The Perfect Crime

Diamonds are not only valuable

“I pulled my car into a strip mall in California last year,” says the traveling salesman, whose business takes him all over the state, including to San Francisco. “It was hot. The windows were closed. The A/C was blasting. A car pulled up behind, boxing me in. A man, a Latino, pointed a gun at me, screaming, “Don't do anything!' He busted my window with a hammer, reached in, unlocked the doors, demanded my cell phone. Another guy grabbed my bag from the back, with about a half-million dollars' worth of jewelry inside. They ran back to a car, escaped. It was all over in about 20 seconds.”

The salesman — let's call him “Ian” — says, “I'm not looking for sympathy. I knew the risks. My insurance covered the loss. I took a couple months off and went back to work.”

Ian is one of 231 traveling jewelry salesmen who were robbed last year in the United States of goods worth upward of $30 million. California has by far the highest rate of jewelry heists in the nation. In San Francisco, such robberies take place an average of once every six weeks. In fact, since January 2000, gangs have robbed 17 traveling salespeople in the city of $6.5 million.

“I view the San Francisco Bay Area as a hotbed of this type of crime,” says Ian. “The I-5 corridor is the perfect getaway route.”

Most of the Bay Area crimes have been committed by organized bands of jewelry robbers, based in Los Angeles and composed primarily of illegal aliens from Colombia, Peru, and Ecuador. The gangs, which the FBI has dubbed “South American Theft Groups,” or SATGs, have operated for more than 20 years, roaming the state preying on jewelry salesmen and stealing as much as $20 million a year in precious gems and wearable treasure.

Yet remarkably, very little is being done to deter them. The thieves' elusive, loosely connected groups have easily adapted to every new security measure thrown at them. Law enforcement has been baffled by their methods, which experts say are typical of a relatively new type of international crime organization. The jewelers themselves have been wary of drawing attention to the crimes. Insurance companies simply raise their premiums.

In the ecology of crime, the jewel thieves seem to have found a perfect evolutionary niche. Not a single one of the salesmen, jewelers, insurers, cops, or criminologists interviewed for this story said there is any real possibility the South American Theft Groups can be stopped. In fact, several experts said a crackdown might only make the problem worse, by escalating the violence or allowing even more virulent crime groups to take over.


THE CRIMINALS

Spotters, Stalkers, and Attack Teams

Last August, a gang of thieves stole $25,000 in jewelry, at knifepoint, from a salesman in Santa Maria, according to a federal indictment filed in San Francisco last fall. Two weeks later, the same gang robbed a salesman traveling through San Francisco, at gunpoint, making off with $200,000 in jewels. A week later, they stuck up a salesman in Sacramento, netting jewelry valued at $50,000. On Aug. 29, the gang hit another jackpot: ripping off half a million in precious baubles from three salesmen from Hong Kong who had just finished showing their line to retailers at San Francisco's Jewelry Mart & Gift Center on Brannan Street. The hungry salesmen had driven to the parking lot of a Chinese restaurant in Millbrae. Three “Hispanic males” trapped them in the car, broke the glass on the driver's side with the butt of a semiautomatic pistol, grabbed the jewels, took their cell phones, and drove away in two vans.

This story is no different from hundreds of other jewelry heists, except in one respect — two suspects were arrested. A few blocks from the crime scene, an off-duty San Francisco fireman saw the robbers transfer a plastic trash bag from one van to the other. Suspicious, he wrote down a license plate number, which was traced to H&S Auto Sales in Los Angeles, a place frequented by Jorge Humberto Zamora-Suárez. Two of the victims identified a photograph of Zamora-Suárez. An FBI-LAPD task force tailed their suspect; they watched him lug “heavy dark bags” into a motel room, which was occupied by Esteban Calderón, a Queens, N.Y.-based jeweler who was already being investigated by the task force for possible involvement in fencing stolen jewelry. Police arrested Zamora-Suárez and Calderón, seizing thousands of pieces of jewelry, including the take from the Hong Kong salesmen. The two suspects are awaiting trial in federal court, charged with conspiring to transport stolen goods across state lines. Zamora-Suárez is also charged with using a gun to rob the Chinese salesmen.

Calderón's attorney, Marlene Gerdst of Beverly Hills, says her client, who is out on bail, simply came upon the scene and has no knowledge of the stolen goods. Zamora-Suárez was denied bail as a flight risk. His attorney did not return telephone calls seeking comment.

LAPD Detective Michael Woodings was involved in the Calderón and Zamora-Suárez capture. He is the nation's leading expert on the South American Theft Groups. “These gangs are fueled by a constant tide of new people from Bogotá. Holes in the [immigration] system allow them to come and go from the U.S. on fraudulent visas, or “wet' through Nogales. They disappear in the major cities.” The gangsters do not bother to disguise themselves when they make a hit. Their fingerprints are usually not on file; they trade identities with ease. They seem to operate quite independently of other South American gangs in the United States that specialize in different forms of crime, such as selling narcotics. The jewel thieves come to America because, to echo bank robber Willie Sutton, “That's where the money is.” And, more important, they are unlikely to be caught.

“They rob because they can,” says Woodings. “San Francisco has a huge concentration of high-end jewelry stores and wholesalers: the Brannan Street area, Union Square, Chinatown, the Marina.” [page]

The very nature of their business has made those dealers vulnerable. Jewelry is not a commodity that can be sold well from a catalog or on the Internet. Buyers want to touch the metals, to watch light refract inside the gems, to search for imperfections with a loupe. Salesmen, who usually work on commission, must often carry hundreds of thousands of dollars' worth of merchandise for buyers to inspect. Except for the larger companies, jewelry firms can't afford a lot of security. And that makes them irresistible targets to thieves.

The bandits who prey on them are extremely mobile and disciplined. Operating in teams of eight to 12 men and women, the robbers set out from Southern California barrios on monthlong hunting trips. Each criminal is trained to perform a role. For example, a “spotter” will traipse the long, airless halls of San Francisco's Jewelry Mart trolling for salesmen. They are not hard to identify. They usually carry an attaché case or knapsack. They tend to be very watchful of the people around them as they go from store to store.

Once a salesman is marked, “stalkers” follow their victim, sometimes for days, noting security weaknesses. When the time is right, they use cell phones to call in an attack team, which closes in, ready for the mark to make the inevitable slip. For example, en route to visit a customer, the target may stop to eat lunch, go to the bathroom, or visit an ATM.

At that vulnerable moment, the thieves strike quickly. One car swoops in, one or two attackers leap out, brandish a gun, break a car window, then speed off with the jewels — all within seconds. Often they will demand the victim's cell phone to stall him from calling the police. Meanwhile, the team of robbers typically hands off the loot to a team in another car, which puts it into pre-addressed FedEx or DSL cartons and drops them off at pickup points within minutes of the hit. Then both teams melt into the urban landscape.

Overnight the jewelry is shipped overseas, where it is dismantled by fences, the gems are recut, and the gold, silver, and platinum are melted. The hot merchandise is recycled back into the world's mainstream jewelry industry — transformed and untraceable. For their efforts, the SATGs reap about 10 to 15 cents per dollar on the wholesale value of the product from the fences.

The victim, on the other hand, is often forced to absorb the loss. A salesman knows his insurance policy won't cover precious goods left unattended in the car — and he will leave them anyway.

Vic Ash, owner/operator of Katra Designs, has been in the business since 1975. He maintains “a mode of constant alert” on the road. Last year, in broad daylight, Ash was 15 steps from his vehicle, headed toward a cash machine, when he heard a car window smash. He turned and saw a man yank his briefcase out of the car. It contained $23,000 worth of precious stones and fancy wedding rings. Unlike Ian's insurer, Ash's insurance company refused to pay him a dime.

“I had to eat it,” Ash remembers, still distressed. “I was not supposed to leave the briefcase, but what if I took it with me and these people came after me?” Leaving the jewels in the car meant less risk to Ash's life and limbs. And he had good reason to worry.

Robbers have been known to pistol-whip victims, and they shot and killed a salesman several years ago in San Francisco. Their violence has been getting worse since the early 1980s, when the underworld began evolving its current methods: The original trick was to distract a salesman on a crowded sidewalk by, say, bumping him with a hot dog, leaving a mustard stain. When the salesman put down his case to wipe off the mustard, an accomplice would grab it. After salesmen got wise to this ploy, the crooks started sticking their tires with ice picks, causing slow leaks, then attacking them when the salesmen pulled over. Naturally, the vendors quickly learned to lock their windows and call 911 when they got flats. That forced the robbers to break windows, to instill fear with guns, to follow their targets to suburbia and take them down in their driveways. Every precaution by the victims was met with an escalation of violence by the robbers.


THE COPS

Thwarted by a New Breed of Criminal

Lt. Bruce Marovitch sits behind his desk in the robbery division at the Hall of Justice. Above him hangs a lithograph depicting moonlight falling on a barren tree, a lifeless stream, an empty house. This is not a place of joy. Marovitch, who teaches cops how to do undercover work, is retiring in a few months. He plans to spend his time reading military novels and writing poetry. He seems a bit embarrassed that San Francisco police are powerless against the SATGs. He explains: “Los Angeles is the mother source of the robbers, who, by the way, are not citizens. The leaders are ex-military and former cops, trained to choreograph the robberies.”

It is impossible to predict where the gangs will hit. Government and financial databases hold little or no information on the immigrant crooks, so the cops can't track their movements electronically. Informants are rare. The police have very few effective weapons in their arsenal.

“We send out undercover details looking for them, but you can't do that every day,” Marovitch says. “It's boring.”

He notes that even when his undercovers, led by Inspector Mark Gamble, spot Hispanic males in the vicinity of jewelry stores, they can't just pull them over. The officers follow the suspects, waiting for them to make a hit. More often than not, however, a second carload of robbers is on the lookout for the undercovers. When the police tails are spotted, the robbers drive away. (“Gamble is good, but the crooks are very good,” LAPD Detective Woodings says.) [page]

The cops can stop the robbers for violating traffic laws. When they find a gun in the car, one person will claim it and submit to arrest. Even so, Marovitch says, “these guys don't usually go to jail. They bail out and that's the last we see of them. Unless there is a murder, they normally get bailed.”

A few years ago, a jewelers association hired a Washington, D.C., law firm to lobby Congress for some relief from the rash of robberies. In response to political pressure, the FBI set up a small task force, based in L.A. The task force has had limited success: It located several inner-city car rental businesses used by the robbers and arrested a handful of thieves and local fences. But such tactics have done little except drive the crooks onto the freeway system in search of cop-free zones.

Marovitch does not have very high regard for the FBI's task force, which he says ignores San Francisco. “The feds don't know how to do surveillance,” Marovitch complains. “We need a RICO [Racketeer Influenced and Corrupt Organization] investigation to go to the source. [RICO prosecutions allow government agencies such as the FBI, DEA, INS, and IRS to pool their resources against organized rings of lawbreakers.]

“There are 740 of these bad guys in Los Angeles,” Marovitch gripes. “Even if we kill 10 a year, it will take 74 years to wipe them out. We need to set examples. They aren't citizens. Don't let them back into the country after we deport them. Put them in jails without TVs. Give them food, water, keep them clean — like at Guantánamo Bay.

“We need to treat them like a criminal enterprise. We need wiretaps. The problem is that nobody is pissed off enough at them. It's a business write-off [for the jewelry companies]. They are like a cancer in the country.”

The SFPD keeps in touch with Woodings in Los Angeles. “He has a database,” Marovitch says.

Woodings, however, laughs when the “database” is mentioned. “We do things the old-fashioned way — with inventory cards. We would like to be computerized.

“The arrest rate is not high,” Woodings admits. He estimates that about 35 suspects a year are caught in L.A., though he does not keep definitive records on numbers of arrests and convictions.

In fact, hard information about the theft groups is difficult to come by anywhere. The FBI claims on its Web site that it established a Jewelry and Gem Major Theft Program in the early 1990s, with “a computerized database, [with] which the FBI collects and analyzes reports of [jewelry] robberies nationwide and disseminates information to federal, state, and local law enforcement.” That appears to be more hype than reality.

The agency's spokesman in San Francisco says that “headquarters” maintains the statistics. But a Washington, D.C., spokeswoman says the FBI does not keep statistics on jewelry robbery; she suggested contacting the Jewelers' Security Alliance in New York. The JSA, an industry group, only keeps track of number of robberies and amount stolen; it does not monitor arrests and convictions.

Convictions have been hard to get, in part because the gangs are so insular. Woodings desperately needs informers. “[The gangs] are networked around family blood ties. When we catch them, they are fearful of talking. You can see it in their eyes, which get all glassy. They want to talk, but it's too dangerous.”

Ken Walsh, professor of criminal justice at San Francisco State University, says, “The police are stymied, up against something that makes them look bad; it's embarrassing. Cops rarely solve these crimes through sheer detective work. But the groups are hard to penetrate. The sheer brutality of their leadership is fantastic. They will not hesitate to cut off your hand, stick a knife in your eye, hurt your family.”

Many cops are also angry at the “technicalities” that keep them from catching bad guys. SFPD Inspector Robert Paco — a soft-spoken cop with a flinty gaze — keeps track of SATG activities in San Francisco. He says that a local ordinance — what he calls the “sanctuary clause” — “thwarts” apprehension of “the Colombians.” (The ordinance prohibits the SFPD from enforcing immigration laws or working with the INS. It was passed by the Board of Supervisors in 1989 in the wake of a massive roundup of illegal aliens in the Mission District.) Paco says if he could stop suspicious cars full of Hispanic males and arrest them for not having proper immigration papers, he could put a big dent in the jewelry robberies.

“You know, we profile people all the time,” Paco comments. “It's a hugely sensitive area, profiling. Hard to come up with a PC solution. You walk gingerly [in San Francisco] when you are afraid of violating the sanctuary law.”

The police are having a hard time stopping jewel thieves partly because the gangs represent a relatively new breed of criminal. The Central Intelligence Agency is very concerned about the rise of “transnational criminal networks,” composed of legal and illegal immigrants from Russia, Nigeria, Mexico, China, and Colombia. According to the CIA-sponsored National Intelligence Council, these anti-social organizations thrive within the “global diffusion of sophisticated information, financial, and transportation networks.” They traffic in slaves and narcotics, smuggle toxic waste and weapons, specialize in money laundering and financial fraud. In California, for example, the South American Theft Groups aren't only after jewelry. “There are other South American groups that specialize in cargo theft, stealing computer chips, electronics,” says SFPD Inspector Paco, “but these jewelry groups do not seem to be connected to them.”

Phil Williams, director of the Ridgway Center for International Security Studies in Pittsburgh, Pa., has studied transnational criminal groups, in conjunction with the Rand Corp. of Santa Monica. “[The groups] are like a plate of spaghetti,” Williams writes. “Every piece seems to touch every other, but you are never sure where it all leads. [page]

“The diversity of these organizations, their symbiotic relationships with legitimate businesses, their capacity to exploit (rather than disrupt) legitimate trading activities and financial institutions, and their ability to corrupt governments and law enforcement agencies, make efforts at decapitation somewhat moot. … And even if government actions do lead to the indictment or elimination of the top leadership, this simply provides new opportunities for internal promotion unless the organization itself is destroyed.”

The hidebound, hierarchical structures of most police agencies, Williams believes, hamper them from pursuing agile, global networks of criminals. Stymied by the criminals' speed of execution and their near-invisibility, law enforcers have been unable to think up a solution to the theft groups. Williams argues that it may not even be prudent to liquidate the gem gangs. “Transnational organized crime is constantly evolving in ways that make it particularly difficult to counter,” he observes. According to the law of unintended consequences, he notes, even more violently inclined groups, such as the Russian mafiya, would probably step in to fill the niche vacated by the Colombian-dominated SATGs.


THE VICTIMS

“I Could Feel Them Casing Me”

Amy Winslow is the West Coast regional manager for the Manufacturing Jewelers & Suppliers of America, based in Los Angeles. She used to sell diamonds on the road. “When I started, I told my mother under no circumstances, even if the caller says he is my boss, tell anyone where I am going or where I live; you would be setting me up to be killed. One night in Memphis, I could feel them casing me on the back of my neck. They rear-ended me near a freeway entrance, but I floored it and got away.

“I grew up with guns. I feel comfortable using them, but there are too many ways for a weapon to be taken away from you and used against you — although a lot of reps do carry them.”

In their efforts to elude their tormentors, mostly in vain, frightened salespeople have learned karate, hired bodyguards, carried fake jewelry, and driven evasively with an eye cocked on the rearview mirror and a cell phone in hand.

Daniel Ballard works for PM West, a gold jewelry manufacturer in Los Angeles. “I saw a guy with a razor cut my tire at a stoplight. I saw his compatriots tailgating me. I backed up and bowled him over and took off. They chased me and then changed their minds.

“It's getting increasingly violent. I am an instructor for defensive pistol. But these robberies take place in crowded shopping malls. The best of the best with a gun will not shoot back in a mall.”

Wholesaler/appraiser Daniel Tenenbaum sits at his desk in front of two open safes bursting with black boxes full of gems, in a San Francisco Financial District office stuffed with jeweled clocks and valuable paintings. “The INS needs to control the borders better. The jewelry industry is suffering grossly. We need a total effort by the FBI to stem the tide. These crimes are a product of globalization, easy communication, access to the whole world; the worst fallout is that the robberies raise the cost of doing business.

“We used to feel safer here in San Francisco than we did in L.A.,” says Tenenbaum, who has been in the gem trade since he was 17. “That's over. I lose several hundred thousand dollars a year by not traveling. Almost every salesman I know has been wiped out at one time or another.”

Large jewelry manufacturers now transport their goods for inspection at the stores via Brink's trucks. It is a cumbersome process, but relatively safe, says Richard Horne, president of luxury retailer Shreve & Co., next door to Tenenbaum's building. Small manufacturers and freelance designers, however, still lug their sample cases from store to store, month after month. For demonstration purposes, some companies have tried replacing the real deal with fake stones and brass fittings, but unfortunately, mock jewelry cannot truly convey value. And photographs are useless.

“Displaying product on the Internet cannot replace actually handling the jewels,” Horne remarks. “A diamond is not just a diamond, they are all different. And jewelry fashions change every year.” Horne goes to Europe and Las Vegas for the bigger annual trade shows. But there are tens of thousands of smaller retailers who depend on regular visits from door-to-door salesmen. “There is a very high level of paranoia throughout the industry,” Horne says. “A lot of salesmen quit, deciding it's not worth the stress.”

One reason the thieves have flourished for so many years is that the jewelry industry has been closed-mouthed about the SATGs, fearing copycats. But that has changed. “We learned you can't encourage law enforcement without the media,” says John Kennedy, head of the Jewelers' Security Alliance. “Cops are more knowledgeable now than they were five years ago. And the crooks are not swayed by publicity anyway.

“We lobbied Congress for FBI attention,” he says. “That's how we got the task force in L.A., which drove the criminals toward San Francisco.”

Kennedy laments that busts are infrequent. “I don't think there will be any one solution. You get them under control in one geographic area, they pop up elsewhere. It's too lucrative. There is an inexhaustible supply of criminals waiting to come to the promised land and join one of the loosely connected gangs. They respect territory and some rules. They check in with local bosses when on the road, but there is no top-down administration. The new generation of players is younger and more violent.”

Insurance companies are definitely not out to catch the gangs, Kennedy says. When all is said and done, the thieves' take barely scratches the value of jewelry manufactured in the U.S. annually: $7.5 billion. [page]

Ronald Harder, president of Jeweler's Mutual, a jewelry industry insurer, says that in 2001 the industry lost $33 million to SATG robberies. After subtracting deductibles and uncovered losses, the insurers paid out a mere $5 million. Harder says his losses are much greater from shipments stolen in transit and employee theft. Like most people contacted for this story, he emphasized that law enforcement agencies must start cooperating with one another by sharing information and resources if anything is to be done about the SATGs. Harder admits, however, that nothing is likely to happen. There is no public outcry over the crimes, or even much sympathy for the victims. “The perception that all jewelers are wealthy paints them as a class enemy.”


Is there any solution?

As the SATGs operate with seeming impunity in California, New York City, Atlanta, Miami, and Chicago, those involved continue to search for ways to combat the crooks. A common suggestion is that the police should use decoys to lure the gangs into ambushes. That idea is a non-starter for Louie Ruiloba, general manager of Frank Barcott Security and Investigations, based in Orange County. Ruiloba, a former San Jose cop, points out that because the thieves surveil their targets 24 hours a day, sometimes for weeks, police decoys will not work.

Prevention is possible, he says, if the jewelry companies would hire multiple armed guards (at a minimum of $25 an hour each). No single bodyguard can defend against a swarm of robbers, Ruiloba says. The best security method is to replicate the methods of the crooks. Use decoy cars. Spot the spotters. Surveil the stores with teams of visible and invisible bodyguards linked by radio. Do not try to catch the crooks. Just make it harder for them to score. There is one potential flaw in Ruiloba's strategy, of course: The bad guys can always kill the bodyguards.

One expert believes the jewelry thieves may always have the upper hand. Scott E. Page is a professor of complex systems at the University of Michigan. He studies criminal networks, along with other “complex adaptive systems” — everything from the weather to Middle Eastern politics to the reproductive patterns of frogs.

“In the game tick-tack-toe, everybody is bound by certain rules,” Page explains. “The outcome is easy to predict as the game progresses. Chess is harder, but the players are bound by known rules, so there are patterns of play.” Just think how hard chess would be, Page says, if the players could change the rules. The key to the survival of the SATGs is their ability to change the rules of engagement, he says. They adapt to obstacles such as the increase in salesman paranoia, locked car doors, cell phones, bodyguards, even capture and deportation, by raising the level of violence.

“There are constraints on the rules that law enforcement can play by,” Page says. “There is no public support for increasing police power because the victims — the jewelers and insurance companies — do not want attention, and nobody is saying, “Oh, the poor jewelers!' Consequently, the opposition to the robbers is at a perpetual disadvantage. The crooks always have the initiative, and they can change the game at will. If the salesmen handcuff their attaché cases to their wrists, the robbers will buy bolt cutters, or just hack off the wrist.”

Of course, the salesmen will not put themselves in that kind of danger, says Page, so everybody learns to live with the status quo: They adapt.

Detective Woodings of the LAPD seems to agree with that rather bleak assessment. “We caused the escalation of violence ourselves by putting more preventative measures in place. The crooks just take countermeasures,” he says.

“We might as well stand on the corner and give the jewels away. Then there would be no more robberies.”

 

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