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NJ State Commission of Investigation Exams the Link Between Scrap Metal Yards and Drug Addicts



Several South Jersey scrap metal yards cited for violations


William E. Cleary Sr. | CNBNewsnet


The New Jersey State Commission of Investigation (SCI) released a 108  page report in Screen Shot 2018-12-27 at 11.39.51June about scrap metal yards in the state helping addicts fund their drug habits by buying stolen metal products such as copper wire, copper pipes and manhole covers from them. Prime offenders in South Jersey, according to the SCI, included Sgt. Scrap Metal in Haddon Township, EMR Recycling previously known as Camden Iron and Metal in Camden City, American Recycling in Mays Landing and Sims Metal Management, Camden City.

Related: Gloucester City Threatens to Sue Haddon Township over Sgt. Scrap Metal Yard

Sgt. Scrap Metal is located in Haddon Township, however, their mailing address is 610 Crescent Blvd., Gloucester City. In a blunt letter, Fred VanGeldren, the owner of Sgt. Scrap took offense to the SCI's labeling of his business. Below is an excerpt from that letter. The complete letter appears at the end of this article.

Screen Shot 2018-12-27 at 11.45.04click to enlarge

"The enormous costs of the illicit bargain between thieves and unscrupulous owners are borne by all New Jerseyans: the ratepayers who see higher bills for cell service and electricity; the consumers who pay more for goods at retail stores; the taxpayers ultimately responsible for replacing infrastructure that has vanished in the night," the report said.

The SCI's chapter on the scrap metal industry is titled From the Cell Tower to the Scrap Yard


On a fall day several years ago, a 22-year-old woman drove into a Haddon Township scrap yard, her Ford Explorer laden with more than a quarter ton of copper wire encased in distinctive rubber sheathing. The coating indicated the wire belonged to Public Service Electric & Gas (PSE&G), New Jersey’s largest utility, which had begun marking its property to counter widespread thefts at its facilities across the state. Though the woman wasn’t wearing a PSE&G uniform and wasn’t driving one of the utility’s vehicles, employees of the company, Sgt. Scrap, paid her $1,567 without questioning the wire’s source. As it happens, the copper was, indeed, stolen from PSE&G, and Sgt. Scrap’s owner, Fred Vangeldren, later acknowledged to authorities he suspected as much all along.


VanGeldren said that his employees followed the rules by making a copy of the driver's license of the customers who brought the stolen property to his business to sell.


The woman was charged with receiving stolen property. Yet Vangeldren, because his employees ostensibly followed the rules by making a copy of her driver’s license and because he cooperated with investigators when they came calling, continued to operate as usual. The transaction and its outcome illustrate a fundamental weakness in New Jersey’s oversight of scrap yards, many of whose owners and employees routinely accept stolen goods with little fear of punishment. And Vangeldren serves as a prime example of the dealer who benefits from a broken system.


The SCI report chastised Sgt. Scrap's employees for buying marked metal without reporting it.


Vangeldren, 47, opened Sgt. Scrap’s Haddon Township yard in 2013. Since then, he has launched a mobile scrap pickup service and opened additional yards in Pennsauken, Glassboro and Freehold Township. That budding empire has been built, at least in part, on the fruits of theft. SCI investigators found episode after episode in which Sgt. Scrap employees bought marked metal without reporting it, failed to follow basic rules on record-keeping and regularly did business with addicts who burglarized hundreds of homes and cell towers.


Some of the addicts selling stolen metal to the scrap yards are people who have an extensive background in the construction business.


John Tracy was one of those addicts. He was also a highly prolific thief. Previously a construction manager for a company that serviced cell phone towers in New Jersey and surrounding states, Tracy was seriously injured in a fall from a tower, breaking several bones and damaging his cervical spine. Oxycodone tamped down the pain, but soon he grew addicted, leading him to supplement his prescriptions with loose pills he bought off the street. To meet the cost, Tracy told the Commission, he began looting job sites of metal, mainly copper wire and copper bus bars, solid metal components used in the distribution of power at electrical substations and other high-voltage environments.


Even after he lost his job over suspicions of theft, Tracy found it easy to continue stripping towers; his former employer hadn’t changed the access codes to gated areas and buildings. He grew so flagrant he once stole copper from a cell tower on the property of the Cinnaminson Police Department, directing an unsuspecting officer to move a K-9 trailer because it would interfere with his purported maintenance work.


Tracy had no doubts about where to unload the metal. Years earlier, he had briefly worked with Vangeldren at a scrap yard that operated under the name Dr. Copper. Vangeldren was a manager at the time. Now, at Sgt. Scrap, he was the boss. In just seven months, records show, Vangeldren paid Tracy more than $100,000 for copper cable and bus bars stolen from scores of towers in New Jersey, Pennsylvania and Delaware. If some of that metal was marked, it didn’t trouble Vangeldren, Tracy said. He told the Commission Vangeldren complained to him it was taking his employees too long to grind off telephone company names from bus bars.


In the power industry, these items are also known as busbars, buss bars or buss bars.


In the future, Tracy said Vangeldren told him, he should remove the markings before bringing them in. Further, when Haddon Township detectives began building a case against Tracy – questioning employees at Sgt. Scrap in the process – Vangeldren tipped his friend off, investigators told the Commission. Tracy wasn’t the only cell tower technician drawn by the company’s lax manner of doing business. He said that during his many visits to Sgt. Scrap, he recognized more than two dozen tower maintenance workers who, like him, were there to sell copper wire and bus bars he surmises were stolen. In a show of sympathy for one of those workers, a fellow addict, Tracy shared access codes with him. That man was later arrested while burglarizing a tower shared by AT&T, T-Mobile and Sprint. It sits less than two miles from Sgt. Scrap.


Vangeldren, in a sworn statement, adamantly denied that he instructed Tracy to rid metal of identifying marks.


Vangeldren, a Gloucester County resident, denied in sworn testimony that he instructed Tracy to rid metal of identifying marks. He also cast himself as an honest businessman who abides by all laws and regulations. In addition, he said he instructs his employees not to accept materials that are clearly the property of utilities.


Facts gathered by the SCI, however, show recurring problems with the company:


On two occasions in 2016, Sgt. Scrap purchased metal marked “PSE&G” from a confidential source working with the SCI and the Haddon Township Police Department. In the first case, the source brought to the Haddon yard copper wire bearing the utility’s name and other scrap metal totaling 396 pounds. He was paid $155. Months later, again under SCI and law enforcement supervision, the source returned, selling copper bus bars stamped “PSE&G” and other items totaling 401 pounds. He was paid $170. One of Vangeldren’s employees examined the metal and signed off on each purchase. The employee did not inquire about the metal’s source or alert police. PSE&G voluntarily provided the material for both undercover operations.


Sgt. Scrap did extensive business with numerous individuals purportedly working for a private company, Shamong Construction, at both the Haddon Township and Pennsauken scrap yards. Not once, however, did Sgt. Scrap employees check any of the individuals’ identification or record their names and addresses, as required by state law and local ordinances, Vangeldren acknowledged. Instead, he testified, he and his employees accepted at face value business cards the men carried. The Commission found only one Shamong Construction in New Jersey. That company has long been defunct, its headquarters a vacant office building in Bellmawr, its 90-year-old owner retired and living in Pennsylvania. Asked to explain why Sgt. Scrap had purchased so much metal from unidentified individuals claiming to be affiliated with a phantom company, Vangeldren replied, “I’m surprised.” He further acknowledged he had not done even the most basic research, such as an internet search, to verify the company’s authenticity. As a result, Sgt. Scrap’s records of those transactions were incomplete, listing “N/A,” or not available, in the name field. Other required information, including addresses and telephone numbers for the sellers, also was not provided. Each transaction with the defunct Shamong Construction, therefore, marked a violation of the ordinances in Haddon Township and Pennsauken.


An SCI analysis of records uploaded by Sgt. Scrap to the RAPID system – the database accessible by law enforcement – showed additional record-keeping irregularities. The analysis examined cash purchases of $12,000 or more. In one case, the Commission found that a Maryland address attributed to a customer and uploaded to RAPID came back to a supermarket. Another transaction involved a customer with an almost identical name as in the first example but with a different address in Straton, Pa. There is no municipality in Pennsylvania with that name, nor is there a Stratton, Pa. Giving every benefit of the doubt, the Commission ran the address in Scranton, Pa. There, it came back to a bank. A third transaction listed an address in the New Jersey town of “Randolf.” There is no such town. In Randolph, Morris County, the address uploaded to RAPID does not exist.


Sgt. Scrap paid more than $38,000 to a South Jersey couple suspected of burglarizing scores of vacant and foreclosed houses in six New Jersey counties, stripping the basements of copper water pipes and leaving the residences prone to serious flooding and expensive repairs. In their confessions to police, the couple cited their daily routine: find homes for sale through real estate websites, scout them, burglarize them and bring the proceeds to Sgt. Scrap the next morning. They would then use the money Vangeldren paid them to buy heroin in nearby Camden. When arrested, the couple had a ledger listing 330 possible targets, 130 of which had been crossed out. In his testimony, Vangeldren said he proactively notified law enforcement about the couple, whom he suspected were stealing based on their unkempt appearance, their daily visits and the tremendous volume of copper they brought in. A Haddon Township detective told the Commission in sworn testimony that Vangeldren did, indeed, offer him the names of the couple, but only after the detective asked him for help in identifying possible suspects in a burglary spree. The husband and wife were subsequently charged.


One man confessed to Egg Harbor Township Police that he burglarized at least 75 homes stealing copper pipes and air conditioner condensers to fund his illegal drug habit. A Camden County resident said she sold over three tons of stolen metal to Sgt. Scrap.


The Commission found the couple’s narrative repeated time and again during its investigation. One Sgt. Scrap customer, a 31-year-old man, confessed to police in Egg Harbor Township he burglarized at least 75 homes throughout Atlantic County, stealing copper pipes and air conditioner condensers to fund his heroin habit. A Camden County woman, also 31, sold to Sgt. Scrap more than three tons of stolen communications wire, copper and other metal, ferrying it to the Haddon Township yard in a compact Mazda as often as three times a day. The woman, who used the money for heroin, told the SCI it should have been obvious to anyone at Sgt. Scrap she was dealing in stolen items. She said it was clear to her the workers didn’t care. Another former tower maintenance worker who became addicted to pain pills after a workplace injury echoed the woman’s assessment, telling the Commission he brought in so many stolen bus bars and backup batteries marked as telephone carrier property it would be impossible not to suspect illegal activity.


Besides Sgt. Scrap the Commission mentioned other scrap yards in South Jersey where tons of stolen metal products were purchased. They included: American Recycling in Mays Landing, EMR Recycling, previously known as Camden Iron and Metal, Sims Metal Management, Camden City.


The investigation determined, for example, that some of the same people who frequented Sgt. Scrap routinely sold stolen metal at other scrap yards with an equal measure of ease. One of those customers – the man who confessed to burglarizing 75 homes throughout Atlantic County – also sold stolen copper pipes and air conditioner condensers to American Recycling in Mays Landing. Other metal thieves brought their wares to EMR Recycling, previously known as Camden Iron and Metal, a buyer and seller of scrap metal with reach around the globe. EMR’s New Jersey headquarters, on South 6th Street in Camden, sits on a lot the size of five football fields, mountains of metal rising from the pavement, tractor-trailers and passenger vehicles alike flitting in and out.


One customer, a 36-year-old Pennsauken man, once installed cell tower antennas for a living. Arrested at a tower mid-theft, pipe cutters still in hand, he confessed to authorities in Ocean County that he’d been burglarizing towers up to three times a week for six months. He said he brought the copper wire to Camden Iron and Metal and Sims Metal Management, also in Camden. None of the transactions drew scrutiny. Like so many other metal thieves, the man said the fear of withdrawal from heroin drove his behavior. “I hate being like this,” he said in the videotaped confession. “I do it when I’m basically getting sick and need heroin.”


According to the SCI investigation all of those charged had criminal records for drugs and theft.


Four people who stole a spool of copper wire weighing 1,150 pounds from an Atlantic City Electric maintenance yard scrapped it at Camden Iron’s South 6th Street site, taking home $4,800. They were caught not because the operators reported suspicious activity but because police investigating the theft canvassed scrap yards. All of those charged had criminal records for drugs and theft, and one of them, according to investigators, had overdosed three times in the previous two years. Each time he was revived with Narcan.


Industry officials told the Commission that the losses in the cellular industry have amounted to hundreds of millions of dollars. A former contractor for a Pennsylvania telecommunications company confessed to stealing backup batteries from towers. He received $122,000 for his efforts from a Philadelphia scrap yard.


The costs associated with these hand-in-glove relationships – with both thieves and scrap yards benefiting – cannot be overstated. In the cellular industry alone, burglaries at towers and storage facilities across the United States have resulted in losses amounting to hundreds of millions of dollars, industry officials told the Commission. Consider the damage wrought by just one thief. The 38-year-old Philadelphia resident, a former contractor for the telecommunications company Ericsson, confessed to stealing more than 4,300 backup batteries from towers in New Jersey, Pennsylvania, Maryland and Delaware. Collectively, the batteries weighed 200 tons. A Philadelphia scrap yard, Greendog Recycling, paid the man $122,000 for his efforts.


These scrap metal thieves who break into electrical substations and take copper wiring along with those who steal manhole covers are exposing the public to untold danger and risks. 


Utilities and railroads have reported smaller losses, ranging from tens of thousands to hundreds of thousands of dollars annually, but those burglaries carry other risks. Thieves who break into electrical substations typically cut through locks or fencing, leaving the dangerous sites unsecured and open to the curious. When copper wiring used to carry signals is stolen from railroad tracks, workers must replace it. That repair work can only be completed when train speeds are greatly reduced or when lines are taken out of service entirely, leading to delays for commuters along one of the busiest rail systems in the nation. Municipalities have not been spared. In South Brunswick, after 63 manhole covers were stolen in 2013, the local government paid $10,000 for new ones. Town by town, city by city, the costs of ignoring indifference to rules and outright criminality in the scrap industry will continue to mount, with taxpayers footing the bill.


The commission recommended that the New Jersey State Police license scrap yards and require criminal background checks for owners and employees. The report also suggested that the state require more documentation from sellers of metals and prohibit dealers from accepting metal marked as the property of telecommunications companies, utilities and local governments.

The commission also investigated pawn shop businesses and the exchange of gift cards for cash transactions.   Read the complete SCI report

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