The Cook County State's Attorney's Office says the men were running a criminal enterprise.
Prosecutors say they recorded six separate meetings from August through November in which both defendants were captured on video admitting that they knew the products they were buying were stolen. At one point, undercover investigators sold them a truck with more than $100,000-worth of laundry detergent, batteries and razors packaged with the Target brand label for a mere $22,000.
With the help of Walgreens, CVS Pharmacy and Target, the state's attorney's office says authorities went undercover to bring down Advance Distributors, a wholesale and retail sales operation on Chicago's Northwest Side that, prosecutors say, would routinely buy stolen merchandise and then resell it for a profit.
"They actually gave us product that we could represent to be stolen," said John Blakey, Special Prosecutor's Bureau. "For example, the semi with $100,000-worth of material was not, in fact, stolen but lended to us by the merchandise retailers."
Ajay Patel of Glenview and Vijay Patel of Lincolnwood were arrested earlier in the week. They are charged with theft and money laundering. Prosecutors say they recovered large quantities of stolen merchandise, which they are still processing, as well as $4.5 million in cash.
"Organized retail crime in general is a growing epidemic for all of us. We're all being impacted by it," said Rob Gibson of JC Penney.
In announcing the sting, Cook County State's Attorney Anita Alvarez also announced the creation of a joint public-private organized crime task force aimed at increasing the prosecution of major retail theft crimes.
Alvarez says "fencing operations," as they are known, obtain their merchandise by working with boosters who intercept shipments, steal from semi-trucks and warehouses. They then remove security tags, identification labels, and in some cases, alter expiration dates from items, such as over the counter medications and food products.
The crimes costs the state approximately $77 million in lost sales tax revenue each year, but it also costs the consumer.
"This crime drives up prices to consumers. The loss to retailers is extensive, which forces them to pass costs along," Alvarez said.
Retailers and prosecutors speaking with ABC7 Chicago say fencing operations are increasing, especially now, with the economic downturn. It seems people are looking to buy merchandise cheaply. However, authorities say consumers often do not realize that some buyers selling them merchandise are not legitimate.