SAN FRANCISCO (KPIX 5) -- A California judge rules the practice of making shoplifters pay to avoid calling in the police "is textbook extortion under California law."
In a video from a company called Corrective Education Center, also known as CEC, a woman is depicted getting busted for shoplifting. She is then taken to a back room where she's offered a deal.
Option 1: the security guard will call police.
Option 2: sign a confession, watch a six-hour video, pay $500 to CEC, and the company won't press charges.
In their corporate video, they call it "restorative justice."
Darrell Huntsman, the CEO of CEC says, "It's really about bringing the offender and the victim together and figuring out how we're going to resolve that, that issue or that offense. That's what restorative justice is."
San Francisco City Attorney Dennis Herrera called it a parallel system of "supposed justice"
Herrera said, "I have absolutely no doubt that there were many unsuspecting individuals who were intimidated, who were fearful and just signed up this bogus program because they were afraid of being reported to the police."
Herrera sued CEC last year, saying the company's actions were illegal.
And on Tuesday, San Francisco Superior Court Judge Harold Kahn agreed, saying, "This is textbook extortion under California law."
Kahn said it "…constitutes false imprisonment…." And that "…the retailer and CEC are acting in concert and are jointly liable."
CEC had been operating in 25 states, including California, at Walmart, Bloomingdale's, Ralph's and Kroger's, Abercrombie & Fitch, and Burlington Coat Factory.
California alone had 13,000 victims, raking in millions of dollars for CEC.
Herrera says he will be looking at restitution and penalties, and the retailers could be on the hook as well.
"If you read the judge's ruling, he says the retailers were complicit in this, even though we didn't sue any retailers. So I think that law abiding businesses are going to look at this and be quite concerned about partnering with this company," Herrera said.
CEC issued a statement saying they were "shocked and dismayed" by the the judge's ruling.
We contacted the retailers that worked with CEC and have not heard back from any of them.
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