California Democratic Governor Gavin Newsom has signed into law 10 new bills aimed at combating retail crime in the state.
Package, announced Fridayincluding new laws to crack down on petty theft, vehicle theft, organized theft and online marketplaces where these stolen goods are sold sometimes resoldThe new law comes after retailers called on local and federal authorities to do more to combat retail theft, calling it a growing challenge that affects profits, customers and employees.
One of the bills in the package, SB 1416, establishes tougher penalties for middlemen in organized retail crime rings and was introduced in response to CNBC’s investigation was published in Marchaccording to the office of Sen. Josh Newman, a Democrat who introduced the bill.
The bill would have imposed additional prison time and fines for selling, trading, or returning stolen property—a key activity for retail resale crime rings. Before the law passed, people convicted of participating in organized retail crime rings could face up to three years in prison. Critics said the sentences and penalties were not enough of a deterrent.
Newman said the law is designed to prosecute middlemen like Michelle Mack — the “queen” of organized retail crime exposed in a CNBC investigation. Police say she made millions of dollars reselling stolen goods on Amazon for a fraction of their normal retail price. Mack was arrested in December and received a deferred sentence five years and four months in prison.
Mack’s husband, Kenneth, also received a similar sentence and is now in custody. The couple was ordered to pay about $3 million in restitution to the cosmetics retailer. Ulta and another $13,000 to Sephora, a court official previously told CNBC.
Retailers have cited shoplifting and organized retail crime gangs like Mack’s “California Girls” as reasons for lower profits, difficulties in recruiting and retaining staff, and a diminished in-store experience. Others have disputed these claims, saying retailers are exaggerating the impact of shoplifting and downplaying the operational issues behind lower profits.
The rate of commercial burglary and robbery in California has been steadily increasing over the past several years, according to data from the Public Policy Institute of California. Petty theft, while still well below pre-pandemic levels, is also on the rise.
Since January, the California Highway Patrol’s Organized Retail Crime Task Force has made 884 arrests and recovered more than 250,000 stolen items with a total value of more than $7.2 million, according to a press release announcing the new law.
Retailers have been urge Congress is set to crack down on organized retail crime nationwide, with retail lobbying group the National Retail Federation pushing to make it easier to prosecute shoplifting as a federal felony.
With the 2024 presidential election approaching, Democrats are also looking for take a tough stance on crime to address Republican criticism of the nation’s rising crime rate. However, critics of the effort to combat retail crime fear These measures may disproportionately harm minority groups.
Another bill, SB 1144, was also passed in a new package of legislation aimed at preventing the sale of stolen goods on online marketplaces like Amazon. The bill, Introduced by Senator Nancy Skinnera Democrat, builds on previous California law by updating compliance criteria for high-volume third-party sellers and making it easier to file civil lawsuits against online marketplaces that sell stolen goods, among other measures.
— CNBC’s Gabrielle Fonrouge, Scott Zamost and Courtney Reagan contributed to this report.
