The effects of organized crime on legitimate businesses
| DOI | https://doi.org/10.1108/13590790610660926 |
| Published date | 01 April 2006 |
| Pages | 214-234 |
| Date | 01 April 2006 |
| Author | Frank J. Marine |
| Subject Matter | Accounting & finance |
The effects of organized crime on
legitimate businesses
Frank J. Marine
Organized Crime and Racketeering Section, United States Department of
Justice, Washington, District of Columbia, USA
Abstract
Purpose – The purpose of this paper is to examine the development and nature of organized crime in
the USA over the past 50 years, emphasizing organized crime’s corruption and victimization of
legitimate businesses and describing law enforcement’s efforts to combat organized crime through
specific case studies.
Design/methodology/approach – First, the paper analyzes the control over and corruption of
legitimate businesses in the USA by the La Cosa Nostra (“LCN,” or the American Mafia), including the
following industries: Las Vegas gaming; moving and storage; garment; waste – hauling; and,
construction, and the following unions: the International Brotherhood of Teamsters; Laborers
International Union of North America; and, the International Longshoreman’s Association. The paper
also describes law enforcement’s successful efforts to combat such corruption through the use of
criminal and civil racketeering laws and specific prosecutions. The paper then discusses the
emergence in the mid-1980s of non-traditional organized crime groups in the USA, including various
Asian ethnic groups and large-scale human trafficking organizations that impact Europe and Asia as
well as the USA.
Findings – The non-traditional criminal groups not only prey on the legitimate businesses in ethnic
Asian communities in the USA, but they also engage in complex crimes, alien smuggling, drug
trafficking, credit-card frauds, money laundering, and other financial crimes. There has emerged a new
era for organized crime that began in the 1990s with the fall of the former Soviet Union and the
emergence of transnational organized crime groups emanating from the nations comprising the former
Soviet Bloc. These organized crime groups engage in a wide variety of economic crimes including
extortion, fraud, illicit appropriation of natural resources, and public corruption. Such extensive
corruption threatens the stability of some of these emerging nations.
Originality/value – This paper will be valuable to law enforcement offices and policy makers to
assist them to understand the scope and nature of organized crime’s adverse effects upon businesses
and economic interests and to develop tools to combat such criminal activities.
Keywords Crimes, Corruption,Law enforcement, United Statesof America
Paper type Research paper
This paper examines the development and nature of organized crime in the US over the
past 50 years, emphasizing organized crime’s corruption and victimization of
legitimate businesses and describing law enforcement’s efforts to combat organized
crime through specific case studies. First, the paper analyzes the control over and
corruption of legitimate businesses in the US by the La Cosa Nostra (“LCN,” or the
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-0790.htm
This paper is the edited version of a presentation by the author at the 23rd Cambridge
International Symposium on Economic Crime, Jesus College, Cambridge University, on
September 6, 2005. The author is the Senior Litigation Counsel of the Organized Crime and
Racketeering Section of the US Department of Justice in Washington, DC. The views expressed
are solely those of the author and do not necessarily represent the views of the Department of
Justice or any of its agencies.
JFC
13,2
214
Journal of Financial Crime
Vol. 13 No. 2, 2006
pp. 214-234
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590790610660926
American Mafia), including the following industries: Las Vegas gaming; moving and
storage; garment; waste – hauling; and, construction, and the following unions: the
International Brotherhood of Teamsters; Laborers International Union of North
America; and, the International Longshoreman’s Association. The paper also describes
law enforcement’s successful efforts to combat such corruption through the use of
criminal and civil racketeering laws and specific prosecutions.
Then, the paper discusses the emergence in the mid-1980s of non-traditional
organized crime groups in the US, including various Asian ethnic groups and large-scale
human trafficking organizations that impact Europe and Asia as well as the US. These
criminal groups not only prey upon the legitimate businesses in ethnic Asian
communities in the US, but they also engage in complex crimes, alien smuggling, drug
trafficking, credit-card frauds, money laundering, and other financial crime s.
Finally, the paper describes a new era for organized crime that began in the 1990s
with the fall of the former Soviet Union and the emergence of transnational organized
crime groups emanating from the nations comprising the former Soviet Bloc. These
organized crime groups engage in a wide variety of economic crimes including
extortion, fraud, illicit appropriation of natural resources, and public corr uption. Such
extensive corruption threatens the stability of some of these emerging nations.
This paper will be valuable to law enforcement offices and policy makers to assist
them to understand the scope and nature of organized crime’s adverse effects upon
businesses and economic interests and to develop tools to combat such crimin al
activities.
Introduction
The nature of organized crime in the US and elsewhere has changed significantly over
the past 50 years, with even more dramatic changes over the last 15 years.
Notwithstanding those developments, a central focus of organized crime has remained
on the corruption and victimization of legitimate businesses – because that is where
the money is. This paper will focus on three phases of organized crime’s effect on
legitimate businesses:
(1) the LCN’s control over and corruption of legiti mate businesses in the US
through its corrupt influence over labor unions;
(2) the emergence in the mid-1980s of non-traditional organized crime groups in the
US, including various Asian-ethnic groups and large-scale human trafficking
organizations; and
(3) transnational organized crime groups foll owing the dissolution of the former
Soviet Union that operate in Europe, the US and elsewhere.
La Cosa Nostra’s corruption of legitimate businesses
The origins of the American La Cosa Nostra and its corruption of legitimate businesses
LCN also known as the American Mafia, had it origins in the US in the early 1930s as a
consequence of prohibition[1]. Bootlegging of alcohol during the prohibition era from
1920 to 1933 was highly profitable and led to the formation of local organized crime
groups in major cities in the US that controlled bootlegging operations. Such illicit
businesses required large-scale organization to purchase raw materials, manufacture
liquor, and to transport, store and sell liquor. Accordingly, local criminal groups
developed the organizational skills and apparatus to carry out such illicit dealings on a
The effects of
organized crime
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