Fuel thieves are rak­ing in mil­lions

The crime is most preva­lent in Cal­i­for­nia, Florida, Texas, of­fi­cials say.

Los Angeles Times - - HIGHWAY 1 -

A black mar­ket for diesel and gaso­line has rapidly spread around the na­tion, with or­ga­nized crime gangs us­ing fraud­u­lent credit cards to siphon mil­lions of dol­lars in fuel from gas sta­tions into large tanks hid­den in­side pickup trucks and vans.

Steal­ing fuel can be less risky than selling drugs or other il­le­gal en­deav­ors, and crim­i­nals can make $1,000 or more a day re­selling the stolen fuel at con­struc­tion sites and un­scrupu­lous gas sta­tions, or to truck­ers look­ing to cut costs, in­ves­ti­ga­tors and in­dus­try ex­perts say.

“It’s pretty ram­pant,” said Owen DeWitt, whose Texas-based com­pany, Know Con­trol, fo­cuses solely on help­ing gas sta­tions pre­vent fuel theft. He said the crime is worst along In­ter­state 10, from Jack­sonville, Fla., to the Los Angeles area. “Cal­i­for­nia and Florida are the two worst; Texas is No. 3.”

Black-mar­ket diesel started be­com­ing a big busi­ness when credit card “skim­mers” be­came more preva­lent around 2006, DeWitt said. Thieves in­stall th­ese de­vices at gas sta­tion pumps, where they record card in­for­ma­tion as un­sus­pect­ing cus­tomers fuel up. The in­for­ma­tion is later trans­ferred to a mag­netic strip on a coun­ter­feit card. The prob­lem has only grown as the de­vices be­come more so­phis­ti­cated.

The black mar­ket has grown quickly in part be­cause the thefts to­tal a few hun­dred dol­lars at a time, and pros­e­cu­tors were slow to pri­or­i­tize them. But as fuel thefts be­come more or­ga­nized, they have caught the at­ten­tion of state and fed­eral au­thor­i­ties around the country.

Agri­cul­ture and Con­sumer Ser­vices Com­mis­sioner Adam Put­nam’s de­part­ment takes the lead on pros­e­cut­ing th­ese crimes in Florida. He said they used to be con­sid­ered a “vic­tim­less” or “slap-on-the-wrist-type crime, and yet they were mak­ing more money do­ing this than a lot of other criminal ac­tiv­i­ties that had a lot higher sen­tences.”

The U.S. Se­cret Ser­vice, which in­ves­ti­gates fi­nan­cial crimes, is in­volved be­cause the gangs use credit card skim­mers. Agent Steve Scar­ince says Mi­ami, Los Angeles and Las Ve­gas are hot spots, to­gether ac­count­ing for about 20 mil­lion gal­lons a year in stolen diesel.

“The crews that we’ve in­ves­ti­gated over the past cou­ple of years — the least prof­itable group is $5 mil­lion a year. And then there are groups that will gross $20 mil­lion-plus,” Scar­ince said. “The gang bangers in Los Angeles have been mi­grat­ing to fi­nan­cial crimes in­stead of street crimes be­cause it’s much more prof­itable and if you get caught, you get pro­ba­tion.”

Court records from a sin­gle Se­cret Ser­vice case pros­e­cuted in 2014 il­lus­trate how much money even a small crew can take in.

Agents in the Los Angeles area surveilled a group with seven pick­ups and SUVs with hid­den fuel tanks hold­ing up to 300 gal­lons each. For 10 months, they ob­served driv­ers us­ing credit card in­for­ma­tion stolen from about 900 peo­ple to fill up three times a day. They trans­ferred the diesel into a 4,500-gal­lon in­dus­trial fuel tanker that made daily runs to sell the fuel to gas sta­tions.

Agents es­ti­mated they stole close to $16,000 in fuel ev­ery day, with the po­ten­tial to steal $7 mil­lion a year. Records in­di­cated it was in op­er­a­tion for about five years be­fore agents shut it down.

“Theft has been in­volved with fuel for as long as re­tail­ers have been selling fuel,” said Jeff Le­nard, a vice pres­i­dent of the Na­tional Assn. of Con­ve­nience Stores in Alexan­dria, Va., but today’s crim­i­nals are “try­ing to steal hun­dreds, if not thou­sands, of gal­lons.”

Thieves of­ten use dozens of fraud­u­lent cards at a time, in­sert­ing one af­ter an­other to fill up hid­den tanks. One gang used fraud­u­lent credit cards for a month to steal $100,000 in diesel from two sta­tions in cen­tral Florida. In other cases, one thief parks a truck to block the clerk’s view while an­other pumps diesel di­rectly from an un­der­ground tank through a hole in the ve­hi­cle’s floor­boards, in­ves­ti­ga­tors say.

Texas Comptroller Glenn He­gar has pur­sued sell­ers of black-mar­ket fuel for break­ing state mo­tor fuel tax eva­sion laws, se­cur­ing some stiff sen­tences: In 2015 alone, his of­fice worked to in­dict more than 100 sus­pected mo­tor fuel thieves. A Gor­man, Texas, man got 40 years in 2015, and a Haskell, Texas, man was sen­tenced to 10 years last Au­gust.

There are ways of foil­ing th­ese thieves, in­clud­ing se­cu­rity de­vices that can shut down a pump if some­one tam­pers with it. It’s an ex­pen­sive arms race, but in ad­di­tion to the eco­nomic ef­fect, there are safety con­cerns.

In 2014, a con­victed fuel thief’s van ex­ploded as he filled a se­cret tank in Mi­amiDade County. In 2015, a man driv­ing a truck car­ry­ing 1,650 gal­lons of stolen diesel led po­lice on a high-speed chase in the Los Angeles area, weav­ing in and out of traf­fic on the 5 Free­way be­fore crash­ing into a bar­rier.

“God for­bid that hits a school bus with a bunch of kids on it,” said Ned Bow­man, ex­ec­u­tive direc­tor of the Florida Pe­tro­leum and Con­ve­nience Store Assn. “A car full of that much fuel is like a bomb go­ing down the street.”

‘The crews that we’ve in­ves­ti­gated over the past cou­ple of years — the least prof­itable group is $5 mil­lion a year.’ —Steve Scar­ince, agent with Se­cret Ser­vice, which in­ves­ti­gates fi­nan­cial crimes

Larry Payne Florida De­part­ment of Agri­cul­ture

PICK­UPS like this one, which is out­fit­ted with a large tank, are some­times used to steal fuel.

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