Black Market Billions: How Organized Retail Crime Funds Global Terrorists [ハードカバー]

Hitha Prabhakar is an excellent author and acknowledged expert of the fashion industry. I would like to assume that this book has good solid facts on how organized crime rips billions of dollars off the retail industry and tracks some of that money to named organizations.

However, from my own studying, following and putting out analysis on terrorism, prior to and following 911, I found myself too troubled by some assertions made early in this book.

For example, take the assertion: "These terrorist groups are hell bent on destroying the American economy, its people, and its way of life, but also the lives of people with their own countries who don't stand with them." This statement dangerously misleads the public.

First, one cannot throw all named organizations into one group. Second, their individual prime objectives differ, but both prior to and since 911 have been primarily focused on either over-throwing their own governments, which they considered oppressive, and / or getting all foreign troops out of their countries or region, or in the case of the Palestinians to gain back their homes or gain relief from Israel's occupation and blockades. Our "way of life" means zip to them. For example, the explicit objectives of the often referenced 1989 mis-named bin Laden fatwah (he was one of five signers) were explicit, i.e., 1) Free al-Aqsa Mosque, 2) Free Mecca, 3) Remove U.S. troops from Saudi Arabia. Nothing about "way of life," etc.

One should not confuse the Taliban and Afghanistan / Pakistan border chiefs with al Qaeda, The Taliban were unequivocal anti-terrorist, known to be "extreme" in their law enforcement, and considered themselves US allies up until our attack. Although not the US official perspective, they and the border tribes are in fact fighting an occupation force, which action is legal by international law i.e., UN Charter Article 51 (and thereby US Constitution Article VI, item 2) as well as UN General Assembly Resolution A/RES/33/24.

As for the Taliban raising the cocaine trade, it was the Taliban which totally shut down the opium production in Afghanistan, and that production did not begin again until after our invasion and overthrow of the Taliban government. Such details, in this work excluded, are relevant if one wants to look beyond political agendas.

Relevant also is that Bin Laden was not released from his 2000 mandated vocal and written Islamic vow to Taliban commander Mullah Omar to remain out of international involvement, under threat of expulsion from guest status in Afghanistan, by Omar until after the US attack on the Taliban following 911.

The Taliban in Latin America? Come on. One has to wonder about some of these sources.

How does anyone, as claimed, address an audience of 30,000 in a room? And if the 30,000 is supposed to refer to al Qaeda, then it is fictitious.

If ORC (Organized Retail Crime) costs retailers nearly $30 billion / year, then how could Ohio alone reported losing $61 billion in sales taxes alone? Even if the entire $30 billion lost were in Ohio, it could not have lost more than $2.4 billion in sales tax annually, assuming 8% sales tax.

Due to my own previous studies of US and International Organized Crime I am in complete sympathy with the premise of this book, the enormous hundreds of billions of dollars extracted from world economies by organized crime, and connections to organizations, not only terrorist, but including political, judicial, law enforcement, and corporate. Hence, I looked forward to reading this book. But, unfortunately, in trying to review this book I ran aground on too many early assertions which I found questionable and misleading. Hence, I lost confidence in the book's credibility of assertions made by the author's sources.

Terrorism is real. But misrepresentations, although innocently passed on, are not helpful, for it misleads people, mis-directs their attention, and can cause them to ultimately be caught by surprise for not realizing the directions, i.e., causes, from which threats can come.

Understand this: These people have causes in which they believe with their lives, regardless of what we may think. These causes have nothing to do with whether we go to movies, party, shop at Walmart, or whatever. Their causes are focused upon what is happening in their own countries and regions. That is the intersection of their hatred and our actions.

This book should focus on the financial trail and minimize tangential assertions.

My apologies for the length of this review.

Hitha Prabhakar's most recent book, Black Market Billions, is an expose of organized retail crime (ORC). Prabhakar is not only concerned about the financial impact of ORC on retailers, but stresses the connection between ORC and the funding of global terrorism. Although I had heard some of this information piecemeal from soundbites on the nightly news, I had never quite connected the dots and understood the extent that ORC funds terrorism or just how widespread the problem is. Prabhakar's book reads like an extended Time Magazine article. It goes for a more superficial breadth than for depth, but still it makes a compelling and interesting read.

Prabhakar became interested in the problem of ORC when she was offered a Givenchy designer bag from a friend who had 'connections' in the business. With a little research she realized that insiders who work for designer firms or high-end department stores had privileged access to inventory and are able to siphon out high-end merchandise and sell it at a discount for profit. What she wasn't prepared for was finding out that this was only the tip of the iceberg. Retail piracy is big business that generates millions of dollars of income. It may have less bang for the buck than drug trafficking, but it is taken far less seriously by law enforcement. This makes ORC a less risky crime, where operatives might incur fines or very short prison sentences but still enable larger organizations to rake in major profits.

The book is divided into three major sections. Section one looks at the larger scope of the crimes. How ORC deprives retailers and manufacturers of profits and robs governments of taxes. In part two, Prabhakar follows the money, tracing the profits of ORC to various gangs, terror organizations, illegal arms dealers, and drug traffickers worldwide. Part three looks at possible solutions to the problems.

In general Prabhakar writes an interesting account of underworld economics. She connects the dots between the profits and the funding of terrorism and even briefly looks into bizarre alliances between street gangs, such as MS-13 (a street gang) with al Qaeda. Perhaps the most interesting part of the book was a brief review of major companies such as R.J. Reynolds and Sony that tried to gain an edge in market share by using illegal traffickers as part of their product distribution pipeline. She also brings out some interesting information regarding the role of gift cards/temporary debit cards in the illegal movement of money from country to country.

Although Prabhakar gives a fine overview of the subject, her emphasis is more on breadth than on depth. I would have wanted a little more detail on exactly how hawalas (underground banking systems based on trust where money can be made available internationally without actually moving it) are able to move and launder money and how the money then ends up in legitimate banks. Part three--which talks about solutions to the problem--was the shortest section of the book. I thought that this was a bit of a pity. I really wanted to know more about the ways to stem ORC and more about the steps that our government should be taking to stop ORC.

Nevertheless, Prabhakar sheds light on a topic that isn't all that well known and vividly connects what seems like petty crime to the funding of terrorism. There is more than enough to learn from this book and it makes for a compelling and interesting read.

This book (Black Market Billions: How Organized Retail Crime Funds Global Terrorists) by Hitha Prabakhakar is a very interesting book to read as it shows how some simple and mundane day-to-day activities such as retailing of consumer goods can be used to fund and support bad guys doing bad things. The consumer goods mentioned are mainly stolen goods or counterfeited/pirated products (such as DVD/software, designer clothing, handbags etc) probably for low cost + high margin reason. These seemingly simple activities can have a very complex structures (boosting, pirating, layering, laundering, etc) and consequences, and this book covers those steps in more detail on the organized retail crime industry topic. Other items covered: cigarettes and store/Amex/Visa/MC gift cards and the latter is very hard to track. This book is hard to put down when you start reading it due to the fascinating stories and also filled with eye opening facts (as per the writer research result).

Some of the examples of things covered in this book:
- Counterfeits luxury goods sold in USA (e.g. New York city etc), the internet, and also the rest of the world.
- OTC medicine stolen from CVS/Walgreen/Walmart and being "sold" back to the retailer through return process (or sold in the internet)
- Many of these thefts and robberies involve inside person
- These thefts are widespread (most retailer have created their own loss prevention task force to deal with this relatively widespread issue)
- The proceed of these activities are often used to fund global terrorism and other criminal activities

In conclusion, obviously, we don't want to be involved with organized retail crime (by buying these counterfeit or stolen products), but it is not as simple as many people likes to score a deal or aspire to own luxury brand above their reach. While it's hard to guarantee 100% that we aren't dealing with ORC when we buy stuff, you can remember some simple rules to minimize the chance of buying stolen and counterfeit goods such as:

1. Stick with well-known/reputable retailer
2. If it (the price) is too good to be true, it probably is (eventhough it's also sometime true that someone's junk is somebody else's treasure, so use your judgment)

Sidarta Tanu