Pawn Shop proposal needs to pass General Assembly 1st

Boyd County Commonwealth’s Attorney David Justice is proposing a state law he thinks will make it more difficult for thieves to dispose of their stolen property at pawn shops. While we do not pretend to be experts on how pawn shops operate, the proposals of the county’s chief prosecutor sound promising and deserve serious consideration by the Kentucky General Assembly.

Under current state law, pawnbrokers in Kentucky are required to hold jewelry and other goods received for 90 days. That restriction does not apply, however, if the pawn shops purchase the items instead of using the property as collateral on loans. In that case, the pawnbroker has no obligation to return the property upon repayment of the loan as no money was borrowed. The transaction is treated as a sale.

“Therein lies the problem,” Justice said.

When personal items are reported stolen, pawn shops are often the first place police look. Pawnbrokers must upload details about each item received and the customer to LeadsOnline, a website frequented by police investigators.

“If the stolen item was pawned, it’s usually still there,” Justice said. “But when pawn shops buy an item, like gold jewelry, they don’t have to hold it. They can just pound it up into gold and send it off to the broker, and there’s no chance the victim will get it back.”

Small-town pawn shops, like the five in Ashland, have long engaged in a symbiotic relationship with the community. The businesses offer local residents a chance to secure a loan by using personal items as collateral. Justice said pawn shops provide a service for people, especially the poor.

But in impoverished regions like central Appalachia, where drug addiction is rampant and can lead to desperation, some residents resort to theft. Stolen goods sometimes appear in pawn shops a day after the crime is committed.

Jewelry is easily the most common items stolen and taken to pawn shops.

Justice said he’s worked “hundreds” of cases involving addicts who have stolen from family members, churches and stores before selling the items of high value to flea markets and pawn shops.

“What happens too often is when stolen jewelry is taken at a pawn shop, thieves don’t usually pawn it, they sell it,” Justice said.

Cher Kiser, general manager of Tri- State Pawn & Jewelry in Ashland, said the frequency at which the shop inadvertently buys or pawns stolen items varies.

“It goes in phases,” Kiser said. “Sometimes, police officers might call us about a stolen item two or three times in one week. But if a crime happens on Sunday and (the suspect) pawns it here on Monday, the police will usually find it on LeadsOnline.”

Tri-State Pawn buys, sells and pawns items rapidly. The business also owns three stores in West Virginia. When it relates to receiving gold or gold jewelry, Kiser said the Ashland shop often abides by the same 10-day holding policy its stores in West Virginia are required to follow.

Justice said that policy isn’t always practiced by any of the pawn shops in Ashland, because there’s no law to enforce it. The lack of state law or ordinance means pawn shops and victims of theft face a challenge when it comes to locating stolen property.

“All five pawn shops in Ashland operate honorably. But everyone knows we have a drug problem in this county. People become so dependent, they’ll beg, borrow or steal,” Justice said.

Once pawnbrokers in Kentucky buy an item, like gold jewelry, they can legally ship the item to a third party for resale immediately.

In the pawn shop business, gold is a valuable asset.

“Some days I hold gold for a day, other times I might have it for a week or two,” Dennis Cade, owner of D & D Pawn and Jewelry, said. “If the gold has diamonds in it, I can either take them out or pay a refinery to take them out first.”

Justice suggested a rule to require pawn shops to hold jewelry for 14 to 30 days. Kiser and Cade said their businesses would be in favor of stricter regulation.

Whether it’s passed on a state level or as a city ordinance, “it would be a great service for the citizens of this community,” Justice said. “It’s an issue that could be easily remedied.”

A law on any level will have some value, but to be most effective, the changes proposed by Justice need to be approved by the General Assembly and not just by a city council or fiscal court.

Justice must first convince a legislator to sponsor a bill containing the changes he proposes. That’s the first step in turning a good idea into a law.

The (Ashland) Daily Independent

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