When banks close their doors, customers bring their valuables to Mike Criscio. Are pawnshops exploiting the poor or saving those hit hardest by the recession?





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People hock their electronics, their tools, and their appliances (in that order). But the first thing they pawn is their gold. If you bring a gold ring to the pawn window in the back corner of M & M Pawnshop—above the fake-marble countertop, below the neon sign that blinks “PAWNS,” to the left of the shelf stacked with 12 guitars (6 acoustic, 6 electric)—owner Mike Criscio will rub your ring on a rough slab of rock called a touchstone. Then, squinting, he’ll squeeze nitric acid onto the streak left by the ring on the stone. If the streak turns green, or disappears quickly, you’re out of luck. It’s fake gold. Your ring is worth almost nothing. A milky-gray color indicates gold-plated silver—which in some pawnshops might fetch you a few bucks—but Criscio, a picky buyer, won’t take it. M & M’s jewelry cases are already packed and melted-down silver is less than 2 percent of the price of melted-down gold. If the streak stays on the stone, your ring is real. But don’t expect to pocket anything close to $1,200 per ounce, the value of gold bullion on the international market.

After all, this is a pawnshop. Pawnshops offer quick and easy short-term loans on which customers’ belongings, called “pawns,” act as collateral. In exchange for convenient cash, “pawners” can expect low appraisals and high interest rates. While a simple gold wedding band sells for around $300 in a jewelry store, it’ll bring just $30 at a pawn window. You can haggle with Criscio and you can curse him when he refuses to budge, but in the end, you’ll take the cash. Most pawners lack property and a decent credit score. They can’t get loans anywhere else. You’ll trade your ring for a pawn ticket, promising yourself that in 30 days you’ll come up with the money—and the 24 percent interest—to buy it back. Pawnshops thrive in times of economic turmoil: While many New Haven businesses were hurt by the recent recession, M & M’s transactions doubled, rising from 30,000 in 2007 to 60,000 in 2008. When people are abandoned by traditional banking institutions—one in four Americans is “unbanked or underbanked,” according to the Federal Deposit Insurance Corporation—fringe economies pick up the slack. Nationally, the number of pawnshops increased by 50 percent between 2007 and 2012 (the latest figure available) to more than 10,000 stores. The uptick may also have something to do with a new crop of pawnshop-themed reality shows. Programs like the History Channel’s Pawn Stars and TruTV’s Hardcore Pawn feature middle-class customers who sell family heirlooms in spick-and-span storerooms (with occasional cameos by celebrities like Bob Dylan and Katie Couric). It’s an attempt, in the words of a 2010 New York Times article, to change the “back-alley image of the pawn business.” And it’s working, says Emmett Murphy, spokesman for the National Association of Pawnbrokers: “Pawn is cool now.”

But for the many Americans who visit out of desperate need, pawnshops seem anything but glamorous. They’re shady, illegitimate establishments, frequented by down-and-out customers and operated by money-mongers. They’re found in impoverished cities, in struggling neighborhoods, in dilapidated buildings—in places like 32 Howe Street, New Haven, Connecticut, the home of M & M Pawnshop.

Head east a few blocks and you’ll find yourself amid Yale’s ivy-covered walls; wander north and you’ll end up in Dixwell, a neighborhood with a crime rate nearly twice the New Haven average. The pawnshop sits on a quiet corner. Next door is a five-story, 148-unit housing project. Across the street is an abandoned lot. Kitty-corner is a Salvation Army outpost. Down the block is a rundown gas station. A yellow awning hangs over the pawnshop’s tinted windows, announcing in thick black letters: M & M PAWN SHOP AND CHECK CASHING CO., LLC. MONEY TRANSFER. BILL PAY. WE BUY GOLD. Customers enter through a heavy metal door, which stayed put two years ago when a would-be robber attempted to drive through it with a truck. Since then, the store has cut back on robbery attempts by installing 16 security cameras and four concealed guns. Most pawners lack property and a decent credit score. They can’t get loans anywhere else. Walking into M & M Pawnshop feels like walking into Home Depot, Toys “R” Us, Best Buy, Zale’s Jewelers, Sports Authority, and PetCo all at once. Wheelchairs share floor space with tricycles. Hot Wheels share a shelf with a saddle. The power drill collection sits next to the Pastamatic, which sits next to the Cuisinart, which sits next to the Grand Slam turkey fryer—which, according to the description on the box, doubles as a seafood kettle. The shelves are so crowded with abandoned secondhand goods that the walls are barely visible. There are 150-odd musical instruments, 50-some PlayStations, more than a hundred flat-screen TVs, dozens of clocks, three washing-machines, a tank full of fish, a fishbowl full of condoms, a Donkey Kong arcade machine, a moped, a scooter, a deer head, and six artificial Christmas trees.

Until recently, a glass enclosure between the porn collection and the gumball machine housed a six-foot python. Three years ago, the snake escaped. It was missing in the store for a month. After 23 years at the pawnshop—which also operates as a thrift store, a check-cashing outlet, a Western Union, a locksmith, and a Connecticut Lottery ticket vendor—Criscio has gotten good at recognizing what’s real and what’s fake. There are 307 gold rings on display—flashy rings with big diamonds, simple rings with a single pearl, a hazelnut-sized Indian headdress ring with a jewel atop each gold feather. Mike Criscio and his employees tested every one of them. Hundred-dollar bill? Hold the watermark up to the light. Customer’s ID? Match the picture to the image on the computer screen when the customer presses his thumb to the fingerprint scanner. But spotting forged checks can be tricky. There’s no foolproof test, so Criscio has learned to read people. He claims he can usually tell the loyal customers from “the crooks” and “the assholes.” He’s not naïve about the fact that many people, when asked to describe a pawnbroker in two words, might well choose “crook” and “asshole.” Pawnbrokers are routinely accused of usury, thievery, and greed. “People like to say that, but they’re wrong,” he says. The industry’s sour reputation also has a lot to do with its business model, which has remained unchanged for hundreds of years. Here’s how it works:

A customer walks into a pawnshop and asks for a loan. He hands over a possession (for example, a television) to serve as collateral. Most of the TV’s worth is sacrificed the moment the customer enters the store: Criscio only pays pawners a third of what he expects to resell the item for. Thus, a customer may walk in with a flat-screen TV for which he originally paid $1000. Criscio will appraise it at $300, and the pawner will walk out with a mere $100. The customer then has a set amount of time—usually 30 days—to buy back his television for the original $100 loan plus 24 percent interest. If the customer fails to pay within a month, the TV becomes the property of the pawnbroker. Criscio says he’ll often “cut a deal” with loyal customers, letting them buy their items back for significantly less than they owe him. He also says that one M & M customer has been taking out extensions on a $500 gold chain since 2006. “It’s crazy,” he says. “Apparently the chain has sentimental value.” Each extension adds $120 to what it will take to buy the chain back. Over the past seven years, Criscio says, the pawner has accumulated $10,000 in interest. In addition to running M & M Pawnshop, Criscio owns three check-cashing stores, manages five New Haven properties, coaches high school football, promotes professional boxers, and receives retirement benefits from his previous job at a state penitentiary.

“My accountant says I’m losing,” he says with an impish grin, but his Range Rover (a gift from one of his boxers, he says), his collection of Rolex watches, and his $70,000 casino jaunts tell a different story. He’s a go-getter, no doubt about it. But he insists he’s a go-getter with a heart of gold. Every couple of months, a customer will drag her misbehaving teenager into M & M Pawnshop. Usually, the teen has been smoking too much weed, sassing his parents, or failing in school. Criscio takes care of it: “I grab him by the neck, throw him against the wall, and say, ‘You better straighten your ass out.’” One customer has been taking out monthly extensions on a $500 gold chain since 2006, each adding $120 to what it will take to buy the chain back. Criscio is 6’1”, with gray-green eyes, buzzed blonde hair, and a red face that alternates between a smirk and a scowl. He talks in a brisk blue-collar New England accent. He’s loud, animated, and honest to the point of being offensive, especially when it comes to Manhattan jewelry dealers and other people he doesn’t like. Still, he comes across as neither a crook nor an asshole. One busy afternoon, his mother stopped by. She wore magenta nail polish, a Bluetooth earpiece, and a diamond Rolex (a gift from her son). Criscio was on the landline in the cramped back hallway, rocking back and forth and fiddling with a wooden sword. He hung up to greet his mother, dodging her kiss like a teenager, then surveyed the scene around him.

A woman in a hijab with a baby across her chest stood in line to pick up a money order. A construction worker in a bright yellow vest waited to buy a lottery ticket. A firefighter cashed a paycheck. Half a dozen customers waited at the pawn window, their voices getting louder as they competed to be heard by the employees behind the glass. Criscio lifted both hands in surrender. “It’s a crazy day,” he said, and headed back to the phone. The front door of the pawnshop opened. In walked a huge guy with a scrunched face and a shaved head. Clad in a baggy white and gray tracksuit, his shoulder muscles bulging near his ears, he looked like a giant bulldog. The resemblance grew as he started to talk—bobbing his head, licking his lips, and barking “Forget about it!” over and over again. David Fitzgerald was “just a plumber going through a rough patch at home” when he met Criscio in 1989. The two clicked, and Fitzgerald began spending afternoons at the pawnshop and eating dinner with the Criscios several times a week: “Meatballs, ziti, forget about it!” he said. Fitzgerald has immense respect for the Criscio family. “Mike built this place up from nothing,” he said, describing the neighborhood before the pawnshop opened. Drug dealers and prostitutes were everywhere, he says. The Criscios cleaned the block up. In the 20 years since, they’ve given jobs to ex-convicts, clothed needy children, and bought countless pizzas for hungry customers.

“Forget about it,” Fitzgerald said. “There’s a place in heaven for what they’ve done.” Criscio’s life story brings to mind “Rumpelstiltskin,” the fairy tale about an imp who spins straw into gold. Raised by second-generation Italians in North Branford, Connecticut, Criscio spent his spare time as a kid mowing lawns, delivering newspapers, and growing vegetables to sell to his elementary school teachers. He didn’t get an allowance. “I started hustling when I was 6 years old,” he says. Criscio loved the thrill of spending money he’d earned himself. When he was 9, he made his first purchase: a $300 snowmobile. Early on in high school, he worked as a bouncer at New Haven bars (at 6’0” and 220 lbs., he had no trouble passing for 18). In college, Criscio got gigs as a construction worker, a foreman in a local labor union, and a truck driver delivering donuts to grocery stores in the middle of the night. After dropping out of school to play football for the Tampa Bay Bandits and the Montreal Alouettes, he began seeking jobs with higher risks and higher rewards: bail bondsman, police officer, prison guard, bounty hunter.

He was particularly fond of the last one. “You got $500 for kicking down a door,” he says. One day in 1992, while Criscio was working as a guard at the New Haven Correctional Center, a fight broke out among 84 inmates. Criscio got caught in the middle, and he ended up in the hospital with a dislocated shoulder, a herniated disk, and a torn ACL. “You’re done,” his doctor told him. After settling with the state for worker compensation benefits, he retired at age 26. He says he’s sworn to secrecy about the amount he receives from the state. “But it works out good,” he says. Later that year, Criscio and a friend bought space in a commercial building on Howe Street and opened Pawn Palace. Within a week, the store had hundreds of daily customers. The friend dropped out in 1995, Criscio’s father replaced him, and the store was rechristened “M & M Pawnshop,” in honor of the Criscios’ shared first name, “Mike.” There are now more than 2 million customers in the store’s computer system. Mike Criscio Sr., who goes by “Pop,” guesses that the store with everything in it is worth more than $10 million. “Mike’s got a lot of balls,” he says of his son. “He takes a shot at anything. If it doesn’t work out, he’ll lose a couple dollars. If it works, he gets millions.” In 2005, Criscio took a shot at managing the career of Chad Dawson, a promising young boxer from New Haven. Criscio already had the necessary skills, according to Joe Tessitore, an ESPN sportscaster and a friend of Criscio’s. “Boxing is pure unbridled capitalism at its finest,” Tessitore says. Boxing managers, like pawnbrokers, navigate a world inhabited by people “for whom a duffel bag full of cash means more than a contract.” By 2006, Dawson was winning world championships and pocketing hundreds of thousands of dollars, and his fame brought other boxing hopefuls to the pawnshop door.

Criscio now works with 35 professional fighters, earning ten percent of what they make on each fight (which is anywhere from $1,500 for a rookie to $1 million for one of “the big guys”). But Dawson’s career spiraled when—as Criscio tells it—he started hanging around a group of New Haven “bloodsuckers,” draining money on cars and clothes. Criscio is now suing Dawson for $1 million, but he doubts he’ll ever see the cash. “What am I going to get blood from, a rock?” he says. Dawson lost another big fight in October. “Karma’s a bitch,” Criscio says. The universal pawnbrokers’ symbol started appearing above European doorways during the Middle Ages: It consists of three gold spheres hanging from a curved metal bar, like Poseidon’s trident turned upside down. According to one theory, the gold balls represent three coin-filled purses given by Saint Nicholas to a man on the verge of selling his daughters into prostitution. The purses paid the daughters’ dowries, their dire fate was averted, and European pawnbrokers adopted the symbol of three gold balls to suggest that they, like St. Nick, were there to save the poor from disaster. But history has not been kind to hock shops. For centuries, they’ve been blamed for usury and all sorts of social ills, and depicted as dens of chaos where the billfold and the bottle reign supreme. In 1744, an anonymous Londoner published a treatise titled, “An Apology for the Business of Pawnbroking, By a Pawnbroker.” Its 77 pages were filled with verbose refutations of various claims leveled against the industry: “Objection One: This Business gives Harbour and Encouragement to Thieves,” “Objection Two: This business is rather prejudicial than serviceable to the Public,” “Objection Seven: But almost Every Man says, That Pawn-brokers are a sad and pernicious set of Men: And what almost every man says, must be true.”

In “Gin Lane,” a 1751 engraving by William Hogarth, the health of the pawnshops is inversely correlated with the health of society: The streets are lined with dilapidated buildings, heaps of garbage, and drunks in the act of hanging themselves. The pawnshop, however, is thriving. More than 200 years later, the 1964 film The Pawnbroker perpetuated the stereotype, portraying pawnshop owners as callous and their customers as “scum.” Told from the perspective of a bitter Holocaust survivor (played by Rod Steiger) who runs a pawnshop in Harlem, the film also exposed the deep-rooted anti-Semitism that has plagued the pawn industry for centuries. Until recently, the majority of both European and American pawnshop owners were Jews, and widespread prejudice against them contributed to the stigma. It’s a common misconception that pawnshop owners want pawners to fail on their payments. In reality, they make far more from interest than they do from reselling abandoned pawns. Here’s why: If, after 30 days, the customer lacks cash to redeem his pawn, he can tack on a 30-day extension for an additional 24 percent of the original loan. Hence, a customer who pawns a TV for $100 will owe $148 after two months. If, at that point, he still doesn’t have the money, he can extend the loan again—for another $24. And so on.

In September, in a lawsuit against a Stratford pawnbroker, the Connecticut Supreme Court ruled in favor of a customer who had been charged 20 percent monthly interest on an assortment of watches, bracelets, and rings. The court determined that state law limits interest on “repurchase agreements” to 12 percent a year. But Criscio says pawnshops can tack on storage fees, insurance and other expenses. “We can still charge 24 percent a month,” he says. With such usurious interest rates, it’s a wonder pawnshops get any business at all. According to historian Wendy Woloson, most pawnshop customers have no other options. In the 1800s, pawnshops were the only institutions that loaned money to poor people; today, banks and other lenders require down payments and good credit scores, which many low-income customers don’t have. “For people who are desperate, their kids have nothing to eat, they’re on food stamps, if there were no pawnshops, what would they do?” Woloson’s 2009 book, In Hock: Pawning in America from Independence to the Great Depression, casts pawnshops as inevitable byproducts of the growth of American capitalism. Pawnbroking, Woloson explains, is a “fringe economy” created by the widening gap between the rich and the poor. At the beginning of the 19th century, America’s rising industry and swelling immigrant population created the perfect conditions for pawnshops to flourish. Factory workers with insufficient wages began using their personal possessions as collateral on small cash loans to get them through the week. In cities along the eastern seaboard, America’s poverty industry was born. Pawnshop loans were so essential to the working class that by 1828 there was one item in pawn for every New York City resident.

Woloson seeks to correct what she sees as history’s unfair characterization of the pawnbroking industry. She argues that pawnshops provided—and continue to provide—a unique and necessary service to millions of Americans. They were our country’s first equal-opportunity lenders. Troy Stokes, a teddy-bear-like 28-year-old who has worked at M & M Pawnshop since 2007, wonders what New Haven would be like without them. “For people who are desperate, their kids have nothing to eat, they’re on food stamps, if there were no pawnshops, what would they do?” They might steal, he says. Or worse. While many people think that pawnshops encourage crime, Stokes thinks they prevent it. Pawning nonetheless takes an undeniable toll on its customers. Failure to pay can mean losing precious belongings, and continued renewal can cost hundreds—or thousands—of dollars. “Pawnbroking demonstrated quite clearly,” Woloson writes, “that the promise of capitalism was broken for countless Americans.” The promise of capitalism has certainly been broken for Brenda, a woman with a scarred face who fell behind on her taxes last year and had to pawn her grandmother’s ring. It has been broken for Helio, a Brazilian contractor who hasn’t been paid in a month. It has been broken for Penny, a mentally ill cancer survivor who has a habit of forgetting her weed bag on the pawn counter. On a rainy late-autumn morning, half a dozen customers waited outside M & M Pawnshop. It was cold out, but they needed money. At 10:00 a.m. sharp, Pop unlocked the door. A huge man in a cream-colored polyester suit wheeled a bicycle to the pawn counter, its broken lock hanging around his neck. He was followed by a short guy who had one hand in his pocket and the other hand raised to his lips. Shhh, he mouthed to Stokes, who was working in the back.

It’s not uncommon for an item to be stolen overnight, pawned by the thief the next morning, and repurchased by its rightful owner in the afternoon. This is a flaw in the pawn system, but how to fix it (and whether it’s the responsibility of the police or the pawnbrokers) is not entirely clear. A state law passed in 2011 requires Connecticut pawnshops to register transactions so that local authorities can track stolen items. Every Monday, Criscio sends police a list of items he bought the previous week so police can check it against their theft reports. But a few years ago, Pop explained, when police stopped reimbursing pawnshops for confiscated goods, pawnbrokers started telling customers not to count on police to recover their belongings. “You’re better off just buying back your stolen stuff here,” he added, explaining that the legal process to redeem stolen items can take months. If you go to the pawnshop before going to the police, he says, you’ll get your stuff back sooner. Every week last fall, an Orthodox Jewish man with a beard and a long black coat entered M & M Pawnshop, asking about a pair of silver candlesticks. They had been stolen from his dining room, he said. He was searching all the pawnshops in the city. New Haven police are more responsible than they used to be when it comes to pawnshops. Fifteen years ago, it was common to see a swarm of cop cars parked outside M & M Pawnshop—not because officers were closely monitoring transactions, Pop says, but because Criscio had set up a room in the back of the pawnshop for the cops to watch dirty movies. (Criscio says it all started during a stakeout. A detective had gotten a tip that M & M Pawnshop was going to be robbed, so dozens of undercover police officers crowded into the back of the store. “The cops were getting bored,” Criscio says. So he flicked on his office TV and popped in a porno. For several years afterward, cops would occasionally stop in to ask Criscio, “You got any new movies?”) Nowadays, the former porn room houses only pawns. There are thousands upon thousands of them, filling every inch of five storage rooms and a 4,000-square-foot basement. Taped to each item is a small slip of paper listing the pawner’s name, the original loan amount, the pawn date, and the item’s history (including the number of extensions). It is clear why the pawnshop’s windows are tinted and blocked with posters. To uncover them would be a waste of window-washing fluid. M & M Pawnshop makes most of its profit from the items in the back of the store—the collection of broken promises gathering interest and dust. Every day, some 200 customers flock to 32 Howe Street, lugging secondhand tools, appliances, electronics and jewelry. Under the awning, through the heavy metal door, and behind the fake-marble countertop stands Mike Criscio, owner of one of 10,000 pawnshops in America, a land of opportunity where the streets are paved with concrete and the sign above the pawnshop door says “WE BUY GOLD.”