Another common method is return fraud. This method can involve: (1) using stolen receipts to return merchandise for profit; (2) replacing original labels with higher-priced labels and returning merchandise for a profit; or (3) shoplifting an item and returning it for profit. Some perpetrators also engage in cargo theft, stealing merchandise during its journey to the retail destination. This can be accomplished by: (1) criminals presenting themselves as drivers with counterfeit paperwork and driving off with loaded vehicles; (2) stopping and robbing a loaded truck during transit; (3) ambushing a trucking facility and hijacking loaded vehicles; or (4) smuggling small amounts of goods from shipments.
The New Law
Under G.S. 14-86.6, a person commits organized retail theft if the person conspires with another person to commit theft of retail property from retail establishments, with the intent to sell that retail property for monetary or other gain, and who takes or causes that retail property to be placed in the control of a retail property fence or other person in exchange for consideration. A person also commits this offense if he or she receives or possesses any retail property that has been taken or stolen in violation of the statute while knowing or having reasonable grounds to believe the property is stolen. S.L. 2022-30 amends this statute to include that a person also commits this offense if he or she conspires with two or more other people as an organizer, supervisor, financier, leader, or manager to engage for profit in a scheme or course of conduct to effectuate the transfer or sale of property stolen from a merchant.
G.S. 14-86.6 previously made it a Class H felony to commit organized retail theft with a value exceeding $1,500 aggregated over a 90-day period and a Class G felony to commit organized retail theft with a value exceeding $20,000 aggregated over a 90-day period. The new law adds new G.S. 14-86.6(a2) to reclassify punishments for different levels of aggregate values of stolen retail property. It adds two categories of offense with more serious penalties. The classifications are as follows:
- When the retail property has a value exceeding one thousand five hundred dollars ($1,500) aggregated over a 90-day period, the offense is a Class H felony.
- When the retail property has a value exceeding twenty thousand dollars ($20,000) aggregated over a 90-day period, the offense is a Class G felony.
- When the retail property has a value exceeding fifty thousand dollars ($50,000) aggregated over a 90-day period, the offense is a Class F felony.
- When the retail property has a value exceeding one hundred thousand dollars ($100,000) aggregated over a 90-day period, the offense is a Class C felony.
Multiple Thefts and Venue
Although not a new provision, it is worth mentioning G.S. 14-86.6(c) provides that thefts of retail property occurring in more than one county may be aggregated into an alleged violation of this statute. Consider a defendant that is alleged to have stolen $20,000 worth of retail property in Durham County, $20,000 in Guilford County, and $15,000 in Pitt County. Each of the values may be combined for a total amount of $55,000 and give rise to a Class F felony offense, provided that all of the thefts occurred over a 90-day period.
Subsection (c) also allows for each county where a part of the charged offense occurs to have concurrent venue for the offense. For the example above, the defendant could be charged in Durham, Guilford, or Pitt. Whichever county is the first to issue a criminal process in the case obtains exclusive venue as to the charges. G.S. 15A-132(c). However, if the county with exclusive venue dismisses the charges, another county with concurrent venue may initiate its own charges, and thereby obtain venue. See State v. Paige, 316 N.C. 630 (1986).
Damage and Assault Committed During Organized Retail Theft
S.L. 2022-30 adds new G.S. 14-86.7 which provides additional penalties for damage to property or assault of a person during the commission of organized retail theft. A person commits the offense of damage to property during organized retail theft if the person conspires with another person to commit theft of retail property from a retail establishment with a value exceeding $1,000 and damages, destroys, or defaces real or personal property in excess of one thousand dollars $1,000.
A person commits the offense of assault during organized retail theft if the person conspires with another person to commit theft of retail property from a retail establishment with a value exceeding one thousand dollars $1,000 and commits an act of assault and battery against an employee or independent contractor of the retail establishment or a law enforcement officer in the commission of the theft of retail property. Both offenses are punished as a Class A1 misdemeanor and may be charged in conjunction with organized retail theft at the appropriate level.
Seizure of Property
The new law also amends G.S. 15-11.1, concerning law enforcement seizure of property, by allowing the return of seized property when certain conditions are met. If the seized property is retail property or other property that is evidence of a violation of G.S. Chapter 14, Articles 16 (larceny), 16A (organized retail theft), or 18 (embezzlement) or G.S. 14-100 (obtaining property by false pretenses), then the district attorney (upon request of the lawful owner or upon his own determination) may make an application to the court for an order authorizing the return of the stolen retail property to the lawful owner prior to any trial of the offenses for which the property was seized as evidence.
Upon application to the court, the district attorney shall notify the defendant of the request for return of the property and provide the defendant 10 business days to inspect and photograph the property. The court, after notice to all parties and after a hearing, shall order any or all of the property returned to the lawful owner or a person, firm, or corporation entitled to possession if the court finds all of the following:
- The defendant has been given notice and an opportunity to inspect and photograph the property prior to the hearing.
- Photographs or other identification or analyses made of the property will provide sufficient evidence at the time of trial.
- The introduction of such substitute evidence is not likely to substantially prejudice the rights of the defendant in the criminal trial.
- There is satisfactory evidence of ownership.
The new law also provides that photographs or other identification or analyses made of any property returned shall be presumed admissible in lieu of the actual property at any subsequent criminal trial for violation of Article 16 (larceny), Article 16A (organized retail theft), or Article 18 (embezzlement) of Chapter 14 of the General Statutes, or violation of G.S. 14-100 (obtaining property by false pretenses). Any property returned pursuant to this provision does not need to be made available for evidence at the time of trial and may be sold or disposed of in any lawful manner by the lawful owner or person, firm, or corporation entitled to possession.
Regulation of Online Marketplaces
With the knowledge that many people rely heavily on the purchase of goods through online commerce, the General Assembly enacted new Article 50 of Chapter 66 of General Statutes, which regulates high-volume third-party sellers operating in the online marketplace. This new article seeks to protect North Carolinians from purchasing counterfeit or stolen goods from these kinds of sellers by requiring online marketplaces to collect and maintain identifying information for high-volume third-party sellers. The new article defines terms, details the kinds of information that marketplaces must collect, and outlines when marketplaces must disclose information about those sellers to consumers. Further, the article provides that violations may be enforced through civil actions brought by the North Carolina Attorney General.
The effective date of this particular provision is January 1, 2023.
If you have any questions about this offense or its application, please feel free to email me at bwilliams@sog.unc.edu.