Baby Formula’s Hot in Underground Market

By Gaiutra Bahadur
The Philadelphia Inquirer

Call them the Bonnie and Clyde of baby formula.

Erin Hayes, 20, and Michael Paciotti, 22, wheeled a shopping cart full of hundreds of dollars worth of Enfamil and Similac out of a Genuardi’s store in Montgomery County, according to guilty pleas entered earlier this summer.

The serial shoplifters, police said, planned to sell the cans of formula to corner groceries in Philadelphia to feed their heroin habits.

Their heist, however brazen, was not unique.

There is a booming nationwide black market in baby formula on city streets, where thieves sell stolen merchandise to mom-and-pop stores or even just to moms and pops at cut rate.

“It’s big business,” Montgomery County Sheriff John Durante said.

Police nationwide have nabbed baby-formula bandits – either by cracking organized-theft rings or catching solo practitioners – in such diverse places as St. Petersburg, Fla.; the Chicago suburbs; Hartford, Conn.; Milwaukee; and Cleveland.

Retailers have sent loss-prevention agents to police conferences, flea markets and grocery stores, hoping to reclaim formula or other purloined goods – or to prevent them from disappearing off their shelves in the first place.

Redner’s, a discount chain based in Reading, estimates that before it locked up its formula in compartments at the checkout counter this spring, it was losing $5,000 a week in stolen formula from its 32 stores in Pennsylvania.

“Our senior staff decided they weren’t going to take it anymore,” said Eric White, a spokesman for the chain.

Acme also reports losses in baby formula, which it sells for about $24 per 1-pound can of the powdered form.

“It’s an expensive product,” said Walt Rubel, the company’s spokesman. “And it’s a relatively easy item to dispose of. It’s not like you’ve stolen a car.”

Prosecutors, defense lawyers, and law enforcement officers in the region say they have seen the deal before: Corner-store owners make a bigger profit when they resell the formula, and the shoplifters – in many cases addicts – make enough to get their fix.

Pennsylvania troopers who raided seven stores known as bodegas in the Kensington section of Philadelphia in April saw that pattern.

Their three-year undercover investigation unearthed an elaborate criminal enterprise involving drug users, store owners and kingpins.

“The shoplifters were heroin addicts, for the most part,” said Cpl. Steven Davis, a trooper with the state police organized crime division. “Usually, the shoplifters aren’t involved [directly] in the organization. They just know where to take the stuff, through word-of-mouth.”

The value of baby formula hasn’t always been widely apparent, even to big-time crooks.

As recently as a few years ago, according to testimony in a federal racketeering trial, thieves connected to Joey “Skinny” Merlino abandoned a tractor trailer full of formula as junk at a rest stop along the New Jersey Turnpike.

The mobsters did not realize how hot their mistakenly swiped loot was.

But as Durante put it: “It’s something that’s going to turn over and sell fast. Babies eat every day.”

Sometimes, several store owners said, the self-appointed salespeople of baby formula hit them up as frequently.

“It is common,” said Eddie Diaz, an owner of the Duran Food Market in North Philadelphia. “The main thing is, you have to say no. They understand we buy only from wholesalers, so they go to another place.”

Diaz said the hawkers come mainly from outside the neighborhood. But Evelyn Thompson, a housekeeper and mother of four who lives two blocks away from Diaz’s bodega, said there is also a brisk trade among locals.

“They’re still doing it,” said Thompson, who a decade ago resold Similac obtained with Women, Infants and Children coupons to corner groceries for $1 or $1.50 per can. Her son had outgrown the formula, and she needed the money to raise her family, she said.

“That’s the way it is,” she said. “People do it. And sometimes their children need that formula. They sell it for drug money, and the next day their children have nothing to eat.”

Supermarkets in the suburbs are a particularly tempting target for thieves, law enforcement authorities say.

Four suburban police departments – as well as the FBI, the New Jersey State Police, and the U.S. Attorney’s Office – aided Pennsylvania troopers in their raid of the Kensington bodegas.
The departments were from Aston, Delaware County; and Lower Moreland, Towamencin and Whitpain, Montgomery County – all of which sit along highways or major roads that lead into North Philadelphia.

In July, police in Camden arrested employees at a deli and two bodegas on charges of fencing after they seized DVD tapes, cigarettes, baby formula and other items stolen from suburban stores.

“We’ve seen an increase because we’ve gotten more stores,” said District Justice John Murray, whose Whitpain court handles about two cases of shoplifting by bulk each month. “Years ago, we did not have the big supermarkets here.”

The shoplifters cruise the highways, authorities said, targeting more than one store on every run.

“They don’t stop at just one shop,” said Durante, the Montgomery County sheriff. “They may hit three or four places and get trunkfuls of stuff.”

Sometimes a car isn’t even necessary.

Petty thieves carrying formula from Babies “R” Us and other stores in Falls Township, Bucks County, regularly walk across the toll bridges to Trenton to fence their goods, said Jan Vislosky, the Falls Township district justice.

When Durante was affiliated with the county forensics unit, he
said, he took fingerprints from cans of formula and other items seized from small groceries in Philadelphia in an effort to hunt down shoplifters. In some cases, the items still bore price tags stamped with the names of the stores from which they had been stolen.

But the black market for baby formula extends beyond – sometimes well beyond – this region.

In Minnesota last year, three women absconded with $1,400 worth of formula they said they wanted to take back to their families in Honduras.

U.S. Customs agents in Fort Worth, Texas, broke up a ring that paid crack addicts to shoplift cases of formula later shipped to Iran, Libya and Iraq. Economic sanctions in those nations had created a demand, prosecutors in Texas said.

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