NCJ Number
74174
Journal
FORBES Dated: (September 29, 1980) Pages: 60-71
Date Published
1980
Length
10 pages
Annotation
The scope and structure of contemporary organized crime are described, especially its growing involvement with legitimate business.
Abstract
Revenues from organized crime are second only to those from the oil business. Furthermore, taxes and Government regulations have curtailed cash flows of many industries so that organized crime is becoming a major repository of investment capital. The profits from organized crime come from hundreds of millions of little transactions, but have a tremendous overall impact on the economy. Organized crime is no longer confined to cities and the East, but has followed economic development into Florida, Arizona, Texas, and California. Criminal organizations may be basically regional in their domestic operations, but have international ties because of extensive involvement in narcotics. Today drugs are conceded to be Florida's biggest business, with mob profits from these ventures channeled into legitimate businesses, particularly real estate. Because of the risk involved and freedom from taxes, organized crime is far more profitable than most legitimate businesses. Organizational styles vary throughout the country, but most organized crime groups operate in a particular territory because the boss has authorized it and receives tribute. The drug traffic has introduced many dynamic newcomers to the business who have weakened the dominance of traditional groups. Although organized crime is characterized by a very complex organization, it still operates on unseen connections and moves large amounts of money in unseen, unrecorded ways. These invisible relationships are enforced by fear and the potential for violence. Prohibition created the financial authority of organized crime, and with its repeal many mobsters became legitimate businessmen overnight, remained in the liquor business, and/or logically extended their activities into other services needed by clubs and restaurants. Newer areas for organized crime investment have been toxic waste disposal, the mozzarella cheese and pizza business, and security fraud schemes. Scores of small banks have been looted in recent years by organized crime gaining control of a key officer to approve questionable loans to mobsters. Organized crime has influenced entire industries by penetrating labor unions, notably the Laborers International, the East Coast International Longshoremen's Association, and the Teamsters. So far organized crime's infiltration of legitimate business has been limited to small businesses, but the pressures of its enormous cash flow could focus its interests on large corporations. One chart and photographs are provided.