The 52-year-old Warwick man swore at the investigators as they went through his home, finding allergy medicine and makeup products stickered with the logos of stores such as CVS and Walgreens.
The products in Norman L. Cipriano's basement were among some 60,000 items seized as part of a sweeping investigation into a Rhode Island-based retail theft operation that targeted retailers across the country, U.S. Attorney Zachary A. Cunha said Monday.
And both Cipriano and 59-year-old local counterpart, Patrick M. Vigneau, of Cranston, had high-level wholesaling roles in the scheme, which heavily relied on shoplifting, and netted about $12.3 million in sales over a period of several years, Cunha said.
"If I were younger, I would whip your a** (expletive)," Cipriano told investigators as they went through his home on Sept. 11, according to records filed in federal court.
Two Rhode Island 'diverters' under arrest, prosecutors say
Both men were arrested and taken into custody earlier Monday after last week's raids at locations in Pawtucket, Warwick, and Cranston brought new momentum to a three-year investigation carried out by the U.S. Postal Inspection Service, Homeland Security Investigations and the Warwick Police Department.
Investigators found "vast quantities of stolen" goods, primarily cosmetics, and over-the-counter drugs, Cunha said at a news conference Monday afternoon.
At a location in Pawtucket, for example, they entered an indoor space lined with "all manner of stolen goods, organized, neatly stacked, and ready for resale," said Cunha, who likened it to a "warehouse storeroom."
The value of the 60,000 items seized by investigators has been estimated at about $1.6 million, prosecutors say.
Investigators, they say, needed three box trucks, each 24 feet long, to haul away the stolen goods.
As investigators worked at a Pawtucket location owned by Cipriano, UPS arrived at the scene to deliver 10 to 15 additional boxes containing health and beauty products and automotive accessories, according to an affidavit that was compiled to support the arrest warrants.
As part of the investigation, authorities also froze several bank and e-commerce accounts.
How organized retail crime works
In court records, investigators say Cipriano and Vigneau's warehousing activity reflects their involvement in a criminal scheme that relies on an entire team of law-breakers.
Cunha had a diagram on an easel.
Some members of the organization, the ones recruited to shoplift items from store shelves, are known as "boosters."
"That theft isn't random," Cunha said, adding that the thieves target specific items at the direction of a crew boss.
The boss tells them what to steal and pays them for their work, often in cash or cryptocurrency, he said.
Such schemes, he said, also receive assistance from middlemen and logistics coordinators, or "fencers," who provide warehousing services and cleaning services to remove labels from stolen items.
"Diverters" like Cipriano and Vigneau are at the top of the ladder. Diverters often set up shell companies to conceal their roles and launder illicit proceeds.
Their diversion supplies small and mid-size retailers who unwittingly purchase the stolen goods. They also sell to consumers via online marketplaces.
The schemes frequently utilize e-commerce marketplaces to promote and offer their goods and use unregulated third-party processors such as PayPal in order to avoid detection.
Cipriano and Vigneau operated under the names of various shell companies, and working with others, sold large volumes of stolen merchandise via e-commerce sites such as eBay, Walmart, and Amazon.
A crime with victims
Last year, the U.S. Chamber of Commerce calculated that retail theft had inflicted $125.7 billion in economic losses. And that toll doesn't include $14.9 billion in lost federal tax revenue.
"Contrary to popular belief, organized retail crime is not a victimless crime," said Homeland Security Investigations Special Agent in Charge, Michael J. Krol.
"When theft groups undermine international commerce and the supply chain," he said, "we all pay."
Both suspects have records, prosecutors say
Cipriano and Vigneau are charged with interstate transportation of stolen goods, conspiracy to commit interstate transportation of stolen goods, money laundering, conspiracy to commit money laundering, and engaging in monetary transactions in property derived from unlawful activity.
According to court records, Cipriano was convicted in Rhode Island state court in 2005. He served a term of six years of incarceration for conspiracy and receiving stolen goods. In August 2013, Cipriano was sentenced to 50 months in federal prison for trafficking counterfeit goods.
A federal jury found Vigneau guilty of offenses that included marijuana possession with intent to distribute marijuana and conspiring to launder money. He was released from federal prison in 2020. He is serving a term of federal supervised release.
This case is being prosecuted by Assistant United States Attorney Ly T. Chin.
This article originally appeared on The Providence Journal: Rhode Island men accused of leading roles in multi-million dollar theft ring. What we know.
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