CHAPTER 12

THE GANGSTER-INTERNATIONALIST

Uninvited to the feast, but going anyway.

Russian proverb

The 1990s were times of hype and horror as ‘the Russian mafia’ – often regarded as a single, monolithic conspiracy – emerged as a suitable bugbear to replace the Soviet threat. FBI Director Louis Freeh thought that ‘Russian organized crime presents the greatest long-term threat to the security of the United States . . . The United States is presented with a well-organized, well-funded, sophisticated and brutal conspiracy.’1 To US Representative Henry Hyde from Illinois, ‘this international enemy, the Russian mafia, is as deadly a threat as there could be and it comes from within as well as without their country’.² In 1993, David Veness, then deputy assistant commissioner of the British Metropolitan Police, warned that ‘in five years’ time there is no doubt that the major threat confronting the inner cities of the United Kingdom will come from central, eastern European and Russian countries’.³

It is certainly true that one of the most striking characteristics of Russian organised crime is how quickly and effectively it has become a truly global phenomenon, even a brand. Its networked, post-modernist model not only allows these criminals to respond quickly to new opportunities, it permits the incorporation of new members regardless of ethnicity, so long as they can work within the Russians’ rules. The first wave of expansion into Europe was largely by vory moving to areas with sizeable Russian communities or, as in the case with many former Warsaw Pact or Soviet states, where they had existing contacts with local criminals and corrupt officials. The Baltic States, Poland and Hungary were all early targets, soon followed by a drift into Austria and Germany (where they were able to capitalise on existing contacts in the east). Similar early targets were Israel (where many used real or fake Jewish ethnicity to ensure immigration rights) and the USA.

But the world was changing. The heavy-handed criminal expansion of the early 1990s provoked a backlash from states and criminals alike, and the vory were often arrested, deported or simply forced to flee. As ever, though, they adapted. The transformation had already begun at home from thuggish street vor to entrepreneurial vor-broker, and this became all the more important for their entry into the global criminal market. The ensuing two decades have demonstrated that this poses a much more serious, if at the same time less dramatic, threat. The modern Russian vory are not interested in challenging or undermining the West, but in enjoying the opportunities it provides. They have certainly not moved, mob-handed, into the inner cities of America, Britain or the Continent.

Mafias do not, on the whole, migrate. As Federico Varese has meticulously demonstrated in his Mafias on the Move, the myth of a globalised, universal criminal class able to migrate to wherever a new opportunity seems to be emerging is just that – a myth. Generally, when ‘mafiosi find themselves in the new locale [it is] not of their own volition; they have been forced to move there by court orders, to escape justice or mafia infighting and wars. They are not seeking new markets or new products but are instead just making the most of bad luck.’4 Even when they do move, the odds are they will fail in their efforts to establish their criminal enterprises in a new land, where they lack local contacts, often even the local language. Instead, Varese’s findings are that for this transplantation to be successful, there are two requirements:

First, no other mafia group (or state apparati offering illegal protection) must be present. It is too much of an uphill struggle for an incoming mafia to set up shop in the presence of a powerful local competitor. Second, a mafia group is most likely to succeed in transplanting when its presence coincides with the sudden emergence of new markets.⁵

The presence of a market without an existing occupier is a rare and generally temporary phenomenon. Organised crime from Russia is undoubtedly a significant feature of the global underworld, but usually in the form of facilitators rather than street-level thugs. These vory are the business partners of local groups: selling them heroin from Afghanistan, laundering their money through Russia’s still-murky financial system, providing weapons and occasionally someone who knows how to use them. In this way, even if the Russian mafiya (as it is sometimes called) is not a direct problem in a country, it can have a serious impact by providing existing gangs with access to expertise, services and criminal products to which normally they could never aspire.

Hence the question must be: what form does Russian and Eurasian organised crime take when it moves abroad? Is it a wolf, working alone or in a pack, a restless predator roaming from one kill to the next? An octopus, sending its questing tentacles in search of food from a safe haven? Or a virus, lacking any plan or central mind, simply infecting those hosts which offer the right conditions and which lack antibodies sufficient to hold the disease at bay? However unflattering it may sound, and although one can point to some cases of effective and strategic ‘conquest’, in the main the viral analogy holds good. This is an entrepreneurial, diffuse form of criminality which allows it quickly to exploit vulnerabilities but which is often as easily pushed back. Yet it can then reappear when a new opportunity arises, having lain dormant until society’s resilience diminishes.

On definitions

Who are they? The mafia is like the government, except that it works. Seriously, the mafia is, well, whatever it wants to be.

Kolya, Russian student, 19966

There is also the fundamental question of what is actually meant by ‘Russian organised crime’. This is an important point, as it is often crudely interpreted by analogy: parallels are drawn between the Russian gangs’ engagement with business and the Japanese yakuza’s, or between the rules of the vory and the Sicilian mafia’s code of silence. This even applies to law enforcers in Russia and, especially, beyond, who seek to force these criminal groupings into the traditional pyramidal model, with a godfather at the top, lieutenants beneath him, and footsoldiers at the base, simply because this is the kind of structure with which they are familiar and comfortable. From personal experience, I recall a painful afternoon spent with a team of smart, enthusiastic European police analysts in the late 2000s, who were trying to understand how a particular Russian group operated. Time and again, a pyramid would appear on the whiteboard, only to be erased as the complexities of this organisation’s structure and operations became clear. Eventually, one threw up his hands and said, ‘It’s not a gang, it’s a bunch of Facebook friends!’ (I’ll spare everyone’s blushes by not naming the country in question.)

There is more than a little truth in this. Instead of the classic hierarchical gang, often drawn from a single ethnicity, home region or kin group, this is a flexible, networked criminal phenomenon that embraces a wide range of businesses (both licit and illicit), practices and even nationalities, but nonetheless has certain distinctive ways of operating. Indeed, ‘Russian organised crime’ may not necessarily be Russian, is often not especially organised, and does rather more than just crime.

The modes of organisation and the extent to which these criminals engage in non-criminal business are best explored later, but it is worth dwelling here on the ‘Russianness’ of these gangs. In the West, other terms are often used, especially by official agencies, notably ‘Eurasian organised crime’ (the FBI’s term of choice) or ‘Russian-speaking organised crime’ (more generally found in Europe). Both have their merits, over and above the political correctness of not singling out a specific ethnic as well as national group. However, ‘Russian-speaking organised crime’ is problematic in that it is sometimes simply wrong; while Russian is certainly the lingua franca within this criminal world, an Armenian gangster is more likely to speak Armenian to his cousin and co-conspirator, while gangs operating in the USA often use English, especially as they induct second- or third-generation migrants or other locals. As for ‘Eurasian organised crime’, while it undoubtedly has far greater descriptive value, it also carries with it the implication that a St Petersburg avtoritet, a South Ossetian gangster-warlord and a Central Asian drug kingpin operate, organise and think the same way. It is probably the most capacious and useful such term, but, for the sake of this book, the commonplace ‘Russian organised crime’ is used for not just Russian gangs but also Slavic groups resident in the rest of the world, as well as for those which may not be predominantly Slavic, but which broadly share the same cultural and operational characteristics, while also having some direct relationship with Russia itself. I do not pretend to offer a detailed exploration of the underworlds of all the post-Soviet states in themselves, on which, fortunately, there is an increasingly robust scholarship.7

Bad neighbours: organised crime in post-Soviet Eurasia

The Russians think they own our country. They don’t but unfortunately there are many here, businessmen, political figures, criminals, who are willing to sell it to them.

Moldovan police officer, 2006⁸

Russian organised crime gangs operate throughout what Moscow from time to time calls the ‘Near Abroad’ – the other post-Soviet states, with the exception of the Baltics. Sometimes they are locally based, sometimes they are offshoots of home groups and sometimes they work in partnership with indigenous gangs. This is a two-way process, even if usually skewed in favour of the Russians. Some Ukrainian and even Belarusian gangs and criminals operate autonomously in Russia, for example, along with groups from the Caucasus. In most cases, the Russians operate locally in partnership with or with the approval of local criminal interests, whether running their own operations or, more often, providing a transnational connection to local rackets which would benefit from this.

Sometimes, this is because there is already a thriving indigenous underworld. Ukraine is a good example, a country in which all the main Russian combines have interests, operations, partners and people, and where even the culture of the vory is still present. Solntsevo has a long-standing relationship with the criminal–political ‘Donetsk clan’, which was the power base for former president Viktor Yanukovych, for example. In the early 1990s, the Russian gangs often had relatively free rein, but the local underworld matured, facilitated by the extensive corruption of the local and national political elite. Taras Kuzio has suggested that Ukraine prior to the 2013–14 ‘Maidan Revolution’ became a ‘neo-Soviet mafia state’.⁹ As with the similar claim made by British journalist Luke Harding about Russia,¹⁰ this is a neat phrase that obscures more than it explains. Nonetheless, there is certainly extensive corruption and in many ways pre-Maidan Ukraine, by a rather roundabout route, came to resemble Russia, with its ‘raiding’ of businesses and circles of corruption. Its organised crime structures are still broadly similar to Russia’s, albeit rather smaller and less concerned with the outside world, but equally linked to corrupt elites and oligarchic control of the economy.11

When Moscow annexed Ukraine’s Crimean peninsula in 2014, though, it did so – as will be discussed later – with the active support of local vory, and it then used and empowered others in the south-eastern Donbas region to fight and therefore excuse its subsequent proxy war with Kiev.¹² Since then, Ukraine has been going through a painful and uncertain attempt to attain the dream of the Maidan, of a democratic, liberal, law-based state, while Moscow and Kiev are locked into an undeclared, low-intensity war that, at the time of writing, shows no sign of abating. Yet, for all this, the gangsters are truly internationalist in their opportunism. Ukraine and Russia may be at virtual war, but their criminals continue to cooperate as before. One officer from the SBU, Ukraine’s security service, ruefully told me that ‘the flow of drugs through Donbas, into Ukraine, and then into Europe simply has not shrunk by a single percentage point, even while bullets are flying back and forth across the front line’.¹³

This is one model where the Russians are more powerful in overall terms, but encounter a sufficiently entrenched domestic underworld that there are no opportunities for direct transplantation or domination. This is evident in many other parts of the former Soviet Union too, although more often the reason is that an authoritarian regime is jealously guarding its monopoly of coercive force and informal influence and thus commands a majority share in its local underworld. In Belarus, for example, President Alexander Lukashenka’s downright neo-Soviet regime keeps the underworld under its thumb in a manner reminiscent – as in so much else – of the USSR in the 1970s. In oil-rich and rights-poor Azerbaijan, key groups need to be connected with (and pay off) the Aliyev regime to survive.¹⁴ Further east, in Central Asia, a succession of more-or-less authoritarian regimes resting on exploitative elites run Tajikistan, Turkmenistan, Kazakhstan and Uzbekistan. Beyond low-level street gangs, which are often suppressed by security forces unconcerned with legal niceties, the main crime organisations will invariably either be run by elements of the elite apparatus or be heavily dependent on them. Their role is often to act as agents diverting profits from corruption and embezzlement of state assets to the elite, or else to manage key illegal businesses for them, especially drug trafficking. Here, the gangsters are often little more than deniable agents of the corrupt elites.

A second model, visible in Moldova, Armenia and Kyrgyzstan, is where the local underworld is weak or fragmented, but so too is the state. In Kyrgyzstan, for example, gangsters put gunmen on the streets to help bring down President Askar Akayev in the 2005 ‘Tulip Revolution’, in the process demonstrating that the state was unable to maintain a monopoly of armed force.15 However, in such countries, the criminals are essentially only relatively large fish in distinctly small pools. The Russian-based networks are able to cherry-pick their opportunities, but still find it convenient to work with and through local criminals much of the time. It might be possible for the Russians to assume a more dominant role if they had to, but local gangs are typically keen to work with them, obviating the need.

Georgia offers a model all its own. Although the vory v zakone may have been expelled, with an undoubted impact on the underworld, that has not magically dispelled organised crime, but has simply transferred power to a new generation. There remain considerable interactions between criminals in Georgia and those in Georgian and other ‘highlander’ gangs in Russia and beyond. However, the state of relations between Tbilisi and Moscow since Russia’s invasion in 2008 is such that there has been little scope for substantial penetration by Russian networks. The rise in 2012 of the Georgian Dream party, founded by Bidzina Ivanishvili, a billionaire with considerable interests in Russia, led to a more emollient policy towards Moscow. However, there are again no unclaimed business opportunities for the Russians quickly or easily to exploit.

Finally, there are the unrecognised pseudo-states of Transnistria (in Moldova), South Ossetia and Abkhazia (in Georgia), and perhaps Donbas soon enough. These all exist on Moscow’s sufferance and while they have local underworlds – generally closely linked with the political leaderships – these are small-time players and unable meaningfully to challenge the larger Russian combines. As a result, these regions have become and remain free economic zones for the Russian criminal networks. However, their utility is limited by their relative isolation, small size and notoriety. Although the case has been made that Transnistria, for example, is turning itself into a working de facto state,¹⁶ the enclave once infamously described in a European Parliament report as ‘a black hole in which the illegal trade in arms, the trafficking in human beings and the laundering of criminal finance’ all thrive,¹⁷ continues to depend to a considerable extent on criminal and informal activities, from money laundering to smuggling.¹⁸

The rise and fall of the first wave

Sure, doing business abroad was about money – but it was also about security. Back in the 1990s, you didn’t know what was going to happen at home, so you needed a bit of stability in your life.

Russian-Ukrainian gangster, 200619

Regardless of their progress within post-Soviet Eurasia, the successes of the vory in central and eastern Europe and beyond in the 1990s seemed at the time to buck Varese’s assertions about the difficulty and rarity of external expansion. They appeared to have not just the appetite for empire building but also the capacity. Russian and Chechen gangs clashed for supremacy over the underworld of the Baltic states: for example, ‘during the “bloody autumn” of 1994, about a hundred murders related to organized crime were committed’ in Estonia, a country of just 1.5 million people.²⁰ Prague was for a while home to representatives of all the main networks such as Solntsevo, Tambovskaya and the Chechens, as well as Semyon Mogilevich, the mobster banker. In 1996, the Israeli police identified thirty-five senior Russian vory operating in Israel, some twenty of whom were members of Solntsevo or closely linked with the network.²¹ They emerged as key players within the Israeli underworld after a brutal struggle in 1996–8 that left many of the country’s indigenous gang leaders dead, while the country became a key money laundry for the Russians.²²

What all this reflected was a temporary advantage caused by the disproportion between the relative resources of the Russian and Eurasian gangs at the time and the local institutions, law enforcement structures and criminal rivals they were facing. In some ways, one could draw a parallel with the Soviet invasion of Afghanistan in 1979: seizing the main cities and communications routes of this divided and impoverished country was no great feat. Actually holding and pacifying it would take greater political and military resources than the Soviets were able or willing to expend, especially as their very presence galvanised opposition. After ten years, the Soviets withdrew from Afghanistan not because they had been beaten, but simply because the dwindling benefits of occupation were so clearly outweighed by its costs, and there was no prospect of victory on the horizon. This was defeat on the balance sheet rather than on the battlefield.

Likewise, in the early 1990s, there were numerous easy initial opportunities for the vory. The new democracies of central Europe, not yet cradled within the European Union, were impoverished and had inherited discredited police forces and anachronistic legal codes akin to Russia’s. Further afield, police were unprepared for the new challenge and there were specific market opportunities. In Israel, the Law of Return – which grants an automatic right of immigration to those able to demonstrate Jewish ancestry – proved an appealing loophole for vory who either met this criterion or, more often, paid to have the necessary documents produced in Russia. In the United States, the presence of indigenous, entrepreneurial criminal enterprises, especially in New York’s Brighton Beach, seemed also to offer a beachhead for quick expansion. In those days, you could be a tattooed thug and still get a visa, and you didn’t need to be too smart when local police forces still hadn’t adapted to this new challenge, often not even having Russian-speaking officers.

Furthermore, Russia’s criminals had particular reasons to want to internationalise their operations as quickly as possible. There was a pervasive (if misguided) belief that there could be a hard-line Communist revival or even some kind of nationalist–authoritarian coup. This helps explain the extreme measures taken – with Western acquiescence – to rig the 1996 presidential elections to ensure Boris Yeltsin beat his Communist rival.23 It also helps explain the gangsters’ enthusiasm for hedging themselves against trouble at home. By internationalising, they could secure revenue streams in alternative currencies (to protect them from the collapse of the ruble), prepare fall-back options if they were suddenly denied access to their main sources of income, and perhaps gain the right to live abroad through citizenship, investment or strategic marriage. That way, they could escape the Motherland if things suddenly began to look dangerous.

To this end – and at the time this was something that escaped the attention of scholars, law enforcers and other observers alike, myself included – for many Russian vory in the 1990s, developing operations abroad was not so much a source of revenue, but a drain: a loss-leader or investment in personal security. It was also a matter of prestige, a form of consumption as conspicuous as the shiny imported limousine and the equally shiny domestic arm-candy. Where it could, Russian organised crime did what most ethnic migrant gangs do: preyed on its own people, exploiting immigrants who lacked their own resources, their own support structures and, often, faith in local law enforcement. (After all, a recent arrival from Russia or the USSR was likely to see authority figures in uniform as more dangerous than reassuring.)

However, many of these new opportunities were only temporary. The economies and law enforcement structures of central Europe largely stabilised and developed through the 1990s and domestic gangs soon sought to contest control of these markets. While they were typically smaller than the aggregates of the Russian structures against which they were matched, the real arithmetic is concerned with resources available in theatre. In other words, just as the Afghan rebels did not have to face off against the whole Red Army, only the 100,000–150,000 men of the so-called Limited Contingent of Forces in Afghanistan, so too the total size of the crime network was less relevant than the actual commitment in, say, Tallinn or Tel Aviv.

This is where the distinctive characteristics of the network become especially significant. A traditional, hierarchical structure can – in theory – quickly throw more resources into a conflict. Unless there is some compelling, existential challenge involved which is common to all parties, then in a network securing additional resources is a vastly more complex and difficult process. Other members, individual and collective, need to be persuaded to join the conflict, which requires the expenditure of social capital, or credible prospects of a solid return. It is relatively easy to persuade others to join ventures which have a proven profitable track record and promise a continued return. The Afghan heroin trade is a good case in point. On the other hand, how do you persuade independent entrepreneurs in the underworld to join what seems to be a losing or at least uncertain struggle? The answer, as Varese suggests, is that people will only do so when they feel they have no alternative.

Furthermore, the indigenous gangs’ home turf advantage in central Europe in particular often manifested itself in the tacit or even active support of local police and security structures, which had also come to terms with the ‘invasion’ they faced. The debate about the intrusion of Russian organised crime often quickly acquired a clearly nationalist tone, with talk of ‘colonisation’ and ‘imperialism’, and became securitised. The presence of Russian gangs began to be considered – not without reason – also in terms of the presence of potential Russian spies, saboteurs and agents of influence. As one Estonian Security Police (Kapo) officer put it to me, ‘in the late 1990s, and again after 2007 [when Moscow launched a cyberattack on Estonia], dealing with Russian gangs was not just a police issue, but a vital security one’.24 Thus, especially in central Europe and the Baltic states, a moral panic about the Russians led to a particular focus on combating them, even at the expense of addressing indigenous threats. As a result, by the end of the 1990s, the first expansionist wave of Russian and Eurasian vory had largely been cut down to size. They had been either forced to withdraw or brought down to becoming just one more player in their respective foreign underworlds.

Samosval and Yaponchik: empire builders or exiles?

It’s wonderful that the Iron Curtain has gone, but it was a shield for the West. Now we’ve opened the gates and this is very dangerous for the world.

Russian investigator Boris Urov, 1993²⁵

One of the recurring debates about the expansion of European empires in the nineteenth century has been how far one can ascribe imperialism to the Machiavellian strategies of metropolitan governments and how far one should instead look to the self-interest, values, ambitions and interactions of the men on the ground, from soldiers to merchants, who often shaped or simply ignored policy from the centre. So, too, it is essential to realise in this context that what from the outside may look like grand strategy may well in fact be the result of a confluence of intent, chance and personal interest. In November 1993, for example, Solntsevo’s leadership decided that they wanted a representative in Italy, not least because of their existing collaborations with Italian criminals and a sense that it offered a permissive environment for their activities.²⁶ Reportedly Monya Elson, a Russian gangster who had fled New York to Italy, said, ‘Here you can do whatever you want, it is not Europe.’²⁷

The initiative was eventually entrusted to Yury Yesin (‘Yura Samosval’), a senior Solntsevo figure and vor v zakone, but it is hard to know for sure how far this reflected instruction from above or initiative from below. Yesin had been close to Sergei ‘Silvestr’ Timofeyev, the one-time Orekhovo chieftain whose violent ways led to his murder in September 1994, and it was assumed that all the Silvestrovskie, his associates, were targets. In a telephone conversation tapped by the Italian police, one of Yesin’s accomplices said, ‘Even the police say that only after all the Silvestrovskie are killed, will there be peace.’28 This was not an unreasonable belief: fellow Silvestrovets Sergei ‘Boroda’ Kruglov, a man of similar criminal status to Yesin, was also killed alongside Timofeyev. Yesin already had some assets in Italy, he had associates who knew Italy (including an Italian with a Russian wife) and, more to the point, he was looking for a bolthole. The prospect of heading to Italy was ideal, and within a month of Timofeyev’s death, Yesin and his crew were there.

So did Yesin start trying to muscle into existing criminal businesses and generally act as the representative of a colonial power? Not at all: as Varese has demonstrated, if anything, he and his crew went out of their way to keep a low profile. He had sacrificed a considerable degree of authority and influence in Moscow for security and his new role largely consisted of investing in the legal sector, laundering money and sometimes being the link man in wider connections. Most of the money made was spent in Italy and on maintaining the group and their lifestyles. In other words, this was neither a profit centre for Solntsevo as a whole, nor an aggressive operation. Rather, it emerged from the confluence of the network grandees’ desire to have an ‘honorary consul’ in Rome in case of need, and an individual’s desire to leave Moscow to signal that he was not seeking to avenge his former patron, and to put some distance between himself and the war in which Timofeyev had died. Even so, by 1996 Yesin had come to the Italian police’s attention and he was arrested the next year. Although he was eventually released on a technicality relating to the admissibility of wiretap evidence, he was expelled from the country and this little Solntsevo cell was no more.²⁹

A similar pattern is visible in efforts to infiltrate the United States through New York’s Brighton Beach neighbourhood. When crime organisations do manage to expand, they tend not to move physically from their home base but instead establish local offshoots, especially within diaspora and migrant communities. They are a migratory resource, facilitating the inflow of criminals through invitation, work opportunity (real or otherwise) or even marriage (again, real or otherwise). They are a business resource, not least in brokering contacts for the gangsters. The largest concentration of Russians outside post-Soviet Eurasia is in the USA. According to the 2010 American Community Survey, there were then just under three million Americans identifying themselves as of Russian origin, although most are assimilated and speak no Russian. This is a granular diaspora, made up of different waves with their own defining characteristics. If one considers simply foreign-born native Russian speakers in the USA, a steadily growing cohort (up from just over 700,000 in 2000, according to the census, to over 850,000 in 200730), then New York remains a key centre for them, even if the appeal of Brighton Beach, their traditional haven, is becoming less marked than that of Manhattan and other parts of the city.

There are undoubtedly organised crime gangs based within the ethnic Russian communities in the United States. But efforts to turn them into outposts of some global crime empire failed and, as with Yesin’s abortive endeavour, as much as anything else reflected underworld politics back at home. Before 1991, violent organised crime had been a local problem in Brighton Beach, but it was relatively primordial. For the previous two decades, groups had risen and fallen which preyed upon their own community. The ‘Potato Bag Gang’ in the 1970s (which defrauded new immigrants, selling them bags of potatoes they thought were antique gold coins) gave way to groups run by figures such as Yevsei Agron (who favoured using an electric cattle-prod on his enemies), Marat Balagula (who pioneered a shift towards white-collar crimes) and Monya Elson (who built a close working relationship with the New York mafia).³¹

In 1992, though, Russian vor v zakone and Solntsevo associate Vyacheslav ‘Yaponchik’ Ivankov came to New York. A gathering of gangster leaders in Moscow had charged Ivankov with bringing Brighton Beach’s gangs into the fold.³² He duly began asserting his authority in the neighbourhood and also making himself some money on the side. Old school enough not to be afraid of getting his hands dirty, it was perhaps inevitable that he would be caught. In 1995 the FBI arrested him on extortion charges. He served nine years in a US prison before being deported home. Officially, this was to face charges of murdering two Turks in Moscow in 1992, but in practice that case quickly and conveniently collapsed as police witnesses contradicted their statements and said they had never seen him. Ivankov walked free.³³

During his brief reign of terror in so-called ‘Little Odessa’, Ivankov did appear to be in charge and successfully began reconnecting Brighton Beach with some kind of Russian gangster international; FBI and NYPD alike reported a spike in money transfers to and from the Motherland, for example. However, after he was no longer there, these connections were revealed for what they really were: either based on simple pragmatism – each party had something to gain – or else essentially artificial, established and maintained through the expenditure of funds, social capital and coercion, all resources prone to depletion. In effect, ‘Yaponchik’ was paying out of his own pocket to make himself look successful.

But perhaps this should not come as a surprise, as in hindsight his dispatch to New York seems to have been motivated less by a serious belief that he could be some new criminal Columbus finding a new world for the Russians to exploit but rather the answer to a perennially vexing problem: what to do with a warrior when the war is over? Ivankov had been the marshal of the Solntsevo-led struggle against the ‘highlanders’ in Moscow, a mob war he had prosecuted with vigorous savagery. His presence in the capital represented a continued risk to the new status quo. The Chechen and other leaders resented him. Given the importance of the vendetta amongst many ‘highlander’ communities, there was the constant risk that some hothead would try to avenge a relative and in the process destabilise the tense peace. Besides which, the tattooed Gulag veteran was an uncomfortable peacetime comrade for the new generation of avtoritety, one with a dangerously strong reputation especially amongst the more thuggish criminal element. Finding some pretext to get Ivankov out of Moscow for a while, but one which would seem to him like an honour rather than exclusion, became a priority. ‘Little Odessa’ seemed the ideal solution. Once again, then, ‘expansion’ actually meant ‘exile’, a continuation of underworld politics by other means, and proved a fragile and short-lived adventure.

In the 1990s, then, the dramatic accounts of the Russian mafia’s outward expansion, whether wolves in the fold, tentacular predators or viral exploiters of Western weakness, were understandable but overblown. The Russians certainly had strengths, and new, uncontrolled markets beckoned. More to the point, they had reasons to expand their operations abroad, even sometimes when they were not cost effective. Soon enough, though, local providers would move into those markets, local law enforcement would respond to the challenge and, as with all empires, the cost would force retreat. But rather than marking the end of Russian criminal engagement with the world, this simply led to its metamorphosis into new and more effective forms.

From conquistadores to merchant-adventurers

Listen, last time, our gangsters thought they could just bully their way in. This time they will be much smarter.

Russian police official, 201134

The Czech police, Interior Ministry and Security Information Service (BIS) all periodically warn that Russian organised crime represents a serious challenge to the country.³⁵ There are certainly many Russians there – walk through the spa town of Karlovy Vary and you hear more Russian spoken than Czech – as well as Russian money in real estate and business. But actual evidence on the ground of Russian crime since the 1990s is minimal. Instead, it is usually Czech gangsters who are brought to justice, or criminals from the local Vietnamese gangs, which are increasingly responsible for trafficking marijuana and methamphetamines.³⁶ Are the official warnings just a ritual excoriation of a mistrusted former occupier? There certainly seems to be a hint of moral panic about it. Two shootings in 2008, for example, led BIS sources to raise the spectre of a gang war between Russian-speaking groups in Prague. It never happened.

Yet that does not mean that the Russians are not there. Over the 1990s, many were forced out of the country and a number of their operations closed down. They withdrew from much street-level activity (though some Ukrainian gangs still victimise the Ukrainian community in Moravia³⁷). But they maintained contacts, all of which could be built on afresh. Their role in the Czech Republic’s underworld by the 2010s was best summed up by one police officer as ‘the criminals behind the criminals, not controlling them, but selling them everything they need’.³⁸ They have instead concentrated on working as illegal wholesalers, criminal coordinators and underworld investors in businesses of every kind.

After all, even if it does not constitute the merciless and irresistible conspiracy of alarmist myth, there is no doubt that Russian and Russian-linked organised crime can be found across the globe. It is defrauding millions out of the US Medicare and Medicaid programmes, swapping heroin for cocaine with Latin American drug gangs, laundering money around the Mediterranean, selling guns in Africa, trafficking women into the Middle East and raw materials into East Asia, and buying up real estate in Australia. Antarctica appears the only continent – so far – untouched. But the Russians are on the whole not trying to supplant or subjugate local gangs. If anything, the opposite is true. Although there are exceptions, in the main Russian networks do not just coexist with their local counterparts, they actively seek partnerships.

Having failed to force their way into markets against local opposition, the real path to a global presence for the Russians has been serving those markets and meeting real or perceived needs. If the unsuccessful 1990s model was the conquistador, the swaggering and swashbuckling imperialist, then his modern counterpart is the merchant-adventurer. This model demonstrates four main characteristics. First of all, just like Soviet citizens during the 1980s anti-alcohol campaign, the Russians enter the market as providers of commodities for which there is a genuine demand. These could be illicit goods, whether narcotics, counterfeit DVDs and cigarettes for Europe, trafficked women for the Middle East, or cheap, poached or smuggled raw materials for the Chinese market. At least as often, the commodity is expertise. Even back in the 1990s it was the Russians who introduced the New York Cosa Nostra to the heady, white-collar profits from fuel excise scams, and these days 60 per cent of the Russian or Eurasian organised crime operations investigated by the FBI across the USA relate to frauds of one kind of another.39

Second, they are able to fulfil these demands ‘honestly’, in the sense that they are able provide them more easily, cheaply or efficiently than alternative sources, rather than relying on artificial advantages such as the use of violence to drive out the competition or uneconomic subsidies. A classic example is their role providing financial services to the global underworld. Any criminal needs the ability to move and above all launder their profits so that they can use the money they make safely, without law enforcement being able to prove connection to a crime. The Russians have been able to develop a wide range of laundries, often through their own financial system, but also by exploiting less scrupulous or demanding jurisdictions abroad. Typically, the money is first ‘prewashed’ within the former Soviet region, such as through Ukraine or Moldova, knowing that, while this does not provide particular respectability, it does at least add an extra layer of legal and technical complexity for police investigators or diligent bank officers seeking to identify the source of the funds. Then it will move through countries such as Cyprus, Israel and Latvia, where the Russians have established relationships and front companies, before moving on to increasingly highly regarded jurisdictions, not least the City of London, in order to ‘wash’ it thoroughly.

Having established these laundries, though, and embedded themselves in the financial systems of other countries, the Russians have assiduously marketed them to other criminals. A particular example is the Bank of New York (BNY) case, part of the international laundering ring broken by the Italian-led Operation Spiderweb investigation in 2002, originally hunting Sicilian mafia funds.40 Via a ring organised by two Russian émigrés, BNY was used to launder $7 billion coming out of and through Moscow from a variety of sources: corrupt Russian officials, businesses looking to evade tax and currency transfer controls, Solntsevo and even foreign gangs such as the Sicilians. The BNY case was a massive operation, but hardly unique except in scale,⁴¹ and epitomises the way the Russians create criminal service industries and then offer them to wider circles of clients, winning business by being relatively cheap, efficient and secure.

Third, the Russians are willing to deal with other criminals of near enough any type, ethnicity or structure. It is an irony that gangsters from a society in which racist, even xenophobic, attitudes are still quite common are the new internationalists, eager to cut deals with anyone and happy to recruit not just agents but partners outside their community. A genuine credit card fraud case helps illustrate the extent to which Russians have seamlessly integrated themselves into multinational enterprises. A Vietnamese shopkeeper in California would covertly duplicate a customer’s credit card information, which was then transmitted to Chinese criminals in Hong Kong and thence to Malaysia. There the data was embossed onto false credit cards. These were couriered by air to Milan, where Neapolitan gangsters from the Camorra sold them to a Russian group in the Czech Republic. The cards were flown to Prague and distributed to agents who fanned out to the major cities of Europe where they almost – but not quite – maxed out their cards buying luxury goods. These goods were then flown back to Moscow for sale in retail outlets.⁴² What could be a better example of today’s global supply chains?

A final characteristic is a particularly sharp awareness of the underworld and upperworld political contexts in which they operate. Their ability to prosper at home has, after all, been dependent upon these skills. Arguably, the failure of the first wave of overseas expansion was often precisely because the Russians did not adequately consider the bigger picture of how their intrusions into other countries would play with their rivals on the street and with the authorities. As a result, the Russian gangs abroad now tend to avoid overt displays of their criminal status, hiding behind indigenous allies, anonymous front corporations and legitimate Russian expat and business communities. They are also especially prone to seek to woo and buy local protectors within the political community.

This model reflects the mix of pressures, opportunities and resources at the Russians’ disposal. Perhaps their greatest asset is Russia itself. Its underworld is a rich, diverse and dynamic source of goods and services of every kind, as is its often-compromised financial system. Furthermore, Russia’s institutions often work to the criminals’ advantage. The constitution’s Article 61 explicitly bans the extradition of Russian citizens, offering a haven to such internationally wanted figures as the aforementioned Semyon Mogilevich. The close intertwining of business, crime, politics and the security apparatus also means that the gangsters can often rely on access to official resources, and even advance warning of foreign investigations. Beyond this, the Russian diaspora, while not a suitable foundation for empire building, does provide a convenient array of contacts and representatives; they work best for the criminals when thought of as bridges rather than bases.

Even small concentrations can prove important. The arrival of Russian tourists, retirees and sun worshippers on the coast of Spain since 1994, for example, has led to local gang outposts forming, largely in Valencia and on the Costa del Sol and the Costa Brava.43 Here they established large-scale money-laundering operations, on the back of running tourism and real estate ventures, blending legitimate business – as, after all, many Russians want to travel to Spain and even buy property – with the illicit. Initially largely in the hands of individual criminal-entrepreneurs, these operations became dominated by the Tambovskaya or its former rival, the Malyshevskaya gang, essentially because the greatest profits were to be earned by working to launder funds for these bigger players. In other words, the initiative to join the network came at least as much from the Spanish-based entrepreneurs as from the centre, often following social contacts with network members holidaying in or retiring to Spain. A very similar pattern obtains in Cyprus, where Russian tourists and Russian business have established a safe and welcoming haven for Russian crime, especially money laundering.⁴⁴

A tale of two underworlds

The Russians we actually arrest here tend to be pretty unimpressive: pimps, smugglers, shoplifters. I don’t see this ‘Russian mafia’, honestly.

British police officer, 201545

This should not suggest that every Russian or Eurasian gangster expat is a smooth-operating criminal service provider. While within Russia itself there has often been a confluence of ‘blue collar’ and ‘white collar’ organised crime structures – tattooed vory and suited avtoritety alike – outside, there is a sharper differentiation between the two. The networks of the avtoritety connect with a wide range of criminal markets and counterparts, but will typically do so behind the scenes, interacting with their clients; these are not strategic alliances so much as the workings of the global marketplace.

There are Russian and Eurasian gangs involved in direct, street-level criminal activity, but these tend to be rather different. Many have little to do with Russia today. Often when the police or the press talk of ‘Russian organised crime’ in the West, they are actually talking about Georgians, Armenians and the like, who are disproportionately involved in the street-level activities of post-Soviet crime abroad. Indeed, these groups are also increasingly multi-ethnic – Russian-speaking more than simply Russian, if even that – and in the process less distinctively ‘Russian’ in organisation and modus operandi. For example, in the United States the cases worked by the FBI’s Eurasian task forces are increasingly multi-ethnic ventures. In states such as Florida and California, Armenians are as commonly encountered in these organisations as Russians. The California-based Armenian Power grouping, for example, was at the heart of Operation Power Outage, which led to the indictment of 102 people in 2011 on a range of charges largely relating to multimillion-dollar frauds. While the detainees from Los Angeles, Miami and Denver were predominantly Armenians, they included Russians, Georgians and Anglo-Saxons – and they were also linked to Mexican gangs.⁴⁶ The use of Russian as a lingua franca for these gangs is declining and increasingly they speak English within their own ranks or in their negotiations with others. Ethnic and gang solidarity, once regarded as a key strength of the Russian gangs, is a thing of the past, with members as willing as any other criminals to cut a deal with the authorities in their own interests.⁴⁷

These groups in the USA have especially acquired a reputation for complex and lucrative frauds of private and government medical insurance schemes. Overall, by 2011, an estimated $60–90 billion was being stolen a year from the Medicare and Medicaid budgets.48 Russian and Eurasian gangs appear to be the largest players in this business, but even so they do not account for an absolute majority of losses. In 2010, the Armenian Mirzoyan–Terdjanian Organisation was charged with stealing $100 million from Medicare, for example.⁴⁹ Breaking the records, though, was a Ukrainian and Russian operation in Brighton Beach that involved nine clinics and allegedly conspired to defraud private medical insurance companies of $279 million over five years, until it was broken in 2012.⁵⁰ Both cases were largely proven in the courts, and their masterminds received sentences of three and twenty-five years in prison, respectively.

If the networks of high-level kingpins (often still connected with Russia) and the low-level émigré gangs represent two separate strands, they nonetheless still sometimes connect. The latter often rely on surviving vory v zakone and avtoritety to provide them with the credibility, connections and even protection they might otherwise lack. The Mirzoyan–Terdjanian Organisation, for example, was under the protection of Armen Kazarian (‘Pzo’), an Armenian-born vor.⁵¹ Likewise, according to the authorities, an illegal gambling and money-laundering ring uncovered in New York in 2013 paid semi-retired vor v zakone Alimzhan ‘Taivanchik’ Tokhtakhounov $10 million simply for the right to use his name to reassure potential partners of their bona fides and scare off predators.⁵² Europol has also noted the presence of such ‘so-called retired leaders who do not seem to be anymore directly linked to a criminal organisation but in fact still exercise control and influence over its activities both in the EU and in the Russian Federation’.⁵³

‘Pax Mafiosa’ or global economy?

One day, two guys are trying to kill each other, and the next day they are doing a dope deal together.

US Drug Enforcement Agency officer, on the Russians⁵⁴

Claire Sterling, in her book Crime Without Frontiers, suggested that the world was being carved up by a global consortium of crime groups in a ‘Pax Mafiosa’.⁵⁵ Likewise, former US Secretary of State John Kerry wrote in 1997 of a ‘global criminal axis’ composed of the ‘Big Five’ (Italian, Russian, Chinese, Japanese and Colombian organised crime) in league with a host of lesser powers, from Nigerians to Poles.56 This certainly sounds fun, conjuring images of the SPECTRE organisation in James Bond films, of shadowy lords of the underworld meeting around a polished mahogany table, ideally in an extinct volcano. Sadly, or fortunately, it is far from the truth. Instead of some global criminal condominium, in the real world we see a global criminal marketplace. The very difficulty of expansion into new territories means that there is little incentive for major criminal combines to compete on anything but a local and specific level; at worst, they simply do not interact. Given that ‘Russian organised crime’ is no more monolithic than any other variety, particular local conflicts need not and generally do not interfere with other opportunities for mutually beneficial business.

Italian-based gangs were probably the first to actively reach out to their Russian counterparts in the early 1990s, seeing new scope for trading goods and favours and, in particular, the chance to launder money through a chaotic, uncontrolled and criminalised banking system. Originally this just involved the Sicilian mafia but soon they were joined by the Calabrian ’Ndrangheta, the Neapolitan Camorra and the Apulian Sacra Corona Unita. Since then, other particular partners have been the Chinese in the Russian Far East and Latin American drug gangs (from whom the Russians buy cocaine or swap it for heroin).⁵⁷

However, this process works both ways and the very characteristics which make Russia such a congenial breeding ground for its own criminals have also sometimes made it appealing to foreign gangs. As discussed in chapter 9, in the Russian Far East, the imbalance of power between Russian and Chinese crime – in many ways a by-product of their respective economies – is increasingly evident. While the former still have considerable street muscle as well as corrupt links with local authorities and law enforcers, their main asset is increasingly as the local agents and representatives of the Chinese gangs or dealers in the goods they seek or can offer, something only exacerbated in the post-2008 economic slowdown.

One particular bone of potential contention as of writing is the new Ussuri Bay casino–tourism resort outside Vladivostok. Intended to tap into the massive Pacific Rim gambling industry (worth $34.3 billion in 2010 and continuing to grow⁵⁸), Ussuri Bay is explicitly being developed to compete with Macao, currently the highest-volume gambling resort in the world. (It is also worth noting that any attempt by Russian gangs to muscle into Macao are fiercely beaten back by the Triads, who dominate the city’s underworld.59) This development has divided the Chinese themselves; those gangs – primarily mainland ones – with existing connections in Russia hope to benefit, while the expatriate Triads who see instead a threat to their Macao revenues are unenthused. It remains to be seen whether these tensions lead to conflict and whether that spills into Russia.

The Chinese case is, however, the exception; in the main foreign gangs do not seek directly to intrude onto the turfs of local Russian ones. For example, Russo-Japanese gang connections are strong and evolving, with the former providing a range of criminal goods and services for their yakuza counterparts, even though this has also been affected by the state of the world economy. As well as prostitutes and methamphetamines, for example, the Russians sell the yakuza stolen cars. According to the Japanese National Police Agency, at their peak Russian gangs shipped 63,000 stolen cars to Japan in a year.⁶⁰ However, with money being tighter in Russia since 2008 and yet luxury cars still being in demand, there has since arisen a reverse flow of new Japanese vehicles being stolen for smuggling into Vladivostok. Meanwhile, yakuza money has drifted strategically into businesses in Russia that they think would be profitable and useful. In particular, this has meant local financial institutions and companies involved in shipping (invaluable for smuggling), fishing (both for illegal fishing and also smuggling) and gambling (especially useful as money laundries).

More generally, as already discussed, Russia’s still undercontrolled ports, airports and land routes make it a favoured hub for smugglers. As well as the Afghan heroin Northern Route, Russia accounts for a share of Latin American cocaine smuggling, especially as the European market becomes more important, as well as both a source and turntable for synthetic drugs. Likewise, Russia is an important route for people traffickers and smugglers, especially those operating from China. These criminals, usually linked to but not part of the mainland or Triad gangs, work through both indigenous gangs and representatives in local ethnic Chinese communities. In Moscow, for example, they largely work with Russians, because they have better contacts with local law enforcement and a lower profile. At the same time, they increasingly also use contacts in the city’s ethnic Chinese community, to meet and safehouse illegal migrants before delivering them to airports or railway stations for the next stage of their travels. In short, the globalisation of the underworld has also forced the Russians to begin to share their own markets with competitors and partners from around the world.

Truly exploring the extent and forms of Russian and Russian-based criminal operations in the rest of the world, and their cooperation with other underworld players, could take up a book in its own right. Nonetheless, what is clear is that this is not a story of conquest. In 2000, journalist Robert Friedman excitedly claimed that ‘the mob dominates Russia and Eastern Europe in a bear hug. It is also turning Western Europe into its financial satrapy’ and went on to quote an FBI source as saying, ‘In a few years . . . the Russian mob will be bigger than La Cosa Nostra in America. And perhaps GE, and Microsoft, too.’61 Instead, what has happened is that global capitalism has embraced the Russian underworld in its ‘bear hug’. The logics of market penetration, of competitive advantage and of joint ventures have shaped this post-modern criminal expansion. There were few profitable niches up for grabs within local underworlds, but the Russians discovered new ones in the global criminal service market, providing funds, services and goods for national gangs. However much the Medicare fraudsters of the USA may make, their profits pale into insignificance compared with the estimated $13 billion a year the Russian Northern Route for Afghan heroin is worth, for example,⁶² or the counterfeit and untaxed cigarette trade. As one Russian police officer put it, with every appearance of pride, ‘our vory are the best capitalists in the world’.⁶³