Two women left a Reisterstown jewelry shop with hundreds of dollars after hawking a shoebox full of gold and silver, much of it allegedly linked to a string of nearly 30 area burglaries. They might never have been arrested, police said, because the store produced no legal record of the transaction.
But in this case, Baltimore County detectives were watching. They had suspicions about Crown Jewelry because the store hadn't documented buying anything of value since it opened in August. The investigation resulted in burglary charges against three people, including one of the women, and charges that the owners of Crown and another store accepted stolen property.
County authorities say such operations are helping them target the burgeoning illicit trade in pilfered metals — copper gutters ripped from homes, gold rings taken in burglaries — by cracking down on "cash for gold" businesses and jewelry shops that try to hide their transactions.
Unscrupulous gold buyers might be enticed to forgo the paperwork that helps police track transactions because the profits from re-selling the items can be big. Police say enforcement can recover stolen property before it reaches the black market.
Too many shops escape compliance because fines provide little incentive for owners to follow the rules, according to authorities. Penalties for underreporting or failing to report are relatively low — up to $5,000 or loss of license. For police, that can mean the only way to get their attention is to launch a criminal investigation — in this case into a series of burglaries.
"These investigations are becoming more common," said Baltimore County Police Chief James W. Johnson. "This is a national problem. With the downturn in the economy, you have more people moving precious metals. This is an area we've got to stay on top of."
Baltimore County has seen an increase in precious-metal dealers, up from about 60 in 2004 to more than 100 today, as gold prices have skyrocketed. While Johnson said most businesses adhere to regulations, some are frequently used to move stolen property.
Police said they zeroed in on the women — including Shannon Lee, 25, who was later charged — after a state database that tracks precious-metal sales showed they were allegedly selling stolen items in Carroll and Baltimore counties.
A surveillance team subsequently followed them Nov. 6 to the Crown Jewelry shop, and then to JD Loan the next day, but police said those transactions never appeared in the state system.
The two businesses along Reisterstown Road that police were investigating remain open, but the owners face charges of accepting stolen goods — including long chain necklaces, hoop earrings, jeweled pendants and personalized rings — and not properly reporting the transactions to authorities.
Police charged Anthony Gelfen and Jay Rodchenko at Crown Jewelry with buying the stolen goods and failure to report the transactions. John Doyle of JD Loan faces similar allegations.
Stephen Tully, Doyle's attorney, said it was too early in the case to comment. But he added: "My client does advise me that he is not guilty of any of the charges." At Crown Jewelry, a man who identified himself as one of the owners referred questions to a lawyer, who did not return calls.
Keeping tabs on secondhand stores, pawnshops and scrap metal dealers has long been a priority for police tracking thieves who need a place to sell ill-gotten goods, whether it's stolen manhole covers or antique dolls. Shopkeepers in Maryland must record transactions and take names, and are required to hold onto items for 18 days — 30 in Prince George's County.
For thieves, "it's their only outlet," Baltimore County Cpl. Christine Sisk said of the businesses.
In 2010, the Maryland State Police set up a task force to monitor the sales through a central computerized database that makes it easier and faster to match merchandise to police reports listing stolen goods. The agency credits the system with recovering more than $8.6 million in stolen property, leading to more than 1,400 arrests in the first two years.
Baltimore County has been one of the most aggressive jurisdictions, making 32 of the 52 complaints against dealers across the state. Such complaints go to the state Department of Labor, Licensing and Regulation, which administers shop licenses and is responsible for issuing fines and in some cases revoking licenses.
"What we do is more of a preventative role. If a shop owner has been involved in criminal activity, police get involved," said Michael Vorgetts, deputy commissioner of the department.
"We generally take a number of things into consideration when considering whether to penalize a licensee," Vorgetts said, including the nature of the infraction and past offenses. He said he could not comment on the Baltimore County cases.
Richard Sussman, president of the Maryland Pawnbrokers Association, said his organization favors strict enforcement, because only recently have other businesses that sell precious metal items been subjected to the same level of scrutiny that pawnshops have seen for years.
"The penalties are very, very severe," he said. "At least there's finally an attempt by the legislature and the police to level the playing field."