What is Organized Retail Fraud

Michigan, in an effort to discourage people from stealing from stores and reselling what was stolen, enacted a law called Organized Retail Fraud.  Pursuant to Michigan Compiled Law section 752.1084, Organized Retail Fraud is a felony that carries up to 5 years in prison, a fine of $5,000, or both.  If committed by a merchant, the merchant’s inventory is subject to forfeiture.  Restitution is always ordered in these cases if the merchandise is not recovered or cannot be resold.  Probation is a possibility for these types of offenses in many cases, and having an experienced criminal lawyer is a necessity to help you try to obtain the best possible result.

How Retail Fraud Differs from Organized Retail Fraud.  Retail Fraud, or shoplifting, is basically a theft from a store that is open to the public of merchandise offered for sale.  Retail Fraud can be a 93 day misdemeanor if prosecuted under local ordinance or if the dollar value of the merchandise is under $200 (two hundred dollars).  It can be a 1 year misdemeanor if the dollar value of the merchandise is under $200 (two hundred dollars) and the Defendant has a prior theft conviction, or if the dollar value of the merchandise is between $200 (two hundred) and $1000 (one thousand) dollars.  Retail Fraud is a 5 year maximum felony if the dollar value of the merchandise is over $200 (two hundred) and the Defendant has a prior theft conviction, or if the merchandise is valued at $1000 (one thousand dollars) or more.  Organized retail fraud is not controlled by dollar amounts or an individual’s prior record, although these might be factors that a prosecutor considers when initiating charges.  Organized retail fraud is determined by the intent of the person or persons involved, and by what Michigan Compiled Law section 752.1084 defines as Organized Retail Fraud.

Examples of Organized Retail Fraud.  With the internet, it is not uncommon for people to shoplift with the intent to sell those items online through eBay, Poshmark, or other websites as a business.  There are also instances where individuals steal multiple identical items (such as razors, powdered baby formula, etc.) from a chain store (Walgreens, Meijers, Walmat, etc.) and sell those items cheaply to another smaller store (party store, mom and pop store, etc).  The smaller store then turns around and resells those items.   In this instance, both the persons who stole the items and sold it to the smaller store, and the smaller store employees who were knowingly part of this transaction, could be prosecuted for organized retail fraud.

Who can be prosecuted for Organized Retail Fraud?   This offense can either be performed by one individual, or a group of individuals working together.  This law envisions a broad number of persons who can be prosecuted for this crime.

  1. A person who organizes, supervises, finances or assists someone else to commit organized retail fraud can be prosecuted.
  2. A person who assists another person to commit organized retail fraud by removing theft detection devices, deactivates a fire alarm from a door, or otherwise conspires to commit organized retail fraud is subject to prosecution for this offense.
  3. If a person purchases or possesses for sale merchandise that he or she believed was stolen from another merchant commits organized retail fraud.
  4. Telecommunication fraud by using fraudulent credit with the intent to defraud another person or breach a wireless telecommunications service agreement also falls under the umbrella of organized retail fraud.

Defenses to Organized Retail Fraud.  Defenses can include reasonable doubt, lack of intent, and lack of identity.  Only a skilled and experienced criminal defense lawyer can successfully assert such a defense on your behalf.

However, according to MCL 752.1084(5) it is not a defense to claim that the property actually was not stolen, embezzled, or converted at the time of the violation if the party was explicitly represented to the Defendant as being stolen, embezzled, or converted.  The probable purpose behind this provision is to allow for sting operations in which an undercover police officer tries to see if a business, or employees of a business, are willing to commit organized retail fraud.  This does not negate an entrapment defense if such a defense is applicable.

The first thing you need to do if you are accused or charged with a crime is to hire an experienced criminal defense lawyer.  Your best bet is to contact attorney Daniel Hilf of the law firm Hilf & Hilf, PLC for any criminal law issues that may arise.