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First Printing: 2013 by Tri-Psyc Enterprise, Lorenzo Ville,Cabanatuan City

Editor: Winston John Romero [email protected]


Table of Contents

CHAPTER I UndERsTAndIng oRgAnIzEd CRImEIntroduction 1Attributes of organized crime 2Understanding the mafia 6Categories of organized criminal behavior 7Provision of illicit services 7Provision of illicit goods 8Conspiracy 8Penetration of legitimate business 8Extortion 9Corruption 9Models of organized crime 9Cressey’s cosa nostra model 12Albini’s patron-client model 17Smith’s enterprise model 19Lanni’s kinship group model 20Chambliss’ crime network model 21Haller’s partnership model 21Blocks description of enterprise and power syndicates 21Nontraditional organized crime 24Organizational constraints 26Reuter on economic constraints 26Mastrofski and potter on organizational constraints 27


CHAPTER II TRAnsnATIonAl CRImEInternational criminal organizations 29The Big Six International Criminal Organizations 31

A. Italian criminal enterprises 31B. The Russian mafia 38C. Japanese Yakuza 43D. The Chinese Triads 44E. Colombian drug cartels 48F. Mexican criminal organization: The Mexican Federation 56

Other international criminals and criminal organizations 60A. Nigerian criminal organizations 60

CHAPTER III InTERnATIonAl TERRoRIsT oRgAnIzATIonsA. Introduction 63B. Terrorist organizations 64

Strategic alliances between the transnational criminal organizations 66

A. International strategic alliances generally 66B. The Colombian cartels: a strategic alliance case study 67

CHAPTER IV monEy lAUndERIngMoney laundering: what is it? 69Money laundering: why fight it? 71The mechanics of money laundering 72The three stages of money laundering 74Money-laundering techniques and tools 77

A. Smuggling 77B. Structuring 79C. The use of front companies 80D. The use of shell or nominee corporations 83E. Bank drafts 84F. Counterbalancing loan schemes 84


G. Dollar discounting 84H. Mirror-image trading 85I. Reverse flips 86J. Inflated prices 86K. The Colombian black-market peso exchange 87

United States v. Saccoccia: the ultimate example of la vuelta 89

CHAPTER V THE IllICIT dRUg TRAdEIntroduction 93Drug control: a br1ef history 94Early drug regulation 95The impact of drugs on society 96Adult arrests for drug law violators 97The pervasiveness of drug abuse 98Measuring drug abuse 98Drugs and crime 100How are drugs and crime related 102Drugs and violent crime 103Drugs and income-generated crime 103Drugs and organized crime 103Players in the drug business 105The business of drugs 106Trends of organized drug trafficking 106Recent trafficking patterns 107Heroin’s return 108The drug trade today 119Southwest and Southeast Asia 110The golden triangle 110The golden crescent 111Mexico 111South American countries 115Bolivia 115Peru 115


Colombia 116Common drugs of abuse 116Categories of dangerous drugs 117Narcotics 117Stimulants 118Hallucinogens 120Inhalants 123Drug control strategies 123Other control strategies 127

CHAPTER VI A bRIEf HIsToRy of TERRoRIsm Overview 129Violence and terrorism 129State terrorism 135Cyclical nature of terror 138Contemporary events: Historical roots 141State and religious sponsored terrorism 143State terrorism as warfare in the 21st century 144State-sponsored terrorism: the big seven 148

Iran 148Iranian terror against Israel 150Iranian assistance to Palestinian terrorist organization 151Palestinian Islamic jihad 151Hamas 151Hizballah 152

Terrorism brief 1 155The Rushdie affair 155

Cuba 156Iraq 157Libya 158U.S. Reaction to Libyan terrorism 159

Terrorism brief 2 160Pan Am flight 103 (Lockerbie) 160

North Korea 161


Sudan 162Syria 165

State-sanctioned and religious terrorism 170The crusades and genocide 170The Turks and the first crusade 171State terror and genocide 173Mindsets of mass destruction 176New types of post-cold war terrorists 176New forms of terrorist-threat scenarios 179

CHAPTER VII oRgAnIzEd CRImE In THE PHIlIPPInEs A. Robbery/hold-up group 183

1. “akyat-bahay” gang 1842. “salisi gang” 1843. Bukas kotse gang 1844.“carnapping” 1845. “dugo-dugo” gang 1856. Budol-budol” gang 1857. “ipit-taxi” gang 1858. “bonet” gang 1859. “lag-lag barya” gang 18610. “martilyo/boltcutter” gang 18611 “acytylene gang 186

B. Bank/pawnshop robberies 186C. Kidnap-for-ransom 188D. Hijacking 190E. Illegal gambling 191F. Illegal recruitment/ prostitution 192G. Drug trafficking 193H. Pyramiding scam in the Philippines 194


1UNDERSTANDING ORGANIZED CRIME

Chapter I

UndERsTAndIng oRgAnIzEd CRImE

InTRodUCTIon

On three separate occasions between 1986 and 1991, reputed New York mob boss John Gotti stood trial facing federal racketeering charges. However, to the surprise and dismay of prosecutors, he was acquitted each time. Some say that the acquittals were a result of furtive trial techniques by Bruce Cutler, Gotti’s attorney; some contend that the government’s case, passed on plea-bargained testimony, was fatally flawed; while others speculated that there had been jury tampering. Whatever the reason, on each occasion the charges against Gotti failed to stick, earning him the nickname “Teflon Don.” Finally, in 1992, the flamboyant Gotti was convicted and sent to prison on racketeering charges and for the 1985 murder of his own crime boss, Paul Castellano. This case not only captivated the American people but helped perpetuate the public’s perception of organized crime in America.

Part of the recent concern about organized crime is that it is becoming more and more transnational and, in some cases, posing a global threat. This threat is especially evident in the breakdown of the former Soviet Union and the emerging role of opportunist Russian “Mafia” members. Furthermore, with regards the changes in political conditions and the technological advances around the world, the 1990s have already witnessed crimes relating to continued formalizing in the global drug trade, an increase in computer-related crimes, and the smuggling of radioactive nuclear material, to name a few. In addition to the entertainment


2 PrinciPles of logic for ArgumentAtion And debAte

industry, sensational images, such as those portrayed by the electronic and print media, also tend to confuse our perceptions of organized crime. Consequently, the study of this all-important field of criminal justice is laden with misperceptions, distortions, and outright inaccurate information.

Just what is organized crime, and how does it relate to other types of crime? In an effort to sort out the true meaning of the term as well as to gain an understanding of the phenomenon, in this chapter, we present organized crime, beginning with definitions of the term and moving on to a discussion of the various models that are believed to represent contemporary organized crime systems. Despite a plethora of literature on organized crime, controversies regarding its definition, structure, functions, and how best to control it continue. The only thing that is really known with certainty about the subject is that organized crime represents a serious social problem that survives despite aggressive anti-crime efforts by law enforcement agencies.

ATTRIbUTEs of oRgAnIzEd CRImE

To develop a workable definition of the term organized crime, a number of dimensions or attributes can be identified that tend to describe the function and structure of the phenomenon. Understanding these attributes as part of a framework is helpful in developing a workable definition of the term. The following are a compilation of attributes offered by various scholars.

Organized crime groups:

• Are non-ideological (i.e., has no political goals)• Are hierarchical• Have a limited or exclusive membership• Are self-perpetuating (i.e., continues over time)• Use illegal violence (or the threat of it) and bribery• Demonstrate a specific division of labor• Are monopolistic• Are governed by explicit rules and regulations, which

include a code of secrecy

We should point out that none of these attributes alone serve as definitions of organized crime, but collectively, they paint



a picture of the organized crime group. Next, we consider the meaning of each of these attributes. When a criminal group is non-ideological, it possesses no political agenda of its own. Unlike some terrorist groups, for example, which espouse very specific political motives, the non-ideological criminal group is motivated by profit.

Experts are in widespread agreement that organized crime groups are highly structured in a hierarchical fashion with an order of authority. More controversial is the question of how highly structured these groups are. Such groups are headed by a few top leaders, while the majority of the rank-and-file members are low-level and subservient. The Italian La Cosa Nostra, the Hell’s Angels motorcycle gang, and the Black Guerilla Family prison gang are all considered organized crime groups, and all have a self–hierarchy of command.

A limited or exclusive membership is another attribute of organized crime groups. Criminal leaders are selective as to who become members. After all, if not careful, the crime group could accidentally recruit police informers, undercover agents, or rebels working on behalf of other criminal organizations. As a rule, this attribute refers to ethnic background, kinship, race, long-time friendships, prison relationships, or other variables that make the recruit an attractive candidate for membership. One’s abilities can also be a factor. For example, the ability to fight, willingness to engage in criminal acts, the ability to keep secrets, and the ability to follow orders are also important to organized crime leaders. Organized crime groups are self-perpetuating, which means that they are designed to persist through time beyond the lives of current members. When members are removed either by dying or being sent to prison, they are easily replaced with new recruits eager to gain acceptance by the group arid to continue the illegal enterprises of the organization. The use of illegal violence and bribery is a hallmark of organized crime groups. Violence is essential to ensure compliance with the rules of the organization and to safeguard the attainment of organization goals. Although used only when necessary, violence results in both specific discipline and as a general message for others. Bribery is another important component of the protection of criminal enterprises and the secrecy of members. As with the use of violence, bribery is used only when needed. As with many legitimate business enterprises, organized crime groups make use of specific functional positions that are



filled by the members who are most suited for the task. This division of labor is evidenced by the positions of enforcer, money movers and corruptors, each of whom is delegated with specific tasks to further organizational goals. The problem of competition creates the need for organized crime to be monopolistic in nature. The group will strive to be in control of a particular criminal racket or even legitimate enterprise. The word monopoly also implies that to increase profits, free trade will be restrained. Such is the case with organized crime. We should point out, however, that not all criminal rackets are conducive to monopolization, as will be seen with the fragmented nature of the illicit drug trade.

Finally, rules and regulations are an important attribute in organized crime. Like legitimate business, successful organized crime groups have established rules and regulations to which members must adhere. Some of these rules and regulations are simply procedures related to a particular illicit enterprise, such as how betting slips and money are transferred to a central gambling bank. Others are often simply common sense, such as a code of silence and prohibited behavior for members (e.g., rules against drug use by members in some drug syndicates). Most of the larger organized crime groups, such as the La Cosa Nostra, the Cali cartel, and the Hell’s Angels, have well-enforced rules and regulations.

UndERsTAndIng THE mAfIA The organization most commonly associated with organized crime is the Mafia, a term that writers, filmmakers, historians, and others often use as a benchmark for understanding the phenomenon of organized crime. In an effort to appreciate the organizational aspects of what become known as the Mafia, it is logical first to consider the meaning of the word. By most accounts, the word Mafia didn’t show up in print until the mid-1860s, and was thought to be a word understood by most Sicilians. Considered a dialect word from the poorer districts of Palermo, Sicily, “Mafia” and “mafioso" commonly referred to beauty, perfection, grace, and excellence, but when applied to a man, mafioso “connotes pride, self-confidence, and vainglorious behavior”. By the mid-19th century, the term “mafioso" became synonymous not just with crime, but suggested a certain type of criminal behavior and attitude as well. When putting the word to use, Sicilians refer to a “man of honor” or “man of respect” who embodies not just a criminal but other personality characteristics as well. These include the village strong-arm man, the boss and mediator of many conflicts. Rather than using the term “Mafia”



directly, people speak of them amid “friends of friends.” It is this brand of communication that characterizes those organized patron-client relationships that are typically controlled by a mafioso. According to traditional concept, the mafioso is brave and self-reliant, a man of action, and one not to be taken lightly. Most importantly, the mafioso is prepared to become a law unto himself if necessary.

Although there is considerable consensus about the meaning of the word “Mafia,” its origins are not as clear. Some historians trace its origin to the Sicilian struggle in the 13th century against French rule. “Morte alla Francia, Italia anela!” was their cry (“Death to France, Italy groans”), forming the acronym MAFIA. Others suggest that the term originated as far back as 1282 as a battle cry of rebels who slaughtered thousands of Frenchmen after a French soldier raped a Palermo maiden on her wedding day. Whatever the source, the term has become familiar throughout much of the world and is often synonymous with such criminal activities as drug trafficking, gambling, extortion, and murder. But organized crime is much more than is conjured up by the term “Mafia.” Although experts in the field are somewhat divided regarding components of the organized crime phenomenon, there is a degree of consensus regarding the aspects of an organized crime organization. For example, many experts agree that organized crime represents profit-motivated, criminal enterprise that employs the use of fear, violence, intimidation, and public corruption to achieve organizational goals and remain immune from law enforcement. In addition, criminal activity is probably restricted to the provision of illegal goods and services. Debate continues among experts, however, regarding the extent to which organized crime has achieved success in monopolizing any given illegal market.

CATEgoRIEs of oRgAnIzEd CRImInAl bEHAVIoR

Organized crime is a unique and dynamic phenomenon that permeates virtually all segments of society. However, it differs from other types of criminal activity in several important aspects. For example, some categories of behavior practiced by organized crime organizations are not applicable to many other types of criminal groups or gangs. Accordingly, it is these categories of behavior that are most commonly associated with “organized crime” activities, because many types of specific crimes are contained within each category. These categories include provision of illicit services, provision of illicit goods, conspiracy, penetration of legitimate business, extortion, and corruption. Once these categories are understood, it will be easier to



comprehend the many different definitions and models of organized crime that are discussed later in the chapter.

PRoVIsIon of IllICIT sERVICEs

The offering of illicit services represents one of the main enterprises of organized crime organizations illicit services are those that legitimate businesses do not provide and which are proscribed by law. Included are (1) gambling operations that act outside the law and offer a financial tax incentive for those who use this service; (2) protection rackets, a form of extortion by which organized crime members approach owners of small businesses and offer them “protection” for the business in case of “unforeseen” misfortune, such as fire or vandalism; (3) loansharking, the illegal lending of money at usurious rates, whose repayment is enforced through violence and intimidation; and (4) prostitution, the sale of sex acts by persons acting as part of a larger organization. The provision of illicit services comprises criminal enterprises in which money can be generated for the furtherance of organizational goals. Also, in many cases the provision of illicit services is done in conjunction with the offering of illegal goods.

PRoVIsIon of IllICIT goods

Like illicit services, a second hallmark of organized crime is the provision of illicit goods, which are not available in legitimate society. Again, vice-related commodities are often associated with this enterprise. In particular, illegal drugs represent one of the primary products in considerable Black market demand. Illicit drugs include marijuana, cocaine, and heroin, to name a few, and the provision of these drugs provides organized crime organizations with billions of revenue4ree dollars every year. In addition, pornography represents another Black market commodity that generates billions of dollars annually. Unregistered guns and stolen goods are yet other examples of products in considerable demand which illicit dealers can sell at lower prices and with more ease than that available to licit distributors.

ConsPIRACy

Another vital category of organized criminal behavior is that of conspiracy, an agreement between two or more people to violate the f aw. In most cases, organized crime members work in concert with each other for the purpose of selling drugs or stolen property, loansharking, gambling, and other activities related to organized crime. Very seldom


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