Organized Crime Offenses
Two of the most profitable racketeering activities of organized crime are drug trafficking and money laundering. Gambling, prostitution, and pornography have also been major moneymakers. In 2002 drug trafficking was the largest illegal organized crime activity both in the United States and worldwide. The three most commonly trafficked illegal drugs were cannabis (marijuana and hashish), cocaine, and heroine. RICO makes growing, smuggling (transporting illegally), receiving, buying, and selling illegal drugs a racketeering activity.
The term "trafficking" means dealing, smuggling, buying with the intent to sell, and selling a substance. For example, once a shipment of illegal drugs enters the United States, a dealer or trafficker pays the smuggler for the drugs. The first trafficker then sells the drugs again to a second trafficker who will transport the drugs to a location where a third trafficker pays the second. Each trafficker is a member of an organized crime group. The amount of money that changes hands goes up with every transaction so each trafficker makes a profit. The money received is called "dirty" money and it needs to be "laundered," or cleaned so it can be passed as legal money.
Money laundering involves specialists within the crime organization who get the dirty money into legitimate financial institutions while concealing where the money came from. Money laundering and global crime usually go together. Financial specialists within organized crime establish a series of bogus companies and deposit dirty money into their bank accounts, usually into banks outside of the United States.
Dirty money is frequently mixed with "clean" or legally obtained money in the bank accounts of legitimate companies, which happen to be owned or run by organized crime groups. This practice is called comingling, or mixing legal and illegal funds together, which makes tracking dirty money difficult. Organized crime money handlers try to completely hide the origins of illegal funds by creating confusing paper (receipt)
trails and often succeed in making dirty money appear to be legitimate company deposits or laundered money.
Once clean or laundered money is moved into legally run businesses, it can be used freely. The types of legal businesses crime organizations commonly run include garbage disposal, meat and produce distribution, restaurants, garment manufacturing, bars and taverns, real estate, and vending machine companies.
Organized crime supplies goods and services that are illegal but which the public nevertheless demands. Illegal gambling or gaming is available in most states, while prostitution and pornography have been favored activities for hundreds of years. Prostitution rings recruit women who engage in sexual activities for money. Pornography is the business of supplying photography or books about sexual behaviors. Using children in pornographic materials is known as child pornography or the sexual exploitation of children.
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