In the last two decades, organized crime has grown more complex, posing evolving challenges for U.S. federal law enforcement. This is largely because these criminals have transformed their operations in ways that broaden their reach and make it harder for law enforcement to define and combat the threat they pose. Globalization and technological innovation have not only impacted legitimate commerce, but they have simultaneously revolutionized crime. In response to these forces, organized criminals have adopted more-networked structural models, internationalized their operations, and grown more tech savvy. Criminals have become more elusive. They see international borders as opportunities while law enforcement views them as obstacles. Criminals have expanded their range of tools and targets as well. Meanwhile, law enforcement "plays by yesterday's rules and increasingly risks dealing only with the weakest criminals and the easiest problems," according to the Strategic Alliance Group, a partnership of seven law enforcement agencies from five nations. Motivated by money, organized crime fills needs not met by licit market structures and/or exploits businesses, consumers, and nations for profit. Organized criminals have capitalized on commercial and technological advances that have bolstered communication and international business. They use innovative methods of moving illegal proceeds around the world. Some nations have also witnessed the creation of ties between powerful business figures, politicians, and criminals. Modern organized criminals may prefer cellular or networked structural models for their flexibility and avoid the hierarchies governed by elaborate initiation rituals that were favored by their predecessors. Fluid network structures make it harder for law enforcement to infiltrate, disrupt, and dismantle conspiracies. Many 21 st century organized crime groups opportunistically form around specific, short-term schemes. Further, these groups may outsource portions of their operations rather than keeping all of their expertise "in-house." In July 2011, to address these and other issues, the Obama Administration issued its Strategy to Combat Transnational Organized Crime ( 2011 Strategy ) . It described transnational organized crime (TOC) as a strategic threat to national security, laid out a definition of TOC, and set forth five policy objectives and six categories of priority actions in an attempt to devise a cohesive federal response to transnational organized crime. Complicating all of this, since the terrorist attacks of September 11, 2001 (9/11), there has been a shift in law enforcement attention and resources more toward counterterrorism-related activities and away from traditional crime fighting activities—including the investigation of organized crime. This report provides an analysis of how organized crime has capitalized on globalization by using borders as opportunities, relying on fast-paced technological change, and adapting its organizational structures. It illustrates how these transformations can impact U.S. persons, businesses, and interests. The report includes a discussion of how U.S. law enforcement conceptualizes organized crime in the 21 st century and concludes by examining potential issues for Congress, including the extent to which organized crime is a national security threat (partly to be tackled by U.S. law enforcement agencies), congressional oversight regarding the federal coordination of organized crime investigations, and the utility of current resources appropriated to combat organized crime. This report employs a broad conceptualization of organized crime in its narrative discussion of criminal activity. In other words, the analysis includes groups engaged in sustained criminal enterprises, such as—but not limited to—drug traffickers, mafia families, smugglers, violent gangs, and fraudsters. These operations may or may not have a transnational dimension to them (which is a requirement under the guidelines of the 2011 Strategy) , but they directly impact U.S. persons, businesses, and/or interests. While this conceptualization may be broader than the definition laid out in the 2011 Strategy , it incorporates a range of criminality that may inform Congress in future legislation impacting organized crime. The cases and examples discussed in this report are not intended to set definitional boundaries for organized crime. Organized crime targeting the United States has internationalized, and its structures have flattened. The popular image of mobsters employing elaborate initiation rituals and strict codes of conduct to control crews that assail their own communities is outmoded. Today, nimble, adaptive, loosely structured small groups with global reach harm consumers, businesses, and government interests on a daily basis. Commercial and technological innovations are behind this transformation. They have helped to reduce national trade barriers, widen transportation infrastructure, and bolster volumes of international business. Smugglers have taken advantage of growing international commerce to hide illicit trade. The Internet and extensive cellular telephone networks have fostered rapid communication, simultaneously revolutionizing licit and illicit commerce. For example, integrated financial systems allow for easy global movement of money. Estimates suggest that money laundering annually equals between 2% and 5% of world GDP. Criminal organizations targeting the United States operate in many of the world's nations. Areas wracked by social disorder, inadequate policing, and poor governance offer opportunities for organized crime to take root. These groups exploit diaspora communities in the United States as cover for their operations, situating elements of their global operations among immigrant enclaves. Organized crime groups are becoming more entrepreneurial or market focused, reacting to changes in both illicit and licit economies. Of course, they are still heavily involved in activities such as narcotics trafficking and money laundering (which have been greatly impacted by globalization), but organized criminals are increasingly involved in less "traditional" high-tech operations encompassing identity theft, counterfeiting of goods, and various types of fraud. Modern organized criminals prey upon weaknesses in international transportation and customs security regimens. Border policing efforts have attempted to keep pace with the expansion of international commerce. Organized criminals attempting to smuggle goods, people, or information across borders also face enhanced border security regimens resulting from the terrorist attacks of 9/11. Regardless, specialized criminal networks smuggle items such as narcotics, counterfeit goods, stolen goods, and bulk cash, as well as humans, around the world and into the United States. They have hidden their contraband within the growing volume of legitimate global trade. Prior to the global recession, between 1995 and 2008 the volume of global containerized traffic tripled. Drug traffickers move large loads of cocaine, eventually destined for U.S. markets, from South America to Mexico via containerized shipping. International counterfeiters use containers to smuggle their fake goods into the United States. As Moisės Naím has succinctly put it, most illicit trade involves copycats, smugglers, and traffickers. While individuals can and do engage in these activities, a good deal can be attributed to organized crime. Criminal groups engage in counterfeiting and smuggling across and within the borders of the United States. This activity includes a wide range of products and influences the lives of everyday Americans, U.S. businesses, and government. Counterfeiting highlights the nexus between globalization and the modernization of organized crime. Although it is difficult, if not impossible, to determine how deeply immersed organized criminals are in this activity, at least one study has suggested serious involvement. Further, in a recent speech before the International Intellectual Property Summit, Attorney General Holder reinforced the need for the international law enforcement community to combat "the international networks of organized criminals now seeking to profit from IP [intellectual property] crimes." In areas such as film piracy, counterfeiting does not necessarily involve high entry costs or large legal penalties when compared to more conventional criminal activity such as drug trafficking. It is also potentially very lucrative. With little infrastructure—a high-speed Internet connection, scanner, and copier and off-the-shelf software—criminals around the globe can easily imitate the branding and packaging that accompanies products, let alone copy the products themselves. Counterfeiting and pirating goods involves the violation of intellectual property rights (IPR), essential to creative and high-tech industries particularly reliant on copyrights, trademarks, and patents to protect innovation. Counterfeiting and piracy potentially harm legitimate businesses and consumers, sapping profits and brand value and flooding markets with inferior and even dangerous products masquerading as legitimate goods. Aside from enforcement outlays, the activity also costs governments tax revenue and may slow economic growth by driving down incentives to innovate. In FY2011, the domestic value of IPR-related law enforcement seizures of contraband in the United States was $178.9 million, a 5% drop from the previous year. Federal officials attributed the decline to "a shift toward using international mail, express courier and consolidated shipping services to import counterfeit and pirated goods." Products originating in China—both Mainland China and Hong Kong—accounted for 80% of these IPR seizures. Another example of organized criminals viewing borders as opportunity involves auto theft. Although international automobile theft has existed almost as long as cars have been around, the integration of worldwide markets and expansion of international shipping have greatly impacted it by facilitating international transport of stolen automobiles. Assessing the level of such activity is very difficult since few metrics for it exist. Regardless, today's international automobile theft rings benefit from the high levels of cargo container traffic ushered in by globalization. These groups profit by stealing vehicles in the United States and shipping them abroad, where they are sold. Such illicit operations react to global demand for luxury vehicles, and in some instances are extremely responsive to market forces. They trawl large U.S. metropolitan areas that have assortments of vehicles and rely on rail or port facilities to move stolen vehicles abroad. In 2011, the Department of Justice (DOJ) brought a civil suit against a money laundering network with ties to Mexican drug traffickers and the terrorist group Hezbollah. The scheme reportedly involved used auto sales in the United States. The December 2011 suit targeted the Lebanese Canadian Bank (LCB) and two Lebanese exchange houses—the Hassan Ayash Exchange Co. and Ellissa Holding—regarding more than $300 million that was allegedly part of a money laundering operation.