By Margaret A. Lourdes, Esq.

Police raids on private Army Navy surplus shops have made headlines the last few years. In 2013, authorities seized nearly $750,000 of alleged stolen military property from a private surplus store in Washington County, Pennsylvania. The raid was linked to a national investigation implicating widespread conspiracies to sell hot military property.

Buying, receiving, concealing, or selling stolen property can lead to criminal charges for possession of stolen property. Therefore, not only the thief can be caught in a legal snare, but the person purchasing the goods can be entangled as well. Of course, most small surplus stores are owned and operated by hardworking, law-abiding shopkeepers. And, generally, the state must prove a party had mens reas, or a guilty mind, before bringing criminal charges. Therefore, a shopkeeper may generally defend allegations of criminal wrongdoing by demonstrating he made an honest mistake by purchasing stolen goods for resale.

However, there is an exception to the rule. Shopkeepers cannot turn a blind eye when merchandise raises an obvious suspicious. For example, in the Washington County case, it was reported the stolen items retrieved in the raid were brand new, in original wrappers. The law expects a fact like this to trigger questions regarding how a seller came into possession of the goods.  This is called the “should have known” standard. The law requires a shopkeeper to stay away from goods that a reasonable person “should have known” were stolen. Therefore, a shopkeeper cannot ignore clues that would suggest a seller does not have good title to merchandise. For example, buying merchandise in large quantities with missing serial numbers; buying large quantities of new merchandise without investigating from where it originated; or taking advantage of unreasonably cheap prices without making reasonable inquiries about the discounts. Shopkeepers who have suspicions should ask for receipts of purchase, or similar evidence from a seller to ensure goods are not stolen. Reasonable inquires can be used in your defense if it is later determined you purchased stolen property.

If you, at some point, find you have inadvertently purchased stolen goods, you should immediately contact your lawyer. A shopkeeper who holds onto stolen goods after learning their status can also face criminal charges for possession even if he had no knowledge at the time of purchase.

In short, if a shopkeeper ignores the obvious, he is not considered “innocent” in the eyes of the law.  Possession of stolen property charges vary. However, they commonly carry misdemeanor fines and jail time. Large scale possession can carry stiffer, felony charges with extended jail time and bigger fines.

“The law requires a shopkeeper to stay away from goods that a reasonable person ‘should have known’ were stolen.”

Furthermore, even if a shopkeeper avoids criminal charges the true owner of stolen property can generally recoup his goods under civil law. Civil law, unlike criminal law, governs disputes between private parties and does not include punishments of jail time.

A property thief does not have the right to legally transfer goods to a shopkeeper. Therefore, the shopkeeper is not acquiring “good title” to the stolen goods in a purchase. For example, a shopkeeper is approached by a seller of a large quantity of unwrapped, standard issue flight jackets. The shopkeeper is suspicious they may be stolen and takes reasonable steps to ensure they are legitimate by asking the seller for a receipt substantiating his purchase. He produces what looks to be a legitimate receipt, but it is in fact a very sophisticated fake. The shopkeeper probably avoids criminal charges. However, he still does not have good title to sell the flight jackets to his customers and, therefore, may be required to return them to the true owner. His legal recourse is to sue the thief for the money damages he incurred from the purchase. The civil remedies become more complicated if the shopkeeper sells the merchandise. State laws vary, so questions relating to whether the true owner can sue a shopkeeper for money damages after stolen merchandise is sold should be directed to an attorney in your state.

In sum, always do your due diligence before you purchase merchandise that seems “too good to be true,” or raises suspicions in any way. If you do purchase merchandise that you later discover is stolen, or you later suspect to be stolen, immediately contact your lawyer and be prepared to return it to the true owner.

Margaret A. Lourdes, Esq. is a practicing attorney in Southeast Michigan. Her firm focuses on business law issues. She also teaches Business Law and Ethics at a business university.