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Criminal Justice

‘You Can Get Anything’: How SF’s Black Market Thrives Off Retail Theft

Written by David SjostedtContributors James WyattPublished Feb. 10, 2022 • 9:00am

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Johnny Chavez, a Navajo-Apache descendant who grew up in San Francisco, was serving in Vietnam when opposing soldiers ambushed and killed his commanding officer. Returning home to San Francisco at age 22 in the early 1970s, he can still recall how the trauma led to a burgeoning heroin addiction that he supported by shoplifting.

“I was hooked on stealing, but I didn’t like doing it,” said the now 70-year-old Chavez over the commotion of his whiskey-drunk friends in the Tenderloin. “I always thought about it when I’d go home. I wished I could stop. But when you’re addicted to something, you’re addicted.” 

Johnny Chavez poses for a portrait on McAllister Street in San Francisco on Sept. 9, 2021. | James Wyatt

Chavez’s criminal origin story is typical of many shoplifters who roam San Francisco’s streets today. For most, a traumatic life event—whether it’s disease, prison time or some other serious setback—can leave them desperate and broke. The sub-economy of stealing goods and reselling them on the black market, known as fencing, has served as a dangerous lifeline for many of the city’s poorest residents.

Annual cases of theft in San Francisco are down 33% from where they were in 2017, according to San Francisco police data, but a national retail security survey found that shoplifting was at an all-time high in 2020, costing the industry an estimated $61.7 billion. Such crimes are part of what’s led 80% of San Franciscans to feel increasingly unsafe, according to a survey from the San Francisco Chamber of Commerce

Public anxiety about shoplifting reached a tipping point just days before Black Friday last year, when a mob of people ransacked several luxury department stores in Union Square. Mayor London Breed blamed the event on coordinated criminal enterprises and directed the police force to swarm the downtown shopping mall. 

Breed has repeatedly promised to catch the perpetrators and even incentivized residents with up to $100,000 rewards for information leading to arrests. The city’s police department increased patrols around Union Square but many department stores have gone a step further by hiring their own private security guards.

“The city has so many incredible employment opportunities. We’re hiring muni drivers and other city employees,” Breed said in an October press conference. “You don’t have to do this. … But once you’ve crossed that line, we have a responsibility to the public to make sure that people feel safe.”

Large-scale fencing rings have been a priority for local and state law enforcement in recent years. In September 2020, five people were arrested for storing over $8 million worth of stolen loot across the Bay Area. In 2018, San Francisco police arrested a dozen people as part of “Operation Wrecking Ball,” a fencing operation that netted $750,000 worth of retail items. One of the biggest warehouse busts in state history occurred in San Diego back in 2017, when officers recovered more than $20 million worth of stolen goods.

Organized retail theft rings usually put stolen items up for sale on websites like Craigslist, eBay and Amazon, which makes it difficult for law enforcement to track the goods compared to the small-time operators who sell their items on the street, according to retail security experts.

The losses are being felt by large and small businesses, particularly in San Francisco. Walgreens made headlines in June by closing five of its San Francisco storefronts, blaming rampant shoplifting and security costs that were 46 times the chain’s average. But the pharmacy failed to substantiate its reasoning in the face of a 2019 SEC filing that revealed the company had already planned to close approximately 200 stores nationwide. 

Liberal-leaning criminologists say the rising angst caused by retail theft should be viewed in the context of a decline of traditional department stores. Foot traffic for retail shops came to a grinding halt in March 2020 and now sits at 46% below the pre-pandemic baseline, according to the San Francisco chamber of commerce.

“San Francisco can be a sort of fishbowl with a lot of cameras on it,” said Jonathan Simon, a UC Berkeley criminal justice professor.  “People have a deep sense of unease and anxiety due to the pandemic. … The mark of American cities is the birth of these really large department stores, and they’re on the verge of extinction.”

But even as city officials assuage large companies by coming up with ways to crack down on illegal vendors, people continue to find ways to sell hot merchandise. Theft has integrated itself into San Francisco’s culture and economy to the point that a few shoplifters told The Standard they have under-the-table agreements with smaller grocery and liquor stores that buy their stolen goods. It’s not uncommon to see a mother buying clothes for her children at illegal markets in the Tenderloin, the Mission and SoMa neighborhoods. 

A mother, shopping with her son, inspects a sweater at Olga Savinky’s unlicensed street vendor site in the Mission District of San Francisco on Dec. 4, 2021. | James Wyatt

“What are they going to do, arrest all of us?” said an unhoused man named Rudy, who lost his construction job over a decade ago due to a MRSA infection in his hip. He now steals goods to sell on the street.

While many fencers justify their actions by saying they only steal from large corporations, the illegal markets have taken their toll on small businesses as well.

“We have to do something, I’m getting small business owners crying because there are people selling the same products out in front of their window for 50% cheaper,” said Santiago Lerma, a legislative aide for Mission District Supervisor Hillary Ronen.

Barbara Staib, a spokesperson for the National Association of Shoplifting Prevention, said that San Francisco’s approach to crime needs an element of educational reform. 

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“To really effect change, we have to accept that the criminal justice system may not be the best deterrent for low-level offenders,” Staib said. “They knew it was a crime before they did it, and they did it anyway. So what we have to help them do is examine why.” 

Back in 2015, a retail loss prevention company called Corrective Education introduced a “life school” approach to curbing retail theft.  The company gave perpetrators an option of admitting guilt or attending a series of classes that intended to provide a path to employment. The City Attorney’s Office disagreed with the method, however, and successfully sued the company for a “predatory business model” that included “extortion and false imprisonment.”

But the need to help people reform is especially important, Staib said, because theft is often a product of mental illness or addiction.  A 2008 study that surveyed 43,000 adults found that one in every 11 Americans has shoplifted, and many criminal justice experts believe that shoplifting is a gateway to more costly and violent crime.

“Not every shoplifter will become … involved in organized retail crime, but I can guarantee you that every person involved in organized retail crime started out shoplifting,” Staib said. “Some people will never shoplift and some people will always shoplift. But the majority of people sit in between and can be influenced by education early on.”

Johnny Chavez, a 70-year-old native San Franciscan, sits at his usual hang out spot located near Jones and McAllister Streets in the Tenderloin on Feb. 8, 2022. | James Wyatt

Chavez considers himself someone who could have benefited from early reformative intervention. In 1979, he committed a brutal robbery that left two men dead. Chavez served 15 years in San Quentin state prison, getting out in 1994 as a reward for good behavior.

He now lives most of his life in a wheelchair, barely getting by with his $1,100 monthly social security payments and subsidized housing in the Tenderloin.

“The open-air markets are beautiful. You can get anything. … You go there and it’s like a flea market,” Chavez said. “But a lot of these people that live around here, they’ve been here for a long time, and they’re sick and tired of the bullshit.”

Photos and additional reporting by James Wyatt.

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David Sjostedt can be reached at [email protected]




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