To Catch a Thief

On a recent job, Mark Ancona, vice president of Cocoa, Fla.-based general contractor Sunrise Systems of Brevard Inc., got the kind of phone call contractors dread—bad news compounded by worse news.

"My superintendent informed me that all of the window frames had been pried out of an apartment building we were in the process of demolishing, and the walls had been ripped open so copper pipes and wires could be cut out," Ancona recalls. "The thieves didn’t bother to turn off the main, so water flowed out of the structure like a river for most of the weekend. On top of the lost revenue, we had to arm wrestle with the county over the bill for 170,000 gallons of water we ‘used’ during demolition."

Vandalism and theft have always threatened demolition job sites, however, the recent boom market for nonferrous scrap has dramatically increased the incidence of theft, according to Ancona. Furthermore, even as the demolition industry itself is growing more sophisticated, so are the thieves targeting the industry’s valuable scrap. "As prices went up, more and more materials started to disappear," says Drew Lammers, president of King Wrecking Co. Inc. of Cincinnati and president of the National Demolition Association. "[Thieves] will also spend more time getting every pound of copper they possibly can," he adds.

"[Thieves] are well-organized, sneaky and, for the most part, fearless," Ancona adds. "We’ve experienced theft of materials while still on site, sitting in the truck eating lunch. The guys work in small teams and will distract the crew, with a second man slipping around the side and walking away with our metals or tools."

Like Ancona’s story illustrates, the bad news is that materials theft is on the rise at demolition sites. What Ancona and his colleagues are finding as worse news is that securing their sites against such theft isn’t always a cost-efficient option.

Copper piping and wire have been popular targets for years and remain among the most commonly stolen items from demolition sites. "Copper piping and copper wiring is so valuable on a per-pound basis, thieves will

However, high prices across nonferrous grades have expanded thieves’ targeted materials. "Thieves in Florida have gone as far as cutting down aluminum light poles and cutting coils out of operating air conditioning units," Ancona says. "They have stolen radiators out of vehicles and cut down power lines."

William Gumbiner, principal of Demolition Industry Consultants LLC, Noblesville, Ind., says stainless steel and brass are also targeted. More than traditional scrap metal is at risk, Gumbiner adds, saying that thieves are also targeting equipment, from gas-powered saws to gas and oxygen gauges to skid-steer loaders. "If it has value, it will be stolen," Gumbiner says. "If a thief can carry copper wire, the equivalent of one bag of cement—90 pounds—the thief can realize a ‘profit’ of minimum $200 cash," he continues. "If the thief can manage to steal a pickup truck load of clean copper, he could realize a ‘profit’ of $3,000 cash. It is a case of risk vs. reward; and, at today’s scrap prices, the reward appears to trump the risk of being caught."

Scrap has always had value in the eyes of demolition contractors, many of whom build anticipated money from recovered materials into their bids for jobs. While thieves may assume that materials at the job site are bound for disposal, making their theft a supposed victimless crime, Ancona says that the loss from theft is definitely felt on the contractor’s bottom line. "Our estimated losses from theft during fiscal 2007 are running about $45,000," he says. "That’s $45,000 in lost profit, not lost revenue."

That kind of financial hit leaves a company hurting. Unfortunately, many contractors find their problems with theft compounded by the high cost of trying to secure their sites.

Demolition contractors are typically responsible for their own security once a site is turned over to them. While this gives them autonomy to manage the site, many contractors are finding themselves caught in the middle of wanting to protect valuable salvage assets and having few cost-effective security methods available to them.

Fences are a fairly inexpensive means to add security, however, they are hardly impenetrable. "Unfortunately, if thieves want to access a site or building, a fence is not going to stop them," says Steve Hosier, Veit Cos., Rogers, Minn.

Pete Charamut of Melbourne, Fla.-based Frank-Lin Excavating Inc., points to other problems with relying on fences. "Fences help, but can create cover for the thief and obstruct our vision on a security drive-by of the site."

Pece has tried fencing and additional lighting as a means to ward off potential thieves and has seen little benefit from either method. "We personally have had no luck with fencing or lighting to solve the problem," he says. "Thieves today are so brazen they will cut fencing and even cut the power to the lighting so they can work in the dark."

More sophisticated means of surveillance, such as security cameras, may add protection, but not without a great deal of added cost. "We’ve considered video surveillance, but it is a problematic solution at best. A camera system capable of recording decent images in reduced lighting is expensive and requires a digital recording device for video stream capture. In addition, they all require electricity," says Ancona.

Tim Maguire of Triple M Demolition in Brantford, Ontario, Canada, says that fences have also done little to protect his work sites. "The only real option is to have full-time security," he says. Maguire says he’s put round-the-clock shifts at job sites, but has found the cost of the extra man hours outweighs the gains of added security. "It’s an all-around losing prospect," he says.

Ancona agrees that many contractors are challenged by finding the balance between protecting valuable scrap and spending more than the material is worth. "On each job, there is a delta between the value of the recyclables and the costs associated with protecting them," he says.

One solution is to move scrap metal to a secure area for off-site processing as quickly as possible.

Charamut at Frank-Lin says he has tried to increase off-site processing as a means to keep scrap away from thieves. "We bring anything valuable back to our yard and place it in containers so we can process it at a later date," he says.

Pece has also reported an increase in his off-site processing. "It’s much safer to transport the materials to a secure facility and process them there with little fear of theft," he says.

Gumbiner also advises getting scrap material off site as quickly as possible. "The best way to limit scrap theft is to remove copper, brass, aluminum and stainless steel daily at the end of each day’s work shift and deliver it to the demolition contractor’s equipment storage yard or directly to a reputable recycler," he says.

Even when cooperating with demolition contractors, scrap recyclers often find themselves caught in the middle of the theft issue. "Scrap dealers are split on [preventing theft] without losing revenues from their legitimate customers. Everyone knows the copper stolen from my job today is probably sold to the same scrap dealer I was going to sell it to, but without serial numbers or other very unique ways to ID the scrap metal, it’s very hard for law enforcement to prosecute," he says.

Ancona says dealers in his area recognize the problem and want to be a part of the solution, but may find themselves in an awkward position. "Yard operators are generally willing to help but must weigh their level of voluntary cooperation against the possibility of reduced revenues and loss of customer trust," he says.

The scrap business is relationship-based, making trust issues like accepting stolen materials all the more difficult to handle.

Scrap theft is also notoriously hard to prosecute, which puts law enforcement agencies at a disadvantage from the start, according to Gumbiner. "Unlike cars, scrap salvage is almost impossible to identify, and most stolen materials are sold within hours of the theft," he says. "The problem for legitimate scrap recyclers is again the inability of the recycler to identify the difference between stolen or legitimately owned salvage."

The difficultly can leave some contractors feeling ignored when they turn to local law enforcement following a theft. Triple M’s Maguire says he’s had little luck with law enforcement following up on theft reports, which puts the onus of dealing with the loss and preventing further incidents fully on him and his staff. Maguire sees theft, much as many in the industry see rising transportation and utility costs, increasingly as a cost of doing business. "It’s a sad, sad thing," he says. "I can’t see it getting any better."

While the scenario seems bleak, contractors can take steps to secure material on site that don’t require costly security equipment.

The relationship-based nature of the business is part of the problem of scrap theft, but it can also contribute to theft prevention, Ancona says. He has found approaching neighboring property owners and law enforcement has been helpful.

"Take the time to talk with neighboring property owners," he recommends.

Ancona says in his experience, investing some extra time and effort when it comes to job-site neighbors can pay off in the long run. "You walk that track hoe over or you help them clear a ditch, now you’ve got a friend forever," he says. "Now he’s going to keep an eye on your stuff."

Ancona also recommends approaching local law enforcement agencies before demolition. "We notify local law enforcement of our presence in the neighborhood. If you approach them with a positive, pro-active agenda, often times they will step up patrols in the area," he says.

Numerous state and local legislative bodies have approved or are considering bills that address scrap metal theft. Gumbiner says he sees legislative action as one of the best ways to combat the problem. "The only way to stop the theft of high value salvage materials…is to enact state laws that would tighten requirements for recyclers to only accept high-value scrap from individuals who produce valid photo IDs and to pay only by check, not debit cards or in most cases untraceable cash," he says.

Hosier says such efforts are underway in his home state. "The city of Minneapolis and the state of Minnesota are currently working on ways to further regulate the scrap dealers and their material acceptance policies. It is virtually impossible for a contractor to dictate to a scrap dealer how he should run his business," he says. "We fully support tougher material acceptance standards, such as detailed chain of custody records; but, in the end, we can only follow the lead of entities in a position to regulate the scrap industry."

Lammers says that, like fences and cameras, even the strictest legislation might not be enough to deter determined thieves so long as nonferrous prices are high. "It’s risk vs. reward," he says, adding that as long as the potential reward of scrap theft outweighs the risk, the demolition industry will remain prone to theft.

Ancona says it will take cooperation on many fronts to decrease the incidence of scrap metal theft from demolition sites. "As a demolition contractor, we absolutely depend on cash from salvage to remain competitive," he says. "Unfortunately, there are no easy answers. With continued cooperation between local contractors, recyclers and law enforcement, hopefully we can realize a reduction in job-site theft and more prosecution of metal thieves," Ancona adds.

The author is associate editor of Recycling Today and can be contacted at jgubeno@gie.net.