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Heavy Equipment Theft Now Estimated To Be A Sophisticated $600 Million Business

On the last day in September, Jerry Dean Ledford was driving a stolen Ford F-250, and pulling a trailer loaded with a stolen tractor, down Highway 74 in Polk County, N.C., when the county sheriff spotted him. He didn’t pull over. Instead he punched the accelerator up to 80 miles per hour and led the sheriff on a chase that ended when he stopped the pickup truck on a small road and ran into the woods.

It turned out Ledford, who is reportedly cooperating with authorities, was part of a heavy-equipment theft ring that operated throughout parts of North and South Carolina. In Spartanburg County, S.C., where Ledford lived, police have reported that there were eight thefts of heavy equipment between mid-July and mid-September.

But, the Ford was Ledford’s mistake. If it had not been for the Ford, Ledford might have just rolled on down the road, right under the sheriff’s nose. Construction and farm equipment pieces have no license plates. They generally have no easily tracked identification numbers either.

That is one of the reasons that heavy equipment theft has become the problem it has become, according to a report from the National Insurance Crime Bureau and the National Equipment Register. According to their data, there were 13,000 thefts of construction or farm equipment reported in 2008.

No one knows the total value of stolen equipment in the U.S. But a conservative estimate puts it at $600 million a year.

Worse, only 21 percent of stolen, backhoes, loaders, tractors, dozers, and other equipment were recovered in 2008, according to the report. That compares to about 57 percent of stolen motor vehicles. Heavy equipment is stolen almost twice as often as it is damaged from fire, collision and vandalism, combined.

The main reason heavy equipment gets stolen is that it gets left outside overnight, unattended, frequently at a wide-open construction site without a fence. Moreover, heavy equipment often does not need a key, or if it does need a key, it takes a universal key that starts all the equipment. Thieves can acquire keys for less than $50.

Sometimes, there are instances where equipment is reported stolen, even though it is not, so the owner can get out of his payments and collect some insurance. One was a farmer in the South who buried his harvester. His fraud was not discovered for three years, says Frank Scafidi, an investigator with the National Insurance Crime Bureau. By then, some of the soil around the harvester had collapsed, exposing the exhaust stack. People could see it from the road, sticking up in the middle of a field.

Heavy equipment insurance fraud is fairly rare because most of the equipment is uninsured. More common is that the equipment is targeted by gangs and theft rings working in the dark of night. They can load a piece of equipment onto a flatbed and start driving away in five minutes. Then they can have that equipment on the auction block the next day.

They may have a check from the auction in their mailbox in a few days.

“These are sophisticated crews or rigs,” says Ryan Shepherd, operations manager for the National Equipment Register. “They have an idea of what they want even before they take it.”

The report on heavy equipment thefts compiled this year is probably the most comprehensive ever. The National Equipment Register has been making such reports since 2001. But this is the first report co-authored with the National Insurance Crime Bureau, combining their resources to get closer to including every theft in the report.

The Register gets theft reports directly from owners and law enforcement, and also from ISO ClaimSearch, the insurance industry’s all-claims database. It also has an alliance with the American Rental Association.

The National Insurance Crime Bureau has access to the FBI’s stolen vehicle and stolen off-road mobile equipment database. The insurance bureau uses that data to help insurance companies recover stolen equipment.

According to the report, the state with the most thefts in 2008 was Texas, followed by Florida, North Carolina, California, and Georgia. Those states accounted for 43 percent of all the recorded thefts. Their ranking probably reflects the amount of construction and agriculture activity in those states, rather than the level of law enforcement or criminality.

The report says that 65 percent of thefts occur while the machines are on a work site.

The most common piece of equipment stolen is the skid steer loader, of which 2,097 were recorded by the report. A new skid steer loader can cost $45,000, and as the report notes, thieves will choose the newest or best equipment first.

“If two pieces of equipment are equally easy to steal, a thief is more likely to steal the machine of greater value. Age, condition, and brand determine a machine’s perceived value,” the report says.

Shepherdm estimates, based on the numbers he sees, that only 40 percent of equipment items are insured.

So, if the police have a difficult time tracking stolen loaders and dozers, how are they recovered?

Shepherd says the most common way is that the new owner has a problem with the machine and brings it in for repair. While items of heavy equipment do not have national vehicle identification numbers, they do have product numbers from the manufacturer, and the shops might notice if these have been altered.

Then there are the less common, more haphazard recovery stories, some of which are told in the back of the report. They include one about a New Mexico detective and a $40,000 skid steer loader. Detective Ward Pfefferle of the Bernalillo County Sheriff’s Office used to watch the house of a person who had previously been convicted for receiving stolen equipment. One day he noticed the person had a new loader. He checked it out, but, there was no such loader listed as stolen in the National Crime Information System. Instead, he had to go further. He checked with the National Insurance Crime Bureau. It checked with the National Equipment Register. Finally, the Register identified the product identification number.

The equipment was returned to the rightful owner, Wagner Rentals.

More Heavy Equipment Theft Figures

The report on heavy equipment theft from the National Insurance Crime Bureau and the National Equipment Register contains a list of some interesting numbers its authors compiled, including:

• 15 Million: the number of pieces of construction and agricultural heavy equipment in use in the United States.
• $10 Million: The value of the equipment that the National Equipment Register and the National Insurance Crime Bureau have helped to recover.
• $27,770: The average value of the items recovered with help from the two organizations.
• 13: The number of insurance companies offering incentives for owners to register their equipment with the National Equipment Register.

Topics Agribusiness Construction