Video shows arrest of suspected mastermind in $8M theft ring targeting Sephora, Ulta

Dressed in pink loungewear on the early morning of Dec. 6, 2023, Michelle Mack and her husband Kenneth were handcuffed and escorted into squad cars from their Bonsall mansion.

CNBC’s cameras were at the home as the arrest happened.

The Macks' home is equipped with its own vineyard and chapel that the couple rented out as a wedding venue and an Airbnb. But according to a search warrant, the home also doubled as a stash house, for a small fortune in make-up, stolen from major retail stores across the country like Sephora and Ulta.

“This is a top priority for me, primarily because of the safety and security risk it brings to our team," said Ulta Beauty CEO, Dave Kimbell.

Kimbell talked to CNBC’s Courtney Reagan about the investment his company has made in security shelves, as well as security and trauma training, in addition to the wave of theft hitting retail stores.

“The network she built across the country was impacting multiple stores and so by eliminating that, it's a step. But unfortunately, I know there are others out there that are just like that."

Michelle Mack, 53, and her husband have pleaded not guilty to charges of conspiracy, grand theft and receipt of stolen property.

Michelle is accused of working with as many as 12 women,  providing them with a list of items to steal from stores across the country. Places like LensCrafters in Clairemont and Ulta Beauty in Mira Mesa.

According to the search warrant the goods were sometimes mailed to a Bonsall post office and ended up for sale, at discounted prices, on an Amazon storefront called "Online Makeup Store."

“We have people that have stolen 54 times. It has become really rampant,” said District Attorney Summer Stephan.

It’s one of the reasons why Stephan and mayors across San Diego County are looking to reform Prop 47.

The ballot measure made some non-violent property crimes under $950 misdemeanors.

Under a new proposal, called the, "Homelessness, Drug Addiction and Theft Reduction Act," prosecutors would be allowed to combine the dollar amount of stolen goods if someone is a repeat offender.

Some city and county leaders are hoping to get enough signatures to put it on the November ballot.

“It will allow us to add those amounts to address the people who are preying on businesses, differently than what the intention was; those first-time youthful offenders that make a mistake.”

Stephan says with online stores and marketplaces becoming the new place for criminals to sell stolen goods, there have been some positive steps toward cracking down.

The recently passed 'Inform Consumers Act' requires online marketplaces to get information from high-volume sellers to help identify stolen goods.

But Stephan says there are still loopholes that need to be closed in some person-to-person marketplaces like Facebook. As well as making sure Prop 47 is reformed so repeat offenders are properly punished.

“It feels like we've decriminalized theft at the expense of these businesses and employees,” said Stephan. “I look forward to a day where the rights of victims and community are balanced with the rights of the criminals. Right now, it's out of balance.”

Amazon released a statement regarding the issue saying:

“We invest more than $ 1 billion annually and employ thousands of people to fight fraud...we use sophisticated detection and prevention solutions."