Organized Crime in the United States: Trends and Issues for Congress
Released: 2010-12-22T00:00:00

Introduction

Organized crime threatens the economy, national security, and other interests of the United States. Particularly in the past several decades, organized crime has been evolving and taking on an increasingly transnational nature. With more open borders and the expansion of the Internet, organized criminals threaten the United States not only from within the borders, but beyond. Organized crime stretches far beyond the Italian mafia, encompassing Russian, Asian, Balkan, Middle Eastern, and African syndicates. Even though organized crime has not received as much recent media or congressional attention as have other national concerns, such as the threat of terrorism, these criminals have not ceased their illicit activities.

Illustrating that the threats from organized crime remain, former Attorney General Michael Mukasey reconvened the Organized Crime Council (OCC) in April 2008 to address the evolving threats from organized crime. Beyond the individual illegal activities committed by organized crime groups (e.g., gambling, prostitution, labor racketeering, smuggling/trafficking, extortion, theft, murder, and money laundering), the OCC has indicated that these organizations may

penetrate the energy and other strategic sectors of the economy; provide logistical and other support to terrorists, foreign intelligence services, and governments; smuggle/traffic people and contraband goods into the United States; exploit the United States and international financial systems to move illicit funds; use cyberspace to target U.S. victims and infrastructure; manipulate securities exchanges and perpetrate sophisticated frauds; corrupt or seek to corrupt public officials in the United States and abroad; and use violence or the threat of violence as a basis for power.

The domestic impact from the activities of organized crime groups thus extends beyond what many may consider to be traditional organized crime activities. Congress may wish to consider the impact of organized crime on domestic issues of immediate concern, such as the economy and national security. Do these evolving threats from organized crime require new tools to combat it?

Another issue that Congress may wish to consider is the adequacy of the resources the federal government allocates to organized crime. Following the terrorist attacks of September 11, 2001, national priorities and federal resources shifted away from more traditional crime fighting—including that of organized crime—toward counterterrorism and counterintelligence. Subsequently, there has been a decrease in the federal law enforcement resources dedicated to organized crime matters and a decrease in the number of federal organized crime cases opened. Consequently, the policy question facing Congress is whether the resources that the federal government allocates to organized crime matters are sufficient to counter the threats that organized crime poses.

This report provides a background on organized crime in the United States as well as the tools that Congress has afforded for the federal government to combat it. It outlines the trends in federal efforts to investigate and prosecute organized crime. The report then discusses the evolving nature of organized crime, including the domestic impact of organized crime, prominent organized crime groups, and their illegal activities affecting the United States. It concludes with a discussion of issues that Congress may wish to consider, including the attention the federal government allocates to organized crime matters, the multilateral efforts to combat organized crime, and issues surrounding a potential nexus between organized crime and terrorism.

Definitions of Organized Crime

A clear definition of organized crime is important for both legal and policy purposes. Some experts suggest that although organized crime is difficult to define, the various attributes of criminal organizations are central to the definition. This report uses the attributes of a criminal organization, in combination with the definitions of organized crime, enterprise, and racketeering as outlined in the current law, as a framework for discussing the trends in organized crime and policy issues for Congress to consider.

Specifically, attributes of organized crime may involve

structure, restricted membership, continuity, violence or the threat of violence, illegal enterprises, legitimate business penetration, corruption, and lack of ideology.

The structure of modern organized crime groups often does not exhibit the rigid hierarchy of more traditional organized crime groups such as the Italian Mafia. Moreover, organized crime groups restrict membership based on a number of factors, including race, ethnicity, kinship, and criminal background. These criminal organizations continue, even if leadership or membership changes over time. Further, violence and/or the threat of violence are integral aspects of organized crime. Organized crime groups profit from illegal enterprises as well as from infiltrating legitimate businesses. They may attempt to corrupt public officials in order to escape investigation, prosecution, or punishment. Notably, the primary goal of organized crime groups is to make money; these groups are profit-driven rather than ideology-driven (a key distinction between organized crime and terrorist groups).

Statutory Definition

There is no current statutory definition of organized crime. The Omnibus Crime Control and Safe Streets Act of 1968, as amended (P.L. 90-351), defined organized crime as "the unlawful activities of the members of a highly organized, disciplined association engaged in supplying illegal goods and services, including but not limited to gambling, prostitution, loan sharking, narcotics, labor racketeering, and other unlawful activities of members of such organizations." This definition described organized crime in terms of the illegal activities rather than in terms of what constitutes a criminal organization. As such, this definition of organized crime could have encompassed the activities of not only organized crime groups, but of terrorist groups and corrupt businesses as well. The definition was repealed in the Justice System Improvement Act of 1979 ( P.L. 96-157 ), leaving the United States with no statutory definition of organized crime.

In the Organized Crime Control Act of 1970 (P.L. 91-452), and more specifically within Title IX—the Racketeer Influenced and Corrupt Organizations Act (RICO) —organized crime is described in terms of an "enterprise" and a "pattern of racketeering activity." The predicate offenses for racketeering include a host of state and federal crimes listed in 18 U.S.C. § 1961. Although RICO provides a definition for an "enterprise," it does not describe the attributes of a criminal enterprise that distinguish it from a legal enterprise. In addition, this definition describes organized crime more in terms of the illegal activities than in terms of the criminal organization.

Background

Organized crime in the United States has a long-standing history. Although this history has its origins prior to the 20 th century, organized crime flourished around the time of Prohibition and grabbed the attention of policymakers. Through most of the 20 th century, U.S. law enforcement combated what many consider "traditional" organized crime networks operating inside the United States, including the Italian Mafia, Russian Mafia, Japanese Yakuza, and Chinese Tongs. These criminal organizations were involved in a variety of illegal activities, and in the 1950s and 1960s, the most profitable of these activities was gambling, followed by loan sharking, narcotics trafficking, extortion, prostitution, bootlegging, and fraud. Other prominent activities of organized crime groups were racketeering, theft, murder, and money laundering.

The national focus on organized crime led to several efforts aimed at investigating and controlling it. These initial efforts included the Senate Special Committee to Investigate Organized Crime in Interstate Commerce in 1950 and 1951 led by Senator Kefauver, Senate hearings on organized crime in 1958 and 1963 led by Senator McClellan, a series of conferences on organized crime at Oyster Bay in 1965 and 1966, and the creation of the 1967 Task Force on Organized Crime. This 1967 Task Force reported that law enforcement measures to curb organized crime had not been successful and, further, that organized crime in America was on the rise. Statistics showed that from 1961 to 1966, the number of individuals indicted by the Organized Crime and Racketeering Section (OCRS) of the Department of Justice (DOJ) rose from 121 to 1,198. Further, the number of those indicted individuals actually convicted rose from 73 to 477. Although the raw number of indictments and convictions rose between 1961 and 1966, CRS analysis revealed that the proportion of individuals from organized crime groups who were convicted during this period actually declined, from 60.3% to 39.8%.

Combating organized crime had been a responsibility primarily of state and local law enforcement. As the scope of organized crime was continuing to increase, Congress recognized the need for better crime fighting tools and the need to further the federal government's role in fighting and prosecuting organized crime.

Omnibus Crime Control and Safe Streets Act

One of the first steps taken by Congress to increase the federal government's role in combating organized crime included a series of congressional hearings in 1967 and 1968 and the enactment of the Omnibus Crime Control and Safe Streets Act of 1968 (P.L. 90-351). The Omnibus Crime Control and Safe Streets Act of 1968 was one of the first major pieces of legislation to directly address organized crime. Specifically, it provided grant money via the Law Enforcement Assistance Administration (LEAA) to state law enforcement agencies to combat organized crime. Included in the act was the congressional finding that

organized criminals make extensive use of wire and oral communications in their criminal activities. The interception of such communications to obtain evidence of the commission of crimes or to prevent their commission is an indispensable aid to law enforcement and the administration of justice.

Title III of this act permitted federal law enforcement agencies to wiretap conversations of suspected criminals, including suspects of organized crime. Electronic wiretapping authority granted in the Omnibus Crime Control and Safe Streets Act of 1968 immediately provided American law enforcement and policymakers with an indication of organized criminals' activity, specifically their involvement in illegally importing and distributing narcotics. Despite these tools to combat criminals, the federal government still lacked the tools to combat criminal organizations .

The Organized Crime Control Act and RICO

The Organized Crime Control Act of 1970 (P.L. 91-452) strengthened the ability of the federal government to combat and prosecute criminal organizations. It provided for Special Grand Juries to investigate multi-jurisdictional organized crime; these grand juries are able to produce reports outlining public corruption and organized crime conditions in their respective districts. The act also allowed for witnesses of organized crime to be granted immunity from prosecution in exchange for testimony. Further, it authorized security for government witnesses or potential witnesses in organized crime cases. This measure laid the groundwork for the Witness Security Program (WITSEC). The WITSEC program allows for the protection and relocation of witnesses and their families, whose lives may be in danger as a result of their testimony in organized and other major crime cases.

Title IX of the Organized Crime Control Act of 1970 created the Racketeer Influenced and Corrupt Organizations Act (RICO). Many view RICO as the single most important piece of organized crime legislation enacted. RICO allows for the prosecution of anyone who participates or conspires to participate in a criminal enterprise/organization through two acts of "racketeering activity" within a 10-year period of time. The predicate offenses for racketeering include various state and federal crimes listed in the U.S. Code. Since its enactment, RICO has been one of the dominant tools used in organized crime prosecutions.

Asset Forfeiture and Money Laundering Statutes

Since the passage of RICO, Congress has enacted legislation regarding asset forfeiture and money laundering, both of which have increased the federal government's ability to combat organized crime. The asset forfeiture and money laundering statutes have provided a means for the federal government to further attack the financial structure and assets of organized crime groups. Although RICO included provisions for asset forfeiture, the Comprehensive Crime Control Act of 1984 ( P.L. 98-473 ) expanded upon these provisions. Specifically, Title II of Chapter III—the Comprehensive Forfeiture Act of 1984—amended RICO by specifying that proceeds (both tangible and intangible) obtained directly or indirectly from racketeering activity were subject to forfeiture. This act also established the Department of Justice's Asset Forfeiture Fund in the Department of the Treasury. The rules for civil forfeiture proceedings were later revised in the Civil Asset Forfeiture Reform Act of 2000 ( P.L. 106-185 ), improving the federal government's ability to prosecute organized crime cases. Money laundering, the primary method of concealing the illicit proceeds from organized crime activities or placing them back into further illegal activity, was established as a federal criminal offense in the Money Laundering Control Act of 1986 ( P.L. 99-570 ). This act also established criminal and civil penalties for money laundering, as well as procedures for forfeiting the illicit funds. It appears that these laws have all provided effective tools, as the Department of Justice and Federal Bureau of Investigation have indicated that the three most prominent tools relied upon when investigating and prosecuting organized crime are RICO, money laundering, and asset forfeiture statutes.

More Recent Federal Attention to Organized Crime29

Following the terrorist attacks of September 11, 2001, congressional and national law enforcement priorities shifted away from traditional crime fighting toward counterterrorism. More recently, however, there appears to be an increase in national attention to the need for fighting more traditional crime, including organized crime. In fact, after a 15-year hiatus, the Organized Crime Council met in April 2008 for the first time since 1993. The renewed attention to traditional crime fighting—and specifically for purposes of this discussion, organized crime—has increasingly shifted toward the transnational nature of organized crime. Though organized crime has arguably always been transnational, it was not until the 1990s, following the Cold War and the spread of globalization, that the transnational nature of organized crime surged and criminals expanded their operations across increasingly open borders.

Federal Law Enforcement Efforts to Combat Organized Crime

In general, domestic crime control tends to fall on the shoulders of state and local law enforcement agencies. As mentioned above, however, the federal government began to play a larger role in combating organized crime following the enactment of the Omnibus Crime Control and Safe Streets Act of 1968, and even more after RICO and the Organized Crime Control Act of 1970. Various federal agencies are currently involved in controlling the activities of organized crime groups. In addition to domestic efforts to combat organized crime, the federal government is also involved in international efforts.

Domestic Efforts

Combating organized crime is not a task handled by one federal agency or even one department. Many agencies have a hand in tackling the threats posed by organized crime. The Department of Justice, specifically the U.S. Attorney General's Organized Crime Council, is responsible for creating domestic organized crime policy. The council is chaired by the Deputy Attorney General and has representatives from the Federal Bureau of Investigation (FBI); the U.S. Drug Enforcement Agency (DEA); the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); the U.S. Immigration and Customs Enforcement (ICE); the U.S. Secret Service; the Internal Revenue Service (IRS); the U.S. Postal Inspection Service; Diplomatic Security; and the U.S. Department of Labor, Office of the Inspector General.

Although many federal and state departments and agencies are engaged in fighting organized crime, the primary agency involved in combating organized crime is the FBI. The Transnational Criminal Enterprise Section in the Criminal Enterprise Branch of the Criminal Investigative Division is responsible for investigating organized crime. This Organized Crime Section is divided into three principal units investigating (1) La Cosa Nostra, Italian organized crime, and racketeering; (2) Eurasian/Middle Eastern organized crime; and (3) Asian and African criminal enterprises.

As a key analytical tool, the FBI uses the Enterprise Theory of Investigation (ETI) to investigate organized crime. ETI involves two steps: (1) identifying a criminal organization and the criminal activities of this organization and (2) identifying the financial assets of the criminal organization for possible forfeiture. This investigative technique seems to complement the RICO statutes in that both ETI and RICO are aimed at dismantling criminal organizations. Further, ETI identifies financial assets that may be subject to forfeiture under civil RICO statutes. This aspect of ETI is directed at combating money laundering and thus the financial lifeline of organized crime.

Domestic Working Groups and Task Forces36

Many of the FBI field offices have organized crime task forces. In those regions, the FBI works with state and local partners as well as with other federal agencies to combat organized crime. These task forces may be broader task forces covering a range of criminal syndicates, or they may be more specific covering a particular organized crime group. One example of a broad organized crime task force exists at the Minneapolis field division of the FBI; this division leads an Organized Crime Task Force that combines the efforts of other federal agencies as well as local law enforcement to target a number of criminal organizations involved in various crimes. On the other hand, examples of more specific organized crime task forces exist at the FBI's New York division; in New York, there have been designated La Cosa Nostra (LCN) task forces, some dedicated to specific LCN families. Even if standing task forces are not formed, domestic agencies work jointly and rely on the resources of one another to combat organized crime. For example, when investigating labor racketeering, the FBI may work with the Department of Labor, the Department of Transportation, and the Internal Revenue Service, as well as state and local authorities.

With respect to prosecuting organized crime cases, the Department of Justice Organized Crime and Racketeering Section has Strike Force Units dedicated to organized crime. These units currently exist in U.S. Attorneys' Offices in 21 of the 93 federal districts with a large organized crime presence. The Strike Force Units operate in these particular 21 offices for historical reasons; those are the 21 offices where the LCN has had the largest presence, and the Strike Force Units continue to operate out of those offices. These units comprise a group of prosecutors with particular expertise in large, multi-defendant RICO cases. Ultimately, the U.S. Attorney General is the chief law enforcement officer responsible for criminal investigations and prosecutions, including those of organized crime.

International Efforts

The United Nations Convention Against Transnational Organized Crime is the main international tool for combating organized crime. In 2005, the United States ratified the Convention as well as the companion Protocols on trafficking in persons and smuggling of migrants. Among other provisions, the Convention provides for greater law enforcement cooperation and mutual legal assistance across nations where there were no previous agreements for such assistance. With the evolving transnational nature of organized crime, this coordination with international organizations is essential. Further, with increasingly open borders and the expansion of the Internet, organized criminals threaten American society not only from within the borders, but beyond.

One outcome of increasing transnational crime is that domestic federal law enforcement agencies work with international organizations to combat organized crime threats to the United States. As one example of this cooperation, the U.S. government and federal agencies support the United Nations (UN) Office of Drugs and Crime (UNODC) efforts to combat international organized crime. UNODC helps UN member countries implement provisions of the Convention Against Transnational Organized Crime to counter organized crime problems. Within the Department of Justice, the U.S. National Central Bureau (USNCB) of the International Criminal Police Organization (INTERPOL) is the point of contact for INTERPOL matters in the United States. The USNCB can access INTERPOL's databases, and it coordinates requests for international investigations between U.S. law enforcement and their international partners. Specifically, the USNCB Terrorism and Violent Crimes Division coordinates requests on organized crime cases. Also, the FBI participates in several international working groups and task forces to formulate best practices in combating organized crime.

International Working Groups and Task Forces

Federal law enforcement agencies in the United States and in Italy participate in the Italian American Working Group, which first met in 1984. This working group addresses problems common to both countries, including organized crime, drug trafficking, money laundering, cyber crime, and extradition issues. The Pantheon Project furthers the law enforcement relationship between the United States and Italy. The project provides for two FBI agents that work at the Italian National Police headquarters and for two Italian officers that work at the FBI.

With respect to Russian organized crime, the FBI is involved in international working groups , including the Eurasian Organized Crime Working Group, the Central European Working Group, and the Southern European Cooperative Initiative. In addition, the FBI set up a joint FBI/Hungarian National Police task force in Budapest, Hungary, to combat Russian organized crime. This task force was established in 2000 to counter the increasing threat of Russian organized crime and is the only international task force in which the FBI is currently involved. The FBI has requested additional funding for this task force in its 2011-2015 budget. The FBI, in conjunction with other law enforcement agencies around the world, has also provided INTERPOL with information on individuals involved in Eurasian organized crime; this information is the basis for Project Millennium , a multinational effort, led by INTERPOL, to combat Eurasian organized crime.

Federal Investigations and Prosecutions of Organized Crime

According to the Department of Justice and the FBI, the threats posed by organized crime have become more broad and complex than ever before. Federal resources dedicated to organized crime matters, however, do not appear to have expanded along with the threats, and have actually decreased since 2001. After the September 11, 2001, terrorist attacks, national priorities, including those of federal law enforcement, shifted further toward counterterrorism-related activities and further away from traditional crime fighting activities. Within the law enforcement domain, this shift can be objectively seen in the field agents assigned to organized crime casework, the cases investigated, and the cases handled by the U.S. Attorneys' Offices.

Agent Utilization

Following the September 11, 2001, terrorist attacks, the FBI reorganized, prioritizing counterterrorism and counterintelligence over traditional crime matters. The FBI did not, however, significantly change its field agent allocation for organized crime matters between FY2001 and FY2004. Agent allocation remained nearly constant at 700, 697, 698, and 720 agents, respectively, for FY2001-FY2004. On the other hand, the FBI utilization of field agents in organized crime matters during this time period did not mirror that of the agent allocation . Figure 1 illustrates that the allocation of agents remained relatively constant, while the actual utilization decreased. The Department of Justice, Office of the Inspector General (OIG), found that in FY2004 the FBI utilized 35% fewer agents on organized crime matters than it did in FY2000. While the FBI utilized 682 agents on organized crime matters in FY2000, this number dropped to 446 in FY2004. The questions remain, however, whether field agents continue to be allocated to organized crime matters at similar rates to those before the terrorist attacks of September 11, 2001, and subsequent FBI reorganization, and whether these agents continue to be utilized at lower rates than which they are allocated.

This disparity between FBI field agent allocation and field agent utilization may suggest several things. For one, it may suggest that organized crime posed less of a threat to the United States in 2004 than it did in 2000. However, recent actions and testimony by former Attorney General Michael Mukasey suggest the opposite may be true. Former Attorney General Mukasey reconvened the Organized Crime Council in April 2008, for the first time in 15 years. He stated that he did so because organized crime—both domestic and international—remains a significant threat. The sustained threat does not explain the decrease in field agent utilization in these matters. A second possible reason for the disparity in field agent allocation and utilization is that although the FBI did not intend to decrease its agent utilization on organized crime matters, agents may have been diverted to higher-priority issues such as counterterrorism. In fact, the Department of Justice, OIG, reported that the FBI confirmed underutilizing organized crime resources because the field divisions committed to prioritizing counterterrorism first and foremost. "Combat[ing] transnational and national criminal organizations and enterprises" is the FBI's sixth-highest priority matter. The FBI diverted agents from traditional crime squads—such as organized crime—and moved them to counterterrorism squads. A third potential explanation is that the FBI lacks the man power and monetary resources to address all significant threats that the country faces. This lack of resources may act in conjunction with the FBI's prioritization of counterterrorism. FBI Director Robert Muller has stated that indeed resources have shifted away from traditional crime fighting, and that there is a need to restore the criminal programs to "appropriate resource levels."

A follow-up report by the OIG indicates that the FBI's agent utilization on organized crime matters may have continued to decrease between FY2005 and FY2009. In FY2005, the FBI utilized 525 agents for organized crime matters. This declined by more than 15% to 443 agents in FY2009. Of note, the agent utilization data for organized crime matters between FY2005 and FY2009 cannot be directly compared to the utilization data for these matters between FY2000 and FY2004 because the classifications of what constitutes organized crime for these periods differ. For instance, data for the period from FY2005 through FY2009 include agent utilization data for transnational organized crime matters, whereas these are not specifically included in the data from FY2000-FY2004. Further, while the organized crime agent utilization data for FY2000-FY2004 were available, the number of agents allocated specifically to organized crime matters for FY2005-FY2009 is unknown because allocation data were only available for overall criminal enterprise casework, encompassing gangs, criminal enterprises (including Organized Crime Drug Enforcement Task Force cases), and organized crime.

Case Openings

In FY2000, the FBI had 682 field agents investigating organized crime, and they initiated (opened) 433 organized crime investigations (cases) in that year, as shown in Table 1 . Thus, the number of cases per agent was about 0.6. In FY2004, the FBI had 433 field agents investigating organized crime, and they initiated 263 organized crime investigations. Therefore, the number of cases per agent was also about 0.6. Taken alone, a decrease in the number of organized crime cases could suggest that the threat from organized crime is actually decreasing. However, the number of agents investigating organized crime decreased proportionally to the number of organized crime cases opened. Therefore, using data from the number of organized crime case openings does not alone provide a reliable indication of the organized crime threat. There are several possible explanations for the simultaneous decrease in agents investigating organized crime matters and the number of organized crime case openings. One possibility is that a reduction in organized crime activity—and thus a reduction in the number of organized crime cases opened—could lead to fewer agents needed to investigate organized crime matters. On the other hand, a reduction in agents working on organized crime cases could lead to a reduction in the overall number of these cases opened and may not actually reflect a decrease in organized crime activity. One possible side effect of a decrease in the number of federal agents investigating organized crime may be an increased workload for each agent working on these cases; if the organized crime threat is sustained—as has been suggested by DOJ officials—it is possible that the caseloads of organized crime agents could increase if the number of agents actually investigating organized crime is sustained or further decreased.

Prosecutions

The Department of Justice, Organized Crime and Racketeering Section (OCRS), oversees federal organized crime prosecutions. As noted earlier, OCRS has organized crime Strike Force Units in 21 of the 94 U.S. Attorneys' Offices (USAOs) where there exists a large organized crime presence in that district. Figure 2 graphs the number of organized crime cases referred to the USAOs for prosecution from FY1999 through FY2010. As evidenced in the figure, there has not been a consistent increase or decrease in the number of organized crime cases filed with the USAOs across these years.

Many factors could influence the number of organized crime cases referred to the USAOs for prosecution. While this number could reflect the actual activities of organized crime groups, several factors suggest that the trends in prosecutions may not mirror the trends in organized criminal activity—either in type or in number. Firstly, prosecutions may be driven in part by Administration priorities, which may not emphasize all federal crimes equally. Secondly, organized crime cases that are actually prosecuted are only a small subset (and not necessarily a proportionate subset) of those crimes committed. Therefore, the number of organized crime prosecutions alone provides little evidence as to the true trends in organized criminal activity.

One question that remains is whether the resources and tools for investigating and prosecuting organized crime in the United States—as previously provided by Congress—are the most effective tools for combating today's threats from organized crime.

Current Organized Crime Trends

As mentioned, organized crime in the United States has taken on an increasingly transnational nature. This shift has been facilitated by factors such as economic globalization and improved communications technology. Organized crime activities across the globe do not appear to be waning, and the National Intelligence Council has estimated that by 2025, the "relative power" of criminal networks will continue to rise, and some countries could even be taken over and run by these networks. The section below provides a detailed discussion of the organized crime groups that operate in the United States, the activities of these groups, and the domestic industries that have been and may continue to be threatened by organized crime.

One way of analyzing the organized crime threat is by examining the most prominent organized crime groups operating in the United States. The FBI, for instance, provides information on the various organized crime groups in order to present a picture of organized crime in the United States. A second method is by examining those areas of society threatened most by the activities of organized crime (such as the economy or national security), regardless of which group is committing the crime. The Organized Crime and Racketeering Section (OCRS) at DOJ, for example, presents the organized crime threats to the United States in terms of the principal threat areas, rather than the individual groups committing crimes. Subsequent discussion uses both approaches to analyze organized crime.

Organized Crime Groups Operating in the United States57

Although organized crime is popularly associated with the Italian Mafia, the breadth of organized crime in the United States includes many other criminal organizations. The FBI investigates organized crime groups that fall into three major categories: (1) La Cosa Nostra, Italian organized crime, and racketeering; (2) Eurasian/Middle Eastern organized crime; and (3) Asian and African criminal enterprises. Figure 3 outlines the top organized crime threats to the United States, as identified by the FBI. Threats to the United States posed by selected large-scale criminal organizations are discussed below.

Eurasian/Russian

The discussion of Russian organized crime tends to reference not only Russian crime syndicates, but a variety of Eurasian crime groups as well. These groups began emerging in the United States in the late 1970s and became even more prevalent following the collapse of the Soviet Union in 1991. They are now considered by the FBI to be the top organized crime threat to the United States. The Russian organized crime groups that operate in the United States exhibit less of a traditional hierarchical structure than the Italian Cosa Nostra, and they form their networks based more on the skills needed for particular crimes. In the United States, Russian organized criminals are involved in long-established organized crime activities such as extortion, abduction, human smuggling, prostitution, drug trafficking, and theft, as well as white-collar criminal activities including money laundering and fraud of various types. In fact, the FBI has indicated that roughly 60% of FBI cases targeting Russian organized crime involve fraud. The types of fraud and scams that Russian criminals participate in cross industries from health care and strategic commodities (e.g., precious metals) fraud to credit card, insurance, securities, and investment fraud. They are also involved in scams in domains such as tax evasion and energy price rigging. Many Russian organized crime groups operate in New York, New Jersey, Boston, Philadelphia, Chicago, Los Angeles, San Francisco, and Miami, among other cities.

U.S. law enforcement has relied heavily on RICO, money laundering, and asset forfeiture statutes to prosecute Russian crime syndicates. They consider these pieces of legislation as significant for combating organized crime activities as well as the structure of the criminal organizations. Principal efforts to control Russian organized crime groups include the establishment of both domestic and international task forces and working groups aimed at dismantling these crime syndicates. Domestically, the FBI has set up task forces in areas such as New York City, New Jersey, Philadelphia, Chicago, San Francisco, Los Angeles, and Miami. Also, local police departments in major cities, including New York and Los Angeles, have set up Russian organized crime task forces. In addition, the FBI is involved in international working groups concerned with Russian organized crime, including the Eurasian Organized Crime Working Group; the Central European Working Group at the International Law Enforcement Academy in Budapest, Hungary; and the Southern European Cooperative Initiative in Bucharest, Romania. The FBI is also involved in an international organized crime task force in Budapest, Hungary, aimed at combating Russian organized crime; currently, this is the only international task force aimed at combating organized crime in which the FBI is involved. The FBI has indicated that this international effort has been invaluable in developing international partnerships and intelligence, as well as expanding its international capabilities.

Asian

Asian organized crime groups have had a presence in the United States since at least the early 1900s. However, there has been an increase in Asian organized crime since the 1990s. Research indicates that there is not one unified Asian organized crime group; rather, there exist numerous crime syndicates, some more traditionally organized than others. According to the FBI, traditional groups include Chinese triads from Hong Kong, Taiwan, and Macau, and the Japanese Yakuza. Less traditional groups include tongs, triads, and Asian street gangs such as the Big Circle and the Fuk Ching. Similar to a trend seen among Russian organized crime groups, an emerging trend seen among Asian crime syndicates is a willingness to cooperate across ethnic and racial lines if it is profitable for the enterprise. Asian organized crime groups derive most of their profits from trafficking in drugs—such as heroin—and people, but are also actively involved in other criminal activities, from money laundering, counterfeiting, and fraud to kidnapping and the theft of autos, software, and clothing. The FBI indicates that Boston, Chicago, Honolulu, Las Vegas, Los Angeles, New Orleans, New York, Newark, Philadelphia, Portland, San Francisco, Seattle, and Washington, DC, are examples of areas with a high prevalence of Asian organized crime.

U.S. law enforcement has relied heavily on RICO, money laundering, and asset forfeiture statutes to prosecute Asian crime syndicates. Similar to efforts aimed at combating Russian organized crime groups, U.S. law enforcement participates in domestic and international working groups aimed at combating Asian organized crime. Domestically, the Interagency Working Group on Alien Smuggling examines policy and investigative issues surrounding the smuggling of aliens and trafficking of women and children, including involvement of Asian organized crime groups in these activities. The FBI is also involved in international working groups concerned with Asian organized crime, including the FBI/National Police Agency of Japan Working Group, Interpol's Project Bridge, the International Asian Organized Crime Conference, the Canadian/United States Cross-Border Crime Forum, and the International Law Enforcement Academy in Bangkok, Thailand.

Italian

The La Cosa Nostra (LCN) is the most prominent Italian organized crime group operating in the United States. Within the LCN, there are five principal crime families. The LCN is involved in an array of illegal activities, from gambling and loan sharking to drug trafficking and money laundering, that threaten American society. Most members of the LCN operate in the New York metropolitan area, but there are also criminal operations in Boston, Chicago, Newark, Detroit, Philadelphia, and Miami. La Cosa Nostra has been operating in the United States since the 1920s and still poses a threat today.

Early congressional and law enforcement efforts to control organized crime were aimed directly at controlling the illegal activities of the Mafia (LCN). As discussed earlier, these early congressional efforts involved enacting the 1968 Omnibus Crime Control and Safe Streets Act (P.L. 90-351) and the 1970 Organized Crime Control Act and RICO (P.L. 91-452), as well as the asset forfeiture and money laundering statutes. Civil RICO lawsuits have been particularly effective in purging the LCN from legitimate industries and unions, such as the Las Vegas gaming industry, the New York moving and storage industries, and the union representing truckers servicing JFK airport in New York. In addition to federal RICO statutes, many states have also adopted RICO statues. Many believe that RICO has been the most powerful tool in combating La Cosa Nostra. Despite these effective tools, the LCN remains a major organized crime threat to American society.

Balkan

The FBI identifies Balkan organized crime, and Albanian groups in particular, as among the most formidable organized crime groups today, as evidenced, in part, by an increase in Albanian-born individuals arrested in the United States. Albanian organized crime groups emerged in the United States in the late 1980s and have evolved from being close knit families to allowing in outsiders with particular areas of criminal expertise. These groups are active in areas such as New York, Los Angeles, Las Vegas, Dallas, and Houston, to name a few. Balkan crime groups have been involved in various illegal activities such as gambling, extortion, robbery, counterfeit currency, drug trafficking, human smuggling, real estate fraud, money laundering, witness intimidation, and murder.

One emerging trend seen among Balkan organized crime groups is an increased cooperation with other organized crime groups—further evidence that Balkan organized crime is not just increasing, but expanding. For example, the FBI has indicated that the LCN has partnered with Albanian organized crime in New York. There, the LCN is relying on the Albanians as their enforcers, and the Albanians have increasingly taken over some turf there that was previously dominated by the LCN.

Other Organized Crime Groups

The federal government recognizes threats from other organized crime groups that may not have the same notoriety as larger groups such as the LCN. For example, Middle Eastern criminal enterprises are primarily involved in organized theft, financial fraud, money laundering, and cigarette smuggling. Also, African crime syndicates—and particularly Nigerian groups—are involved in heroin trafficking, money laundering, and fraud (including insurance, bank, auto, healthcare, identity, and document fraud).

Of note, a trend among organized crime groups is that they begin by victimizing members of their own neighborhoods and ethnic communities, and then expand their illegal activities beyond these community lines. For example, in the 1920s Prohibition era, the Italian-American mafia began victimizing other Italians in the Five Points neighborhood of Little Italy in New York, before extending its activities to other neighborhoods of New York and the surrounding metropolitan area. If this is indeed a common pattern across organized crime groups, then it is likely that emerging crime groups may expand their activities rather than restrict them to the areas in which they currently operate.

Domestic Impact of Organized Crime

The U.S. Department of Justice Organized Crime Council, chaired by the Deputy U.S. Attorney General, has identified eight strategic threats to the United States posed by international organized crime. Of note, the term "international organized crime" includes not only those organized crime groups operating outside the borders of the United States, but within the U.S. borders as well. As mentioned earlier, the council noted that international organized criminals have and may penetrate the energy and other strategic sectors of the economy; provide logistical and other support to terrorists, foreign intelligence services, and governments; smuggle/traffic people and contraband goods into the United States; exploit the United States and international financial system to move illicit funds; use cyberspace to target U.S. victims and infrastructure; manipulate securities exchanges and perpetrate sophisticated frauds; corrupt or seek to corrupt public officials in the United States and abroad; and use violence or the threat of violence as a basis for power.

Former U.S. Attorney General Michael Mukasey outlined strategic goals in combating these threats. These goals continue to include

targeting the largest organized crime threats, dismantling criminal organizations and removing their leadership, marshalling information from all available resources, and relying on all possible domestic and international tools and law enforcement partnerships.

One specific goal of the Organized Crime Council that may be of particular interest to Congress is to "provide law enforcement with updated legislation and operational procedures needed to combat international organized crime." Specifically, the Organized Crime Council indicated that laws and regulations should be expanded, updated, or modified to afford the government the abilities to investigate and prosecute organized criminals that affect American society from outside U.S. borders. This suggests that federal law enforcement currently may not have the extraterritorial jurisdiction or the most effective tools to combat the evolving organized crime threats to the United States. The section below provides a detailed discussion of some potential impacts of organized crime, followed by possible issues that Congress may consider.

Impact of Organized Crime on the Economy

Organized crime could weaken the economy with illegal activities (such as cigarette trafficking and tax evasion scams) that result in a loss of tax revenue for state and federal governments. This is particularly of issue given the current state of the country's economic health. Their fraudulent activities in the domains of strategic commodities, credit, insurance, stocks, securities, and investments could weaken the already-troubled financial and housing markets.

Money Laundering

Money laundering involves concealing the nature, location, source, ownership, or control of proceeds from an illegal activity or placing them back into further illegal activity. The ill-gotten proceeds are laundered through a variety of methods to become "clean money." With the expansion of the Internet and increased globalization, the methods of money laundering continue to become increasingly complex and difficult to detect. The Financial Crimes Enforcement Network (FinCEN), under the Department of the Treasury, indicates that the routes for money laundering include banks, check cashers, money transmitters, businesses, and casinos. Money launderers use methods such as complex wire transfers, shell companies, and currency smuggling to hide their dirty money.

Money laundering became a federal crime in the Money Laundering Control Act of 1986 ( P.L. 99-570 ). It came to Congress's attention that organized criminals were camouflaging their proceeds, and Congress strengthened the federal criminal statues to better combat criminal organizations. Recently, the scope of the money laundering statute has come under examination. Until more recently, the statute prohibited financial transactions of proceeds from illicit activities, but it did not define what constitutes "proceeds." The Supreme Court ruled in United States v. Santos that in the money laundering statute, the term "proceeds" refers to profits rather than gross receipts.

Legislation enacted in the 111 th Congress has since amended the money laundering statute. The Fraud Enforcement and Recovery Act of 2009, or FERA ( P.L. 111-21 ), clarifies both the money laundering and international money laundering statutes. Namely, it indicates that "proceeds" includes gross receipts of illegal activities. Some experts have argued that expanding the predicate offenses for international money laundering could broaden the tools the federal government is able to rely upon when investigating and prosecuting organized crime that is increasingly crossing international lines. However, recently enacted legislation has not addressed these predicate offenses.

Cigarette Trafficking

Law enforcement agencies have also noted that criminal syndicates' participation in the trafficking of contraband cigarettes poses a significant threat to American society. A number of different organized crime groups are involved in cigarette trafficking. This illicit activity indirectly threatens the American economy and American communities. Cigarette smuggling leads to lost tax revenue. Businesses, in turn, compensate by raising taxes for the consumer, ultimately placing the increased economic burden on the consumer. Excessive economic burdens on the consumer are of particular concern now because of the current economic recession. Consequently, revenues that would assist in funding government programs are being illegally redistributed because of organized crime activities. Congress has repeatedly debated legislation to revise the Jenkins Act to enhance reporting requirements for the sale of cigarettes and smokeless tobacco products as well as legislation to provide stronger penalties for smuggling such products.

Piracy and Counterfeiting

There is evidence that organized criminals are becoming increasingly involved in the production and distribution of counterfeit and pirated goods. In Los Angeles County alone, Russian, Asian, Eurasian, and Lebanese organized crime groups are among those that have been involved in intellectual property rights crimes. Industries targeted are broad, including the music and motion picture industries, clothing companies, luxury goods manufacturers, and the tobacco industry. The federal government has taken several steps so far in fighting these crimes. In fact, in March 2004, the Department of Justice created an Intellectual Property Task Force to combat the increase in intellectual property piracy and counterfeiting by organized crime groups. Also, the Office of the United States Trade Representative (USTR) has indicated that an Anti-Counterfeiting Trade Agreement (ACTA) is being formulated with other countries, including Australia, Canada, EU, Japan, Jordan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, and the United Arab Emirates. According to the USTR, one benefit of the ACTA is that it will help combat the piracy and counterfeiting that is an "easy source of revenue for organized crime."

Counterfeit currency is another example of a domain in which many organized crime groups are involved. Asian organized crime groups in Los Angeles and New Jersey have been linked to the production of "supernotes," or fake $50 and $100 bills. This can not only lead to a loss in actual money (for those paid in the counterfeit currency), but it can damage the value of the U.S. dollar. Some experts and policy analysts have suggested that one possible legislative option to help counter the involvement of organized crime in piracy and counterfeiting may be to expand the organized crime and money laundering statutes to include large-scale piracy and counterfeiting tied to other criminal activities.

Organized Crime and Terrorists

In addition to concern surrounding the many industries in which organized criminals operate, both analysts and policymakers have expressed concern about the potential nexus between organized crime and terrorism. The principal distinction authorities make between organized crime groups and terrorist groups is motivation. Money motivates organized crime, and ideology motivates terrorism. Because of this fundamental difference, the National Intelligence Council expects that between now and 2020:

[T]he relationship between terrorists and organized criminals will remain primarily a matter of business, i.e., that terrorists will turn to criminals who can provide forged documents, smuggled weapons, or clandestine travel assistance when the terrorists cannot procure these goods and services on their own. Organized criminal groups, however, are unlikely to form long-term strategic alliances with terrorists. Organized crime is motivated by the desire to make money and tends to regard any activity beyond that required to effect profit as bad for business. For their part, terrorist leaders are concerned that ties to non-ideological partners will increase the chance of successful police penetration or that profits will seduce the faithful.

Despite the difference in motivation for organized crime and terrorism, the linking element for the two is money. Terrorist organizations may obtain funding from criminal acts, similar to organized crime groups. Also, terrorist organizations may launder these funds, similar to criminal organizations. One example of a domain in which both organized criminals and terrorists may both benefit monetarily is piracy. Although there is currently less evidence of terrorist involvement in piracy, this business is a high-profit, low-risk activity, attractive to both criminals and terrorists.

Even if organized crime groups and terrorist organizations do not form long-term alliances, the possibility of short-term business alliances may be of concern to citizens and policymakers alike. The FBI indicates that although it has not yet had a case of organized crime groups working directly with terrorists, the possibility exists, and it continues to be watchful for this nexus. Because organized criminals are monetarily motivated, the FBI believes that these criminals would be inclined to work with terrorists if offered sufficient funds.

Although there are few reported instances of organized crime groups actually aiding terrorists, there are reported instances of international organized criminals conspiring to provide support to terrorist organizations. One such instance is Viktor Bout, an international arms trafficker who has been charged with conspiring to sell weapons to the Revolutionary Armed Forces of Columbia (FARC). As mentioned earlier in this report, federal law enforcement distinguishes between organized crime groups and drug trafficking organizations. Although there are no reported instances of organized crime groups directly working with terrorists, there are reported instances of "narco-terrorism," or terrorism funded through the proceeds of drug trafficking; the Liberation Tigers of Tamil Eelam, members of Hizbollah, and the Al-Qaida network are all examples of terrorist groups with close ties to drug trafficking. GAO reports that U.S. officials are concerned with the threat in Eurasia of the links between terrorist organizations and organized crime, and trafficking in persons and drugs. With the prevalence of drug trafficking in the United States (via drug trafficking organizations as well as via organized crime groups that also have a hand in drug trafficking), policymakers may question (1) to what extent there is a nexus between domestic organized crime and terrorism and (2) what measures will most effectively combat both terrorism and organized crime.

Potential Issues for Congress

The evolving nature of organized crime, as discussed, presents several issues that Congress may wish to consider. One issue is whether the tools that Congress has provided the federal government with to investigate and prosecute domestic organized crime—namely RICO, money laundering, and asset forfeiture statutes—are still effective tools to combat today's threats from organized crime. As evidenced by proposed legislation, Congress is considering clarifying and expanding these statutes so as to better equip the federal government to fight organized crime.

Federal Organized Crime Resources

Policies exist that allow federal law enforcement to investigate and prosecute organized crime groups. What may not fully exist, however, are the monetary and personnel resources to effectively combat organized crime—evidenced by a decrease in FBI agents used to investigate organized crime matters and in FBI organized crime case openings.

As previously discussed, in FY2004, the FBI utilized about 35% fewer agents on organized crime matters than it did in FY2000. Agent utilization on organized crime matters also declined by over 15% between FY2005 and FY2009. The FBI has recognized that prioritizing counterterrorism and counterintelligence cases affects resources available to criminal investigations and that targeting the most significant threats will allow criminal investigative resources to be used most effectively. FBI Director Robert Muller testified to the need for restoring resources to the FBI's criminal programs, which include organized crime. Efforts—both administrative and congressional—can be made to this effect in several ways. One congressional option may be to increase overall funding available to the FBI and other federal law enforcement agencies that may be experiencing a decrease in resources dedicated to more traditional crime fighting matters, including organized crime. If these resources are then administratively allocated to criminal programs, organized crime agent utilization could potentially be more closely aligned with agent allocation without taking resources away from higher priority areas. Another congressional option may be to provide directed funding for organized crime matters. This option could ensure that any increase in funding intended to be directed toward criminal programs or organized crime matters would be utilized in those domains.

Yet another policy option may be to decide that the existing resources dedicated to organized crime are sufficient, given the limited financial resources available under the federal budget and given the national priority of combating the threats from terrorism. If, on the other hand, more funding were available or if the link between organized crime and terrorism were more direct, the case for reevaluating the funding directed toward organized crime might be stronger. However, considering the current budget constraints and priorities, some may consider existing organized crime funding as adequate.

Multilateral Crime Fighting

The federal government is already involved in several multilateral efforts—with state and local agencies as well as with international allies—to combat organized crime. With respect to working with domestic state and local law enforcement agencies, federal law enforcement agencies have formed joint task forces, some that target a variety of organized crime groups and some that target specific criminal organizations. Several of these task forces were outlined in previous sections of this report. Some analysts have suggested that despite the benefits of multilateral crime fighting, potential jurisdictional issues may arise. As organized crime groups have expanded their activities beyond state and even national lines, so has the responsibility for combating organized crime expanded. There exists a clear line between state and federal jurisdiction for prosecuting crimes. However, jurisdiction over agency responsibility for investigating cases may at times be unclear. This may be due in part to overlapping agency responsibilities and may also arise from the complexity of the cases investigated. For instance, an organized crime case with a drug component may fall under the jurisdiction of both the FBI and the DEA, potentially causing confusion on which agency would take the lead on such cases.

An issue that may become more visible than the issue of domestic law enforcement coordination is that of international law enforcement coordination. By ratifying the United Nations Convention Against Transnational Organized Crime in 2005, Congress took a step in working with foreign governments and law enforcement agencies to combat organized crime. Specifically, this Convention provided the framework for international cooperation by requiring mutual legal assistance between countries in fighting organized crime, as well as by requiring extradition for those organized criminal offenses outlined in the Convention. These provisions enhance the United States' ability to combat international organized crime and work with countries where there was no previous mutual assistance arrangement already in place.

As organized crime becomes increasingly transnational, so may the need for international organized crime working groups, task forces, and law enforcement cooperation. The benefits of international cooperation and partnerships are twofold. U.S. law enforcement can extend its expertise and capabilities to assist overseas law enforcement combat organized crime. Partnering with international law enforcement will develop the intelligence needed to support domestic investigations of organized crime. However, one of the challenges, as expressed by federal law enforcement, is the increased time required to conduct international investigations. Among the various effects that this may have on investigations, organized crime groups may be inadvertently afforded a longer time to conduct their illegal activities, potentially affecting a greater number of victims or increasing the magnitude of damage to the victims. A second challenge relating to international investigations may arise from the domestic practice that federal prosecutors are involved at all stages of organized crime cases. When investigations are conducted abroad, the involvement of prosecutors may not be as consistent.

In addition to law enforcement collaboration with foreign nations, Congress has given the federal government extraterritorial jurisdiction to investigate and prosecute individuals who criminally violate U.S. interests abroad ( P.L. 99-399 ). This legislation was directed at combating terrorist acts against the United States, and thus the extraterritorial jurisdiction does not necessarily cover all crimes committed by organized crime groups. The increasingly transnational nature of organized crime as well as the potential for a nexus between organized crime and terrorism—as suggested by some analysts—may lead policymakers to question whether and/or how to extend this extraterritorial jurisdiction beyond the crimes currently covered with the practical and diplomatic challenges that such an approach may entail.

Potential Organized Crime Nexus with Terrorism

Some experts have indicated that the lines between organized crime groups and terrorist organizations may become increasingly blurry. Even if organized crime groups and terrorist organizations do not form "long-term strategic alliances," as suggested by the National Security Council, the links between organized crime and terrorism may still be significant. The council suggests (as does the FBI), however, that organized criminals and terrorists may ally for business purposes. Both criminal and terrorist organizations depend on money; organized criminals are profit-driven, and terrorists—though ideology-driven—need money and goods to finance their operations. It has been suggested that organized crime groups may cooperate with terrorists if the business alliance is profitable.

Some experts have cited potential additional areas of overlap between organized crime groups and terrorist organizations. For example, the language school that provided some visas for the 9/11 hijackers is also reported to have provided visas for prostitutes of a human trafficking ring. There have also been instances of terrorist organizations drawing on the structure and activities of organized crime groups as models for structuring their organizations and financing their operations. Drug trafficking, for instance, has been one of the most profitable activities for both organized crime groups and terrorist organizations. Other illegal activities include human trafficking, weapons trafficking, endangered species trafficking, art and antique theft, counterfeiting, and credit card fraud.

Because there may be overlap between organized crime groups and terrorist organizations in terms of their criminal activities and funding sources, some analysts have argued that combating organized crime is central to combating terrorism. Congress therefore may consider the potential nexus between organized crime and terrorism when addressing the nation's security and determining the appropriate allocation and utilization of resources, as well as effective information sharing and interagency cooperation, as discussed above.