1. 5
The Business of Organized Crime

2. Delivery of Illicit Goods and Services
Organized crime provides a wide array of illegal goods and services to millions of customers on a daily basis.
Some organizations operate world-wide.
Organized crime also conducts its business in a legal way.

3. Corruption
Corrupt relationships between organized criminals and public officials must occur:
At the law enforcement level.
Between the organized criminals who infiltrate businesses and the public officials who regulate these businesses.

4. Pornography Soft-Core Hard-Core
Results from restrictiveness of public policy that prohibits hard-core pornography. (Simulated sex.)
Hard-Core
Depict more specific and explicit sexual acts (and private parts of the body).

5. Prostitution
Any sexual exchange in which the reward is neither sexual nor affection
Legal definition: (Something of monetary value)
Cash
Promiscuity
Relationship to a sexual partner
Subtlety

6. Prostitution Types of Prostitutes Streetwalkers Massage Parlor
Stag Party Girls
Hotel and Convention
Bar Girls
Escort Service

7. Drug Trafficking The Distribution Chain
Importers bring large quantities of cocaine or heroin into US.
Importer hires skilled smugglers to transport the drugs.
Once drug is in US, wholesaler purchases drugs from importer.
Mules or runners – transport drugs for wholesaler.

8. Drug Trafficking Wholesalers receive nearly pure drugs.
Drugs must be diluted (stepped on) with chemicals to increase the amount of the drug.

9. Drug Trafficking Drugs, Guns, and Armed Conflict
Transfer of Arms in “Gray” Market
Fraudulent documents issued by the company, may be used to disguise the actual customer.
Fraudulent documents may disguise the military nature of the goods.

10. Drug Trafficking Drugs, Guns, and Armed Conflict
Transfer of Arms in “Gray” Market
False declarations by the company may hide the actual identity of the supplier.
The arms transfer may be disguised as humanitarian.
Difficult to do without corrupt customs officials.

11. Contraband Smuggling
Seeks to achieve high levels of illicit profits by avoiding taxes, tariffs, and duties on certain consumer items.
US is a primary transit country for contraband being shipped to other destinations.
US is a major source of considerable contraband.
Automobiles, alcohol, tobacco products.

12. Counterfeiting Currency
Typically outside the portfolio of organized crime
High risk
Labor intensive
Relatively low yield profits
Half of the counterfeit money is produced in US.
Therefore; half the counterfeit money is produced outside the US!

13. Counterfeiting Consumer Goods
Counterfeit goods are called knockoffs and is global.
Consumer goods that are desirable and easy to produce are targets of counterfeiting.

14. Gambling The Process Writers - write bets
Bets taken to central office.
Layoff bank covers extraordinary high bets.
Banker is the person that supplies capital to establish the business.

15. Loan Sharking
Provides money at a high interest rate to people who have little choice but to go to such sources in search of financial support.
Because the loan is illegal, default cannot be sought in a court of law “unclean hands doctrine”. This leads to “self-help measures” to collect the debt.

16. Environmental Crime
Legitimate business of waste removal for organized crime.
Illegal waste disposal.
Illegal international trade in animal parts.
Unsafe shipping of Hazardous Materials.

17. Business Racketeering
Reasons to seek Legitimacy
Organized crime groups seek profitable and safe investments.
Active participation in legitimate business enhance the integration of crime group members with members of the business community.

18. Business Racketeering
Reasons to seek Legitimacy:
Organized crime often supplies investment capital that would otherwise not be available from other sources.
Provides money laundering opportunity.

19. Labor Racketeering The use of union power for personal profit.
Major activities by which organized crime realizes illicit profits:
Sweetheart contracts.
The misuse of union benefit funds.
Extortion or “strike insurance.”

20. High-Tech Crime Target computer networks: Government entities
Public utilities
Industries
Businesses
Financial institutions

21. High-Tech Crime
“Computer Crimes” (Any crime in which a computer is utilized):
Identity Theft & Subsequent Purchases
Trading in “kitty porn”
Arranging Prostitution
Communicating Conspiracies
Soliciting Financial Schemes

22. Human Trafficking A significant current crime problem.
Individuals are usually sold for forced into agricultural or industrial labor.

23. Trafficking in Women and Children
Source Countries of Traffickers
Poor economic and employment prospects for women.
Well-defined and organized extant criminal organizations.
A culture that emphasizes a subordinate role for women in society (e.g. Asia, Middle East).

24. Money Laundering
Process where criminals conceal or disguise the proceeds of their crimes or convert those proceeds into goods and services.
Money Laundering Process:
Placement stage
Layering stage
Integration stage

25. Money Laundering Methods: Bulk movement strategy
Use of financial institutions
Use of nonfinancial and commercial businesses
Movement through the underground banking system
The Underground Banking System