NANCY E. JONES
Anoop Dugar lived at 23 Crawford Gardens in the small Springdale suburb of Harrisburg, Pennsylvania. He was a quiet, polite, and considerate child who grew up attending the local public schools. When Anoop was in elementary school he excelled in writing, entering and winning several contests. He also entered read-a-thons for charity events and won those. In his middle-school days he was the winner of several local and national spelling bees. His parents traced their roots to India and were proud of him and his older sister. Anoop was devoted to academics and steered clear of physical activity. He was an avid reader who spent huge amounts of time alone. When he graduated from high school he was significantly overweight and had been teased incessantly because of his size. Following graduation, he convinced his parents to allow him to live in the basement of their home and was employed as a night auditor for local hotel chains. His sister became a reporter for CNN News. Much of his free time was spent watching various Pittsburgh athletic teams on television and, on the rare occasions when he was seen in public, he usually wore clothing that supported Pittsburgh teams. The houses on Crawford Gardens were well-maintained family homes. Neighbors came and went and saw very little of Anoop. Residents did not have the faintest idea that the soft-spoken son of Amal and Charu Dugar was turning to a life of crime. In fact, he was about to be exposed as a mastermind in a major wire fraud case by his sister in a CNN report.
Anoop, it seems, had a dark side. He began using hotel customers' credit card numbers to purchase personal merchandise. Moreover, when customers reserved rooms with their credit cards but paid in cash upon check-in, Anoop would pocket the cash, charge the room to the credit card, and manipulate hotel records to cover his activity. Anoop waived indictment and pleaded guilty. Days later, CNN got a hold of these facts and Anoop's sister reported from the district court. The district court attributed a loss amount of nearly $918,000 to Anoop's actions. He accepted responsibility for a portion of this loss but objected to nearly $811,000 of it. He argued at sentencing and on appeal that he should not be responsible for the total because the prosecution had not fully proven the amount he stole. This argument worked to reduce his sentence from 30–36 months to 18–24 months.
After serving 23 months in Somerset State Prison, Anoop returned to his parents' basement in central Pennsylvania and was under court-supervised probation. While he had been in prison, there were repeated calls to the police for domestic abuse at his parents' house, but his mom never pressed charges against the father; she was a very submissive wife. While Anoop was incarcerated, his dad divorced his mom and made several trips back to India. Anoop stayed in contact with his dad, and his mom became quite dependent on Anoop after he was released from prison. She encouraged him to find employment and to continue to focus on losing weight, as he had done while jailed. Charu was struggling to make ends meet now that her husband had left her.
About a month later, Anoop was hired at a local nutrition store called General Nutrition Supply (GNS) about ten miles from his home. As Anoop gained retail experience, he began to see opportunities to return again to the dark side. He wanted to be an entrepreneur and was unhappy having to work for GNS. He became dependant on steroids and worked out daily at the local gym. The expense of his dependency wore on his finances, and he rekindled his life of crime. He convinced his mother to open a storefront on eBay selling supplements and told her he would help support the business as a buyer. But she didn't really know that she was letting Anoop's illegal activities develop unhindered.
In midsummer a new diet pill called NixObi was introduced as an over-the-counter weight-loss aid. Immediately after it hits the shelves, Local Market — a supermarket chain with 150 stores in the Mid-Atlantic States — began reporting that they were unable to keep any of the product on the shelf. Within a 25-mile radius of Springdale there were more than a dozen Local Market stores, and one of them was in the same plaza as the GNS store where Anoop worked. I was working as the Vice President of Asset Protection for Local Market at the time, and my team was called in to determine why we were constantly out of NixObi.
The data analysts quickly determined that the NixObi pills were likely being stolen. A study of Local Market's purchases versus sales of NixObi reflected that very little of the product was selling, and the profit margin on the product was quickly eroding. Kurt Gentry, one of our data analysts, began gathering information about the weight-loss pill from various sources. Several Local Market detectives began reporting incidents of theft, and several stores claimed they were ordering more units than they were selling. When Kurt presented this information to me, I immediately assigned Investigator Andy Peters to the case.
Andy began to investigate who might be stealing the product and where they might be selling it. A quick Internet search showed that eBay had already held about 350 auctions for this brand-new product. The very next day there were more than 400 packages of NixObi for sale online. Andy asked Kurt to review all of the auctions and determine which ones were within 200 miles of the Local Market marketing area. Kurt quickly determined that there was an eBay seller within 20 miles of several Local Market stores, known as "beautynutritionqueen23." Other items offered by this seller included health and beauty care items and general merchandise. Kurt let the Local Market detectives know that the seller lived near Harrisburg, and then he initiated contact with her. He sent her a message saying, "I have two questions. I live near Harrisburg and I am very excited to try NixObi as it is new to the market. I actually have kids in daycare in Harrisburg. Would it be possible to pick up the product at your house? Where did you get the product from? I have been skeptical to try diet pills, but the FDA approval helps me feel better with this one." The seller responded with, "We can meet somewhere if u win the auction and I can assure u that my NixObi is the real deal. Check my feedback."
Kurt bid on several products and won the auction. He completed his purchase through PayPal, through which he discovered the seller was Charu Dugar. Investigator Andy Peters searched her name in Local's system and discovered she had a store loyalty card. Using the search engine Zabasearch, he found her address at 23 Crawford Gardens in Springdale. The transactions on her loyalty card appeared to be normal shopping purchases made at normal times. Further investigation revealed another loyalty card for her address registered to Anoop Dugar. Anoop's card had excessive transactions in the Harrisburg area, and most were made overnight. Many of the purchases were for packing tape and envelopes. Andy Peters requested that Detective Walt Bradley review the closed-circuit TV (CCTV) footage of the transactions on this card. Bradley observed Anoop taking numerous items from the health and beauty care (HBC) aisle, concealing them in his clothing, and making purchases of tape and mailing envelopes. The detective thereafter viewed the surveillance at four other area stores and saw Anoop entering each store wearing a Pittsburg Steelers jacket, concealing NixObi and other products from the HBC aisle in his jacket, and leaving the store without paying. Kurt then analyzed the eBay sales for "beautynutritionqueen23" for the past 90 days; he found 1,319 items sold for $14,259. Kurt ordered additional products and received them in Duck Brand padded envelopes, which Anoop Dugar frequently purchased at Local Markets.
I then reviewed the evidence and asked Andy to contact the local police to discuss the matter with them. Sergeant Hope of the High Hill Police Department agreed to take the case and coordinate it with the other jurisdictions. He drove by Charu's address and noted a late-model, four-door, blue Honda Accord in the driveway. During parking-lot surveillance of one of the Local Market stores, Detective Bradley saw a blue Honda Accord pull into the lot. He recorded the license plate number and saw Anoop walk into the GNS store next to Local Market.
Sergeant Hope, armed with significant evidence, contacted Assistant District Attorney Brenda Peck. She requested that Local Market continue to purchase NixObi and let Anoop steal the product until he accumulated at least $2,000 in thefts, at which point the crime would become a felony. Investigator Andy Peters and I conducted a conference call with Local Market's Asset Protection personnel and outlined the case for them. We directed them to mark 18 frequently stolen HBC items, including NixObi diet pills, at eight Local Markets using invisible ink.
A few days later, Peters and Bradley went to a store to investigate the following:
The store reported their NixObi went missing during the overnight shift between July 25 and 26.
The store did not sell any NixObi on July 25 or 26.
Anoop Dugar's loyalty card showed a purchase at 2:01 PM on July 26.
Around 11:00 PM on July 26, "beautynutritionqueen23" posted two bottles of NixObi for sale on eBay.
Detective Bradley reviewed the CCTV and saw Anoop Dugar enter the store at 1:55 AM on July 26, walk directly to the HBC aisle, and conceal all of the NixObi and several other HBC items in his jacket pockets. He purchased mailing supplies and left in a blue Honda Accord.
Sergeant Hope presented the case evidence to U.S. Postal Inspector Larry Bond, who agreed to take the case because it involved using the U.S. Postal Service to ship stolen goods. Inspector Bond requested from Local Market all of Anoop Dugar's purchases of stamps and shipping supplies and a rough estimate of traceable retail losses. Kurt provided all the point-of-sale receipts for all postal supplies Anoop bought in the previous three months. He also continued bidding on eBay auctions for marked product. When he received the product from the auctions, he kept it unopened in the original envelopes, and turned it over to the police to be opened in their presence, thus preserving the chain of custody. When we did open the envelopes, we discovered that much of the merchandise had been removed from the boxes already. Detective Bradley arranged to have the Springdale police department inspect the trash at 23 Crawford Gardens during the weekly garbage pickup, so Gentry met Detective Bradley and Postal Inspector Bond at the Springdale Maintenance Garage to review what had been found. Evidence seized from the trash included three marked NixObi packages, numerous DVD sleeves and plastic wrap, Local Market receipts, Local Market bags, packaging supplies, addressed envelopes and eBay invoices and correspondence.
At this point, Inspector Bond told me he had enough evidence to request search and arrest warrants for Anoop Dugar. A few days later the warrants were executed at 23 Crawford Gardens at 7:30 AM Anoop Dugar was taken into custody by U.S. Postal Inspectors and approximately $5,000 in retail products, packaging supplies, a Pittsburgh Steelers jacket and a computer were taken as evidence from the home. The eBay records were subpoenaed and revealed that Anoop had sold $104,000 worth of Local Market's merchandise. That afternoon Anoop Dugar was arraigned in front of the U.S. District Magistrate and pleaded not guilty.
At that time he was under court-supervised probation for his previous federal offenses. Weeks later the grand jury indicted Anoop under a violation of his probation and charged him with mail fraud. The indictment found that he knowingly engaged, and attempted to engage, in a scheme and artifice to defraud and to obtain valuable property, by means of false and fraudulent pretenses, representations and promises. Specifically, he — as a previously convicted felon under court-ordered supervision — had engaged in an Internet fraud scheme involving the sale of stolen goods. As part of his artifice to defraud, Anoop concealed his extensive criminal record from his victims. Another aspect of the scheme was advertising to innocent customers that he possessed an inventory of goods. He was willing to sell these goods at favorable prices when, in truth and in fact, he did not have lawful possession of these goods because they were stolen from various businesses. He also lied to his probation officer and concealed material facts regarding his employment, income and fraudulent activities. Eventually Anoop pleaded guilty to the charge of mail fraud, but again he argued that he should not be responsible for the entire $104,000 because the government had not proven the amount beyond a reasonable doubt. The judge, who had presided over Anoop's previous cases as well, disagreed and committed him to the custody of the U.S. Bureau of Prisons for a term of 33 months.
Note
Lessons Learned
This case was intriguing because it proved that traditional investigative skills and techniques can be effective in combating modern Internet crimes. The investigative team followed the same fundamental steps, which included gathering evidence, determining how the crime occurred, identifying the suspect, developing the case for prosecution and proving damages. The difference was that specialized techniques for tracking merchandise flow and Internet activity were used. The process of marking our products with the ultraviolet invisible ink, although labor intensive, was critical. It provided the chain of custody that the District Attorney's office needed to establish the crime. As a result, we learned that we needed to be able to identify our product once it reached the black market. We are currently working on a long-term solution for this issue.
At the time of this investigation, we had just begun using data analysis in theft cases. We discovered that there was a significant difference between handling traditional (physical) evidence and electronic (intangible) evidence. We capitalized on the ability of data mining to tap into various sources. This included information primarily intended for marketing, not loss prevention. Our team's skillful coordination of gathering and protecting evidence, especially electronic, led to a successful outcome. Data mining has continued to evolve and Local Market has placed more focus on Internet crime as a result of this case.
Both the private and public investigators had to work very closely together. Key members of the team were the Internet auction site investigators. Their efforts and cooperation with both law enforcement and the internal investigators made this a solid case. The laws that protect the privacy of Internet sites and their clients proved to be a challenge. Anoop was exploiting antiquated laws and the anonymity of the Internet to sell stolen goods. The investigation was delayed by several weeks while the team went through painstaking efforts to obtain the evidence necessary to prove the government's charges. Resources had to be diverted from other projects to devote the proper time to building this case. From a supervision level, managing the risks throughout the investigation required constant focus and attention.
Nancy E. Jones, CPP, received a BS degree from Worcester State College, Massachusetts, and is a certified teacher. She began her career in retail security in 1970 and has worked for three major East Coast supermarkets. As the Vice President of Asset Protection, she is responsible for protecting the assets of a company that includes 250 stores located in the mid-Atlantic region.