The E-Z Money pawn shop shares a block of West Patapsco Avenue with a vacant storefront, a liquor store and a used furniture shop. "We buy scrap gold coins," the sign out front says. "Top $$$ paid."
The neon sign is turned off, but the lights are on inside, where the elderly owner and his son are busy cleaning empty shelves. The father is going off to federal prison in December, though he doesn't know for how long, and on Tuesday he was busy sprucing up for a new owner.
He was willing to talk — only if his name didn't appear in the newspaper — but all he wants to say is that he was duped into becoming part of a conspiracy he knew nothing about. He pleaded guilty to federal money-laundering charges.
Federal authorities raided his shop in South Baltimore's Brooklyn neighborhood and 11 others in and around city in March, describing them as lucrative fronts for a $20 million scheme using merchandise plundered from stores.
A 104-page search warrant application filed in U.S. District Court details an illicit industry and links local stores such as Cash N A Flash and We Buy to a theft ring that warehoused its inventory and used the Internet and mail to sell items stolen from retail store shelves back to customers "far below retail value."
The business has its own lingo. Shoplifters are called "boosters" or "lifters" and were on "vacation" when locked up. "Cleaning" an item means ripping or burning security labels and retail tags off products.
Pawn shop owners often complain that they can't easily discern stolen items, but in this case federal authorities said they proved the owners and workers knew they were trafficking in shoplifted goods. Detectives spent more than two years working undercover and secretly recording conversations, sending in confidential informants and talking to 40 "boosters."
On Monday, Jerome Ira Stal, 41, described by prosecutors as the ringleader, pleaded guilty in U.S. District Court in Baltimore to money laundering and could be imprisoned for up to 10 years when he is sentenced in March. Prosecutors say 11 others have already admitted their involvement.
The scheme was simple. Shoplifters stole over-the-counter medicine, movie DVDs, health and beauty products, gift cards and tools from stores like Target, Safeway and Walmart. They then sold the items to pawn shops, getting about 25 cents on the dollar.
Federal authorities said the pawn shop owners trucked the stolen goods to a warehouse owned by Stal off Reisterstown Road in Northwest Baltimore, where workers removed labels with a heat gun or lighter fluid, and resold everything to other wholesalers in other states or on Internet auction sites, including eBay and Amazon.
Prosecutors said that Stal paid one co-defendant $1.8 million for merchandise stolen from areas stores and had more than $1 million in pilfered products in the warehouse, TS Liquidators, when cops raided it in March. He also had $1 million in bank accounts and $140,000 in cash, the authorities said.
This criminal case is a blow to an industry that already has a seedy reputation as places of last resort for people desperate for quick cash. The investigation has exposed a hidden criminal enterprise behind the worn storefront shops.
In July 2009, an undercover Baltimore County police detective carried a tattered pillow case full of medicine and other products provided by Target into the We Buy pawn shop on Rolling Road in Catonsville.
In court documents, the detective said that an employee "proceeded to use a lighter to burn off the Target security labels from the sides of the boxes" and then gave the undercover officer "a new backpack and stated, 'This will help you for next time. It looks better than carrying a pillow case.'"
The detective wrote that he was paid $262 for items that retailed for $755.84.
Later, police had an informant call the same store to inquire about selling more stuff.
"I just [expletive] cleaned out, robbed [expletive] Wal-Mart, Target, and all so ..." the informant said, according to transcription of the recorded call contained in court documents.
The employee stumbled, "Ah ... ah ... ah … Alright, alright, alright. .. Don't bring it. Don't bring it. Don't bring it. … You just said the wrong [expletive] on the phone."
At E-Z Money on Patapsco Avenue, the owner said he bought mostly medicine from people off the street and that there was no conspiracy between owners or shoplifters.
He was certain of this: With now a dozen guilty pleas and more people under indictment, he noted, "A lot of people are going to prison."