Power Theft

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					                                                     Power Theft
                                                     The Silent Crime'
, ..                                                      KARL A. SEGER, Ph.D.
'.                                                            Corporate Consultants
                                                                 Lenoir City, TN
                                                       DAVID J. ICOVE, Ph.D" P.E.
                                                            Senior Systems Analyst

                                                 Behavioral Science Investigative Support Unit

                                                                FBI Academy

                                                                 Quantico, VA

             In 1981, FBI Special Agents armed       prOVided information to law enforce­        2,800 cases in 1 year and recovered
       with Federal search warrants raided           ment authorities that led to 27 arrests     nearly $800,000 from guilty customers. S
       several east coast buildings in search        and 25 convictions. About 10 years                Energy thieves do not restrict
       of evidence of gambling. During the           later, the annual figures reached 453       themselves to major utility systems of
       raid, these Agents discovered an unu­         arrests and 447 convictions. Among           metropolitan areas. Rural electric co­
       sual condition-the electrical power in        those caught stealing that year were a       operatives and smaller municipal sys­
       one of the buildings had been intention­      prominent lawyer, an electrical engi­       tems also report losses to thieves. In a
       ally bypassed.                                neer, a State legislator, and a high         national survey, a group of rural coop­
             The theft of energy is an economic      school principal. The company esti­          eratives reported that they suspected
       crime that adversely affects all utility      mates that two-tenths of a percent of its    more than 2 percent of their members
       customers. Utilities estimate that 0.5 to     customers currently steal power and          of stealing power.­
       1.0 percent of all customers steal from       that without an aggressive deterrent              Residential customers are respon­
       them' and that their annual losses ex­        program, 10 to 15 percent would steal.      sible for about 80 percent of all de­
       ceed $1.7 billion in electricity and $1.3           Consolidated Edison (New York)        tected thefts, while commercial and
       billion in natural gas.>                      investigated 88,942 cases of suspected      industrial users account for the remain­
             New Orleans Public Service, Inc.,       power theft and caught 12,000 cus­          ing 20 percent. However, commercial
       was one of the first utilities to recognize   tomers stealing $7 million worth of elec­   and industrial users account for an es­
       its power theft problem and to develop        tricity and gas in a single year.'          timated 80 percent of all dollar losses.
       a program to combat it. 3 In 1971, the        Potomac Electric Power Company              Usually, thefts by industrial users ex­
       first year of the program, the company        (Washington, DC, area) discovered           ceed $100,000, and in several cases,

       20 I FBI Law Enforcement Bulletin
            utilities estimated losses of almost $1        will flow through the straps and the re­
            million.                                        mainder will continue to register on the
                   When a customer steals from the          meter. Unfortunately, some of the
            utility, the company absorbs the loss          thieves attempting to use this method
            into its rate structure, making honest          have electrocuted themselves. Others
            customers pay for it. Theft of services        have created dangerous conditions that
            costs each customer in the United              have resulted in fires.
            States about $30 per year in additional              Some enterprising thieves steal an
            utility expenses.?                             extra meter and place the spare meter
                                                           in their socket for 10 to 15 days each
            Committing the Crime                           month. Then, before the meter reader
Dr. Seger         There are more ways to steal             is scheduled to read their meter again,
            power than most utilities care to admit.       they put the meter provided by the utility
            Some techniques are very simple, but           back in the socket. Meter readers usu­
            effective, while others are sophisticated      ally catch these people when they
             and difficult to detect. The utilities, for   make random checks of the meters be­
            obvious reasons, dislike publicizing the       tween meter reading cycles.
            methods used to steal power. Although                Other offenders drill or shoot a hole
            we understand their concerns, we have          in the meter. They then use a piece of
            two reasons for deciding to discuss            wire or coat hanger to put a drag on the
            some of the more common methods                wheel. They remove the wire and cover
            used. First, law enforcement may find          the hole with duct cement and a splash
            it difficult to detect and investigate a       of paint before the meter reader re­
            crime without knowing the modus op­            turns.
            erandi (M.a.) used to commit it. Sec­                Sophisticated power thieves either
            ond, consumers already can acquire             use elaborate bypass systems or
            this information in a number of different      tamper with internal mechanisms of the
            "How To" pamphlets currently available         meter. Usually, they will install a bypass
            through the mail. s                            system at the weatherhead where the
                  Three of the most common meth­           entrance cable attaches to the house
            ods used for stealing power include in­        and then runs to the other side of the
            verting the meter, placing straps behind       meter. By placing a switch on the by­
            the meter, or switching meters. Invert­        pass, customers can decide when they
            ing most meters (turning the meter up­         want electricity to run through the meter
            side down) will cause the meter to run         and when they want it to run through
            backwards, which actually takes watt           the bypass.
            hours off the reading. Remarkably,                   Customers tampering with the in­
            some customers get so greedy that              ternal mechanisms of the meter can
            they reverse too many hours off their          simply bend the wheel to create a drag,
            meters. Thus, they show a net loss from        or they can tamper with the meter's po­
            one meter reading to the next.                 larity to accomplish a similar objective.
                 Placing jumpers or metal straps           They also can modify registration of
            behind the meter is an effective, though       electricity by. placing resistors in the
            dangerous, way to steal electricity. If        meter.
            done correctly, some of the electricity

                                                                                      March 1988 I 21
                  "Power theft affects all consumers because it results in
                                     increased rates."

                                                                                           An assortment of various metal items used for
                                                                                           jumping electrical meter sockets.

Combating the Problem                          i1y access them. Many companies             monitor all disconnected accounts, es­
      The first step in combating the          move these meters to outside areas          pecially if they disconnected a con­
 power theft problem is for utilities to de­   where they can Visually inspect the me­     sumer for nonpayment. Utility
velop and maintain system integrity.           ter when it is read. In areas where         personnel should drive past the house
 Law enforcement agencies should en­           power theft has become a major prob­        at night several days after the utility has
courage utilities to seal all meters and       lem, utilities can place these meters on    disconnected the service. If they see
then inspect the seals regularly:- For         utility poles high enough to be beyond      lights. they may then suspect that the
this program to be effective, utilities        the reach of the customer, but still eas­   customer is stealing. If a police officer
must securely maintain the seals.              ily readable by meter readers.              sees electricity being used where it has
Some utilities use plastic seals with se­             Utilities that closely monitor the   been legally disconnected, he or she is
rial numbers and require employees to          amount of electricity used by customers     witnessing either the theft of electricity
sign for them by number. Others have           can often detect a theft without looking    or the receipt of stolen property. de­
lead seals and use crimping devices            at the meter. They can accomplish this      pending on the applicable legal statutes
with distinctive patterns to close those       task by having their data processing        in his or her jurisdiction.
seals. The utility will know that some­        department conduct a comparison
one has tampered with the seal if they         analysis of a current month's usage         Investigating the Crime
find the wrong serial number or crimp­         with the same month of the previous              Some utility systems have devel­
ing pattern on a seal at a customer's          year. If they detect a decrease of more     oped an in-house capability by using
house.                                         than 33 percent. they should inspect        former police officers to detect and in­
     Some older homes have meters lo­          the metering system at that account.'o      vestigate power thieves. Most utilities,
cated in basements or back rooms                  Law enforcement agencies should          however, rely on their local law enforce­
where the utility company cannot read­         encourage utility firms in their areas to   ment agency to assist them with the in­
                                                                                           vestigation and prosecution.

22 / FBI Law Enforcement Bulletin
      Utilities often initiate probable              that of a witness to what was found at         Prosecuting Power Thieves
cause investigations after a meter                   the scene. If the investigation results in           Law enforcement agencies are not
reader detects a broken seal or other                prosecution or litigation, the utility will    always aware of the extent of power
indications of tampering. The meter                  call the officer as a material witness. In     theft and its economic impact, because
reader reports the condition to a super­             these cases, the customer usually de­          when a utility catches a thief, it prefers
visor or power theft investigator, who               cides to reimburse the utility for the loss    to give the customer the opportunity to
then conducts the investigation. At this             to avoid court proceedings.                    pay for the amount of electricity stolen
point, some utilities will contact their 10­               In jurisdictions where the utility and   to avoid criminal prosecution. This often
cal law enforcement agency, and an of­               the police agency have decided to              is an effective approach when dealing
ficer will accompany the utility                     prosecute power thieves, the officer at        with first-time offenders. On the other
investigator during the initial investiga­           the scene of the initial investigation         hand, dealing with repeat offenders ne­
tion.                                                usually will collect the photographs and       cessitates criminal investigation and
      If the investigator finds evidence of          evidence. The utility investigator serves      prosecution to combat the problem.'2
tampering, the area around the meter                 as a material witness. In these cases,               Many States have laws that make
is treated like any other crime scene."              the utilities want to try to prove the cus­    meter tampering and power theft
The investigator often prepares reports,             tomer's guilt. They hope the judge will        crimes punishable by a combination of
takes photographs, and collects evi­                 require guilty customers to make resti­        a fine, imprisonment, or civil restitu­
dence. The handling and eventual dis­                tution to the utility as part of the sen­      tion.'3 Most power theft cases are in­
position of the photographs and                      tence.                                         vestigated and prosecuted under two
evidence will depend on any agree­                         A number of utility systems con­         general sets of statutes. Meter tamp­
ments between the law enforcement                    duct their own investigation, and when         ering laws deal only with evidence in­
agency and the utility.                              warranted, take certain cases to their         dicating that someone tampered with
      If the primary objective of the utili­         local police department. Other systems         the meter or metering system. 14 Inves­
ty's power theft program is revenue re­              avoid criminal prosecution entirely.           tigation under these statutes tries to es­
covery, the utility will collect and                 They prefer to use the civil judicial sys­     tablish that the meter was tampered
maintain the evidence. The law en­                   tem, when needed, to deal with their           with and that the consumer charged
forcement officer's role, in this case, is           power theft problems.                          with the crime did the tampering. Since
     An example of one utility thief's method for
     slowing down an electric meter by using a
screw driver inserted through a predrilled hole in
                                 the meter glass.

                                                                                                                               March 1988 / 23
           "         the theft of utility services costs the United States over $3
                                      billion every year . ... "

it seldom is easy to prove who was re­             tested and technicians who will pro­         sible. The prima facie clause has been
sponsible, some State statutes include             vide the necessary testimony in              challenged in a number of States.'6
a prima facie provision that assigns the           court.                                       Some States have upheld the clause in
presumption of guilt to the person(s)              Account billing history-This would il­       the face of challenges, while others
who benefited from the tampering.                  lustrate the time the theft began and        have ruled it unconstitutional. As a re­
      The other set of statutes ad­                the amount and cost of the stolen            sult, many utilities have decided to
dresses the total power theft problem,             electricity. Most utilities have the abil­   avoid criminal prosecution when the
including the dollar loss suffered by the          ity to review each account's con­            question of who actually tampered
utility.'5 These statutes apply when               sumption and billing records on a            with the meter becomes an important
someone has tampered with the meter                month-by-month basis to provide this         point.
system and actually stolen electricity or          information.                                      Another problem in the criminal
other utility services. Again, some                   Some utilities prefer to use civil lit­   prosecution of utility theft arises in
State statutes include an assumptive            igation when they have questions such           some State statutes that require the
provision that assigns responsibility for       as: Did meter tampering or power theft          prosecution to prove the defendant in­
the tampering and theft to the person(s)                                                        tended to injure or defraud the utility.'7
                                                occur? How much electricity was not
who benefited as a result of the action.        metered as a result of this tampering/          This can make prosecution difficult. For
      Some States provide for awarding          theft? Was the defendant responsible            example, a customer moves into a va­
treble damages if a utility wins a suit         for the electricity used at this location?      cant house or apartment where no ser­
against a thief. For example, if a cus­         In a civil process, the utility does not        vice is connected and then jumps the
tomer stole $1,000 in services, the             accuse anyone of stealing. They simply          socket to get power. Did this customer
court could award the utility $3,000 in         state that the meter did not operate cor­       intend to call the utility, report the ac­
damages.                         I                                                              tion, and pay for the electricity used, or
                                                rectly and that the defendant is respon­
      Before a utility can file charges         sible for the electricity used at the           did he intend to steal?
against a potential suspect, it should          location where the loss occurred.
gather the following as evidence, doc­                                                          Recent Cases
uments, and appropriate statements:             Problems in Prosecution                               The New York State Supreme
   Witnesses-These include the meter                  In many States, a conviction for          Court recently affirmed a conviction of
   reader who initially detected the pos­       meter tampering or power theft can be           theft of services by a corporation based
   sible diversion, the utility investigator,   based solely on a utility being able to         on evidence of a damaged electrical
   and the police officer who conducted         demonstrate motive, opportunity, and            meter that recorded a substantially re­
   the investigation.                           that the accused benefited as a result          duced power consumption. '8 The court
   Tampering devices-These could in­            of the tampering, regardless of who ac­         concluded that since only the corpora­
   clude straps behind the meter, wires         tually did it. Utilities establish motive       tion's employees had access to the
   used in a bypass system, or other            through the customer's billing records          room housing the damaged meter,
   tampering devices or equipment rel­          and the cost of the diverted power.             there was sufficient evidence for a con­
   evant to the case.                           They demonstrate that the accused had           viction.
                                                opportunity and benefited from the di­                The Sixth Circuit of the U.S. Court
   Meter report-This would show that
                                                version by showing that the accused             of Appeals held in a Tennessee case
   the meter was operating correctly
                                                lived in the residence or owned the             that electrical service is a property right
   when installed and demonstrate how
                                                business where the theft occurred.              and cannot be discontinued to a cus­
   the particular tampering method used
                                                     States having statutes that include        tomer without prior notice or a prede­
   would have affected the metering of
                                                the presumptive clause assume that              termination hearing." Even though a
   electricity. Most utilities have labora­
                                                the person "who benefited as a result           city found that its meter had been re­
   tories where the meters can be
                                                of the tampering" is criminally respon­         moved and replaced by another one,

24 / FBI Law Enforcement Bulletin
the court held that the customer had         help to combat this problem. Utilities         Footnotes
                                                                                                  'E. F. Gorzelnik, "Theft of Service Poses Major
sufficient due process rights to prevent     have the responsibility to assess the          Problems," Electrical World, May 1982, pp. 101-103.
termination of electrical service without    extent of the crime in their service area            2A J. Donsiger, "The Underground Economy and the
                                                                                            Theft of Utility Services," Public Utilities Fortnightly,
notice.                                      and to establish methods and proce­            November 22, 1979, pp. 23-27.
      An investigation into the literature   dures for identifying thieves. They must             3"Utilities Say 1 Percent of Users are Stealing
                                                                                            Power:' the New York Times, March 26, 1984.
also found two cases in which electrical     also determine what their objectives will            ·"Con Edison Reports $7 Million in Power Stolen in
power diversion resulted in the loss of      be once they detect potential thefts.          1981, But Sees Improvement:' The New York Times,
                                                                                            August 24, 1982.
professional employee status. A board        Some utilities conduct all of their inves­           5"PEPCa Adds Investigators, Catches Many More
                                                                                            Thieves," The Washington Post, February 6, 1981.
of education in Alaska dismissed a ten­      tigations and f9110wup actions,                      61982 National Energy Theft Survey (Boston: New
ured school teacher after his conviction     while other systems call upon their local      England Power Service, July 2, 1982).
                                                                                                  7Supra note 5.
for diverting electricity. The Alaska Su­    law enforcement agency to assist them                8J. J. Williams, tron Gonads (Alamogordo:
preme Court upheld the board's deci­         in investigations.                             Consumertronics Company, 1970).
                                                                                                  OK. A. Seger."Systems Approach Limits Power
sion to dismiss the teacher based on               Since many utilities do not have         Theft," TVPPA News, November-December 1982, pp. 10­
their finding that the act constituted a     personnel with the experience or qual­         13.
                                                                                                  lOSupra note 1.
crime of moral turpitude}O Another case      ifications necessary to conduct a crim­              11 Supra note 9.
                                                                                                  12J. J. Gray. ed., "Theft of Utility Services;' Criminal
involved the disbarment of an attorney       inal investigation, the potential role of      and Civil Investigation Handbook (New York: McGraw Hill
convicted of theft of services by meter      the police agency becomes very im­             Book Company, 1981), p. 7-126·8.
                                                                                                  13Ala. Code §13·2·80 et seq.; Alaska Stat.
tampering or receiving unmetered elec­       portant. If utilities elect to conduct their   §42.20.030; Ariz. Rev. Stat. §13·1601; Cal. Penal Code
trical service, as well as attempted         own investigations, they will still need       §499a; D.C. Code §22·3115; Fla. Slat. Ann. §812.14; Ga.
                                                                                            Code §26·1507; Haw. Rev. Stat. §708·825 et seq.; Idaho
criminal possession of a weapon."            advice, assistance, and training from          Code §18·4621 et seq. Iff. Rev. Stat. tit. 111 213
      Courts hearing appeals on utility                                                     §381,382; Kan. Crim. Code §17·1921; La. Rev. Stat.
                                             their local police agency. If they decide      §14.67.6; Ohio Rev. Code Afln. §4933.19; Pa. Stat. Ann.
power service thefts generally found         to work with the agency to combat the          tit. 18 §3926(e); Tn. Code Ann. (TCA) §39·3·938; and
                                                                                            Utah Code.Ann. §76·6·409(1)(a) and (1)(b); paper
the terminology describing this offense      problem, they must establish proce­            presented by S. R. GrUbbs, "Legal Remedies for Theft of
to be clear (i.e., not unconstitutionally    dures for the coordinated effort.              Electricity," American Power Association Legal Seminar,
                                                                                            November 12, 1980.
vague). A Louisiana Supreme Court                  Though the theft of utility services           I·See. for example, Virginia §18.2'163, Tampering
case found no problems in the terms          costs the United States over $3 billion        with Matering Device; Diverting Service. The Virginia
                                                                                            statute does inciude a prima facie provision.
"diverting," "preventing," and "interfer­    every year, by working together utilities            15See, for example, Tennessee §39·3·938, Diversion
ing," which described how utility service    and police agencies can combat this            01 Electric Power· Presumption 01 Intent to Delraud ­
                                                                                            Civif Action by Utifity. The Tennessee statute does
was obtained by a defendant. 22 The Su­      crime and help control the future cost         include a provision whereby the utility can recover treble
preme Court of Delaware also upheld          of energy to the consumers in our coun­              16Paper presented by M. Banks, Current Diversion
that their State's theft of services stat­   try.                                 [f~~      Training Manual, University of Florida and the
                                                                                            Sou1heastern Metermen's Association, March 1979.
ute also was 'not unconstitutionally va­                                                          17Paper presented by F. M. Bryant, Mater
gue. 23                                                                                     Tampering, Power Diversion and Underbilflng, American
                                                                                            Public Power Association, June 11, 1984.
                                                                                                  18People v. San Roc Restaurants, Inc.• 498 N.Y.S.
Summary                                                                                     2d 481 (1986).
                                                                                                  '.Myers v. City 01 Alcoa, 752 F.2d 196 (6th Cir.
     The economic crimes of meter                                                           1985).
                                                                                                  20Kenai Peninsula Borough Board 01 Education v.
tampering and power theft have grown                                                        Brown, 691 P.2d 1034 (Alaska 1984).
to alarming proportions in many parts                                                             21Richard DeCasare v. Departmental Disciplinary
                                                                                            Commiftee, 443 N.Y.S. 2d 375, 82 AD. 2d 716 (1981).
of the world. Power theft affects all con­                                                        22Sl ate v. McCoy, 395 So. 2d 319 (La. 1980).
sumers because it results in increased                                                            23Wright v. State, 405 A2d 685 (Del. Supr. 1979).

     A coordinated effort between utili­
ties and law enforcement agencies can

                                                                                                                                    March 1988 / 25

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