Traditional Organized Crime (e.g., Mafia)
Traditionally, organized crime (e.g., the mafia or cosa nostra) was comprised of an opportunistic crime syndicate (Hortis and Jacobs 2014, 180). In a sense it still is, like white-collar crime and street crimes generally. Specifically, organized economic crime exploits pre existing opportunity structures where the rewards are likely and worthwhile, and the risks are practicably ignorable. This is the traditional perspective of organized crime groups strategically exploiting existing opportunities through fairly rigid top-down structures of command-and-control. In this sense, it resembles many legitimate commercial entities.
However, there are competing theories (cf. the emergent perspective whereby organized criminals proactively create opportunity structures) (Silverstone 2011, 193). Thus, the function and operation of a criminal network with nodes and tentacles extending into diverse goods and services across wide expanses of geography serves as a modern paradigm. Previously, it might have taken a village to organize a bank heist; presently, it takes a global consortium to develop the foundations of plans (e.g., deploying the skills of information technology experts pejoratively known as hackers), to coordinate through the use of inside knowledge (e.g., a conspiracy of criminal associate and employee of the victim) the optimal time and place to execute illicit plans, and to conceal and wash the criminal proceeds (e.g., professionals of offshore banking). This is not your mom-and-pop or local crime family in action.
Moreover, while stealing a little can readily be accomplished independently, stealing much may demand collusion inside and outside of the targeted victim(s). Human beings as social animals are predisposed to cooperative ventures, licit and illicit; human beings also seem predisposed to take orders, which suggests the usefulness of command-and-control structures and top-down hierarchies of bosses and associates following the chain of command. The organized crime group as the Gambino crime family directed and controlled by the godfather made sense, superficially. Moreover, who was to disagree publicly? Not the megalomaniac leadership of illicit collectives; not the career-advancing, super-crimefighter of public prosecutor and criminal investigator. This paradigm of organized crime collectives offered much to many. But what about truthfulness; was this more mythology than evidence-based?
The traditional conception of organized crime as a vertical, rigid command-and-control enterprise based on ethnic background (e.g., Sicilian-style mafia in Palermo morphing into American-style mafia New York City) makes a great story. This illicit collective purportedly enjoyed and featured a brotherhood based on origins of birth and ethnic ties. Thus, it was not class-based but a construct in which, for example, any Italian tracing his/her (but overwhelmingly his) ancestry to Sicily, Naples, Calabria, and so on would be eligible by this identity trait to become a made member or associate, regardless of the humbleness of one’s birth and upbringing. It was a unit dedicated to illicit collective action, but it did not discriminate on the basis of socio economic background, according to the myth.
Compare the quaint interpretation of the illicit ethnic brotherhood with the professionalization of organized economic crime where sophisticated lawyers, bankers, accountants, and so on are necessary to create both the appearance of legitimacy and the availability of laundered criminal proceeds. Traditional organized crime has been modified by the professional managerial class of finance, insurance, and real estate because these sectors capture high net worth individuals’ financial and economic interests (cf. the economic elite) and, as importantly, preserve and grow these interests. The safety and confidentiality of financial flows, licit and illicit, depend on the knowledge and skills of the investor, portfolio manager, and facilitator class (not a collective characterized by many lowborne and humbly raised individuals, and as importantly, not restricted or defined by the identity trait of ethnicity).
Organized crime may be conceptualized from the perspective of its groups (e.g., mafia families, street gangs) or its markets (e.g., illicit drug distribution, illicit firearms distribution). Theoretically, while these may be two different ways of identifying the problem, they are not either/or pathways. In fact, organized crime persists and thrives along transnational horizontal and vertical lines (United Nations Office on Drugs and Crime 2010, 18). Because the markets are gray and white, they are inseparable from their market participants. That is, organized crime is comprised of numerous, if not innumerable, players operating in upper- and underworlds. It is collusive in nature, global in effect. Moreover, it is more anonymous than notorious. To be a public figure (e.g., Gambino, Gotti) is to attract the attentions of law enforcement agencies and industry regulators: one cannot demonstrably dwell in the underworld and obtain, for example, a casino license.
In fact, making a hullabaloo of the specific prosecution of semi-public figures such as John Gotti, Jr., while likely furthering the public prosecutor’s careers, does not cause a material adverse effect on organized economic crime, generally. This comprises an imaginary solution to an ill-defined problem.
Importantly, the practice of individuals in the employment of organizations to coordinate and cooperate with other individuals in the employment of other organizations in the furtherance of criminal activity is not unique (e.g., O’Brien 2019). That individuals organize is to be expected; that individuals commit crimes resulting from these organizations is not surprising. That the organized crime group would be represented as a shadowy enterprise mirroring the largest corporations in the west is surprising.
If one appreciates the fact that traditionally, depicting organized crime like ExxonMobil allows the myth-creators to partake in a seemingly noble exercise: powerful, evil criminals are imprisoned—please give me my political plum (e.g., judgeship, high elected office, high appointed office) and anoint me as a hero. The American crime-busters of the 1960s, 70s, and 80s needed these myths to parley their role in controlling a developing political economy (viz., the United States) to greater heights of their own profit, gain, and influence. Under this fact-pattern and dynamic— never define a problem such that it cannot be solved by yours truly.
Jurisdictionally, not all organized criminal activity is investigated and prosecuted as organized economic crime (e.g., securities fraud may not form the basis for private party civil enforcement of the racketeer influenced and corrupt organizations act, Henning 2018). Thus, a lay definition of organized crime would likely include many more cases than a legal expert’s definition of organized crime, notwithstanding the presence of organization (e.g., conspiracy), membership in an enterprise (e.g., employee), which is used to facilitate the unlawful obtaining of profit, gain, or power such as insider-trading schemes, market manipulation, price-fixing, bid-rigging, customer allocation, and lobbying, to name a few.
The mafia does not have a monopoly on organized crime: The state does through what it outlaws and prosecutes; through its influence over mass media; through its exploitation of the vulnerable and uninformed public at large. For example, New Jersey state criminal investigators ominously raised the threat of a particular motorcycle gang in New Jersey through publication in a popular mass media news outlet in New Jersey on what can fairly be deemed slim empirical data or evidence supporting this alarm (Napoliello 2020). Critical questioning and impartial assessment of the state investigators’ report was not evidenced. This was and is not unusual reporting.
Whether actions compose the material elements of a crime depend on the influences at work in the specific political economy defining the crime. In practice, these forces may also significantly influence enforcement of the crime. State action (e.g., criminal investigations, public prosecutions) does not occur in a vacuum, and crimes, including organized economic crime, are the result of commitments of state actors to conduct preliminary and full investigations, as appropriate, and follow up on these actions, where necessary, through the office of the relevant public prosecutor. Without recognition of the vital role played by the state in defining what is and what is not organized crime, measurement of this criminal activity may be materially and unqualifiedly understated.
In brief, it’s way easier to posit organized crime as a comparatively small group of Italian or Italian-American thugs exercising an exaggerated deleterious influence on the lives of resident victims, notwithstanding that most of these purported victims have no clue they are even victims (excluding obvious victims in some cases like extortion). The ultimate question is who has committed the greater fraud—the myth weavers presenting as gospel the traditional organized crime narratives; the criminal justice actors taking the public and its purse for a long, expensive ride; or the so-called white-collar fraudsters (e.g., Skilling at Enron, Ebbers at WorldCom) bamboozling investors, employees, and pensioners?
If the actions of the U.S. legislature were to be considered a signal of formal federal government interest in the problem of organized crime, the period between 1934 and 2003 would comprise the focus and heyday of its published transcripts of hearings (Von Lampe n.d.). However, due to the evolving nature of organized crime, federal enforcement tools and adequacy of federal resources dedicated to the mitigation of the risks posed by organized crime persist as major public safety concerns (Finklea 2010, 25–26). The problem as conceived originally as a collective of bad individuals of shared ethnicity does not provide adequate guidance currently. Without endeavoring to disprove the preeminence and potency of small groups of illicit directors (e.g., the crime commission—panel of boss of bosses) and illicit officers (e.g., bosses of families), since such exaggerations of influence cannot be disproven and need not be disproven presently as the concern in this work product is the nature and threat of organized transnational economic crime and not whatever inheritances exist from collectives such as the five families of New York City. What was inherited might have become legitimate. However, what remains is something altogether different from the Gambino crime family or American-style of traditional organized crime.
Both the desire for outsized profits perceived as available from organized criminal activities and the desire to use terrorism financed through organized criminal activities together present potentially grave economic and bodily harm threats to the general welfare of the public at large. Just as the cell-like nature of terrorism transplanted from venue to venue does not leave telltale indicia in many cases, the gig-like nature of organized economic crime morphs across geographies, united by the conditions necessary to get away with major crimes. These crimes are more horizontally brokered than orchestrated vertically.
Ironically, the enterprises most like traditional organized crime groups, many of which failed to survive the criminal justice purges of the 1970s, 80s, and early 90s in the United States, would be those operating in the financial services sector. They are regulated and registered, but they are allowed to conceal formally their clients’ and their own transactions, checked, if at all, by public auditors paid and controlled to a significant extent by these financial services companies. Regulation, especially in the major financial centers such as London and New York City, tends to be light. Apart from bureaucratic registration—a control that neither prevents nor detects major crimes—the financial services industries, including fintech such as Wirecard, traverse the globe, enhancing the liquidity and secrecy of electronic stores and flows of financial funds (i.e., e-money).
While American-style enforcement has focused on the enterprise characteristic of organized crime groups (cf. the conspiracy element separate and apart from the requirement of a continuing criminal business), a characteristic developed in the 70s and applied in the 80s in the United States that had resulted in disabling financial sanctions and long terms of imprisonment for some bad actors and associations—in fact, some independent scholars have focused on more limited definitions of organized crime groups, preferring to demand certain characteristics be found in the underlying criminal activities such as direct and fixed control over production and distribution of illicit goods and services (Leukfeldt, Lavorgna, and Kleemans 2017, 296). This would seem to exclude much of what passes for gig organized economic crime networks as described in this manuscript. However, such an approach does not give due account for the innovative capacities of organized criminals and modern information and communications technologies, that is, there is little net value in seeking to obtain criminal monopolies (e.g., exclusivity over the dark web) and hegemony over the multistep supply and logistics chain (e.g., adoption of the parent-subsidiary relationships common in many legitimate global organizations). The criminal liability exposure is too great.
Additionally, the pool of desperation is not of rigid dimension and unvarying volume. The gig enables transcendence of the traditional crime family, outsourcing criminal liability and making remote any demonstrable connections of the parts to one another. The web of organized criminality is expedient, impermanent, and without stars and kings. Through anonymity, the effectiveness of the criminal web is enhanced. It moves and reforms with the breezes of opportunity. Moreover, opportunity is a global construct.
The advantages of flexibility and variability in procuring and delivering illicit goods and services include making detection and punishment more unlikely and administratively difficult. Charging an individual with operating a global and significant criminal enterprise, if the evidence were developed, is an easy sell to criminal investigators and public prosecutors. Charging end-users and apparently bit players—not a great sell. This variability conceals comparative influence. There is no vertical command-and-control fact pattern against which to assess the illicit market participants’ role. The players seem useful for any given transaction but not necessary to the enterprise as a whole; of course, this may likely be owing to the absence of an enterprise. Indeed, there are a series of illicit transactions, but these are difficult to source against any one individual or collective. There are no directors and officers (but this is not to conclude that a strict equality and unyielding horizontality exists among all participants; some are more equal than others).
Contrarily, the five families of New York City-based organized crime groups in the 20th century were too hidebound to New York City venues and vulnerable to enveloping federal jurisdiction and rules of law such that the Racketeer Influenced and Corrupt Organization Act’s (RICO) generous, at least from the state’s and later plaintiffs’ bar perspectives, criminal and civil powers were applied to substantially emasculate the bosses and underbosses of these traditional organized crime (American-style derived from Sicilian-style) groups. In effect, the kings and princes were taken out, leaving innumerable associates to ply their unlawful trades through other means, methods, and crime scripts.
The success prosecutions of American-style, traditional organized crime leaders demonstrated to the underworld that acting like an industry mogul in expensive suits and luxury cars is only a short-term strategy. More discretion and distribution of criminal and civil risks are required. It became practical to broker illicit transactions and obtain significant profits, gains, and influence without owning the underlying goods or providing directly the underlying services. Better to take an illicit commission off the top of the (criminal) proceeds than to take the gross and exercise managerial control over the distribution of the gross. Who needs the gross if you can get the net up front?