State report investigates secondhand stores that exploit addicts

BY Rhonda Schaffler, Correspondent |

Pawnshops, scrap yards and cash-for-gold stores have become ATMs for addicts. That finding was contained in a 108-page report released by an independent watchdog investigating public corruption and organized crime. Business Correspondent Rhonda Schaffler recently sat down with Kathy Riley of the New Jersey State Commission of Investigation looking into complicity in New Jersey’s Drug Addiction Crisis.

Schaffler: Kathy, let’s talk a little bit about this report, Corrupt Commerce. You basically looked at an underground economy here in New Jersey with some very unsavory characters and activities.

Riley: Yes, this investigation grew out of an investigation we did 1o years ago. We were one of the first government agencies to really identify the growing prescription pill abuse as the leading edge into a heroin epidemic. So we looked at that issue a little closer and found that there were some corrupt businesses that were essentially profiting from victims of the heroin and opioid crisis and cashing in on that crisis by enabling and exploiting drug addicts, who are basically desperate to do whatever they can to fund their next fix.

Schaffler: So these businesses included things like pawnshops, recycling centers, business that, perhaps not completely surprising, some materials going through there could be questionable. They don’t have the best reputation, but there was illegality going on.

Riley: Well, I think what was compelling that we found was not only were these businesses accepting stolen goods, but in some cases they were directing customers on what items to steal that they could be resold for maximum value.

Schaffler: So the people that came in that had issues, they needed drug money, tell me some stories, briefly. Give me examples of some of the people you encountered during this investigation.

Riley: We had very many sad tales of individuals who were raiding parts of the public infrastructure. We’re talking manhole covers, storm grates, wire emblazoned with the local utility. They would load up vehicles that would be so loaded down with these metals that they were dragging on the ground. And these folks were going to these scrap yards and secondhand stores two or three times a day. They would go and they would sell these items that were clearly stolen. And the same thing happened every time, no questions asked. They were readily given cash to fund their sale.

Schaffler: And cellphone towers, too, were hit, right?

Riley: We also had some stories of individuals who had previously worked for some of the telecom companies and unfortunately became addicted to heroin. And what happened is they still knew the codes to the cellphone towers. They were never changed, so they were able to go in and raid the batteries, the backup batteries, to these, and they apparently sold for quite a penny. And the problem is when that happens, cellphone service is compromised for all of us.

Schaffler: So why weren’t any questions asked? If somebody comes in multiple times during the day with metals or wires that say PSE&G on them, how could no questions be asked?

Riley: Well, we had one of the scrap dealers who told us, if we ask questions, I wouldn’t have any customers. Which we think sort of summarizes our argument here that they’re knowingly buying stolen goods.

Schaffler: How are residents in New Jersey being impacted beyond those involved in the transactions? There’s a public cost to what you found.

Riley: Absolutely. There’s a public cost. First of all, the infrastructure that’s stolen or damaged, that’s tax dollars that have to pay to replace that. Also, regular citizens can feel the impact on higher cellphone bills, or utility bills. And also, we saw the whole element of items that were stolen from retailers. They have to pass the cost on somewhere to regular taxpayers as well.

Schaffler: There were some very sad stories in this report. There was one man who went through $800,000 worth of money to support his drug habit, and then had to turn into going into some of these scrap yards in selling goods just to sustain the habit.

Riley: Some of the stories are heartbreaking. These are individuals who said they were desperate, otherwise they would never do such things. We also heard from the family members of people who had overdosed and they were equally heartbreaking because they had gone to some of these businesses and said, “You know my loved one is selling stolen items here. Please do not give them money to fund their drug habit.”

Schaffler: What is the underlying problem? Why is this going on and how does it get fixed?

Riley: Well, what we found is there is a real patchwork approach to addressing this. Municipalities regulate secondhand goods stores and scrap yards, so there’s sort of a hit or miss approach, if you will. And some municipalities have pretty good ordinances. We highlighted one in Pine Beach, Ocean County, but a lot of them don’t. In fact, we saw some towns that the police didn’t even know they had an ordinance to police these kind of operations. So we think there needs to be more overall statewide approach to both regulation and oversight.

Schaffler: And then of course the issue always comes up, how do you regulate people that are being honest? You don’t want to have a broad brush and hurt everybody. And in fact, Gov. Christie was not a fan of increased regulation on these entities. How many bad apples are there? Is it the exception rather than the rule?

Riley: We don’t like to paint a broad brush either, but I think if these businesses are doing the right thing, they’re not going to have any problem. Some of the regulations that we’re proposing are online databases that would regulate sales and track the details of those sales. That’s already being done in some communities and it seems to be pretty effective.

Schaffler: And what other suggestions is the commission making?

Riley: We would like to see, again, a statewide licensing. We recommend the state police handle that and they could work hand-in-hand with the county and local officials to regulate it. We also think there should be things like video cameras to watch what’s going on in these businesses. There’s a lot of things that we think would not be too onerous on the business community, because we don’t want to want to do that either. We think these are things that are reasonable, but could be effective.

Schaffler: What surprised you the most when you were doing work on this report and learning about some of these individuals.

Riley: I think the extent to the infrastructure theft. I think a lot of us know that drug addicts perhaps steal things to fund their drug habits, but the fact that bleachers were being stolen from a schoolyard, or storm grates and manhole covers, the just desperation and the lengths that were gone to to get metal that would fund a habit is pretty staggering.