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Waco, Texas looks to further discourage metal theft
City considering tougher laws on sales of scrap metal to discourage copper theft
By Kirsten Crow, Tribune-Herald staff writer
June 5, 2011
Waco officials are considering tougher regulations for scrap metal companies after a rash of copper thefts led to hundreds of thousands of dollars in losses to area homes, businesses and churches.
And while details of the new regulations being considered were unavailable, one component could be a requirement for electronic reporting of scrap metal sales.
"The problem seems to go with the copper prices," Waco City Manager Larry Groth said. "It seems like there have been more copper thefts than normal the last several months . . . We're seeing if we need to strengthen our ordinances."
Waco police officials are working with city attorneys to bring a discussion item to city council, likely during a late June or early July work session, Groth said.
At least one area official at a local scrap metal company said they will comply with any new ordinance. But he said it could overburden local scrap metal businesses, which he said already follow many procedures to discourage theft.
The issue recently returned to the fore after Waco police detectives arrested five men thought to be responsible for multiple air conditioning thefts throughout the city.
One of those men, 21-year-old Kristopher Harold, was charged with five counts of theft of more than $1,500 and less than $20,000, a third-degree state jail felony.
Arrest warrant affidavits state Harold sold $6,626 worth of air conditioning parts and metals — including 56 sealed units, 48 electric motors and 31 aluminum copper radiators — to a local scrap metal company, M. Lipsitz & Co., from January through April.
Harold confessed to 49 air conditioning thefts, amounting to at least $178,000 in damages, according to the documents.
In total, authorities think Harold sold scrap metal 64 times from September through April.
It would be speculative to state that Harold would have been arrested sooner if scrap metal companies were required to electronically report their purchases, said Waco police spokesman Sgt. W. Patrick Swanton, "but it would have certainly benefited the cases and absolutely could have helped assist in prosecution."
Most local pawn shops voluntarily report sales electronically through an online database called Leads Online, detectives said.
The online company also offers a Metal Theft Investigations Program, which operates in a similar manner, but local scrap yards are not required to use it.
Leads Online
Reporting electronically has revolutionized investigations into burglaries and thefts, police said this week.
Detectives Robbie James and Kevin Carter, who investigate burglaries and thefts as part of the Neighborhood Services Division, said they use Leads Online every day to track down stolen items and alleged thieves and burglars.
It's been used to make arrests in at least two recent cases: One of a 48-year-old man who confessed to three burglaries in his neighborhood after detectives searched the database and found stolen items that had been sold at area pawn shops.
Another man was charged with theft after detectives found he pawned at least seven lawn edgers reported stolen by a local hardware store.
All but a couple of Waco pawnshops use the electronic reporting system, and a few video game and gold and jewelry stores use it as well, the detectives said.
The program is free for merchants, while the city pays $8,000 per year for a subscription to search the database — a small amount compared to the money saved on manpower to investigate such crimes, as well as the value of making arrests and recovering stolen items, officials said.
Merchants are required by state law to log information on each pawn or purchase the stores make, including the name and address of the individual who is pawning the item, as well as a description of the item.
Several years ago, pawnbrokers would collect the tickets with that information for police review. Once at the station, a volunteer or a staff member could spend hours entering the data from the tickets into the station's database, the detectives said.
Because of the sheer number of tickets from each store, it could take weeks before the information was entered into the database and analyzed. In the meantime, the merchandise may already be gone. Pawn shops only hold a purchased item for 21 days before it hits the sales floor, and 61 days when it is pawned as a loan, brokers said.
More than 500 law enforcement agencies in Texas use Leads Online, according to company spokeswoman Lindsay Williams.
It is effective because thieves and burglars are always trying to exchange stolen goods for cash, detectives said.
"(Criminals) try to get rid of their stuff," Carter said. "If it doesn't go to pawn shops, it goes out on the streets. Our ultimate goal is to prevent every way they get paid . . . and decrease the thefts. If you can't get rid of something, you won't steal it."
Pawn shops
Several pawnbrokers said this week that other secondhand merchants, such as gold and jewelry dealers and scrap metal yards, should face stricter regulation.
Tom Pflaum, owner of Bosque Pawn and Jewelry, uses Leads Online, describing it as a "standard procedure."
Once a week, he compiles all pawned goods tickets and uploads them to the site. As required, he reports information from driver's licenses, serial numbers of products and descriptions of the products.
Although the store turns away suspicious sellers, they occasionally end up with stolen products that are turned in to the police, he said.
Any losses from stolen merchandise are just "the cost of doing business," Pflaum said.
"We don't lose much . . . There's a lot easier places to take (stolen merchandise) to than pawn shops," Pflaum said. "We don't want or take stolen merchandise; we don't need to."
One of the few pawnshops in town that does not use the program is Rodeo Pawn.
Mark Shaw, manager of the store, said employees photograph sellers, which is not mandated. They also photograph items if they feel it is necessary.
Reporting electronically is a superfluous step for a business already bogged down in mounds of paperwork, he said, and the store is strict about what it accepts as collateral.
"We'll call the police (if it's suspicious)," he said. "It's not worth the hassle to us, nor do we want the public or the police department to think we're fencing goods."
Employees ask sellers about the products — how to turn on a TV, for instance, or what carat a stone is. If the seller fumbles, it's a red flag that the product does not belong to them, Shaw said.
Both Pflaum and Shaw were critical of scrap yards, saying there are times when employees should question where a person is getting metal, especially if it's someone who has made several trips.
Both of their businesses have had their air conditioners stolen in the last year, they said.
Possible changes
Metal thefts are on the mind of lawmakers as well.
One measure, which authorizes the state to require "additional documentation, confidentiality and record-keeping provisions for metal recycling entities and provides penalties for non-compliance," has already been sent to the governor for his signature.
It has provisions for scrap yards to get more information to identify sellers and authorizes the state to contract with a vendor to provide a statewide electronic reporting system for purchases.
It includes central air conditioner condensing coils among regulated materials.
That's great news for Houston police Sgt. Mike McGinty, who oversees the department's Metal Theft Unit and testified in favor of the bill.
"It made no sense that these people could go to a scrap yard and sell air conditioning units on a daily basis," he said. "Nobody bothers to say, 'Where did he get these things?' "
Although the Texas Department of Public Safety keeps a database that scrap yards must report their records to, McGinty described it as virtually "unsearchable."
Waco Detective James agreed, saying data entered by scrap yards includes the weights and types of metals sold by individuals, but not in what form they arrived at the yard.
For instance, it may show the name and required information of an individual, and what was sold, but does not say whether it was sold in the form of air conditioner compressors.
According to research by the city secretary's office, the issue was last broached locally during a September 2007 Waco City Council meeting. An audio tape of the meeting reveals a debate about whether the city should ramp up its scrap metal ordinance, even though the state had recently increased its own recording standards.
It's not clear what became of the discussion after that meeting.
The two major scrap metal companies in town do not use Leads Online, nor are they required to, detectives said.
But tightening ordinances related to scrap metal companies isn't new, Commercial Metals Company plant manager Gregg Hill said.
He's worked at several recycling plants during the past 12 years, and has seen a wide range of local ordinances.
Should the city adopt more stringent reporting measures, CMC will do what it must, Hill said.
When the Dallas City Council adopted an ordinance requiring a thumbprint to sell metal, the scrap metal sellers in the city lost business from outlying areas, Hill said. He thinks the thumbprint requirement played a role in that.
Minimum guidelines
Waco's current ordinance essentially follows minimum state guidelines, Hill said. Each month, staff uploads CMC's records to the Texas Department of Public Safety database.
When police need help, Hill said the yard supplies the tickets for transactions, as well as video, upon request.
They also turn people away if "something doesn't look right," such as an individual with a lot of copper wire without explanation, he said.
"There's no way to safeguard 100 percent, but we do turn away business that doesn't look legitimate," Hill said.
He said he worked with Leads Online when he worked at a Shreveport, La., plant.
Although he described it as "pretty much a painless system," Hill noted that any time a new step is created when processing scrap, it can "burden the business."
He said computer upgrades and additional personnel for data entry are among possible added costs.
Charles Johnson, operations manager of M. Lipsitz and Co., another major scrap metal company operating in Waco, declined an interview for this story. Melvin Lipsitz, vice president of the company, turned down a similar interview request in May.
In the meantime, the city will continue to look for improvements to the ordinance, while balancing the needs of the community, police and businesses, Groth said.
"The government is here to hopefully serve the greater good of all . . . we try to stay business-friendly, but we also want to keep citizens' rights and welfare in mind, too," he said.
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