Rick Anderson’s story isn’t unique, but that doesn’t make it any less frustrating.

In late 2005, thieves broke into the storage yard of his company, RLA Sheet Metal Inc. Behind the chain-link fence and barbed wire, the Healdsburg, Calif., business kept trailers and service trucks - and 600 pounds of copper waiting to be recycled.

The thieves hand-carried each piece and loaded it into a vehicle parked on a nearby street. Anderson figures the leftover copper was worth more than $1,000.

Six months later, the company was hit again. This time, he says, the thieves were much more efficient - they simply backed their vehicle into the yard and took the whole bin.

Many contractors, builders and building owners nationwide have similar stories. For more than two years, copper, buoyed by a worldwide building boom, has been fetching record prices - a fact not lost on those who have no qualms about breaking into homes or businesses to get at the suddenly very precious metal.

“They’re going through the fences, they’re going through the gates, they’re going through anything to get it,” Anderson says. “All construction is just getting hammered.”

Many thieves are breaking into HVAC condensers to steal the copper tubing inside. Some home and building owners are fitting their equipment with security devices. Here a technician installs the Warning Watchdog. The product from Jackson Systems sounds an alarm when a condensing unit is tampered with.

Big money

In recent weeks, copper has been averaging $3.30 a pound - down about 20 cents from a year ago, but twice what it was fetching back in 2004, according to the Web site MetalPrices.com. In summer 2006, prices were as high as $4 a pound.

Different kinds of copper, such as wire, pipe and cable, command different prices, but all are far above historical averages. And that, along with copper’s never-ending ability to be recycled, has made everything from air-conditioning compressors to telephone wires a favorite target of thieves, who sell the metal to scrap yards and dealers.

“It’s very unfortunate,” says Danielle McAuley, spokeswoman for the Copper Development Association, a New York-based group that promotes the metal. “It’s a lot of materials (being stolen) as far as I’ve heard.”
The association has an official policy of not commenting on specific incidents, although McAuley says they prove the metal’s popularity.

“It speaks to the essential nature of copper,” she says.

With prices so high, some thieves have taken to risking their lives to obtain the metal. In late August, a 25-year-old Massillon, Ohio, man was killed when 23,000 volts of electricity went through his body after he tried to take copper from a power substation. Similar deaths have been reported in South Carolina, Michigan, Texas and Colorado.

Industries affected

With the sheet metal and HVAC industries two of the most well-known users of copper, contractors have been hit hard by the rash of thefts.

TD Industries in Dallas is another victim of copper theft. Security cameras caught unidentified men prying open the shop’s back door. The suspects carried the copper out of the building and loaded it into a truck.
The individuals were never apprehended and got away with over $50,000 worth of new copper.
“They got us pretty good,” says Larry Cook, the company’s managing director.
Since the incident, TD Industries has beefed up its security. Cook was reluctant to go into specific details, worried they could tip off other potential burglars. But he says that the company sought the advice of a security company.

Cook says other contractors should do the same. A security company can look at a building and see potential weaknesses from a thief’s point of view.

“Sometimes we don’t think like thieves,” he says.

The thefts at RLA Sheet Metal made Rick Anderson spend more than $4,500 upgrading his company’s defenses. Now motion-sensing infrared beams and silent alarms that connect to the city’s police station protect his storage yard.

Solution?

The rise in copper-containing HVAC equipment thefts has led some industry manufacturers to begin marketing protection products for contractors and building owners. One such company is Indianapolis-based Jackson Systems, which developed the Warning Watchdog.

The device, which debuted in April, monitors individual condensing units for voltage interruptions and refrigerant losses. When activated, the Warning Watchdog sounds a loud siren. It can also trigger a telephone or other security device that will immediately notify owners or contractors that a unit is being tampered with.
Kurt Wessling, sales director for Jackson Systems, which is primarily involved in making zone-control devices, says the alarm was created after a contractor reported that one of his customers had several air-conditioning units stolen in a two-week period. When the contractor installed new units, thieves returned and took the replacements.

Wessling explains that the copper inside a condensing unit is “of a very high grade,” which has a higher resale value at scrap yards.

But he adds that it’s not just copper that thieves are targeting.

“Whole HVAC units are being taken from empty buildings,” Wessling says.

Thieves are becoming so sophisticated that some will watch the real estate market and look for unoccupied houses, he says. When no one is around, the thieves will show up and rip out the air conditioner.

A void

Product-development manager Phil Kimble says that Jackson Systems did some research to find out if the security industry had been doing anything to protect HVAC units. He found that most security companies were marketing and designing their products for securing homes or businesses, but not outside condensing units. Soon after, Jackson Systems started work on a prototype for the Watchdog.

The company provides customers with stickers that can be placed on condensing units that say the units have an alarm. That can deter thieves from even trying to tamper with the system, Jackson Systems officials say.

Kimble says that copper theft causes problems beyond just losing equipment and the cost to replace it. If a condensing unit is stolen from a new-construction project, there could be lawsuits over who’s responsible for replacement - the customer or the contractor.

In addition, the thefts can create ecological concerns.

“Thieves are ripping these out and not recovering refrigerant. This is very dangerous for the environment,” says Wessling.

With copper and other metal prices continuing to rise, Jackson Systems officials say it’s possible that alarms like the Watchdog could become standard equipment on HVAC systems.

“Global demand is continuing to rise for high-grade copper,” says Wessling. “Much like alarm systems on cars have become standard, we see a possibility customers will buy after they’ve become a bigger trend.”

‘Inside' jobs

But theft-deterrent systems are of little use if trusted employees are the ones stealing copper. That’s what happened at Stan’s Heating and Air Conditioning in Austin, Texas.

Stan Johnson, president of Stan’s Heating, says his company has twice been a victim of internal theft.

The first time, a warehouse employee was coming in to work early and loading equipment into his pickup. The employee was caught when a manager wondered what was in the back of his truck. He found a furnace from the company’s warehouse.

Johnson says that led to a “Keystone Kops chase” as the worker tried to flee. Eventually he was arrested and two other employees believed to have had knowledge of the theft were fired.

More recently, an employee was caught arriving early to take copper wire from the warehouse. Johnson says that his company was tipped off when another contractor called and said he saw a man in a Stan’s Heating and Air Conditioning uniform at a scrap yard selling what looked like new copper.

Police ran a sting operation on the scrap yard and found that all of the employees, including the owner and his wife, were knowingly buying stolen copper. Everyone at the scrap yard was arrested and the place was shut down.

As for the Stan’s employee, he spent six months in jail and was ordered to pay back what he sold the copper for. However, Johnson points out, that’s less than the copper was worth.

“We still lost no matter what happened,” he says.

Suspicions

Johnson says that his company now watches for potentially suspicious behavior, such as employees coming into work very early, long before anyone else typically arrives. He says that the offending employees “gave us no reason to distrust them.”

When the last employee was arrested, Johnson says that newspaper articles on the case were posted for everyone to see. He says it’s important for employees to know their company takes such actions very seriously.

“If employees think they can do it and you don’t do anything about it, it leaves the door open (for more theft),” Johnson says.

The number of employees willing to risk their job in order to make some money off of stolen copper shocks him.

“The economy has been hot as a pistol in Texas,” says Johnson. “And employees are still willing to take a chance.”

The relatively easy time some thieves have selling copper to scrap yards and metal dealers has a lot of cities and states looking to increase oversight of such businesses. The Institute of Scrap Recycling Industries, a Washington, D.C.-based lobbying group that represents dealers, urges members to work with lawmakers and legislators to ensure they don’t purchase illegal materials.

It’s not an easy task, says Bryan McGannon, spokesman for the institute, because “stolen and legitimate materials are nearly identical.”

“Theft is always around our industry,” he adds. “We do tend to see an increase in metals theft when copper prices go up.”

For reprints of this article, contact Jill DeVries at (248) 244-1726 or e-mail devriesj@bnpmedia.com.

Sidebar - States try to control illegal metal sales

As thefts of copper and other metals increase, even as prices drop slightly from record levels, lawmakers in many states are considering legislation to make selling illegally obtained materials more difficult and keep better track of transactions involving metals.

Here’s what some states are doing to combat metals theft.

Alabama: A new law passed this year requires scrap metal dealers to check the ID of customers and keep track of purchases. Police now have the ability to place a hold on transactions involving metal they believe may be stolen.

California: A state Assembly bill would prohibit scrap dealers from buying metals unless the seller is paid by check, which cannot be given less than three days after the sale. Dealers would be required to keep the seller’s identify on file. The proposal would not apply to customers who already have their information on file with the scrap dealer.

Hawaii: A new law passed in May makes stealing copper weighing over a pound a Class C felony. It requires dealers check the ID of those looking to sell copper. Sellers must provide detailed descriptions of the items being sold and dealers must photograph them and keep the information on file. Suspicious sales must be reported to police.

Illinois: A bill awaiting the governor’s signature requires scrap dealers keep records of metal purchases for three years. Seller ID is required only for transactions involving more than $100 worth of metal.
Louisiana: A bill signed by Gov. Kathleen Blanco requires scrap dealers check identification and keep records of sellers and materials purchased.

Massachusetts: A Senate bill under consideration requires licensing of junk and scrap metal dealers and collectors, and mandates dealers keep transaction records. If passed, sellers would have to provide their name, address and date of birth. All information would have to be turned over to police.

New York: The state Assembly is debating a bill that would beef up regulations for junkyard owners and stiffen penalties for those who sell illegal scrap metals.

North Carolina: Secondary metals recyclers will be required to provide police with receipts from purchases if a bill is made into law. It would also outlaw the purchase of scrap metal from those under 18, except for aluminum cans.

Ohio: Those who deal in scrap aluminum siding, copper and catalytic converters would have to improve recordkeeping under bills introduced by state representatives and senators.

Tennessee: The state has established a commission to study scrap metal theft and ways to deter it. It is scheduled to report its findings by Feb. 1.

Texas: Starting Sept. 1, the theft of insulated or noninsulated wire that contains at least 50 percent bronze, copper or aluminum and is worth less than $20,000 will be a felony.

Source: The Institute of Scrap Recycling Industries.