Revisiting and Revising Organized Crime
This is a book about organized crime. It includes discussion and analysis of organizing for criminal purposes, the collective commission of criminal activities, and organized concealment of criminal activities. Relevant ideas are drawn from scholars and practitioners, including the author’s professional experience. A key notion is that organizing for profit, gain, and power is not unusual; however, organizing for these ends outside of the rule of law is something extraordinary.
Please observe that within this work product, there are several related uses of the core concept of organized crime:
1. Organized crime (OC) means unlawful activities comprising crimes within the jurisdiction.
2. Organized economic crime means unlawful activities inclusive of crimes and predicate acts that could be considered criminal (e.g., whether resulting in civil or administrative charges brought by regulators such as the U.S. Securities and Exchange Commission).
3. Transnational organized crime (TOC) is a fairly recently developed phrase applied to cooperative ventures or associations, in fact among organized crime groups operating cross-border.
4. Transnational organized economic crime is a modification of TOC to include potentially unlawful activities that are generally not investigated and prosecuted as crimes (e.g., use of tax havens and secrecy jurisdictions to avoid taxes).
5. OC groups, whether restricted to collective criminal activity or expanded to collective, potentially unlawful activity.
There is a wide gulf between the land of organized crime (e.g., traditional organized crime as committed by the New York City five mafia crime families in the mid- to late-20th century) and the land of organized economic crime (e.g., bankers behaving badly, whether “mis-selling” securities and investments, wrongfully foreclosing on mortgages with defective chains of legal title, creating bogus customer accounts to meet sales targets and secure employment and bonuses). The traditional organized crime group (e.g., the Gambino crime family) is conceived as a primarily illicit collective exercise, whereas the organized economic crime group (e.g., Enron, WorldCom, Wirecard), when discussed seriously at all, is conceived as a secondarily illicit collective exercise—a hybrid. This overestimates the immorality of traditional organized crime and underestimates the amorality of organized economic crime.
Some key concepts developed in this work product include the materially misleading theory of organized crime as akin to Fortune 500 companies; the materially misleading theory of organized crime as an existential threat; the materially misleading theory of organized crime as independent of the political economy at large (including the creation of a large reserve army of the desperately un- and under-employed); and the materially misleading theory of ethnicity as a precondition to participating in any given illicit collective. In brief, organized crime is to be expected under conditions of widespread precariousness in the political economy, especially where the rule of law is changeable, whether in design or implementation, based on narrow interpretations of bribery (e.g., excluding political contributions) and honest services (e.g., excluding the prosecution of official dishonesty not resulting in bribes or kickbacks).
By way of example (and there are indeed too many to catalogue and describe), the UK’s Serious Fraud Office charged two high level executives of accounting irregularities (i.e., criminal fraud) with respect to reporting profits under a contract with the UK government. While the executives were charged criminally, the corporate employer received a deferred prosecution agreement (a voluntary settlement not accompanied by a criminal conviction) (Tokar 2020a). This set of conduct is as much organized economic crime as it is white collar crime, but it would rarely be discussed and analyzed publicly as a criminal event at its core indicative of an organized criminal enterprise. In many cases and in many material respects, the conduct of legitimate enterprises are, absent the violence and extortion, functionally equivalent to traditional organized crime, except the different treatment afforded the offenders by the criminal justice system.
Traditional organized crime is interpreted as crude and characterized by the willingness to use brute force, whereas white collar crime is interpreted as comparatively sophisticated and characterized as tricksters in business attire bamboozling victims.
Moreover, any organized crime capacity sufficient to threaten the viability of a state would sooner co-opt it than consolidate it. Maintaining the legitimacy of the state is too important to risk commingling with organized crime, both from the perspective of organized crime leadership and the corrupted leadership of the state. Better to perpetuate a kabuki theater illusion of conflicting organizations, preserving both the alienating otherness of organized crime and the law and order regime of the state. Fundamentally, if organized crime could challenge the survivability of the state, it would indistinguishably and without differentiation become the state. Thus, if the state were to imperceptibly morph into an organized crime-like structure and operations, its residents, analysts, and scholars would likely be none the wiser.
There are two types (not mutually exclusive) of enterprises: (1) those that are supported by the threat of licit violence such as lawfully established entities that may invoke the rule of law (e.g., state or police action) to coerce counterparties, including employees, to do what they may not want to do otherwise (e.g., disbursing payments under contracts or other legal authority); (2) those that are supported by the threat of illicit violence such as organized economic crime groups that may resort to extortion or actual infliction of bodily injury to coerce counterparties, including their own associates, to do what they may not want to do otherwise. The former enterprises have the backing, explicit and implicit, of the state responsible for making and enforcing rules of law and possessing a monopoly on the use of lawful force, and the latter enterprises operate extralegally, without resort to the panoply of legal protections afforded to parties under routine contracts and other arrangements formally invoked within the given jurisdiction and political economy.
The lawful enterprise is normal, and the unlawful enterprise creates its own exceptions within or exclusions from the operation of law. Legitimate enterprises rely on the rule of law as their explicit and immediate control mechanism (e.g., how they protect the proper disposition of assets, enforce contractual rights and obligations); organized crime groups rely on the use or threat of use of force as their implicit control mechanism (e.g., extortion, murder, assault). Both forms of enterprise reserve coercive power to accomplish their objectives. Brute force hides in the background of legitimate enterprises, but it may be front-and-center for organized crime groups. Legitimate enterprises use force or threats of force lawfully under ordinary circumstances; organized crime groups use force or threats of force unlawfully routinely. Official power legitimizes the ordinary commercial enterprise under rules of law; it makes a pariah of organized crime groups with coercive and violent power.
The usefulness of approaching organized crime under an enterprise theory is the severity of punishment under the U.S. rules of law. Conceivably, punishment is directly correlated to risk of harm to society.
An enterprise may be three or more individuals working under a hierarchy of command-and-control for the purpose of engaging in, among other wrongful conduct, racketeering activity. U.S. law found in Title 18 U.S.C. Section 1951 et seq. (as amended 2001) proscribes racketeering and racketeer-influenced and corrupt organizations under chapters 95 and 96, respectively. Under U.S. law, there is a broad range of federal and state crimes comprising racketeering activities, subjecting the convicted to potential life imprisonment, with civil remedies available to private litigants under a private right of action.
Theoretically, the punitive regime imposed on organized crime enterprises is intended to meet the threat imposed by such dangerous organizations. However, one may fairly question whether this threat has been inflated beyond the evidence and data accumulated to support the imposition of aggressive and debilitating state law enforcement action.
Interpreting organized crime as a threat to be approached as a dangerous enterprise (i.e., traditional mafia American-style derived from old mafia Sicilian-style) is the fundamental premise of the punitive regime and forms the basis of conclusions from the legal theories and factual concepts. If the analyst and researcher were to take this perspective too seriously, he or she would imagine global enterprises approaching the breadth and depth of influence on society of the largest global corporations. This equivalency is not observed in the world of experience and practice. Criminal networks cannot be operated like ExxonMobil. After all, legitimate enterprises file tax returns, advertise, hire and fire without resort to violence, and so on. Organized crime groups are largely opaque. The market capitalization of ExxonMobil may be transparently calculated on any given day. The pernicious effects of organized crime groups are not so clearly proven.
While it seems indisputable that command-and-control exists in the legitimate sphere of the political economy, merely taking orders under threat of violent reprisal as would be done in traditional organized crime groups is not sufficient reason to apply this fact-pattern to regional, national, international, and global cooperatives of individuals seeking profit, gain, and power outside the law (or via corruption of law-makers and law enforcement). That is, the act of taking orders does not establish command-and-control under a form of hierarchy and does not make ExxonMobil equivalent to the Gambino crime family.
However, the rule of law is an essential condition for the establishment of organized crime and its transient and semi-permanent groupings. Without prohibition of the conduct under rule of law, there is no organized crime; without official sanctioning via state-determined unlawfulness, an ill-behaving high managerial agent under the authority of a legal fiction (e.g., corporation) may be characterized by outsiders as exhibiting the attribute of organizational deviance (e.g., lack of ethics resulting in social harm but corporate and agent benefit) but not by insiders, regulators, and law enforcement agencies (i.e., his or her deviant but legal actions could be supported by peers and supervisors under the protections of the legal fiction) (Lesieur 1979, 96). (Cf. Knowingly selling overpriced investment products to vulnerable, unwitting purchasers—this conduct may be highly rewarded by the legal fiction but financially disastrous to the counterparty; it may not be deemed organized crime in the United States.)
Thus, there is a difference between a potential group of white collar criminal actors working collectively in a legitimate enterprise and organized economic crime groups operating without the cover of legitimacy provided by listing in the New York Stock Exchange. One may fairly question who harms society more—the loan shark collecting gambling debts or the financial services agent foreclosing on a mortgage without validly establishing legal chain of title, for example.
Organized criminals need to exploit vulnerabilities in the rule of law. Thus, they need to think like clever lawyers to avoid detection, prosecution, and incarceration. Generally, the rule of law is exploited through three primary mechanisms:
1. The design of the law itself contains what are commonly described as loopholes, for example, the law does not effectively cover the transactions, principals, and agents. Techniques such as the use of shell or front companies and offshore finance may render the parties immune from the reach of the particular law. Moreover, the law may allow secrecy such that beneficial owners of the asset and beneficiaries of the transaction are legally hidden and remote from law enforcement and regulatory authorities. Also, culpable states of mind (mens rea) may be built into the criminal law, making prosecution of certain offenses difficult to prove (e.g., those demanding specific intent to violate the law such as willfulness, which requires proofs that the suspected person knew he or she would violate the law in committing the conduct at issue). Contrast this design attribute with strict liability, under which a person may be convicted if the proofs demonstrate beyond a reasonable doubt that the person committed the criminal act; his or her state of mind is primarily irrelevant.
2. The law may not be applied aggressively in practice. Of particular mention is the protective and covert concept of prosecutorial discretion under which public prosecutors determine exclusively that which is subject to criminal sanctions (e.g., the use of leniency such as deferred and non-prosecution agreements may further limit the effectiveness of the rule of law as a deterrent against organized economic crime). Prosecutions may be aborted at other steps in the criminal process as well, for example, the presenting prosecuting attorney at a grand jury primarily controls the evidence that the jury hears—a gatekeeping function that may be perverted and unchecked by an independent and impartial authority.
3. The lack of appropriate and timely feedback mechanisms in the law specifically and society generally (e.g., the use of freedom of information statutes to obtain relevant data and evidence about the implementation of the criminal laws may be ineffective or absent). Transparency inherently conflicts with proprietary financial interests in many cases such that the owner/controller of assets and beneficiary of profits, gains, and other revenue streams may lawfully remain beyond question and challenge. His or her remoteness from transparency may indeed lead to a condition of lawful bliss. Moreover, the public at large may be materially uninformed of the criminogenic environment, especially where some organized economic crime is highly visible in the society such as the Madoff criminal enterprise and other organized economic crime is virtually invisible (e.g., unethical and corrupt practices engaged in by financial institutions in peddling overpriced securities stuffed with too many unpayable loans evident before, during, and after the great financial crisis 2007). A public diverted is a public unable to prioritize properly.
To be truly effective in support of the public interest, the rule of law needs to be just in design, just in implementation, and just in remediation. These conditions would demand much integrity, transparency, and accountability not only from the legislative, executive, and judicial branches in relation to one another (i.e., internally), but also require significant independent capacity on the part of the governed (i.e., the public at large) to rein in and adjust errant state apparatuses. This totality of circumstances is an ideal and not a realized attribute of many, if not most, societies. A viable independent check on performance would seem a wonderful preventive and detective control on abuse and corruption of power.
Thus, gaslighting the public at large, scholars, and even criminal investigators and public prosecutors about the severity and persistence of organized (economic) crime groups based on (limited) data disclosed to the public or otherwise available through freedom of information and related transparency schemes is undoubtedly practiced to an indeterminable extent. Crime officially recognized may be dwarfed by actual levels of crime. Also, crime rates may be inflated or misleadingly presented to divert public attention from root causes of dysfunction.
The accuracy, completeness, and timeliness of the data and evidence available under the rules of law as a potential check on regulators, law enforcement agencies, and organized criminals alike is a vulnerability that may best be approached through abduction, that is, the development of educated theories and concepts not entirely dependent on inductive and deductive reasoning methods, which are vulnerable to lack of data and implicit biases, respectively. The analyst and researcher should make educated guesses to some extent based on the actual conditions of society (e.g., a plutocracy demands a different form of accountability than a democracy due to the unevenness in the distribution of power). Uncritical acceptance of preexisting paradigms, conceptual frameworks, and misleading data and evidence is not adequate.
The discussion and analysis of organized crime groups follows theory and concepts developed from official actions and reports (e.g., criminal investigations, public prosecutions) based on the state’s prohibition of defined conspiratorial or entrepreneurial activities. Whether these theories and concepts hardened into rules of law are too broad or too narrow form the initial research issues motivating the preparation of this book. Scholars and analysts developing their work products under the peer-review systems generally relied upon by public officials, the academy, and private sector influencers in think tanks strive for new knowledge, but what is novel about individuals cooperating to obtain profit, gain, and power extralegally; what is novel about corruption, whether at the political, bureaucratic, or commercial levels? Sometimes, the questions are more valuable than the commonly accepted answers. Also, what if the wrong questions are asked; who benefits?
For example, organized crime is theorized and conceived as a market-based activity, that is, black and gray market participants cooperate, collude, conspire, and/or form enterprises for financial gains and political influence (cf. Lobbying). Thus, organized crime seems market-based via its participation in transactions albeit illicit somewhere in the supply and value chains. Organized crime is economic and ranges from entirely corrupt (e.g., drug cartels) to partially corrupt (e.g., legitimate business enterprises collectively behaving badly such as Enron). Traditional thought and accepted knowledge posit organized crime as market-focused (Mills, Skodbo, and Blyth 2013, 13). This may be due to an overemphasis on that which is overt and primarily measurable (e.g., punishable criminal activities like human trafficking and child pornography) versus that which is covert and primarily unobserved (e.g., implicit desires to obtain good and services more or less prohibited by rule of law under the applicable legal regime).
Linking organized economic crime to corruption, which may be conceived as collective social action that fails the tests of integrity, ethics, and often the rule of law is more useful. The market is a venue, virtual and physical, within which to transact corruptly.
Consistent with the U.S.-based (American-style) five families’ conception of mafia and organized crime, the illicit enterprise is in effect an entity led top-down in a strictly enforced hierarchy of decision making and approved action. Organized crime is thus like legitimate commercial enterprises except the reporting entity is covert and supported by unlawful actions. The conception of organized crime as an attribute of society and a complement to the rule of law is underappreciated.
All societies within the modern global economy are vulnerable to organized crime risk, which results from the hazardous alignment of financial and political interests. These interests are mutually supportive to extract profit and maximize political power notwithstanding the rule of law. In fact, the rule of law squelches the competition unable to form the necessary matrix of facilitators (e.g., lawyers, accountants, bankers, politicians). The risk of organized crime to a particular society is coextensive with the ability of individuals to form relationships insulated from attack originating inside and outside of the law. Moreover, the smart lawbreaker limits his or her exposure such that, if caught, this type of lawbreaker would assert that the conduct comprising the illegality was neither willful nor criminal, notwithstanding the financial benefits accruing to the lawbreaker and harms borne by society (e.g., bankers and the 2008 financial crisis). Thus, the organized wrongdoer avoids the stigma of criminalization, becoming untouchable in the eyes of the criminal justice system (Woodiwiss 2015a, 122). This pattern is important to appreciate, as failure to do so results in gross underestimation of the influence of organized economic crime. It’s not just the Gambinos.
Conduct such as price fixing, bid rigging, market manipulation, the exercise of corruption of the public sector, including the executive, legislative, and judicial branches, is not distinct in kind from actions such as extortion, offering illegal gambling, and prostitution opportunities, and drug, firearm, and human trafficking. Generally, they are corrupt. To obtain a significant measure of success and persistence, these bad actions are contingent upon an alignment of interests along the supply (e.g., manufacture of firearms and drugs), value (e.g., logistics of distribution), and return on investment (e.g., placement and integration of funds) chains and schemes. Thus, the attribute of organized crime is a composite or matrix of horizontal and vertical extension—not an organized hierarchical and command-and-control unit like the Gambino crime family.
Knowledge about organized crime cannot rest on traditional theories and conception as these do not adequately probe into the darkness of the human psyche situated in the attendant circumstances of the given political economy. Moreover, the darkness is expanded, contracted, and otherwise mediated by the political economy in place: systems that commoditize and monetize much of human activity (e.g., neoliberalism as practiced in the United States) inherently create incentives to traffic in goods and services by prioritizing market activities and transactions, that is, things, services, and influences become available for sale and purchase. Organized crime is political and economic in effect, but its causes and consequences are contingent upon the political economy in place—specifically, what is available for sale and purchase and by whom (cf. The solicitation of financial resources from loan sharks versus the preparation of a loan application to a licensed bank; moreover, what if one cannot obtain a bank loan for whatever reason, even to purchase necessities such as medical care?)
Analogously, consideration may be given to the incidence of specific infectious bodily diseases and the resulting morbidity and their relationship to the locale in which the infected is situated. Organized crime is in an important sense a public health problem solvable only through collective action. However, organized crime’s adverse effects on public health are often only incidentally addressed, notwithstanding its role in undermining the rule of law (e.g., making bribery a viable pathway toward favorable official and commercial decision making) and threatening the proper regulation of goods and services (e.g., providing counterfeit items, including pharmaceuticals, that may be ineffective or worse) (Reynolds and McKee 2010, 2). The prevalence and persistence of organized economic crime as a species of corruption degrade the public at large.
Political economies that de-prioritize public goods and health may be deemed more at risk from social diseases like organized (economic) crime in a way similar to their vulnerability to infectious bodily diseases (cf. U.S. morbidity rates from COVID-19 well in excess of the remainder of the world, (Williams [Thomas Chatterton] 2020, 7)). Organized crime as a social disease may be more frequent in occurrence and more severe in influence due to the attendant circumstances in the given political economy, inclusive of the commitment to public goods and lack of commitment to providing necessary resources for public services.
Organized crime facilitates access that would otherwise be unaffordable or unattainable. This may be in the form of entrée into political influence (e.g., bribes and kickbacks) or procurement of goods or services not readily available to the purchaser (e.g., drugs, firearms, child pornography). Telescopically, organized crime creates an expanded supermarket or mall of illicit items. Microscopically, it is composed of individuals ranging from bullying thugs willing to engage in violence and threats to persons in suits masquerading as legitimate power brokers and protectors of financial and other property interests. In brief, explicit knowledge of organized economic crime (i.e., the control mechanisms in play in the upperworld) is dwarfed by implicit activities, agreements, and relationships opaquely underneath the surface (i.e., the control mechanisms at work within the underworld). There are no boardroom minutes of organized economic crime strategies and tactics.
Additionally, new knowledge and the required skills to use and further this knowledge may require the suspension of belief in the common theories used to describe crime generally and organized economic crime specifically. Constructs such as crime as individual choice, crime as exploitation of the opportunities presented in the situation at hand, and crime as routine activity learned and normalized within the criminals’ milieu are useful in many respects, though these constructs are not properly theories but analytical perspectives (Levi 2010, 353). That is, they do not so much explain why criminal activity occurs as much as how it occurs. They are concepts useful to analyze the criminal activities, targets, guardians, and offenders, breaking down the criminal event into its constituent parts. Logically, they lead to either an infinite regression (i.e., if Y causes Z, what causes Y, and so on?) or adherence to a categorical and core belief in the free will of individuals. Both of these perspectives are problematic. These schemes of interpretation may erroneously compress chaotic and random activity into complex and orderly activity, that is, they may be beautiful but wrong. In fact, the development, persistence, growth, and declines of organized crime are attributable to a dynamics not fully understood and contingent upon the attendant circumstances, which are not stationary, in which individuals find themselves.
It’s not the method (e.g., regression analysis) that’s unsound; rather, deep, broad, comparative, valid, reliable, and timely data are lacking.
Decisions are founded on individual preferences, which are grounded in their perceived opportunities. The thinking process is both rational and irrational, transparent and opaque, and embarking and continuing on a career in organized criminal activity is a push and pull from preceding and expected factual circumstances mediated by the individual’s reasoning and imaginative capacities. These vary from individual to individual. Moreover, they are not fixed categories but are formed and refined as the individual ages. Crime, especially the organized form, is not merely a matter of individual decision making but a composite of the individual’s perception of items available on the menu of alternatives.
Other things being equal, organization is a beneficial capacity of individuals. Language is used to facilitate cooperation among groups of individuals more or less united in accomplishing their goals and objectives. Criminal conduct is that which is excluded from the domain of lawful protection and included within the domain of conduct formally deserving of potential sanctions: the criminal assumes the risk of lawful punishment normally imposed through the judicial system. Theoretically and conceptually, the existence and persistence of organized crime groups— locally, regionally, and internationally—should not be surprising as the rule of law imposes its own set of obstacles and impairments differentially within the given political economy. For example, not every individual can obtain an adequacy of financial resources through application to the local bank; some perceive the need for loan-sharks, whether due to bad credit histories, unexpected emergencies, and so on.
Briefly, direct and indirect participation in organized economic crime groups, whether as a complicit associate, facilitating professional, or vulnerable customer, may not comprise the dominant form of relationships among individuals in a given political economy, but it is surely not rare in the sense of being unheard of. Organized criminals are not common, but they are not consistently and awfully deviant as a subgroup within society at large. For example, criminal activities may comprise a fairly small proportion of the individual’s complete set of actions (which may explain why neighbors and unwitting facilitators may have opinions of the character, if not reputation, of organized economic criminals different from the victims).
It should not be assumed that there is anything like an organization of mobs on a wide or even national scale under the direction of “super criminals” so dear to the minds of a gullible public nourished since childhood on flamboyant film and fiction.
—(Maurer 1940, 167)
While that idea was directed toward interpretation of frauds and swindles in the first part of the 20th-century United States, it applies still to interpretation of organized economic crime American-style long discussed and analyzed under the official and public prosecutors’ vision of arch masterminds pre—Al Capone to post—John Gotti centrally directing and controlling vast networks of coordinated criminal activities performed as members in unincorporated criminal associations like the traditional NYC five families. An intriguing story and the stuff of even better Hollywood films, but augmented by imaginative inferences not grounded in convincing evidence. That center cannot hold, and narratives supportive of some tough-on-crime individuals’ careers need critical re-examination. The bias is formidable.
In brief, a more accurate, albeit incomplete, discussion, and analysis of organized economic crime groups should focus on theories and concepts derived from analysis of large sets of loose networks and not tight, rigorously hierarchical organizations (Levi 2016, 401). Of course, the absence of a singular bogeyman or even covert small-numbered cabal that directs and controls serious criminal activity locally, regionally, nationally, and internationally creates its own problems, including an inability to explain and script organized crime groups as something more intriguing than the American mafia’s five families and as something perhaps not entirely remediable by existing law enforcement tools and techniques. The source’s head cannot be decapitated in such a decentralized environment. In fact, the primary earners in this loose matrix are entirely replaceable. Dispensability of leadership is an attribute supporting horizontal growth among individuals, with less dependence on wisdom from above.
However, even networks of organized crime, while not rigidly hierarchical with top-down authority effective across varied geographies globally, need to have strong local support to maintain freedom from police action and efficiency of operations (Lars and Larsson 2011, 531). Thus, in lieu of a figurative normal pyramid representing narrowly circumscribed top-down authority and power like the traditionally conceived Sicilian and American mafias, the more accurate representation would be funnel-like, with the narrow bottom representing local authority and power that expands upward throughout the network. A corrupt network conceived as a set of interlocking industries is significantly more potent and persistent than a large, rigidly operated illicit enterprise or corporation.
It is the transactional nature of organized economic criminal activity that contributes to its persistence in time and diversification across jurisdictions globally. The attributes of high-tech (i.e., computer-based information and communications technologies) and digital currency (e.g., financial flows of e-money) empower individuals to pursue profit, gain, and influence outside the norm. Barriers to entry are reduced, and ivy league university degrees are not required.
Appreciation of the reality that valid records and reliable information about organized economic crime is scarce is a useful starting point for serious consideration of the magnitude and trending of this problem. Whether conclusions take the form of estimated earnings or extent of influence of any named organized crime group or family, the so-called expert and lay opinions about organized crime have definite weaknesses and limitations (Chepesiuk 2011). Sifting truth from myth and puffery is an art requiring humility, lest one too readily and gullibly accept one’s own and others’ conclusions, theories, and concepts independently of the skill of critical thinking applied to reliable evidence and data. Relying on data and evidence that are demonstrably flawed, incomplete, and self-serving because this seems a common and familiar practice will not result in enlightenment.
Knowledge of organized crime has long been characterized by reliance on state-generated data and document research, especially through the use of secondary data (i.e., previously prepared by another party). Comparatively, reliance on interviews from offenders and victims, as well as the use of inferential statistics, is understandably uncommon as much about organized economic crime groups is hidden until exposed by law enforcement agencies with the narrative formed entirely or partially by their investigative and prosecutorial agendas (Windle and Silke 2019, 410–11). Thus, reporting on organized economic crime groups should result in questions about validity and reliability of the research. Moreover, controlling the narrative about the past, including the genesis, persistence, and remediation of threats to the given social order and political economy, was and is a high priority within societies, so the methodologies of research need impartial and competent analysis. This book strives for such analysis, accepting its limitations. In brief, a multidisciplinary approach may be best (Carrapico, Irrera, and Tupman 2014, 213); such is provided in this book, which focuses, among other things, attributes required to succeed and persist in the global economy outside the rule of law. It does not focus on the evil man theory of American-style/traditional organized crime.
This book takes the view that memberships in criminal societies are not the norm, but conspiracies and collusion among networks of likeminded individuals form the pattern known colloquially as organized economic crime. In brief, an organized crime group is comprised of three or more persons acting in concert to commit serious crime for financial or other benefit (United Nations Office on Drugs and Crime 2013, 2). Note that this other benefit suggests that organized crime need not be exclusively organized for financial gain but would include, for example, terrorist cells committed primarily to forcing changes in the political economy and social norms, as well as highly influential individuals seeking to move the administration of law enforcement toward other targets and priorities, whether through changes in the rule of law, appointment/election of co-opted bureaucrats and politicians, or otherwise.
Moreover, while consensus might have been reached to debunk the formerly held view of the mafia as myth (including early beliefs of J. Edgar Hoover, director of the U.S. Federal Bureau of Investigation), and there is undoubtedly a loose hierarchical structure to organized crime groups (e.g., boss, underboss), the idea that organized crime is highly centralized and coordinated is doubtful (Woodiwiss 2015b, 90). The traditional hierarchical structure imposed on organized crime, akin to the military with captains/capos, seems doubtful. While the intent of this article is not to theorize and conceive of organized economic crime as an entirely flat structure (i.e., there are often indeed levels of influence in organized economic crime groups), the idea of a rigid hierarchy like paramilitary organizations is farfetched and likely inapplicable in most modern contexts (if really ever).
Thus, the ideology behind much theorizing and conceptualizing about organized economic crime needs reconfiguration. Its operations, structure, membership, and terminology are neither loosely fixed on the paradigm of Fortune 100 companies that publicly report to the U.S. Securities and Exchange Commission nor tightly based on popular mythology often created and promoted by Hollywood, media organizations, and career-seeking law enforcement officials. Organized economic crime is not contained in permanent criminal enterprises. It flows inside and outside the rule of law in the pursuit of profit, gain, influence, and enhancement of financial and political position. It is based on terror while adopting a façade of normalcy to outsiders.
However, to be clear—organized economic crime does not need violence or threats of violence. For example, hedge fund investment advisers and/or portfolio managers using corporate insiders to misappropriate nonpublic information and thereby establish profitable trading positions ahead of the market may fairly be deemed to commit organized economic crime. A shotgun and Fat Tony are not prerequisites to commit organized economic crime.
Theories and concepts dedicated to positing an evil other or Mr. Big of certain ethnicity surrounded by others of the same ethnicity are indeed useful in bringing about the replication of crime control policies similar to those adopted by the dominant hegemony (currently, the United States), but they are not indicative of the non-monopolistic and fragmented nature of the reality of organized economic crime. In an important sense, to define the problem of organized crime in a specific way (e.g., Mr. Gambino) is to influence the acceptable solution (e.g., to counter the overblown powers of Mr. Gambino, a commensurately powerful army of criminal investigators and public prosecutors is necessary).
Organized economic crime is socially embedded in political economies across the globe, yet simplifying it as a cancerous element known as transnational organized crime permeating societies and spanning venues and jurisdictions is more mythic than truthful. What has been deemed the emotive cloud of transnational organized crime is akin to the fog of war but ungrounded in reality. There is no shadow government denoted or connoted by transnational organized crime, but there are innumerable disparate marginalized individuals from nation-to-nation that have sought and are seeking a way out of desperate conditions. These individuals organize more or less to effectuate racketeering, forming legal and illegal associations and using various means and methods to accomplish crimes (Hobbs and Antonopoulos 2013, 44–45). Expediency and not market or global dominance is the rule.
Organized criminal groups displace the state as arbiter of disputes. The macro level of statewide discipline is avoided by organized crime groups (alternatively or jointly, the purchase of immunity from effective inspection and oversight is obtained through various schemes of grand and petty corruption, including bribery and kickbacks). Instead of the norms grounded in the state’s political institutions and promulgated as society wide standards by influential non governmental organizations (NGOs), the authority for organized economic crime group members is more intimate, for example, through the direct employer (meso level), with the macro level rejected. Analogously, it is as if the business code of a publicly filing corporation became the only relevant and enforceable rule of law—society be damned. One may observe this constriction of morals and ethics in the actions of individuals that contend all that matters is the employer’s profit. This enfeeblement of imagination may be found in the Gambino crime family and in the market manipulating traders at Enron.
Importantly, while there are undoubtedly similarities between legitimate businesses and organized economic crime-tainted businesses, accurate and complete knowledge of how organized crime functions in practice should not be entirely reliant on the principles used in the analysis of commercial enterprises. There’s much less structure and routinized processes in organized crime, traditional and new, than discoverable in legitimate reporting entities (Liddick 1999, 428–29). Moreover, the intersection and intertwining of organized crime and legitimate business, especially in the United States, make it difficult to identify consistently organized economic crime group activities from legitimate enterprise activities, that is, one’s perception of the market becomes gray and uncertain (Beare 2007, 45).
Oversimplification of this dilemma of identification cannot be resolved merely by pointing to the establishment of requirements of documentation, maintenance of books and records, and deployment of effective internal controls. A glance at the enforcement actions of the U.S. Department of Justice and the U.S. Securities and Exchange Commission in relation to the Foreign Corrupt Practices Act is enough to suggest that lip service to integrity is to be expected. While organized economic crime groups lack the books and records and internal controls over financial reporting, they nonetheless need to control the disposition of assets, which, of course, implicates the use of facilitators (e.g., bankers, lawyers, accountants, company formation agents). Often, these facilitation strategies will also be used by legitimate enterprises.
Thus, the difficulties in recognizing and measuring organized criminal activities are formidable, presenting a predicament and pushing the scholar and analyst into the narratives used by criminal investigators and public prosecutors. A picture may be worth a thousand words, but a good story (e.g., The Godfather by Puzo) or film (e.g., Goodfellas by Scorsese) may be worth millions upon millions of dollars. In a sense, one does not so much follow the money as one is pulled into its vortex.
However, the most alluring and invidious characteristics of organized crime are its tendencies to corrupt and create collusive commercial relationships in the domestic (i.e., the United States) and international (e.g., South America) political economies in furtherance of power, profit, and gain. Organized crime is materially supported, if not formed, by common interests among politicians, police, business elite, and so-called rank-and-file associates, all of whom may discover that the benefits of organized crime are well worth assumption of the risks (InSight Crime 2019).
Moreover, while analysis of organized crime in comparison to the structures and processes of legitimate enterprises often comprises valuable scholarly exercises (e.g., enterprise conditions) such as supply, demand, competition, and regulation provide a high level conceptual framework for contrasting the legitimate enterprise against the organized crime enterprise (Lord, Campbell, and Van Wingerde 2019, 1229), the proverbial devil is in the details. Market dimensions such as the actors and providers, commodities and products, and services used to understand the particular fit of an enterprise within a political economy indeed contribute to understanding the big picture in a sense (id. at 1223), but it is the professional intermediation (e.g., company formation agents, lawyers, bankers, accountants) that provides the intersection between similar market conduct such as legitimate tax avoidance and unlawful tax evasion. Neither of these categories is exclusive to organized economic crime groups. Again, one may observe the outsized influence of criminal investigators and public prosecutors at work: tax evasion makes one an organized crime figure (cf. Al Capone), but tax avoidance makes one richer and sans criminal taint. One may fairly inquire how these distinctions are made by investigators and prosecutors, but the public disclosure and especially prosecutorial discretion often leave one required to trust too much in these officials’ decision making. That is, one must trust without verification.
Perhaps not so coincidentally, by the 60s and 70s, occurring alongside the reportedly powerful influence of the American mafia-style organized crime groups, especially in New York City, the use of artificial accounting devices to exploit tax avoidance opportunities became common for the legitimate elite, including the politically exposed persons (Ogle 2020, 30). Concealing profits and gains and the covert accumulation of capital may comprise at least one important intersection of organized economic crime groups and the non criminal elite. Creating transactions and audit trails that place income and gains, whether earned lawfully or unlawfully, and assets, whether disclosed or undisclosed to tax administrations, is a playground for lawyers, bankers, and accountants that knowingly, recklessly, or unwittingly facilitate the growth and persistence of organized (crime) groups. Organized corruption, whether in the upper- or under-world, needs these facilitators to preserve the monetary value of the big score. In a sense, high tech information and communications technology facilitates these global but illicit financial flows by bridging these worlds under common goals and objectives, including profit maximization, capital accumulation, and fee income.
Moreover, conduct typically deemed tax avoidance and not tax evasion empowers the professional facilitators to deem themselves not culpable, that is, they are criminaloids whose conduct is akin to “honest fraud.” They learn how to commit these honest acts of fraud within their given employer, industry, and institutions, including the criminal justice system (Ruggiero 2019, 254). Thus, it is not their raw conduct that is scrutinized with respect to the rule of law; instead, they skirt along the cusp between that which the state prosecutes and that which the state ignores, for whatever reason. Hence, their sense of clean hands arises not from the propriety and integrity of such borderline schemes as those comprising tax avoidance but from the lack of aggressive prosecutorial response from the criminal justice system. Here, we may observe the powerful yet seemingly arbitrary role played by the state in deciding which tax reduction schemes are acceptable and which are criminal.
Clearly, if an individual were to kill another without excuse or justification, he or she may be deemed to have committed homicide notwithstanding the silence and ignorance of the criminal justice system that for whatever reason overlooks the conduct. The failure of the state and criminal justice system to recognize the raw predicate acts for what they are is a form of whitewashing and processing of the raw conduct into acts that are not unlawful. This formally acceptable social processing does not change the underlying reality; criminal activities are real notwithstanding the state’s failure to recognize them.
The analysis of organized economic crime needs to penetrate and expand the hegemonic market-based thinking of neoliberal economics by adding a heretofore fairly opaque and non-criminalized domain—the set of transactions comprising tax reduction strategies and offshore finance. While tax avoidance and tax evasion are not identical, they share the same reasons for existence: tax sheltering. A focus on the professional facilitators’ exploitation of the vulnerabilities offered through legal technicalities, whether created intentionally as loopholes or drafted inexpertly due to careless legislators, would expose the false sense of lack of equivalence between strategies of avoidance and evasion. Arguably, preservation of assets, estates, and trusts through offshore finance and capital outflows comprise a serious threat to the national public sectors while benefiting some facilitating agents in the private sector, as well as the beneficial owners. Thus, the state’s law enforcement and public policy regimes pick winners and losers without substantive justification, using legal formalism. One may fairly consider who can benefit from the legal niceties around tax avoidance and evasion strategies, and who cannot really take advantage of these protective pathways to capital accumulation. Additionally, the state that adopts such preferential policies and practices may foster a sense of illegitimacy of the ruling regime among the public at large.
This study of organized crime is not based on deductive or inductive methods of reasoning. Deductive arguments demand necessary conclusions from clearly accepted, valid and reliable first principles, which are lacking; inductive arguments do not provide robust explanations, omitting that which drives and transforms organized economic criminal activities (Douven 2017). However, this study is based on abductive reasoning to explain that which may be too often unobservable or without sufficient documentation (e.g., wide conspiracies, clandestine criminal conduct), using the principle of best explanation. Realistically, hard data are unavailable; alternative ways of knowing are required.
Sources of evidence for abductive reasoning include:
• Records obtained from criminal investigators’ surveillance techniques
• Interviews of witnesses and targets
• Summary reports prepared by public prosecutors in putting together the legal theory of the case
Each of these evidence streams contributes to identifying the nodes of strategic decision making and paths of criminal activities to lead experts in the field to their conclusions about the material aspects of organized economic crime. The resultant analyses are supported by evidence, sometimes inadmissible, but they are not ordinarily provable by the methodologies common in the social sciences such as quantitative regression analysis. Fundamental considerations of whether organized economic crimes are to be interpreted as independent variables that corrupt society or as dependent variables that result from collective corruption impair the purity of analysis based on regression.
In brief, the accuracy and completeness of studies of organized crime and its structuring, operations, and governance are empirically and logically lacking in timeliness. They refer to historical conditions of detected organized criminal activities from the perspectives of biased individuals such as criminal investigators, public prosecutors, offenders, informants, and other witnesses and victims. These observed and unobserved biases cannot be measured quantitatively, but they matter greatly. Careerism bends the arc of the narrative to that which benefits the storytellers, which in the case of organized (American-style mafia) crime is sourced primarily through the criminal investigator and public prosecutor. This results in an incomplete and materially misleading interpretation of organized economic crime, leaving out how individuals in suits with the support of lawyers, accountants, and bankers can accomplish plundering of the public without resort to threats and acts of illicit violent. These actors may have the state and rule of law behind them.
To know organized economic crime is to recognize and distinguish truth from falsity (e.g., the primarily illicit, such as the Gambino crime family, to the mixed or hybrid, such as the Enron corporation, to the primarily licit enterprise, such as WalMart). Organized crime is variable and opportunistic not fixedly attached to weak states and ineffective rules of law. Concrete circumstances that risk to the surface of public attention are deceptively incomplete. They do not show the creative historical preparation occurring throughout society that makes organized economic crime the preference of both desperate and privileged individuals.
The future pathways of organized crime are necessarily abstract, avoiding description at present, transforming from revealed methods and practices that were detected by criminal investigators. However, they may be analyzed intelligently through studies calling upon the skills and methods of risk assessment (e.g., vulnerability of the target and guardian; exploitation capacity of the offender and his or her network). Organized economic crime is a collective social action that exploits vulnerability with society generally and individuals specifically.
Generally, accuracy of organized economic crime risk assessment depends on the knowledge of local conditions (e.g., leadership tends to be based on familiar and well-grounded relationships), appreciation of the comparative rarity of such underlying organized criminal activity (e.g., most individuals are not committed to workforces that focus on the provision of illicit goods or services), and market-based analysis (e.g., organized economic crime is lured by and coalesces around alpha profit opportunities) (Albanese 2008, 272).
Attendant circumstances matter in the assessment of vulnerability. A state characterized by surveillance and supporting detective and administrative systems, controls, and processes operative deep and wide (e.g., private sector snooping, intelligence agency sweeping, criminal investigator subpoenaing, public prosecutor discretion) is vulnerable differently from a state characterized by a basic lawlessness. The former has information, and the latter has chaos. However, among other vulnerabilities, the former is vulnerable to corruption of state (e.g., fascism; deleterious cooperation between public and private sectors; laws, regulations, and law enforcement not in the true public interest), and latter is vulnerable to anarchy (e.g., gray and black markets providing essential goods and services, including financial credit, lack of access to an honest and well-functioning judiciary to mediate claims and defenses).
A deep and broad understanding of the operation of variable organized economic crime groups in the particular society in the particular time is necessary to develop generally accepted knowledge and principles. Otherwise, one is lacking context, history, and awareness of the present actuality of variable organized economic crime. Epistemology of organized crime is a function of sifting through hypotheses, premises, and conclusions toward the reality of the conditions of cooperating criminals’ manifest in the facts and evidence at hand (Whaley and Busby 2000, 92). There is a gulf between proximate causes (e.g., the cooperative and organized pursuit of criminally obtained financial profit, gain, and political influence) and root causes (e.g., the deficiencies in living conditions in society and governance that make cooperative and organized pursuits desirable).
There is an expression common in consideration of the design of internal control systems for economic units, including proprietary business entities and public sector and not-for-profit entities—the system should require a conspiracy to unlawfully take assets belonging to the economic unit. This is what has occurred. Currently, transactions are overseen by systems of multiple review and approvals such that rare is the case of one individual alone causing a large loss to his or her employer. This perceived organization strength can be defeated by the development of a clever conspiracy. Be careful what you wish for!
As organized economic crime is not accurately, completely, properly, and timely apprehended from the perspective of quantitative regression analysis alone (obtaining sufficient observations of reliable panel data would take too long and would be too expensive), it may be practically and expediently viewed as an outcome of initial conditions in society. Arguably, it may be posited as dependent variable with root causes within the political economy and as an independent variable with adverse effects on the political economy. These causes and effects exist at the social, institutional, and individual levels. See Table 1.1 below for a summary depiction of these attendant circumstances.
The reliability and helpfulness of these insights are not to be interpreted as absolute truths but as indicative signs within a society infected by organized economic crime, bearing in mind that trustworthy information concerning organized economic crime is rarer than commonly conceived.
In brief, the table suggests that organized economic crime creates and/ or arises from a dystopia and corrupted sense of individual freedom notwithstanding the liberties entrusted to the individual by the state. The individual is not merely philosophically free in the abstract but impelled/ compelled to collective action to remediate and improve his or her position and status. The socialization is likewise corrupted.
Essentially, organized economic crime is an illicit extractive process, absorbing financial resources and assets from productive processes. It has analogues in the legitimate political economy (cf. Rentier capitalism), which renders it as a useful model to study, whether as a causative agent contributing to the corruption of society or as a logical and empirical result of a political economy that leaves many behind. Organized economic crime develops and prospers under the conditions of state-sponsored capitalism (e.g., China) and the conditions of the capital-sponsored state (e.g., the United States). The use of ideology dependent on who owns and controls the means of production matters less than the process of distribution of the goods and services produced. For example, if the landlord’s rents are way too high, it matters little from the perspective of the tenant whether the landlord is an individual or the state.
Table 1.1 Overview of causes and consequences of organized economic crime
Overview |
Social |
Institutional |
Individual |
Causes |
Market failure |
Ineffective law enforcement |
Opportunism and social norms |
Consequences |
Black and gray markets |
Corruption, including cronyism |
Amoral, win-at-all costs perspective |
Thus, the question of where did organized crime begin is in material respects not determinative of where it is and how it succeeds (and fails) in meeting the needs and desires of individuals within a given political economy. Organized crime is in inherent risk in society and collective action. People getting together to conspire in the harming of another person, whether through taking his or her property by force or fraud or through manipulating executive, legislative, or judicial decision- and policy-making with bribery and other unlawful means, is hardly a recent phenomenon. The search for and realization of an unfair advantage infects political economies, especially in conditions of winner-take-all and/or inadequate social safety nets for the inevitable losers in a competitive environment.
Ironically, a highly competitive environment is prone to increasing organized economic crime risk by rivals colluding for advantage (cf. bid-rigging, market manipulation, price-fixing, customer allocation, bribery and kickback schemes—these actions against the social contract [i.e., antitrust] are more effectively performed with the cooperation and co-optation of small but well-placed individuals).
This is not to suggest that organized crime is for losers as the abilities required to become and remain successful in organized economic crime ventures demand much across the organization:
• High managerial agents (e.g., bosses and underbosses)—these individuals oversee the staff, planning and conspiring inside and outside of the gang, meting out discipline, issuing contracts and promotions, determining their financial interests (i.e., cuts of the criminal proceeds). These agents have been called bosses, underbosses, and capos, though this paramilitary nomenclature is misleading as it suggests a discipline and orderly process non existent.
• Staff (e.g., full-time/part-time associates)—these individuals earn the money, directly participating in illicit transactions (e.g., gambling, drugs, murders under contracts). These staff members have been called soldiers and associates. Again, paramilitary in too many descriptions but essential toward effectuating (rather than tasking and/or financing) the underlying criminal conduct such as making the bribe, receiving the kickback, and so on.
• Consultants (e.g., facilitators such as lawyers, accountants, and bankers)—these individuals prevent and fix problems (e.g., designing and carrying out money laundering schemes, shell company formations, arrangements for bail money and a lawyer if arrest). Consultants include the so-called consiglieres (World Heritage Encyclopedia 2020). This apparently legitimate domain (as it also serves mere tax avoiders!) is both the underbelly and upperworld of organized economic crime. It seems legit and provides high incomes for many of the participants.
Of course, facilitators may come in the most surprising forms. For example, a formerly well-respected professor from the University of Miami (Florida, United States) provided substantial assistance to money laundering activities in support of organized crime (Asmann, Dudley, and Molinares 2020). Talent, expertise, success, reputation, and skill do not necessarily raise the integrity and accountability of the human species, especially where there are fertile opportunities for illicit commissions for (illicit) services rendered. It may be that in some jurisdictions anything is for sale at the right price; this corruption supports the proliferation and persistence of organized economic crime. Really, the only criterion for the amoral is whether there’s a substantial risk of getting caught.
Beyond the raw act of wrongfully giving money (e.g., bribes) or wrongfully getting money (e.g., kickbacks), the need to cleanse these criminal proceeds is dire, resulting in a high risk of money laundering associated with bread-and-butter organized economic crimes such as drug, firearm, and child pornography distribution. Money laundering is especially difficult to control. Fundamentally, operating an enterprise, obtaining finance for the enterprise, investing discretionary funds of the enterprise in other enterprises—these are routine and lawful activities. Done with criminal proceeds and the same acts become unlawful. Thus, differentiating between lawful monetary transactions and unlawful monetary transactions demands both a great deal of relevant experience and competency on the part of the investigator and a sufficiency of computer-based data readily available for algorithmic testing.
Even so, the adroit criminal record keeper can conceal or omit the attributes providing links to and hints of illicit transactions (e.g., use of unsuspected front companies or straw men). Thus, professional skills in financial services (e.g., lawyers, accountants, bankers), including the use and misuse of wire transfers, are a required part of every successful organized economic crime enterprise.
The most typical form of cooperation in (transnational) organized economic crime groups may be the informal partnership comprised of a few core members aided and abetted by ephemeral relationships resembling employer-employee and independent contractor associations (Von Lampe 2012, 183). This structure of cooperation—a form of compartmentalization of risk of detection by law enforcement—empowers the group, creating persistent and robust relationships that resist easy discovery and dismantling by state actors (Klima, Dorn, and Vander Beken 2011, 24). These underworld partnerships have upperworld offices, but knowledge of the compromised character and real reputation of these professional offices is difficult and expensive to obtain in the globalized informal partnership arrangement. No forms 1065 are filed with the Internal Revenue Services for these associations in fact.
Moreover, recognition of the reality that much discussion, analysis, and rule- and policy-making about the threat of organized crime is not knowledge- or evidence-based but a reflection of budgetary priorities motivated by factors beyond data (Van Duyne and Vander Beken 2009, 279). It’s not all about crime-fighting, even organized transnational economic crime however elevated the threat. These ideas suggest that it is important to interpret theories and concepts, as well as the purportedly supporting empirical data, promulgated by officials and generally accepted by experts with a critical eye. The data may be invalid (i.e., not faithfully representing the underlying reality) and not reliable (e.g., assented to and used under a quasi-groupthink consensus process among privileged decision- and policy makers).
Transnational organized economic crime cannot both be the greatest threat to civil society in decades and something that, notwithstanding giving law enforcement agencies oodles of money, results in a scarcity of convictions in practice. It seems the task of reducing the risk of transnational organized economic crime is Sisyphean in nature.
Indeed, the formation, development, redevelopment, and dissolution of organized crime groups is a social phenomenon designed to obtain profit, gain, and influence outside the rule of law, with the caveat that what is deemed organized crime is a matter of official policy and declaration (cf. financial services in support of tax avoidance/evasion). It is changeable, morphing from/to purely illicit cooperation to/from co-optation of the rule of law itself (e.g., corrupt and organized influences over the executive, legislative, and judicial branches). For example, a politician may receive a bribe or campaign contribution—these transactions are cousins.
While there are many similarities between the operations of legitimate and organized crime enterprises, law enforcement cannot fine or otherwise punish organized crime enterprises with the same tools used against legitimate enterprises sponsoring criminal acts. For example, non-prosecution and deferred prosecution agreements are not used against organized crime enterprises as these have no right to exist notwithstanding the legal fiction of the establishment of legitimate enterprises. Thus, organized economic criminals, such as banks behaving badly, may have their sins deferred but this is and was not available to the Gambino crime family. By analogy, this may illustrate the difference between a legal fiction and an unlawful fraud. Ironically, the legal fiction (e.g., a duly incorporated financial services provider in the Cayman Islands) is clearly imaginary, having only legal/official effects, but the unlawful fraud is real, having victims that breathe and bleed.
Importantly, organized crime, while global and local in many respects, is primarily a local phenomenon supplemented and empowered with a vast but transient and impermeable network that often extends offshore to loosely affiliated, semi-autonomous units. However, rigorous and formal collusion and consolidation with other international criminal groups is not the norm (Varese 2012, 249). Consolidated financial reports and tax returns are not issued. Thus, organized crime groups and gangs tend to maintain their own identity and informal social structure as these are the sources and means of their influence. They commit crimes, conceal evidence, and manage the distribution of criminal proceeds through the cooperation of members within the different levels.
Organized crime as a locally determined phenomenon notwithstanding these extensions into venues farther afield has important consequences (Edwards and Gill 2002, 210). The threat is tenuous but real; sinister but hard to observe; changing yet persisting; invisible to most but hyper-visible to law enforcement. Organized crime seems a paradox, with the shadow as presented by conventional law enforcement interpretations as monstrous, but for an overwhelming majority of the public— organized crime is hardly visible.
Cooperation among the criminal nodes of this transnational organized crime matrix, which includes local gangs and facilitating professionals, is transactional more than ethnic. The local origin indicates the nodes’ primary source of strength. While support such as offshore financial services and supply chains are essential, these do not transmute the overall and overarching character of organized crime. Whether transnational or regional, organized crime is more likely a federation of regional influences dedicated to the accumulation of financial gain and power in the political economy, licitly and illicitly where necessary, held locally but facilitated globally.
Briefly, bosses and underbosses organize and manage; lieutenants and capos supervise and facilitate; soldiers and associates cooperate and implement on the ground. A rigid structure cannot survive across the hazards presented by rival groups and gangs, and law enforcement targeting as the weakest link(s) can lead to the implosion of the group. Flexibility of network enhances success in a given venture and contributes to persistence through time. The organized crime group or gang at the core of operations functions like a regime of middle managers within an enveloping family of high managerial agents that are loosely affiliated with one another across geographic areas. A friend of a friend goes a long way to extend the reach of organized crime, but this does not make it a global behemoth.
Generally, competitive entities that seek a share of the limited resources within the same political economy generate tension that breeds conflict. Where violent means and fraud are viable tactics, the growth and persistence of organized crime groups are not surprising (Nakamura, Tita, and Krackhardt 2020, 3). Thus, the degrees of freedom contemplated, experienced, and implemented by organized crime groups place it at a competitive advantage without adequate counterintelligence and reliable rule of law delegated to protection of their victim-class, which may as likely include rival gangs as impoverished debtors.
The willingness to use force and threats puts organized crime at the same functional level as the state, which normally reserves a monopoly on the application of force. Organized crime levels the playing field, but its members, associates, and facilitators assume the risk of incarceration. Indeed, organized crime presents a formidable shadow to the state because it will co-opt professionals, politicians, and judges; it will cheat and use violence and threats of violence against those whom it senses strive to disable it. But this is the shadow only, a bad dream. Mostly, organized criminals are more desperate than potent; more crude than sophisticated; more likely to take foolish risks than adopt the safe, conservative course of action. Organized criminals struggle to overcome and transcend their own vulnerabilities, which include the desire to partake of life with a limb or two in the underworld.