www.drgonzo.org

The Basics Of

Organized Crime For

Law Enforcement

By Randy Gonzalez

Table of Contents

Chapter 1: Introduction – The Meaning of Organized Crime – Page 1

Chapter 2: Organized Crime Development and Growth – Page 8

Chapter 3: Organized Crime Structure and Operations – Page 15

Chapter 4: Structural and Operational Aspects – Page 22

Chapter 5: Activities and Practices – Page 29

Chapter 6: The Changing Nature of Organized Crime – Page 36

Chapter 7: Non-Traditional Organized Crime Asian And Other Crime Groups – Page 43

Chapter 8: Asian and Other Crime Groups Continued – Page 50

Chapter 9: Changing Nature of Organized Crime – Page 57

Chapter 10: The Business Threat of Organized Crime – Page 64

Chapter 11: Activities Associated with Organized Crime – Page 71

Chapter 12: Organized Crime, Public Corruption and RICO – Page 78

Chapter 13:Patrol Investigative Vigilance to Organized Crime and

Terrorism –Page 85

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Chapter 1: Introduction – The Meaning of Organized Crime: Defining “organized crime” in the United States has always been both controversial and confusing in regard to an exact definition. Many alleged experts in the field of criminology, from academic theorist to real-world practitioner, have not always agreed on the precise terminology. Yet, here we will attempt to keep things as simple as possible. We have heard of such terms as La Cosa Nostra, Mafia, the Syndicate, the Mob, the Combination, the Commission, the Family and so forth. Yet, these words typically refer to something we call “traditional organized crime” in a historical sense. Today, criminal justice is faced by at least three types of “organized crime”. These may include:

1. Small Scale Organized Crime – not affiliated with “traditional organized crime” families of the historical variety, but remain as organized criminal groups.

2. Traditional Organized Crime – related to historical processes and linkages that reflect early immigration into the U.S.;

3. Non-traditional Organized Crime – reflected in newer shifts and movements within the criminal element that do not fit the “traditional organized crime” framework;

The words mentioned earlier are usually associated with the traditional organizations associated with the “original” organized criminal phenomena occurring in the United States a hundred plus years ago. More simply, the term “Mafia” reflects the common assumptions regarding organized crime in an historical context. Over time, these traditional groups altered their approach to criminal activity along economic lines in order to protect and preserve their operational capabilities. They more or less conformed to the basic principles of “supply and demand” to maximize their material gain. This organizational emphasis, supply and demand, economic criminal opportunity, homogenous ethnic composition, and so on, relates primarily to the traditional conception of organized crime. In addition, the various kinds of illicit activities, hierarchical structure, power concentration, enforcement, history and affiliations, set the “Mafia” apart from the newly emerging groups of non-traditional organized crime. For practical purposes, the following definition is offered only as a working definition for present consideration.

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Fundamental to the operations of organized crime is the ability to function outside the lawful and legitimate frameworks of normal society. Such activities seek to avoid control by the government and allied regulatory agencies. So called “professional criminals”, as opposed to early learners (unorganized, unskilled amateurs), have chosen a life-style of criminal behavior as an occupational endeavor. Such persons, within the context of organized crime, associate together in an effort to neutralize duly constituted authority, in order to perpetuate their ongoing criminal activity. Intricate conspiratorial actions, carried out over a period of time, seek to undermine legitimate business operations in order to increase profit and power. Some basic characteristics of traditional organized crime include the following.

Defining Organized Crime

The words “organized crime” can be thought of as a series of mutually beneficial relationships between professional criminals, politicians or associated influential persons, and clientele. In terms of clientele, in a service provision sense, it caters to the demands of those who desire the illegal services provided. Organized crime creates and endeavors to sustain a “deviant opportunity subculture”. The goals are similar to that of legitimate businesses, in that it seeks to maximize profit and power. Key issues are related to power and control of “business operations” that maximize material gain. In creating and promoting the deviant opportunity subculture, through both legitimate and illegitimate avenues, politicians and persons of influence, organized crime seeks to manipulate the supply and demand spheres of influence. From various vice activity forms of behavior, organized crime endeavors to cultivate a core of illegal activities that will ensure a constant supply of material gain resources.

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Traditional Notions About Organized Crime

1. A series of interconnected mutually beneficial relationships to further criminal activities so that money and power can be maximized to every extent possible. Material gain is the primary goal of the operations.

2. Consists of an enforced hierarchical structure, in which efforts are directed toward conspiratorial activities of an ongoing nature. Involves the coordination of an organizational structure and associated personnel. Utilizes effective means of controlling and disciplining its members.

3. Involved in a number of profit making operations, from basic illegal “business” activities such as gambling, prostitution, adult entertainment, to more complex activities such as money laundering and computer crimes.

4. Various levels of the threat of violence to actual violence are employed in order to ensure objectives are obtained.

5. Organized crime is not to be confused with terrorist activities, for which the goal of action is primarily political in nature. However, the types of crimes committed, organizational structure and tactics against others may be similar in nature.

6. Serious effort is directed toward organizational maintenance, cash flow, personnel discipline and ongoing “business” operations.

7. It seeks to be immune from the reaches of legitimate lawful authority.

8. Various activities generally include: gambling, loan sharking, drugs, prostitution, various forms of adult oriented entrainment, extortion, bribery, embezzlement, fraud, fencing activities, union operations, auto theft, cargo theft, credit card crimes, vending machines, trash collection and waste disposal, other smuggling activities, etc.

9. Key aspects: structure, profit continuity, monopoly, relative immunity, power and control.

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During the 19th century, the United States experienced a large-scale immigration movement particularly from European countries. As a result, a certain percentage of this population group chose a life of crime as opposed to making an effort to assimilate into legitimate societal endeavors. The criminal element no doubt would have been criminals no matter where they went, either in their home country or their newly adopted country. Simply stated, people become criminals because that is the lifestyle they choose. Most people are not criminals, and choose to become law-abiding citizens. And, those who choose to become criminals typically prey on their own neighborhoods. With Italian immigrants, for example, in the 19th century, emerging organized crime groups of Italian heritage began immediately preying on fellow Italians. In these formative years, an example of extortion activity developed in what became known as the “black hand”. As an extension of organized crime, the so-called “black hand” operation involved sending a letter to a target, which depicted an imprint of a “black hand”. Extortion has always been a key activity of organized crime operations. Such efforts today extend into the takeover of legitimate businesses in modern society. From lotteries and other forms of gambling, prostitution and loan sharking, organized crime has tried to permeate every level of our society. Organized crime is not new in the history of the human race. During the 13th century, for instance, legend has it that today’s traditional organized crime began to develop in its formative stages. It appears that Palermo, Sicily is the birthplace of the Italian (Sicilian) version of today’s traditional organized crime. The story is told that violent clashes occurred between members of the Sicilian population and their French rulers. As a result, a slogan emerged in the form of: “Morte alla Francia Italia anela!”, or “Death to the French is Italy’s cry!”. From this, legend suggests that the name “Mafia” stems from creating initials out of the so called “death slogan”. Reid points out:

Italy’s ultimate political unification, in the nineteenth century, isolated the nearby island of Sicily, and, having played out its role as savior to the people, the Mafia turned about face. Discarding its ideal of fighting oppression, it began to mount an unceasing reign of terror that, over the years, has been exported to many places around the world. Extortion, arson, and murder perpetrated on all classes became the trinity of terror that ruled Sicily. (1)

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It is suggested by some that during the growth and expansion of the Mafia in Sicily, it absorbed an organization known as the Camorra. This was a criminal organization that developed in Seville in 1417. It was transported to Sicily by the ruling powers at the time. The Camorra started out as a criminal organization and assisted those in power by providing a range of services. Among these, assassinations were included. The ruling power tolerated the Camorra, and it infiltrated various levels of the local government including the military. When the government attempted to fight back against the Camorra, those arrested became an active influential part of the prison system. Beginning in 1907, many of the Camorra fled to the United States. After feuding with elements of the American Mafia, the two groups finally forged an alliance around 1920. The Mafia began to evolve as a “society” made up of other “secret societies”. From these beginnings, comes the concept of “Omerta”, or the so-called code of silence (umirta – literally means humility). It represents a characteristic members were ideally supposed to exhibit. It suggested such things as: quality, manliness, and above all, silence. Yet, the most important thing it stands for is the ability not to talk about business activities. Success or failure came to rest on how much someone talked, especially to outsiders and law enforcement officials. In the end, the most important concept that emerges today is that of profit for the organization. It is the single most important objective. (2)

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According to many researchers on the topic of “organized crime”, a good understanding of it can only be achieved by analyzing the historical differences in the several types, and its structural development. And, it is not so simple, many times, to define exactly the scope and extent of what organized crime constitutes. This may be especially true when comparing organized crime to other forms of organized criminal activity. Albini, for example, points out: (3) It is not always easy to fully define contemporary organized criminal activity purely within these parameters. In the United States today, there are many types of “professional” criminal activities that are outside what we would typically define as “organized crime” or the “Mafia”. Some researchers have tried to distinguish among the types of organized crime by use of the following terms: (4)

Organized gang: organized criminality that focuses on bank robberies, murder, hijacking, auto theft, and related street crimes which are committed by gangs who organize to carry out such activities on a large scale; Racketeering: a transition occurs when intimidation and force become standard operating procedures in order to extort benefits from legitimate and illegitimate businesses; Syndicated crime: this sometimes refers to organized gang activity that becomes a process of providing goods and services to those who are willing participants in obtaining the goods and services, and will pay for such activities;

Among the various criteria considered in an effort to differentiate organized crime from other forms of criminal activity have been the following: the existence and degree of organization; the degree of specialization and training of the criminal participants; the ultimate goal of the criminal association as direct monetary profit orientation (versus profit in the sense of gain or retention of social or political position); whether victimization is accomplished by use of fraud versus force, intimidation, and fear; and finally the time span within which the criminal enterprise is perpetuated.

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There emerges in most discussions and investigations concerning organized crime a distinction in terms of organization. Organized crime tends to be more “business-like” in its operations. It is more than two or more people getting together to commit a crime, or even a series of crimes. Instead, it is an ongoing relationship within a structured environment. Key aspects evolve as individuals mutually associate in order to have a continuing enterprise of activity to ensure profit and power. These elements tend to include the following concepts: (5)

q The organization maintains control over the interaction, the activities, as well as the nature and direction of the goals and objectives.

q Subsequently, there is division of labor, assignments of duties, communication among the levels of the structure and a hierarchy of power.

q Various groups associated with the organization are overseen by a control center. There is a center of leadership that coordinates and directs activities, operations and functions of the organization.

q There are mechanisms for recruitment and selection of personnel to fill the ranks of the organization. In addition, within the context of “personnel management”, there is also a means by which discipline is carried out within the organizational structure.

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Chapter 2: Organized Crime Development and Growth: From the exodus of other countries, to the United States at the beginning of the 20th century, members of their own neighborhoods quickly victimized early immigrants. The extortion of various benefits remains today a significant aspect of organized crime activities. As opportunities for development and growth of the organization became more prevalent, various gambling operations and prostitution services expanded. Organized crime became a source of loans to those who could not afford to borrow money from legitimate sources. Naturally, the interest rates that were charged were high enough to keep the borrower in debt for a long period of time. With the subsequent passage of the 18th Amendment to the U.S. Constitution, the prohibition of intoxicating beverages became a target of opportunity. This Act prohibited the manufacture, sale and delivery of intoxicating beverages. The action by Congress became effective in 1917. At the beginning of 1919, the required number of states had approved the action by Congress, which was known as the Volstead Act. From that point, the “liquor industry” became an object of “warfare”, competition and rivalry among various ethnic organized crime operations. Alliances were formed to ensure control and distribution of illegal liquor, and otherwise maintain power and economic enrichment for various organizations. Organized crime was able to provide goods and services to a significant percentage of a willing public. Those members of the public who wanted forms of escapism, in order to deal with difficult times and situations, found organized crime willing and able to deliver sex, drugs, intoxicating beverages, money and gambling. By the mid-1930’s, organized crime had become very powerful and influential throughout various levels of American Society. Politicians and persons of influence were sought out for their support and involvement in perpetuating the ongoing provision of the various “goods and services”. Gambling, associated adult entertainment, and other sources assisted in the development and growth of a powerful American “underworld”. During the Great Depression, the “underworld’ was able to maintain perhaps the largest accumulation of cash and assets at that time. In contrast today, organized crime is a multi-trillion dollar multinational conglomeration of business activities, both legal and illegal. “Loan-sharking”, the practice of loaning money at excessive interest rates, became an opportunity to make more money.

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Organized crime seeks protection for interference from law enforcement authorities. It is an ongoing criminal enterprise that operates like a regular business entity. It brings together the client public with the goods and services the client public desires. Organized crime provides the basis for a deviant opportunity subculture. It expands its ventures into legitimate as well as illegitimate business endeavors. Control and money flow are essential.

The client public desires certain types of activities to meet personal needs for gratification of one sort or another. Such deviant behavior seeks out the source for such goods and services. Those so inclined locate those who are able to provide such goods and services. This could range from corporate infiltration and takeover, to the realm of adult entertainment, gambling and drugs.

Goods and services provided by organized crime range from loan-sharking to drugs, and everything in between. It is the realm of pseudo-dreams and escapism and includes an assortment of vice oriented crimes.

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General Historical Development

1830’s – Organized criminal activity reported in Chicago, providing goods and services related to: prostitution, gambling, counterfeiting, and other illicit services. There is evidence that operations were protected from law enforcement through local corruption of public officials, and lack of a formalized police function. 1850’s – Early beginnings of an organized police operation in the Chicago area. Organized crime efforts continued to develop, along with the corruption of the local police force. 1860’s – During the Civil War period, gambling establishments continued to develop, along with the growth of house of prostitution. By this time, organized crime had made its appearance in urban America, and gained a foothold through the use of corruption and violence. At the same time, other cities, such as New York, San Francisco, New Orleans, Cincinnati, Kansas City, St. Louis, Milwaukee, and others, experienced similar developments related to a “criminal underworld”. 1880’s – This period records the emergence of large gambling operations, particularly in Chicago. Bookmaking syndicates and racetracks were controlled by organized crime elements, not only in Chicago, but also in Northern Illinois and Indiana. 1900’s – By the turn of the century, 15 Tongs (criminal organizations that operated in Chinese-American communities) were reported operating in San Francisco. They provided primarily such services as prostitution, drugs and gambling. The so-called “Black Hand” gangs emerged during this time. Their method of operation was primarily extortion by use of a threatening letter within the Italian-American neighborhoods. Cities such as Chicago, Pittsburgh, Detroit and New York has early reports of “Black Hand” activity. 1920’s – With the advent of the Volstead Act in 1920, various criminal organizations began to cooperate in the provision of illegal liquor. The supply sometimes came from British merchant operation, as well as from various Canadian sources. (6)

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1920’s – This era saw a close relationship between political machines and criminal underworld elements. They provided services to various political organizations, paid off police officers and politicians, and increased their overall influence and power within the communities of a number of U.S. cities. Various leaders and followers within the growing criminal organizations represented Irish, Polish, Italian and Sicilian-Americans. During Prohibition, organized crime elements were able to accumulate large sums of money. This cash flow was invested in other illicit activities that led to the further growth and expansion of organized crime operations. 1930’s to 1950’s – This period saw further growth and development of existing organized crime operations, as well as the emergence of new organizations. In 1950, U.S. Senator Estes Kefauver (Kefauver Senate Hearings on Interstate Commerce in Organized Crime) began his famous investigation into U.S. organized crime activities. From the committee’s efforts, information suggested there was a working relationship between various organized crime elements across state boundary lines, as well as the existence of something known as the “Mafia”. In addition, it was further reported that corruption existed between criminal organizations, law enforcement and elected officials. This sub-culture of organized crime and corruption has existed since about the middle 1800’s to the present day. 1960’s – Other investigative efforts targeted organized crime operations. In 1963, the Senate conducted investigations through the Senate Investigating Committee, under the chairmanship of Senator John McClellan. The famous testimony of Joseph Valachi was heard. From his testimony another term emerges. Valachi referred to the discussion of organized crime as “Cosa Nostra”. The term has often been misunderstood in the context it was used. It is not used to refer to an organization. It is a term which means “our affair”, or “our concern”, and sometimes “our situation”. The translation of what Valachi said came to mean “our thing” or “our family”. Following the hearings, the term began to be used to refer to a criminal organization. (7)

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From the twenties through the sixties, various elements within the complexity of U.S. organized crime, made efforts to consolidate and strengthen power and control over various illicit goods and services. Large amounts of liquid assets, made such operations difficult to deal with from a law enforcement perspective. Money and resources were put to work to make more money and increase resources. Business infiltration became another form of power and control. The infiltration of businesses gave way to the takeover of union interests. In 1986, the Federal Safe Streets Act sought to further define the nature of organized crime in the U.S. (8)

1. Organized crime is a type of conspiratorial crime, sometimes involving the hierarchical coordination of a number of persons in the planning and execution of illegal acts, or in the pursuit of a legitimate objective by unlawful means. Organized crime involves continuous commitment by key members, although some individuals with specialized skills may participate only briefly in the ongoing conspiracies.

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2. The primary activity of organized crime is the pursuit of economic gain. Certain members within the organization may also pursue power, control and status as personal objectives.

3. Discipline within the organization is typically of a sure, swift and certain nature. And, in the pursuit of economic gain, organized crime is not limited to illegal activities.

4. It fosters its activities based on a network of relationships that bring together, in the “illicit market place”, a client public and various goods and services demanded by the client public.

5. Given the relationship between the public, politicians and the provision of desired goods and services, organized crime represents the results of contradictions within society.

6. Organized crime is a criminal conspiracy of persons who desire to commit ongoing criminal enterprises for the purposes of economic gain.

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Until about the time of Prohibition, organized crime figures were pretty well contained to their neighborhoods by virtue of the power of local politicians. They stayed in the dark realm of the “underworld”. Gangsters paid politicians and the police for protection, and, as a result, played a subordinate role to the political forces. The organized crime figure, for the most part, remained in the shadows. Yet, with the advent of Prohibition, an air of legitimacy settled over the world of the organized crime organization. The gangster moved out into the world. They were a source of a product the public wanted and could not get anywhere else. Every socio-economic level of society was represented in the patronage of gangster owned establishments. Organized crime elements became a focal point for entertaining the public with a variety of products. The public was spending millions of dollars a day for liquor. The “industry” grew in terms of billions in annual profits to organized crime operations. A kind of role reversal began to transcend the relationship between organized crime, politicians and the police. Money meant power. And, the gangster became powerful by virtue of the cash flow from illegal liquor. Prohibition was a period of violence, gang rivalry and bitter intense competition. Yet, toward the end of Prohibition, efforts were made to develop alliances and cooperate over the distribution of good and services. The focus of “goods and services” became liquor, gambling, money, drugs and sex. By the early 1930’s, and Post-Prohibition, these services had continued to amass enormous amounts of money and power. The income from gambling and other sources of revenue continued to build the financial power base of the various organized crime elements. From loan sharking to corporate infiltration and business takeovers, the upward spiral of profits continued. During Prohibition, gangsters controlled much of the trucking industry throughout the country. Large fleets of trucks transported illegal liquor from coast to coast. In the Post-Prohibition years, trucking operations turned toward the hauling of all kinds of merchandise. Trucking was still controlled by elements of organized crime. As a result, unionization efforts in the trucking industry led to deals being made. From these efforts, organized crime moved into positions of influence and control of labor union operations. The growth of organized crime in the United States is a result of cooperative efforts between gangsters, elements of government, politicians and the public. Large segments of the American public desire the goods and services provided by organized crime. Organized crime could not exist without the complicity of a willing American public.