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pawn law

March 19, 2019 - 7:40am
posted by Howard B. Owens in pawn law, news, notify.
      Kevin Earl

A proposed local law aimed at curbing property thefts is back before the County Legislature after undergoing revisions to more narrowly focus its intent on pawn shops and other businesses most commonly favored by criminals to fence stolen goods.

County Attorney Kevin Earl worked with a variety of interested parties, including District Attorney Lawrence Friedman and Chief Deputy Jerome Brewster to draft proposed language that would still meet the intent of the legislation, but ensure it only hit its target without potentially adding an unintended regulatory burden to other local businesses.

The original bill was introduced in November and met some initial opposition from some members of the Legislature and some local business owners.

The key change of the law narrows the scope of the regulations to businesses known as "pervasively regulated." Prior case law has established that certain business activities can be monitored by the government without a warrant because of the nature of the business. In New York, these already include pawn shops, coin dealers, chop shops, and other enterprises that can be used as fronts for stolen property.

The change ensures the law can't be used to impose regulations on commercial thrift-type stores, used book and record stores, antique stores, or businesses that resell gift cards, among other establishments that might have been swept up in the prior broader language of the law.

Public Services Committee Chair Shelly Stein said during yesterday's committee meeting that it's important to remember the purpose of the law. 

"We are trying to assist victims of theft and robbery in the county," Stein said. 

Even so, the revised bill isn't supported by all members of the Legislature. Both legislators John Deleo and Andrew Young said they are uncomfortable adding another layer of regulation on private enterprise.

"We have one pawn shop here and we're creating more mandated laws when we get upset when the state puts mandates on us," Deleo said. "I don't think it's right. I have faith in law enforcement that if we have a problem, we can solve it. I don't care how much lipstick we put on this, I have a hard time buying into it. I guess I have more faith in law enforcement.

After the meeting, Young said he still isn't satisfied with the language of the law.

"It has been suggested that the decision to be made to pass this law is easy because it is simply to choose between victims of stolen goods and potential criminals," Young said. "I don’t agree that is what it is about. The decision to be made is to weigh the cost of additional government rules, regulations and reporting requirements against the value those government-imposed burdens provide towards assisting victims of theft. 

"The changes made make this law better and somewhat less intrusive. I am not sure we have reached the point where the value of this law outweighs the cost."

Another significant change is the elimination of the licensing fee for a qualified secondhand dealer.

"We did this to address the suggestion that this was only a money grab by the county," said County Clerk Michael Cianfrini. "We wanted to eliminate that concern."

Earl said he's confident that changes in the bill's language will help it withstand any potential Constitutional challenge.  

Niagara County passed a new law similar in language to the original draft of Genesee County's law and Earl said officials up there, after he shared his concerns with them about the local law, don't intend to make changes.

"Niagara County had nobody show up at their public hearing," Earl said. "There were no objections. It's probably a good thing we had objections up front or we might have had problems on the back end."

Brewster said just discussion of the law has compelled Pawn King on Veterans Memorial Drive, Batavia, to start using Leads Online, a digital service used by pawn shops to enter items received into a searchable database. Law enforcement agencies can then subscribe to the service (there's no cost to the merchants who participate) so they can see what items are coming into the shop and check the list of items reported stolen.

Pawn King was already using the service in other counties where it does business because those counties legally compel Pawn King to use Leads Online.

Brewster said passage of a similar law locally will ensure Pawn King continues to use the service and will help ensure their compliance is thorough.

Businesses required to record transactions and hold items for at least 10 days under the law could lose their license and be forced to close if found out of compliance.

Mike Barrett, owner of Barrett Marine, said after the meeting that with the revisions, he's more comfortable that the new law. If passed, it won't apply to Barrett's business, but the owner of John G. Cooper Coin Shop in Le Roy said at age 76, this law may be a signal that it's time to retire.

Previously:

November 29, 2018 - 2:51pm
posted by Mike Pettinella in news, pawn king, pawn law, notify.

The Genesee County Legislature on Wednesday tabled a proposed local law designed to closely regulate secondhand dealers, but as far as one longtime Batavia businessman is concerned, the board should scrap it completely.

(Download PDF of the proposed local law.)

“I can’t sleep over this; I’m livid,” said Michael Barrett, owner of Batavia Marine & Sporting Supplies on West Main Street. “To put the onus on the business in the county is terrible.”

Barrett said he doesn’t like the proposed $150 licensing fee and what he perceives as extra layers of government intervention. Businesses not complying with the law would be subject to being charged with a Class B misdemeanor.

“I don’t need to be checked out by the sheriff’s (department), I don’t need to have to log everything in a book and I don’t need to have to download it to the sheriff’s (department),” he said. “That is their area of expertise, not mine.”

Legislature Chairman Robert Bausch said county lawmakers have “gotten comments about it – pro and con,” which has led them to ask for clarification of some the language of the law.

He said that District Attorney Lawrence Friedman, in conjunction with police agencies and the county attorney’s office, will be revising portions of the law.

“We’re going to get something out there eventually, but it is going back to the Public Service Committee and they don’t meet until January 14th," Bausch said.

Wednesday’s tabling action means that a public hearing scheduled for Dec. 12 on the matter will be cancelled.

Bausch said that the primary focus of the law is to pinpoint the source of items being sold to pawn shops and similar businesses and to curtail criminal activity -- “not to interfere with their business activity."

“We’ve heard that Pawn King (the county’s lone pawn shop, located on Veterans Memorial Drive) is doing the right thing in other counties (with a LeadsOnline tracking program),” he said. “Our concern is that there (be) no collateral damage to other businesses.”

He also noted that when a similar law was proposed five or six years ago, no one objected except for scrap dealers. The law did not take effect due to lack of support from legislators. This time around, scrap dealers are exempt from the proposed ordinance.

Commenting on concerns from business owners who offer gift cards, Bausch said that is not part of the equation.

“I don’t even worry about the gift cards as part of normal business activity, unless people are selling gift cards to the pawn shop,” he said.

Legislator Andrew Young, who has come out as being opposed to the law, acknowledged that the intent is "admirable," but feels that it is too restrictive.

"We've gone way too far ... it's nine pages of limitations and regulations," he said. "And it is ambiguous as to who it really covers."

Young said he hopes some of the points he made during recent committee meetings will take hold and that he is looking forward to discussing the revised document at a Ways & Means Committee meeting next month.

Public comments on The Batavian and other sites have been mostly against the law.

Barrett, who takes in used gun parts such as empty cartridge brass, scopes and reloading equipment, said there already are many layers of regulations and is “overburdened as it is.”

“Business is bad in the county … so many empty buildings in our town,” he said. “I’ve talked to one business owner and he said if this goes through, he’s taking his business out of the county.”

Barrett said he’s read the proposed law very closely and believes that other than “used cars, clothing, books and scrap, everything else is open.”

He said he plans to be there when the public hearing does take place and hopes that he is joined by other business owners.

“Wild horses couldn’t drag me away,” he said.

November 20, 2018 - 4:20pm
posted by Howard B. Owens in pawn king, pawn law, pawn shops, crime, law enforcement, news, notify.

img_2196publicservice.jpg

Local law enforcement is backing a new proposed county law to more tightly regulate pawnbrokers but the draft legislation may have a spill-over impact on other local businesses.

At least one county legislator, Andrew Young, is opposed to passing the new law.

A public hearing on the proposed law has been set for 5:30 p.m. on Dec. 12 in the Old County Courthouse. (Download PDF of proposed local law).

The purpose of the law is to help local law enforcement find stolen property, recover stolen property, and apprehend the criminals who pilfer other people's property. 

“Basically, our interest in doing this is an interest in not only being able to prosecute people who steal this property and take it to pawn shops to be sold, but also making it possible to make things right for victims of these burglaries," said District Attorney Lawrence Friedman, who drafted the proposed law at the request of Sheriff's Office.

Friedman, as well as Undersheriff Gregory Walker and Chief Deputy Jerome Brewster, were clear however, there's really only one business in Genesee County that is the target of the law and that is Pawn King, 4140 Veterans Memorial Drive.

"I worked with Jerry from the start five years ago," Friedman said. "The request came from local law enforcement because of a problem primarily with residential burglaries and that proceeds from these burglaries were primarily going to pawn shops and primarily one local pawn shop," Friedman told members of the Public Service Committee at a meeting Monday.

The Legislature considered a similar law five years ago but after opposition from scrap metal dealers at a public hearing, where they raised concerns about the logistical difficulty in tracking where scrap metal came from, the proposed law lost support among legislators.

County Attorney Kevin Earl has modified the bill to remove regulation of scrap metal dealers.

During his presentation in support of the proposed law, Friedman recalled two recent incidents he said illustrates the need for the law.

If you read the local news, Friedman told legislators, you know about a recent incident where a suspect pulled into the driveway of County Manager Jay Gsell and allegedly threw a stolen gun from the car. That case is linked, Friedman said, to a recent string of burglaries in the area and one of the suspects allegedly used a fake ID to pawn stolen items at Pawn King.

"That's a big problem," Friedman said. "That's one example of something that goes on here on a regular basis."

Friedman also said the assistant district attorney for the Town of Batavia Court recently took an affidavit from a witness who said he saw a person wheel an entire shopping cart full of merchandise from Walmart to Pawn King across the street and pawn all of the items.

"That's the kind of thing we're dealing with," Friedman said.

Brewster said the proposed law would make his job, and the job of all local criminal investigators, easier.

"It will make it harder to get away with illegal activity and make it easier to prosecute those who are breaking the law," Brewster said.

Friedman said when he wrote the law five years ago, he patterned it after a law already passed in Monroe County as well as ones in other jurisdictions.

There are similar other laws in other jurisdictions, including other states, and some of them have run into legal challenges over the implication in the laws of warrantless searches, which violate the Fourth Amendment.

Under the terms of these laws, including the law proposed in Genesee County, police officers can enter the place of business of a secondhand dealer without notice and inspect the property and demand to inspect the mandated records kept by the business.

In California, GameStop is suing over a pawn shop law.

In this law journal article, the author says that in New York, courts have found, specifically in People v. Keta, that the state has a greater interest in stopping chop shops from trafficking in stolen parts than chop shop owners have a right to privacy. The Supreme Court has ruled that records inspections of closely regulated businesses, which includes pawn shops, are permissible.

However, Onondaga County paid a $15,000 settlement in 2015 after a court ruled his business was the victim of a warrantless search under that county's pawn shop law. Also in New York, a New York City law that required law enforcement inspections of pawn shop records was struck down by a judge there.

Last night, The Batavian emailed Friedman and Earl and asked them how these New York cases, which are more relevant than cases in other states, differ from the proposed local law and we haven't received a response.

Young said Cattaraugus County passed a similar law and later repealed it. We couldn't find any news coverage of such a repeal, but we did find a story about the City of Salamanca deciding to repeal its pawn shop law after local antique dealers objected to the law.

While the proposed law does target pawn shops, the definition of secondhand dealers includes any business, with a couple of exceptions, that acquires previously used items for the purpose of resale to the public.

This would seem to include antique dealers, junk dealers, non-charitable thrift stores and secondhand shops, and used record stores.

Exceptions are written into the law for clothing and books but no other items.

Jewelry stores and coin dealers with sales of less than 15 percent of sales from used items are also exempt from the law. Also exempt, antique dealers who sell exclusively at trade shows and licensed auctioneers.

The law also covers the resale of gift cards. This seems to apply to the resale of gift cards from other businesses, which is common in local businesses, such as Tops Market, Walmart, and Target, as well as The Batavian.

Earl told legislators those type of gift cards, even though they are acquired from the issuer for resale to a third party, are not covered by the law.

He quoted from Section 2, paragraph F:

"Secondhand Article" means any article or object, with the exception of clothing and books, that has previously been bought or sold at retail and/or which has been previously used and/or is not in a new condition.  This shall include any “gift card” .... 

Earl argued that the law only covers gift cards that are considered "used" even though once a gift card is used, it loses its value.

The purpose of including gift cards is to deal with criminals who shoplift from stores such as Walmart and then return the items. Since they don't have a receipt, they are given a gift card. Brewster said, for example, they might get a $100 gift card and then walk over to Pawn King and sell it for $50.

When questioned after the meeting about clarity on the gift card provision, Friedman reiterated it was not the intention of the law to cover gift cards sold by The Batavian or retail outlets such as Tops. He said it would be up to the Legislature to refine the law if they thought such clarity was necessary.

"I guess what I'm going to say is we drafted it as we thought was appropriate," Freidman said. "This is not the end. You know there's going to be a public hearing and everyone is going to have an opportunity to be heard about that. And presumably, there could be further refinements made to it just like we did after the last public hearing."

The law as proposed requires secondhand dealers to acquire a license. There is a $150 annual fee for the license. Licenses could be denied to anybody with a criminal conviction and potentially to businesses with employees who have criminal convictions for property crimes.

Secondhand dealers would be required to keep written records of all transactions -- both buying and selling -- in their shops as well as enter data into LeadsOnline, a private business that law enforcement can contract with to track the acquisition of used merchandise by dealers. LeadsOnline is free to participating businesses.

Dealers would be required to obtain photo identification of every person, and make a photocopy of the ID, of every seller or buyer of merchandise.

Section 12, paragraph B:

Prior to acquiring or disposing of any secondhand article covered by this local law, every Secondhand Dealer shall request Identification from the seller or purchaser and shall verify the identity of such individual by comparing the individual to the photographic image contained on said Identification. The Secondhand Dealer shall record the individual’s name, date of birth and address (or current address if different than that listed on the Identification), and the Identification number (e.g., motorist ID number) listed on the Identification. The Secondhand Dealer shall make a photocopy of the front of the Identification.

Failure to comply with the law is a Class B misdemeanor.

The law also covered dealers who transact business online, such as eBay resellers, if they're based in Genesee County.

It's not clear how online retailers would comply with the requirement to obtain a physical ID of buyers and sellers.

License dealers must also allow local law enforcement and code enforcement to inspect their place of business prior to receiving a license and at any time upon request once the license is issued.

Young made the point that many Web-based businesses operate out of the owners' homes and he asked if such owners would be expected to make their homes subject to inspection by law enforcement.

None of the advocates for the law provided an answer to the question.

Young compared the law to code enforcement and health inspection laws, which usually involve an appointment with the inspector.

"Not only is an appointment made," Young said, "the consequences are you're not serving the lunch next day. In this case, you go to jail."

Earl said, as a Class B misdemeanor, there is no jail term. It's more like a traffic ticket.

The proposed law was first discussed in the Public Service Committee. Young is not a member of the Public Service Committee but he was given an opportunity to voice his concerns.

The Public Service Committee unanimously recommended approving a public hearing on the proposed law.

The Ways and Means Committee met immediately after the first meeting. Young does serve on that committee and Ways and Means was also asked to vote on approval of a public hearing.

Young again raised objections to the proposed law, which prompted another discussion.

There isn't a need for the law, Young suggested, because Pawn King is already entering its transactions in LeadsOnline. Young said he spoke with the manager of the local Pawn King.

"It’s not true," Walker said. "He may say that but he’s not doing it."

During Public Service, Friedman hinted but didn't outright say, that Pawn King conducts some transactions after regular business hours.

Young voted no to send the proposed law to a public hearing. He thinks the bill should go back to the lawyers to clarify key points.

"There are too many unanswered questions," he said.

Chairwoman Marianne Clattenburg suggested that the bill could go to public hearing and the Legislature could then better determine how to amend the law after hearing from the public.

Ways and Means approved sending the proposed law to a public hearing on a 4-1 vote.

Much of Young's objection to the proposed law is that it creates a new regulatory scheme for businesses, which he thinks runs counter to the county's effort to try and attract new business.

"This is an unprecedented law in this county," Young said. "In this county, we don't have too many local laws and they've usually been reserved for things that are really important. Monroe County has a different governing body and they think differently than ours, but we're taking one of their laws and making it even more restrictive."

Young argued that the problem in Genesee County doesn't rise to the level of passing new laws.

Friedman said there is a pressing need for the law.

“I have to disagree with the statement that there is no problem here," Friedman said. "There is absolutely a problem here.”

Photo: Public Service Committee meeting.

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