In the area’s latest flea market bust, investigators used surveillance equipment and name-brand products from Kroger and CVS to shut down alleged racketeering rings that stretched across five Ohio counties and involved fencing name-brand and counterfeit goods at the Caesar Creek Flea Market.
The late-June bust resulted in charges against 11 people in Franklin, Fayette and Clinton counties ranging from crack cocaine trafficking and trading stolen name-brand products for drugs to the peddling of counterfeit trademark sports clothing.
The Caesar Creek case was part of the region’s first organized retail crime investigation, said Sgt. Steve Ream of the Middletown Police Department.
Still authorities have few illusions there will be a long-term drag on the incidence of flea-market racketeering or overall organized retail crime — responsible for an estimated $30 billion a year in losses nationwide.
Instead, a new ring will satisfy the demand for name-brand products at black-market prices. Thieves, or “boosters,” — typically driven by drug addictions — find a way to “fence” their stolen goods for money or drugs at flea markets, pawn shops or online, authorities said.
“So it’s an ongoing cycle,” said Dennis Dansak, a former U.S. Department of Justice agent who manages the Kroger Co.’s organized retail crime unit.
“We infiltrated the flea market and opened Pandora’s Box,” Ream said.
But flea market officials said vendors involved in crimes are a small minority compared to the majority of law-abiding entrepreneurs operating businesses from booths at the markets.
At the nation’s 1,100 flea markets and through lobbying at the state and federal level, operators also are fighting shoplifting and organized theft operations, said Gregory Dove, president of Levin Service Co., owner of the Caesar Creek Flea Market and Treasurer Isle in Monroe, Butler County.
Flea markets find themselves at odds with major retailers when proposed law or rule changes target flea markets, said Dove, also a National Flea Market Association board member.
“We are a successful competitor of these big-box stores,” he said. “We do not allow the sale of stolen merchandise. We do not allow counterfeit items or the sale of knockoffs.”
Policing flea markets
Problems with the sale of counterfeited or stolen name-brand goods are pervasive, said Bob Hope of Hi-Hope Consulting, a Cleveland-area company assisting with the Caesar Creek case.
“It’s all over the state of Ohio. It’s all over the country. It’s all over the world,” Hope said.
Monroe Police Chief Gregory Homer estimated his officers raid local flea markets two or three times a year, in addition to conducting periodic checks at the flea markets. Homer said vendors also sell a variety of legitimate goods at booths and in front of the established vendor areas at flea markets.
“In general, they are not bad neighbors,” he said.
Every weekend at Caesar Creek Flea Market, 250-350 vendors peddle goods and services to 8,000-16,000 customers, Dove said. They operate under many of the same laws and rules regulating retailers, while operating on a much smaller scale, he said.
“Flea markets are truly small-business incubators,” Dove said. “It’s a great way for them to get started.”
ORCAs in Ohio
Following collaborative investigations at two Columbus flea markets, Ohio’s first Organized Retail Crime Association (ORCA), another tool being used to fight organized retail crime in America was formed.
Kroger, CVS and other major retailers are taking initiative, in part out of recognition that local law enforcement faces tight budgets and competing priorities.
Getting the goods
Court records show that on April 13, Ream first met with a Clinton County deputy, undercover agents from Kroger and the Franklin Police Department, and a confidential informant (CI) at the Caesar Creek Flea Market.
After donning surveillance equipment donated by Kroger, they approached a vendor at the flea market, according to a Clinton County Municipal Court search warrant.
“The CI asked the vendor if she purchased items from people. The vendor advised the CI to go to aisle 1 and speak with Vicky,” according to an affidavit filed with the warrant issued for the search of four booths at the flea market operated by Vicky L. Emerson, 63, of Batavia.
During the next two-plus months, police and company agents worked undercover to identify vendors willing to fence the goods – provided by the retailers - at cut rates, as well as vendors suspected of peddling counterfeit goods, records show.
Records show authorities seized goods from booths operated by 10 vendors, including Robert E. Davis, 43, of Jeffersonville. Emerson, Davis and four other vendors face charges of receiving stolen property or selling counterfeit goods.
Those charged and their lawyers could not be reached for comment.
Dove noted only five vendors were charged after the two-month undercover operation. He said one vendor was evicted and said authorities had returned some seized goods. Flea market officials worked to combat shoplifting and organized theft from vendors, he said.
“We want to protect the integrity of the small businesses,” he added.
Laundry soap and crack cocaine
The same day the booths were searched, Davis and two other Jeffersonville men, Marcos J. Baker, 34, and Terrance Russell, 33, were arrested, as an informant and undercover officer unloaded 92 bottles of Tide detergent at Baker’s home, according to a Fayette County search warrant.
Before he was arrested while allegedly trying to flush cocaine down a toilet, Baker traded an undercover detective and informant drugs or money for name-brand products multiple times, according to documents filed in Fayette County Common Pleas Court and U.S. District Court in Columbus.
“I explained to Mr. Baker we had another load if he was interested. Mr. Baker stated he was interested. We opened the back hatch of the vehicle and started unloading the Tide laundry soap,” the agent reported.
As Baker was taken into custody, federal agents searching his home recovered more Tide, as well as 28 grams of cocaine, according to court documents.
Baker faces up faces up to 20 years in federal prison and a $1 million fine in federal court.
Baker, Davis, Russell and two others were charged in Fayette County with engaging in a pattern of corrupt activity and receiving stolen property. Baker, Russell, Davis and Jason Milstead, 29, of Bloomingburg, are scheduled to appear next on Oct. 7.
A fifth alleged co-conspirator, Holly Jo Penwell, 34, of Washington Courthouse pleaded guilty to complicity to receiving stolen property on Aug. 27 and was sentenced to nine months in prison.
Staff writer Rick McCrabb contributed to this report.
The newspaper gathered court records and talked with authorities from Columbus to Washington Courthouse to Lebanon, and interviewed national experts on organized retail crime and flea markets. Incident reports, search warrants and court filings complement information gathered from interviews and press releases by authorities involved in the most recent undercover operation targeting the resale of stolen name-brand goods and counterfeit products.