Overview of the Size of the Problem
It is difficult to identify and estimate the problem of organized crime. Politics has suffused the subject matter (Critchley 2009, 234). While public prosecutors proudly proclaim and publicize their purportedly high-profile convictions of organized crime bosses and underbosses, the public may not perceive any material difference in their immediate attendant circumstances, that is, organized crime may seem almost invisible to most residents before and after the much-ballyhooed official enforcement actions. Contrast this perception with the hypervisibility of social and individual problems implicating, for example, drug abuse (e.g., opioid addictions). Thus, the effects of organized economic crime are experienced widely throughout society both before and after reportedly momentous enforcement action (e.g., convictions of NYC crime family bosses).
Just as illicit financial flows accompany the lightly regulated global stream of electronic money transfers, the distribution of organized crime’s fruits (e.g., drugs, firearms, political corruption) continues seemingly unaffected. The enforcement action is more theater than remediation. One may fairly question the real efficacy of headlines proclaiming yet another high-level mafia crime family boss/underboss takedown—the overall flow of illicit goods and services remains untouched. Obviously, the boss is not really as influential as publicly proclaimed by law enforcement press releases. The illicit games continue.
The conception of organized economic crime as paramilitary groups suggests that legally impairing the freedom of the generals and admirals will cause the armies and navies to implode. In reality, the size of the problem is largely unaffected by the legal decapitation of the titular head created by law enforcement hand-in-glove with mass media. Good press is easy for some; good outcomes—way more difficult to achieve, measure, and preserve.
By defining the problem as one originating with a few bad and powerful actors at the top of rogue hierarchies of criminal activities, the publicity-seeking and reputation-inflating leadership in the political economy may claim victory when the evil pariahs are undone. However, even this strategy is Sisyphean: note that like triumphs in the global war against terror where disablement of the latest and greatest threat to freedom and democracy occurs with fair regularity only to be immediately followed with the rise of yet another latest and greatest threat, so is the war against organized crime. Powerful bad actors seem to pop up like mushrooms in a forest after a rainstorm.
Not only is the magnitude of the problem not accurately and completely measured but the direction and trend of the problem are likewise opaque. High level math cannot create relevant and reliable models of the vector of organized economic crime where the underlying data are materially deficient. In a sense, policy-makers’ and law enforcement agencies’ assumptions and estimates may be fairly characterized as self-serving, imaginary statements unmoored with the realities experienced by individuals whose lives are impaired by the persistent drug and firearms distribution problems.
Moreover, the new organized economic crime is transnational (cf. global), engaged in illicit networks composed of associations of small cells of individuals with extensive distribution and concealment schemes requiring innumerable individuals. A link analysis showing these intertwining and overlapping relationships across the globe would comprise an awe-inspiring figure or graphic, but such a representation would disclose more chaos than complexity. It materially lacks predictive power and truth value. However, these associations in fact, whether legally formed or informally coordinated, involve the following types of criminality (see National Security Council 2011):
• Corruption of state institutions, including bribery
• Corruption of markets, including intellectual property theft
• Cybercrime, including wire fraud
• Terrorism, including illicit financial flows
• Trafficking in drugs, humans, and weapons across land, sea, and air, including through unguarded and unauthorized ports of entry
As defined above, the size of the problem is immense, suggesting that, perhaps, the proliferation and persistence of transnational organized economic crime is not a bug but a feature of the modern global political economy (at least as depicted in the west). To the extent these depictions are intentionally used to support other agendas (e.g., American-style imperialism) may be the subject of another’s research.
Estimating the extent and gravity of organized crime influence is clearly difficult. As in the UK, where fraud is the most commonly experienced crime (National Crime Agency 2019, 43), organized economic crime covers a wide range of criminal conduct: from drugs to firearms to other schemes for profit, gain, and power, a shared material element of these actions is concealment. Offenders do not strive to be apprehended. Focused and persistent efforts toward uncovering organized economic crime are necessary for both justice and measurement. These efforts may be inconsistent, varying with the public priorities of the period under examination. Times, policies, and priorities change. Commitments are ephemeral.
Deception methods are key in executing successfully (at least, from the offenders’ perspective) both organized and individual criminal activities. From commission of the predicate acts forming the offense to concealment of the inculpatory evidence of the crimes to conversion of the proceeds from criminal activities, the tactic of deceit is common and necessary, including the use of physical disguises (e.g., masks), activity disguises (e.g., routine service provider), and diversions (e.g., outside disturbance to refocus attention of the target’s guardians) (Lafleur, Purvis, and Roesler 2015, 42–43).
Of course, wherever the art and techniques of deception are invaluable and highly rewarded, they recur more frequently and with increasing sophistication. This further obfuscates the size of the problem. Opacity is the norm.
Moreover, deception may enable the offenders to avoid brute force and physical violence, as well as to hide their identities. Analogous to making an audit trail byzantine and labyrinthine, the methodology of offender deception tends to leverage the offenders’ ability to commit criminal activities without meaningful attribution by law enforcement and witnesses, taking advantage of the pre existing deficient knowledge base of those outside the criminal network. The markets of criminal activities, criminals, and criminaloids are vast and not enumerated in any census counts or reliable statistical techniques. Hide-and-seek is especially effective where law enforcement cannot identify the movers-and-shakers in the network; knowledge of any given participant is too remote from the core because there is no core. There is a vast web of connections and pathways.
The United States faces threats from transnational organized crime that, while also difficult to measure, are likely significant and will persist (Office of the Director of National Intelligence 2018, 13–14). The hidden and pernicious entanglement of fraud as specialized economic crime with general transnational organized economic crime contributes both to the failure to uncover the existence of organized economic crime groups and their roles, means, methods, and persistence in transnational transactions (Police Foundation and Perpetuity Research 2017, 25).
By way of example, the so-called tri-border area extending from Puerto Iguazu in Argentina to Ciudad del Este, Paraguay, and to Foz do Iguacu, Brazil may comprise the largest illicit economy in the west (Brown 2009). Now, the globalization and interdependence among organized criminals (and terrorists) from disparate countries in the world cannot be denied absent willful ignorance. This phenomenon grew from the seeds of organized criminal activities in local venues. The growth may fairly be deemed malignant, and the locations forming the original roots of organized crime are distributed throughout the globe.
The profit, gain, and influence opportunities are too great. Organized economic crime is transactional activity that will provide alpha returns, so long as one is practiced in the art of deception. Ironically, without the rule of law making organized economic crime a prohibited class of transactions, the return on investment would likely be significantly reduced via competition. As it is, few want to compete in the markets of organized criminals, and any form of intra-market competition may be lessened through arrangements common in the antitrust domain (e.g., bid rigging, price fixing, customer allocation, market manipulation) such that the competition among organized economic crime groups does not rise to a highly noticeable level (e.g., that which would alert law enforcement and regulatory authorities that a major social problem exists). In a sense, the criminal markets are more self-regulated than commonly believed.
Internecine turf battles observed in drug trafficking are usually localized and fairly simple to resolve (e.g., murder, mayhem, intimidation). The so-called mafia wars are overblown, especially when examined from the top-down perspective. The leadership has too much to lose, but the rank-and-file, with much to gain, is more tempted to engage in local acts of rivalrous violence.
Upon recognition and appreciation of the clandestine, corrupting and corrupted, and essentially fraudulent nature of tales originating about organized crime influence, the scholar and analyst face enormous difficulty in measuring accurately and disclosing precisely what it is that sometimes generates a moral panic from what it is that is more an apparent threat that abruptly fades from public consciousness. Empirically, one cannot identify sufficient competent evidence of the ebb and flow of organized economic crime independently of mass media pronouncements and law enforcement boastings (or oversights). Organized crime is modernity’s sinister bogeyman and evil shapeshifter (until it becomes a low law enforcement/intelligence agency priority like the period post-9/11 in the United States). They fade like low density meteorites. The half-life of organized economic crime incidence and persistence is beyond objective measurement, and inter-subjective measurements proffered by those with an axe to grind (e.g., public prosecutors seeking career advancement, journalists seek fame and fortune, cooperating witnesses, and informants seeking leniency). The biases obfuscate, yet a careful observer cannot help but notice that the goods and services of organized economic criminal activities (e.g., drugs, firearms, child pornography, human trafficking) show no significant level of shrinkage notwithstanding the dissolution of conceived threats such as New York City’s five families.
Organized economic crime influences have historical bases (e.g., the yakuza in Japan) and modern interpretations (e.g., la cosa nostra or the mafia in Italy and the United States). For example, research in the UK suggests that the threat of organized crime is dwarfed by the resources arrayed against it, and other reasons may exist for presenting organized crime as a high risk to society (Sproat 2012, 328). After all, careers may be developed and leveraged into other opportunities under an exaggerated response to a problem not deserving of such attention and resources. The “tough on crime” attitude properly disseminated through the mass media may result in the garnishment of significant influence in the political economy beyond any given law enforcement agency and into society at large (e.g., high political office, richly compensated consultant). That is, these tough crimefighters, whether as politicians or law enforcement agents, parlay this attitude into oversized influence, exploiting fear and vulnerabilities nurtured in the public at large by the policymakers and law enforcers.
Organized crime is fairly definable, however, inaccurately and incompletely. That is, the crimes can be catalogued (e.g., extortion, drug smuggling, human trafficking, firearms distribution) and counted (e.g., surveys of administrative jurisdictions with official data and public prosecutors with aggregation of cases data), but the overarching or undergirding organized crime group is more like a floating signifier. It means whatever the law enforcement agencies and public prosecutors say, it means. There are insurmountable measurement errors at play.
Consideration should be given as to the preparation of an accurate and complete database built on intercepted and indexed communications (e.g., U.S. National Security Agency sweeps). If the information within every communication carried through wire, through mail, and through wireless were not only gathered but reliably interpreted and catalogued for parallel investigation by law enforcement agencies (e.g., U.S. Federal Bureau of Investigation) and disseminated timely and transparently to the public at large, the threat assessment of organized crime would be conceived with equitable accuracy. Perhaps, there’s more to be gained by the elite decisionmakers within the political economy to maintain the secrecy of this information. A threat based on ignorance may be inflated and deflated at will, depending on the effectiveness of propaganda methods and psychological operations (psyops); or maybe it’s just an over-abiding commitment to the civil and constitutional rights of the public at large.
Briefly, organized economic crime persists and grows as a global, national, regional, and local set of phenomena due to common weaknesses in formal (e.g., governmental) approaches to solve the problem of organized economic crime. Enforcement of laws is irregular across jurisdictions, consistency and design of rules of law describing and prohibiting the predicate and enterprise criminal activities differ across jurisdictions, and inadequate data exist to capture the breadth and depth of the causes and consequences of organized crime (Council on Foreign Relations 2013). With measurement error characterizing efforts to define the set of problems contributing to and resulting from trans-jurisdictional crime, the theoretical and conceptual framework for understanding organized crime itself may create further issues. Problems ill-defined are not properly solved.
Neither self-serving overestimation (e.g., by public prosecutors, politicians, criminal investigators) nor naive underestimation (e.g., by the same sets of professionals!) of transnational (and local) organized economic crime help to address the risks presented by organized crime. Moreover, the clandestine nature of organized crime suggests that it may be a problem more suitable for mitigation by intelligence agencies than law enforcement agencies, assuming the threat rises to the level of national security concern.
Of course, due consideration should be extended to the logical and empirical difficulties of calibrating the level of threat where so much profit, gain, and influence can be obtained via manipulation of the threat level. Here, the conduct of legitimate and illegitimate collectives of social actors intersect within the political economy. Whereas scale may be estimated fairly reasonably by measures such as market capitalization in the legitimate domain, these measures generally lack applicability in the illegitimate domain. Nonetheless, the overarching goals are similar in appearance and shared in function:
1. Profit – both domains seek operating profit; that is, an enterprise or entity that sustains itself through routine and repeated conduct (e.g., distributing goods and services on a regular basis, engaging in tax avoidance/evasion schemes).
2. Gain – both domains seek (capital) gains; that is, engaging in nonroutine transactions that increase the economic and financial viability of the enterprise or entity (e.g., property and casualty loss claims, real estate exchanges, bankruptcy liquidations) in one-off commercial activities.
3. Influence – both domains seek to preserve their power in the political economy through developing and nurturing special relationships with other (external) actors that create opportunities for further commercial activities (e.g., political campaign contributions, lobbying).
Thus, where the legitimate enterprise pursues objectives in conformance with the goals (e.g., selling lawful goods and services in the market), the illegitimate enterprise’s objectives are comprised of pursuits within the gray and black markets (e.g., selling stolen pharmaceuticals, selling unlawful drugs and other contraband).
Whereas the size of the legitimate enterprise is estimated through the issuance of regular financial reports, which may be independently audited, the size of the illegitimate enterprise remains in the shadows, subject to inflation and deflation according to the tenor of the times and the agendas of the leadership in the political economy. Should ordinary residents be terrified of organized crime? It depends on whether the resident borrows money from the neighborhood shylock he or she cannot pay back; on whether the resident gambles on the losing end with bets placed with the local unregistered bookie; on whether the resident transacts in illegal drugs, unlawfully distributed firearms, or engages in human trafficking …
It may be fairer to conclude that one’s greatest risks are found in mundane activities that have little to do with organized crime (e.g., driving a vehicle recklessly; engaging on the disfavored end of office politics; abusing lawfully prescribed pain medications, etc.).