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Organized Crime - Activities

illicit money business relationship

The range of activities in which organized crime groups are said to be involved is vast indeed. Traditionally, it has been argued that these activities are of two major types. The first involves the distribution and sale of illicit goods and services. Specifically such illicit enterprises might include prostitution, drugs, gambling, pornography, and loan-sharking. Extortion, the other major form of activity, is undertaken as an end in itself or as the means to other ends. These extortionate practices include various forms of business and labor racketeering and, it is argued, they have often provided the point of entry by which organized crime groups "infiltrate" legitimate businesses. While infiltration may in some cases be the appropriate word, in other cases, it obscures the role played by business interests that knowingly engage with organized crime groups because they believe it is in their best interests to do so. Such cases suggest collaboration rather than infiltration since the relationship is more symbiotic than parasitic. Thus, a legitimate business might use the relationship with an organized crime group as a source of investment capital while the organized crime group might view the relationship as an effective way to launder funds, diversify risk, or achieve some level of public respectability.

What illicit marketeering and extortion share in common, to some degree, is the potential for organization and routinization. In all such cases, not only collaborators but also victims understand the nature of the relationships in which they are involved. However, both groups may be unwilling to share the task of preventing or controlling the prohibited conduct. This may be because of their own profit-sharing, in the case of collaborators, or because they fear that such action could put them in danger, as in the case of victims.

Other forms of activities associated with organized crime groups—such as the use of violence or political corruption—must be understood in terms that stress the instrumental character of such practices. By definition, the businesses of organized crime operate beyond the reach of law and therefore conflicts that arise among participants cannot be resolved using the state-approved legal apparatus. Under such conditions, violence (and more importantly the threat of violence) assume some significance as techniques of conflict resolution. In a related way, organized crime groups need to be able to evade or to neutralize those state agencies charged with their control. Traditionally, corruption has proven to be an important mechanism by which this task is accomplished. As in the case of the infiltration of legitimate business, however, corruption is more often a form of symbiotic relationship than a form of victimization.

By the 1980s and 1990s, policymakers and academics alike had begun to argue that it would be misleading to think about organized crime activities in traditionally narrow terms. While various forms of extortion and marketeering continued to be important income sources, organized crime had become much more sophisticated. Of particular interest in this respect was the increasingly important role that criminal associations were thought to play in various financial markets. In the late 1990s, for instance, it was claimed that organized crime groups owned or controlled several New York brokerage firms.

During this period, attention also focused on the crime of money laundering. As cash businesses, drug trafficking, gambling, and other organized crimes generate huge amounts of money that is vulnerable to seizure by state authorities. The movement of these funds through international money markets not only launders the money but also in many cases extends criminal enterprises and facilitates corruption and bribery. It has been estimated that over $750 billion in illicit funds is laundered worldwide annually of which $300 billion is laundered through the United States.

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