Health goods sold on Web raise concern

By Leslie Earnest

Feb. 20, 2008 12 AM PT

Times Staff Writer

Popular health and beauty products sold on Internet auction sites could be stolen, tainted and possibly dangerous, according to a warning issued today by the National Retail Federation.

Advil, Visine, baby formula, diabetic testing strips and other goods are being stolen from stores, warehouses and cargo trailers and peddled on EBay and other online auction sites, said Joseph LaRocca, the group’s vice president of loss prevention.

Because crooks typically don’t keep what they steal in temperature-controlled environments, baby formula and medicines might be contaminated before they’re delivered, he said. Although many retailers market health and beauty products online, the anonymity of those who use auction sites heightens buyers’ vulnerability.

“In the online auction world, you do not know who you’re buying the product from and you do not know where the product came from,” he said. La Rocca said he wasn’t aware of anyone who had been harmed by using such products, but he and others maintained that there was a risk.

“I would think people would find it pretty scary that they didn’t know where this bottle of pain reliever or children’s cold medicine had been for the last six months,” said Tony Heredia, a former Central California law enforcement officer who is now director of assets protection for Target Corp.

The situation poses another kind of risk to retailers, which lose as much as $30 billion a year to organized retail crime. “It’s an issue for every retailer,” said Dan Fogleman, a spokesman for Wal-Mart Stores Inc.

Although retailers have always been plagued by shoplifters and unscrupulous employees, problems posed by organized crime have grown as the Internet has made it easier to unload merchandise.

“We’ve seen a huge increase over the last two years or so in organized retail theft activity,” Heredia said. Street gangs, traditionally drawn more to drug sales, have zeroed in on retail theft as it has become more lucrative, he said. Recently, Target cooperated with law enforcement in a sting allegedly involving MS-13 gang members, he said. He would not say where it occurred because the case was being prosecuted.

A spokesman for the Food and Drug Administration said in an e-mail that the agency was working with auction sites that “filter out and take down auctions for prescriptions or over-the-counter drugs.”

LaRocca said he and others with the retail federation had lobbied for state and federal legislation to limit or stop the sale of certain products on online auction sites. The Colorado House Judiciary Committee considered a bill last week that would have prohibited some items, including nonprescription drugs and cosmetics, from being sold at online auction sites but indefinitely postponed action on the bill.

Patrick Byrne, chief executive of Overstock.com, said the firm didn’t allow the sale of baby formula or prescription or nonprescription drugs. The online discount retailer and auction house objected to the Colorado bill because it would have held the company liable if someone “slipped in a one-day auction” on its site, he said.

“We felt that was pretty onerous,” he said.

Officials at EBay Inc., which also opposed the bill, couldn’t be reached for comment.

Thieves have a variety of ways of unloading stolen goods, including hawking them on street corners or at flea markets. Sophisticated crime rings may work with pawn shops or small stores, La Rocca said. Crooks can dramatically expand their customer base by using an online auction site.

After stealing the merchandise, criminals can remove the packaging and alter the expiration date. “These are signs that should certainly raise some red flags,” LaRocca said.

A year ago, law enforcement agencies in the San Francisco Bay Area dismantled a retail crime ring that was allegedly buying baby formula and medical supplies and other stolen merchandise from major retailers, selling it over the Internet and shipping it to other states. At one Hayward warehouse, investigators seized about 13 tractor-trailer loads of merchandise, including vitamins, over-the-counter drugs, baby formula and hygiene products.

leslie.earnest@latimes.com

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Pilfered products

These are the products most often stolen and sold online:

Abreva

Advil

Aleve

Benadryl

Braun toothbrushes and replacement heads

Claritin

Cover Girl cosmetics

Crest Whitestrips