Almonds, pistachios and other high-value nuts are an appealing commodity for not only health nuts, but also more recently to highly sophisticated criminal organizations in the San Joaquin valley.
A cargo theft specialist describes the motivation behind a crime wave hitting California’s lucrative tree nut industry: “It’s not easy to track a nut.”
It’s also not easy to immediately detect the criminals strategically robbing millions of dollars in nut cargo. But that’s what’s facing growers, the industry and authorities in California, where nut production brought in $9.3 billion in 2014.
“It hit us right between the eyes,” said Roger Isom, CEO of the Western Agricultural Processors Association. “This is not anything we’ve really seen before … we’ve experienced 30 thefts in the last six months,” he said in April.
With just a laptop and cell phone
While 621,694 pounds of tree nuts were stolen last year, the majority of robberies involve no breaking in. Rather, criminal organizations are exploiting the industry’s weaknesses and scamming their way through the system via strategic cargo theft, said CargoNet, a cargo theft prevention and recovery network.
“They basically trick [the distributors] into giving [the criminals] the cargo,” said Scott Cornell, transportation lead and cargo & theft specialist at Travelers Insurance.
To do this, all one needs is a laptop and a cell phone, Cornell said. The “bad guys” use the identity of a legitimate trucking company but change the contact information. They then apply online to pick up the nut cargo load with the false trucking identity, arrive to pick it up, and disappear. It’s only days later, when the distributors try to contact the company and reach a disconnected number, that they realize they’ve been scammed.
Another common method is known as fictitious pickup: Thieves arrive to pick up a nut load before the trucking company does and appear to distributors as legitimate through falsified paperwork. Other times, unknowing truckers are tricked into picking up a load in return for immediate cash.
An increase in cargo theft began around 2012 and surged in 2015, with total losses of $4.6 million last year, according to the U.S. Department of Justice in Sacramento. While general cargo theft is nothing new, nut processors specifically have seen thefts rise from just one in 2009, according to the Justice to Department, to 32 in 2015, according to Cornell.
California produces the most tree nuts in the United States, growing almost all the nation’s almonds, walnuts and pistachios. It is second to China in world production of tree nuts and is hit the hardest by theft, according to the USDA. But nut thefts also have been spotted in Georgia and Arizona, Cornell said.
The monetary value of the nuts has risen due to both popular demand for their health benefits and California’s drought, said Bob DeMallie, senior director of communications at Travelers Insurance.
Not only does the high profit attract thieves, but also the low risk involved in stealing nuts; they’re untraceable, can quickly disappear and are easy to move, said Cornell.
One nut load can be “a lot of money with nobody getting hurt,” DeMallie said.
Criminals picked up on this when the 2008 recession hit, raising demand in the food and beverage industry as demand for expendable items such as electronics fell. Criminals followed suit and have not returned to electronics, said Cornell.
Many times the fraud goes unnoticed for as long as six days or more – and by then the nuts are gone. With the country’s largest exporting port in Los Angeles, the cargo may even be on another continent by the time distributors realize they’ve been scammed.
Once criminals have the nuts, within about 24 hours they have been distributed, mostly domestically, Tulare, California, County Sheriff Mike Boudreaux said. Tulare County is the No. 1 agriculture-producing county in the state. “Any crop – nut, vegetable, fruit, you name it, we’re growing it here,” Boudreaux said.
The nuts can be sold overseas, direct to domestic consumers or to small, unknowing businesses, said Cornell. Black market price for nuts is equal to fair market price, unlike other commodities such as electronics where price drops.
Should punishment be harsher?
These robberies involve no violence, which means they are considered misdemeanor offenses in the state of California. When it comes to the agriculture world, Boudreaux said, crimes need to be considered felonies across the board, with severe penalties.
“It impacts us on so many different levels, as you can imagine,” he said, from migrant workers and their families to farmers to the shelf price a consumer pays.
The sheriff’s department created an internal task force to address the problem– and have recently doubled its size. Boudreaux said there have not been any recent thefts, and he credits the heightened sense of awareness and task force education efforts with nut growers, growing associations and distribution locations.
“Those [tactics] seem to be working really well,” he said.
He said officials expect theft to pick up again in September, which is harvest season for pistachios and walnuts. “Come walnut season, we do a lot of patrolling not only in air, but on the ground,” Boudreaux said.
State and local law enforcement work together on nut theft investigations. In 2013, Tulare law enforcement was able to coordinate the arrest of four people by working with Los Angeles port police.
“Our guys are going to follow these trucks as far as we need to … we’ve been as far as New Mexico,” Boudreaux said.
Western Agricultural Processors’ Isom said his group wants to see the nut thieves in jail, but the first step is raising awareness of the problem. California Assembly Member Kristin Olsen wrote a bill that would create an agricultural cargo theft task force. The bill has passed the House and is expected to be approved by the Senate.
Along with law enforcement, insurers, associations and distributors are working together to step up security such as recording copies of truckers’ driver’s licenses, using fingerprint scanners and more.
“Our resources need to be focused on protecting those [people affected] … at the end of the day, we’ve got to catch these guys,” Boudreaux said.