A state watchdog group finds the state's pawn shops, secondhand good stores and scrap metal yards are infested by corrupt and mob-connected owners who are encouraging drug addicts to steal goods and metals from retailers, utilities and homes.

Shockingly, the state investigative report finds, many of these illegal and unscrupulous businesses could have been shut down but local police department were clueless about their municipalities' own laws.

“We found that not only do these secondhand goods stores and scrap yards readily accept stolen items, in some cases they were directing the customers on what items to steal,” said Kathy Riley, a spokesperson for the State Commission of Investigation, which issued the 100-page report Tuesday recommending that the state take over the licensing and regulating of these businesses.

“These are businesses that are contributing to the opioid crisis, which is arguably the most serious public health emergency in generations, by basically serving as cash machines for addicts," she said.

“Some of the individuals who were behind the counters and directing some of these sales were individuals who were convicted felons or organized crime associates.”

The report finds that businesses were encouraging or turning a blind eye to addicts who routinely stole metal that had been stripped from cell phone towers and railway lines.

Addicts were even trading storm grates and manhole covers without the owners even batting an eye.

As the shops got rich, utility customers and taxpayers paid the expense.

In South Brunswick, for example, the town had to spend $10,000 after 63 covers went missing in 2013.

“It didn’t matter if they were emblazoned with a utility's name on it. These things were readily accepted by these places and giving cash to the seller," Riley said.

The report also faulted retailers and Lakewood-based CardCash.com — which allows people to sell unused gift cards for a price much less than what the card is worth, and the site then resells it for a higher price than it paid. The report says thieves often take advantage of lax return policies by returning stolen goods for gift cars, which they then sell to these cash shops.

The SCI report found that New Jersey pawn shops and secondhand businesses each raked in hundreds of thousands of dollars a year from CardCash. One retail theft crew earned more than $317,000 from CardCash in two years, the SCI said.

The report recommends a law requiring that all transactions by these businesses be recorded on a statewide database that police can access.

In Ocean County, which already requires all such stores to use a database, the SCI found that nearly 40 percent of the county's overdose victims had conducted businesses with these shops.

The extensive report, which relied on former thieves providing testimony and undercover investigators infiltrating the shops, identifies stores and owners by name.

Money Mikes in Union Township

The SCI report says the Springfield Avenue shop "serves as an occasional hangout for mob affiliates and a beacon for addicts and drug traffickers.”

The municipality adopted an ordinance in 2011 to require secondhand stores to obtain photo ID from sellers and report all purchases to police. The law also allows police to deny annual licenses for any applicant convicted of a “moral turpitude involving dishonesty, fraud, deceit or misrepresentation." But township police say they were unaware of this law.

If the law had been enforced, Michael Kiszka, 53, would never have been allowed to open his business in 2014 after he had been convicted of aggravated assault, burglary, credit card theft, receiving stolen property, theft by deception and trafficking stolen cars. He also was fined for insurance fraud.

He said he declines to do business with crooks but the SCI said Kiszka bought property he believed to be stolen from undercover agents. He also testified under oath that he does not file tax returns.

“One of his closest companions, Alesio Politi, 68, is a suspected loan shark who admitted under oath before the Commission that he forged checks and operated a PNC bank account in the name of female acquaintance to hide money from the government," the report says. "That account, the SCI found, served as the hub of Politi’s suspected loansharking operation.”

Years earlier, he opened M&R Jewelry Exchange with partner Ralph Pio, who had been charged in a scheme that raised money for the Genovese crime family.

Police said that he did not report a single purchase of precious metals in 2015 as required by ordinance. But his company got more than $36,000 from a smelting firm for precious metals, the report said.

Klein Recycling — Hillsborough

Richard Santaniello, 48, partners with a mob-connected businessman and convicted killer and his scrap yard is described as a “breeding ground” for drug addicts who went there at least five times a day, the report says.

His payroll included convicted racketeers and made members of the Philadelphia mob family. Five employees were using fake Social Security numbers, the report said.

The SCI said Santaniello's yard accepted obviously stolen manhole covers.

Hillsborough does not have an ordinance regulating the operation of scrap yards.

State law requires scrap meta dealers to report suspicious transactions to authorities, but Hillsborough police never heard from Santaniello unless they approached him first.

State law also mandates that yards confirm the identity of sellers with valid government ID and make a copy, which did not always happen, according to a cooperating witness.

The report notes that $165 million flowed through the company’s accounts in less than four years. The SCI says Santaniello owns a home in Howell, half-million-dollar home vacation home in Toms River and a 32-foot boat.

The SCI said Santaniello pleaded the Fifth Amendment right when questioned by commission.

Cash Out Check Cashing — Deptford

Nicholas LePore Jr. was convicted of arson, theft, and federal tax evasion. The theft charged involved him and an employee buying gift cards they believed to be stolen. In two years he got $305,000 from CardCash.com, the SCI said.

A 2013 municipal ordinance should have put him out of business. But police were unaware of the law, the SCI said.

Sgt. Scrap’s — Haddon Township

Fred Vangeldren, 47, opened Sgt. Scrap’s Haddon Township yard in 2013. He also has a mobile scrap pickup service in Pennsauken, Glassboro and Freehold Township.

“That budding empire had been built, at least in part, on the fruits of theft,” the SCI report says.

The report says he paid a cooperating witness more than $100,000 for copper cable and bus bars stolen from communication towers in New York, Pennsylvania and Delaware. He even complained that it was taking his employees too long to grind off the telephone company names from bus bars, one witness testified, although Vangeldren denied this.

The report said he paid $38,000 to a South Jersey couple accused of stealing scrap from foreclosed homes in six counties. In this case, Vangeldren cooperated with police but only after investigators approached him first.

Another burglar confessed to selling Vangeldren's business scrap he stole from 75 homes in Atlantic County, the report said. A Camden County woman confessed to selling more than three tons of communication wire, some of which went to Sgt. Scrap's, the SCI said.

Federal Metals and Alloys — South Plainfield

An SCI surveillance team said men returned stolen goods to a Lowe’s, got a gift card, which they then used to buy copper pipes at the same store, then took that to the yard.

Blackwood Cash for Gold — Gloucester Township

A woman testified she would steal vacuum cleaners and laptops from Targets and bring them here.

An 11 member-crew stole Dysons from from retailers 50 times over four weeks before they were caught. Some of these stolen cleaners were sent here, the report says.

One woman said she told owner Richard Gabbay to not let her son sell him things because he was stealing them from her home and using the proceeds for his addiction. Jonathan Coll died from an overdose weeks after he sold Gabbay a watch, gift card and laptop on three consecutive days in September 2016.

The report says bank records show Gabbay was paid $100,000 for gift cards in 2016.

Shore Discount Furniture and Bedding/Shore Gold and Pawn — Stafford

Owner Dennis P. Ayala, 59, sold a loaded Beretta handgun to an undercover detective and bought an Xbox and gift card he believed to be stolen, the SCI report says. At his home, police said they found three more illegal guns, including one that he purchased from an addict who had stolen it from his father.

The Pawn Shop — Union

An SCI source said owner Ian Woloshin bought three electric generators that he knew were stolen, the report says.

Quick Cash — Toms River and Beachwood

Owners Michael Bucca, 47, was convicted for running a burglary ring while sister Malissa Bucca, 42, was part of a drug ring that sold oxycodone pills pushed by a crooked doctor, the SCI report says.

Police arrested three men in 2011 on charges of selling Quick Cash two garbage cans of bronze vases stolen from a cemetery.

In two years, the Buccas received $407,0000 from CardCash.com.

The store shut down after they were convicted on receiving and fencing stolen property but Michael Bucca opened a scrap metal business, 3M Metals, at the Toms River site.

K&H — Vineland

“Year after year, burglars arrested by Vineland police have confessed to bringing their stolen jewelry to K&H," the SCI report says. The owner, Philip Kaslon, and employees have been repeatedly cited for failing to follow local rules requiring documentation for purchases and checking ID.

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