The Basics

Of
Organized Crime
For
Law Enforcement
By Randy Gonzalez

www.drgonzo.org
 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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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.

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.
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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.
 4

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)
 6

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)

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.

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;
 7

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.
 8

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.
 9

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.

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.

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.
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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.
 14

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.