Organized Crime in the United States: Trends and Issues for Congress

Congressional research reportDec 22, 2010

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Organized Crime in the United States:

Trends and Issues for Congress

Kristin M. Finklea

Analyst in Domestic Security

December 22, 2010

Congressional Research Service

7-....

www.crs.gov

R40525

CRS Report for Congress

Prepared for Members and Committees of Congress

Organized Crime in the United States: Trends and Issues for Congress

Summary

Organized crime threatens multiple facets of the United States, including the economy and

national security. In fact, the Organized Crime Council was reconvened for the first time in 15

years to address this continued threat. Organized crime has taken on an increasingly transnational

nature, and with more open borders and the expansion of the Internet, criminals endanger the

United States not only from within the borders, but beyond. Threats come from a variety of

criminal organizations, including Russian, Asian, Italian, Balkan, Middle Eastern, and African

syndicates. Policymakers may question whether the tools they have provided the federal

government to combat organized crime are still effective for countering today’s evolving risks.

Organized crime could weaken the economy with illegal activities (such as cigarette trafficking

and tax evasion scams) that result in a loss of tax revenue for state and federal governments. This

is particularly of issue given the current state of the country’s economic health. Fraudulent

activities in domains such as strategic commodities, credit, insurance, stocks, securities and

investments could further weaken the already-troubled financial market.

On the national security front, experts and policymakers have expressed concern over a possible

nexus between organized crime and terrorism. Despite the difference in motivation for organized

crime (profit) and terrorism (ideology), the linking element for the two is money. Terrorists may

potentially obtain funding for their operations from partnering directly with organized crime

groups or modeling their profitable criminal acts. Even if organized crime groups and terrorist

organizations do not form long-term alliances, the possibility of short-term business alliances

may be of concern to policymakers.

In light of these developments, several possible issues for Congress arise. One issue centers on

whether the evolving nature of organized crime requires new enforcement tools. Some

policymakers have suggested that current laws may not be effective at countering present threats

from organized crime. As organized criminals threaten American society from both within and

outside U.S. borders, should Congress expand law enforcement’s extraterritorial jurisdiction to

investigate and prosecute these criminals, and to what extent should Congress encourage

multilateral—both domestic and international—crime fighting efforts?

Another possible issue for Congress concerns whether the resources that the federal government

allocates to organized crime matters are adequate and appropriately allocated to counter the

threats organized crime poses. Following the terrorist attacks of September 11, 2001, national

priorities and federal resources shifted away from more traditional crime fighting—including that

of organized crime—toward counterterrorism and counterintelligence. For instance, the number

of federal agents actually working on organized crime matters and the number of organized crime

cases opened in FY2004 decreased relative to levels before September 11, 2001.

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Organized Crime in the United States: Trends and Issues for Congress

Contents

Introduction ................................................................................................................................1

Definitions of Organized Crime...................................................................................................2

Statutory Definition...............................................................................................................3

Background ................................................................................................................................4

Omnibus Crime Control and Safe Streets Act ........................................................................5

The Organized Crime Control Act and RICO ........................................................................6

Asset Forfeiture and Money Laundering Statutes...................................................................6

More Recent Federal Attention to Organized Crime...............................................................7

Federal Law Enforcement Efforts to Combat Organized Crime....................................................7

Domestic Efforts ...................................................................................................................8

Domestic Working Groups and Task Forces ....................................................................9

International Efforts ..............................................................................................................9

International Working Groups and Task Forces.............................................................. 10

Federal Investigations and Prosecutions of Organized Crime..................................................... 11

Agent Utilization................................................................................................................. 11

Case Openings .................................................................................................................... 13

Prosecutions........................................................................................................................ 14

Current Organized Crime Trends............................................................................................... 15

Organized Crime Groups Operating in the United States ..................................................... 16

Eurasian/Russian........................................................................................................... 17

Asian ............................................................................................................................ 18

Italian ........................................................................................................................... 19

Balkan .......................................................................................................................... 19

Other Organized Crime Groups ..................................................................................... 20

Domestic Impact of Organized Crime........................................................................................ 20

Impact of Organized Crime on the Economy ....................................................................... 21

Money Laundering........................................................................................................ 22

Cigarette Trafficking ..................................................................................................... 22

Piracy and Counterfeiting.............................................................................................. 23

Organized Crime and Terrorists........................................................................................... 24

Potential Issues for Congress..................................................................................................... 25

Federal Organized Crime Resources.................................................................................... 25

Multilateral Crime Fighting................................................................................................. 26

Potential Organized Crime Nexus with Terrorism................................................................ 27

Figures

Figure 1. FBI Allocation and Utilization of Agents on Organized Crime Matters, FY2000FY2004.................................................................................................................................. 12

Figure 2. Organized Crime Cases Filed with the U.S. Attorneys’ Offices, FY1999FY2010.................................................................................................................................. 15

Figure 3. Organized Crime Threats in the United States............................................................. 16

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Tables

Table 1. FBI Organized Crime Cases Worked Per Agent, FY2000 and FY2004 ......................... 14

Contacts

Author Contact Information ...................................................................................................... 28

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Organized Crime in the United States: Trends and Issues for Congress

Introduction

Organized crime threatens the economy, national security, and other interests of the United

States.1 Particularly in the past several decades, organized crime has been evolving and taking on

an increasingly transnational nature. With more open borders and the expansion of the Internet,

organized criminals threaten the United States not only from within the borders, but beyond.

Organized crime stretches far beyond the Italian mafia, encompassing Russian, Asian, Balkan,

Middle Eastern, and African syndicates. Even though organized crime has not received as much

recent media or congressional attention as have other national concerns, such as the threat of

terrorism, these criminals have not ceased their illicit activities.

Illustrating that the threats from organized crime remain, former Attorney General Michael

Mukasey reconvened the Organized Crime Council (OCC) in April 2008 to address the evolving

threats from organized crime. 2 Beyond the individual illegal activities committed by organized

crime groups (e.g., gambling, prostitution, labor racketeering, smuggling/trafficking, extortion,

theft, murder, and money laundering), the OCC has indicated that these organizations may

•

penetrate the energy and other strategic sectors of the economy;

•

provide logistical and other support to terrorists, foreign intelligence services,

and governments;

•

smuggle/traffic people and contraband goods into the United States;

•

exploit the United States and international financial systems to move illicit funds;

•

use cyberspace to target U.S. victims and infrastructure;

•

manipulate securities exchanges and perpetrate sophisticated frauds;

•

corrupt or seek to corrupt public officials in the United States and abroad; and

•

use violence or the threat of violence as a basis for power.

The domestic impact from the activities of organized crime groups thus extends beyond what

many may consider to be traditional organized crime activities. Congress may wish to consider

the impact of organized crime on domestic issues of immediate concern, such as the economy and

national security. Do these evolving threats from organized crime require new tools to combat it?

Another issue that Congress may wish to consider is the adequacy of the resources the federal

government allocates to organized crime. Following the terrorist attacks of September 11, 2001,

national priorities and federal resources shifted away from more traditional crime fighting—

including that of organized crime—toward counterterrorism and counterintelligence.

Subsequently, there has been a decrease in the federal law enforcement resources dedicated to

organized crime matters and a decrease in the number of federal organized crime cases opened. 3

U.S. Department of Justice, “Remarks prepared for delivery by Attorney General Michael B. Mukasey on

International Organized Crime at the Center for Strategic and International Studies,” press release, April 23, 2008,

http://www.usdoj.gov/ag/speeches/2008/ag-speech-080425.html.

Ibid. The Organized Crime Council began meeting in 1970 and continued through 1993. When former Attorney

General Michael Mukasey reconvened the Council in 2008, this was the first time it had met in 15 years.

Department of Justice, Office of the Inspector General, Audit Division, The External Effects of the Federal Bureau of

Investigation’s Reprioritization Efforts, Audit Report 05-37, September 2005, p. 73. This statement is based on

(continued...)

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Consequently, the policy question facing Congress is whether the resources that the federal

government allocates to organized crime matters are sufficient to counter the threats that

organized crime poses.

This report provides a background on organized crime in the United States as well as the tools

that Congress has afforded for the federal government to combat it. It outlines the trends in

federal efforts to investigate and prosecute organized crime. The report then discusses the

evolving nature of organized crime, including the domestic impact of organized crime, prominent

organized crime groups, and their illegal activities affecting the United States. It concludes with a

discussion of issues that Congress may wish to consider, including the attention the federal

government allocates to organized crime matters, the multilateral efforts to combat organized

crime, and issues surrounding a potential nexus between organized crime and terrorism.

Definitions of Organized Crime

A clear definition of organized crime is important for both legal and policy purposes. Some

experts suggest that although organized crime is difficult to define, the various attributes of

criminal organizations are central to the definition. This report uses the attributes of a criminal

organization, in combination with the definitions of organized crime, enterprise, and racketeering

as outlined in the current law, as a framework for discussing the trends in organized crime and

policy issues for Congress to consider.

Specifically, attributes of organized crime may involve

•

structure,

•

restricted membership,

•

continuity,

•

violence or the threat of violence,

•

illegal enterprises,

•

legitimate business penetration,

•

corruption, and

•

lack of ideology.4

The structure of modern organized crime groups often does not exhibit the rigid hierarchy of

more traditional organized crime groups such as the Italian Mafia.5 Moreover, organized crime

(...continued)

statistics from the FBI alone, not including other federal law enforcement agencies. The FBI is the federal law

enforcement agency most involved in investigating organized crime matters.

James O. Finckenauer, “Problems of Definition: What is Organized Crime?” Trends in Organized Crime, vol. 8, no. 3

(Spring 2005), pp. 63-82.

According to the FBI, there are four main Italian organized crime groups operating in the United States: the Sicilian

Mafia (from which the LCN was formed), the Camorra or Neapolitan Mafia, the ’Ndrangheta or Calabrian Mafia,

and the Sacra Corona Unita or United Sacred Crown. The term “Mafia” tends to be an encapsulating term

referencing all of these groups.

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groups restrict membership based on a number of factors, including race, ethnicity, kinship, and

criminal background. These criminal organizations continue, even if leadership or membership

changes over time. Further, violence and/or the threat of violence are integral aspects of organized

crime. Organized crime groups profit from illegal enterprises as well as from infiltrating

legitimate businesses. They may attempt to corrupt public officials in order to escape

investigation, prosecution, or punishment. Notably, the primary goal of organized crime groups is

to make money; these groups are profit-driven rather than ideology-driven (a key distinction

between organized crime and terrorist groups).6

Statutory Definition

There is no current statutory definition of organized crime. The Omnibus Crime Control and Safe

Streets Act of 1968, as amended (P.L. 90-351), defined organized crime as “the unlawful

activities of the members of a highly organized, disciplined association engaged in supplying

illegal goods and services, including but not limited to gambling, prostitution, loan sharking,

narcotics, labor racketeering, and other unlawful activities of members of such organizations.”

This definition described organized crime in terms of the illegal activities rather than in terms of

what constitutes a criminal organization. As such, this definition of organized crime could have

encompassed the activities of not only organized crime groups, but of terrorist groups and corrupt

businesses as well. The definition was repealed in the Justice System Improvement Act of 1979

(P.L. 96-157), leaving the United States with no statutory definition of organized crime.

In the Organized Crime Control Act of 1970 (P.L. 91-452), and more specifically within Title

IX—the Racketeer Influenced and Corrupt Organizations Act (RICO)7—organized crime is

described in terms of an “enterprise” and a “pattern of racketeering activity.”8 The predicate

offenses for racketeering include a host of state and federal crimes listed in 18 U.S.C. § 1961.

Although RICO provides a definition for an “enterprise,” it does not describe the attributes of a

criminal enterprise that distinguish it from a legal enterprise. In addition, this definition describes

organized crime more in terms of the illegal activities than in terms of the criminal organization.

Federal law enforcement tends to refer to organized crime groups as distinct from drug trafficking organizations

(DTOs) or gangs. Therefore, this report does not include specific discussions of DTOs or gangs. For more information

on DTOs (Mexican DTOs, in particular), see archived CRS Report R40582, Mexico’s Drug-Related Violence , by (name

redacted). For more information on gangs, see CRS Report RL34112,Gangs in Central America, by (name redacted

); CRS Report RL34233,

The MS-13 and 18th Street Gangs: Emerging Transnational Gang Threats?, by (name re

dacted); and archived CRS Report RL33400, Youth Gangs: Background, Legislation, and Issues, by (name redacted).

RICO is codified at 18 U.S.C. § 1961-1968.

As defined in 18 U.S.C. § 1961, an “‘enterprise’ includes any individual, partnership, corporation, association, or

other legal entity, and any union or group of individuals associated ... although not [necessarily] a legal entity,” and a

“‘pattern of racketeering activity’ requires at least two acts of racketeering activity” to occur within 10 years of one

another for a criminal organization to be prosecuted for racketeering. Racketeering is defined as any number of

violations, including an act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, or

dealing in a controlled substance. See 18 U.S.C. § 1961 for a comprehensive list of the predicate offenses for

racketeering.

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Background

Organized crime in the United States has a long-standing history. Although this history has its

origins prior to the 20th century, organized crime flourished around the time of Prohibition9 and

grabbed the attention of policymakers. Through most of the 20th century, U.S. law enforcement

combated what many consider “traditional” organized crime networks operating inside the United

States, including the Italian Mafia, Russian Mafia, Japanese Yakuza, and Chinese Tongs. These

criminal organizations were involved in a variety of illegal activities, and in the 1950s and 1960s,

the most profitable of these activities was gambling, followed by loan sharking, narcotics

trafficking, extortion, prostitution, bootlegging, and fraud.10 Other prominent activities of

organized crime groups were racketeering, theft, murder, and money laundering.

The national focus on organized crime led to several efforts aimed at investigating and controlling

it. These initial efforts included the Senate Special Committee to Investigate Organized Crime in

Interstate Commerce in 1950 and 1951 led by Senator Kefauver, Senate hearings on organized

crime in 1958 and 1963 led by Senator McClellan,11 a series of conferences on organized crime at

Oyster Bay in 1965 and 1966, and the creation of the 1967 Task Force on Organized Crime. This

1967 Task Force reported that law enforcement measures to curb organized crime had not been

successful12 and, further, that organized crime in America was on the rise. 13 Statistics showed that

from 1961 to 1966, the number of individuals indicted by the Organized Crime and Racketeering

Section (OCRS) of the Department of Justice (DOJ) rose from 121 to 1,198. Further, the number

of those indicted individuals actually convicted rose from 73 to 477.14 Although the raw number

of indictments and convictions rose between 1961 and 1966, CRS analysis revealed that the

proportion of individuals from organized crime groups who were convicted during this period

actually declined, from 60.3% to 39.8%.15

Frank Browning and John Gerassi, The American Way of Crime (New York: G.P. Putnam & Sons, 1980), p. 53.

U.S. Congress, House Government Operations, Legal and Monetary Affairs, Federal Effort Against Organized

Crime: Report of Agency Operations, committee print, 90th Cong., 2nd sess., June 1968.

Congressional testimony in 1963 by Joseph Valachi—a prominent member of the LCN Genovese crime family—

shed light on the true extent of the LCN network. Joseph Valachi was the first Mafia member to publicly affirm the

existence of a criminal organization such as the LCN. In 1963, he testified before the Permanent Subcommittee on

Investigations of the Senate Committee on Government Operations. For text of his complete testimony, please see U.S.

Congress, Senate Committee on Government Operations, Permanent Subcommittee on Investigations, Organized

Crime and Illicit Traffic in Narcotics, 88th Cong., 1st sess., September 25, 1963.

Task Force on Organized Crime, Task Force Report: Organized Crime: Annotations and Consultants’ Papers, The

President’s Commission on Law Enforcement and Administration of Justice, Washington, 1967, p. 14.

From remarks by Rep. Dante B. Fascell, Chairman, in U.S. Congress, House Committee on Government Operations,

Subcommittee on Legal and Monetary Affairs, The Federal Effort Against Organized Crime. Part 1, 90th Cong., 1st

sess., April 5, 1967.

From remarks by Fred M. Vinson, Jr., Assistant Attorney General, Criminal Division, Department of Justice, in U.S.

Congress, House Committee on Government Operations, Subcommittee on Legal and Monetary Affairs, The Federal

Effort Against Organized Crime. Part 1, 90th Cong., 1st sess., April 5, 1967.

For this analysis, CRS used the data referenced in the U.S. Congress, House Committee on Government Operations,

Subcommittee on Legal and Monetary Affairs, The Federal Effort Against Organized Crime. Part 1, 90th Cong., 1st

sess., April 5, 1967. Convictions carry a greater burden of proof than indictments, and thus are more difficult for

prosecutors to obtain. While the raw numbers of both indictments and convictions were on the rise, the proportion of

indicted individuals who were later convicted decreased; this may suggest that organized crime was perhaps growing at

a rate faster than the criminal justice system was able to handle.

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Combating organized crime had been a responsibility primarily of state and local law

enforcement.16 As the scope of organized crime was continuing to increase, Congress recognized

the need for better crime fighting tools and the need to further the federal government’s role in

fighting and prosecuting organized crime. 17

Omnibus Crime Control and Safe Streets Act

One of the first steps taken by Congress to increase the federal government’s role in combating

organized crime included a series of congressional hearings in 1967 and 1968 and the enactment

of the Omnibus Crime Control and Safe Streets Act of 1968 (P.L. 90-351). The Omnibus Crime

Control and Safe Streets Act of 1968 was one of the first major pieces of legislation to directly

address organized crime. Specifically, it provided grant money via the Law Enforcement

Assistance Administration (LEAA)18 to state law enforcement agencies to combat organized

crime. Included in the act was the congressional finding that

organized criminals make extensive use of wire and oral communications in their criminal

activities. The interception of such communications to obtain evidence of the commission of

crimes or to prevent their commission is an indispensable aid to law enforcement and the

administration of justice.

Title III of this act permitted federal law enforcement agencies to wiretap conversations of

suspected criminals, including suspects of organized crime.19 Electronic wiretapping authority

granted in the Omnibus Crime Control and Safe Streets Act of 1968 immediately provided

American law enforcement and policymakers with an indication of organized criminals’ activity,

specifically their involvement in illegally importing and distributing narcotics.20 Despite these

tools to combat criminals, the federal government still lacked the tools to combat criminal

organizations.21

Task Force on Organized Crime, Organized Crime: Report of the Task Force on Organized Crime, National

Advisory Committee on Criminal Justice Standards and Goals, Washington, 1976.

U.S. Congress, Senate Committee on the Judiciary, Organized Crime Control Act of 1969, report to accompany S.

30, 91st Cong., 1st sess., December 16, 1969, S.Rept. 91-617.

The LEAA administered federal funding for state and local law enforcement agencies, educational programs,

research, and crime initiatives. It is no longer in existence and has since been succeeded by the Office of Justice

Programs (OJP).

The Omnibus Crime Control and Safe Streets Act was later amended by the Violent Crime Control and Law

Enforcement Act of 1994. This amended Act addressed organized crime in that it expressed the sense of the Senate that

“the United States should encourage the development of a United Nations Convention on Organized Crime.” Five years

later in 1999, the United Nations began developing a Convention against Transnational Organized Crime. The

Omnibus Crime Control and Safe Streets Act was also amended by the Electronic Communications Privacy Act

(ECPA) of 1986 (P.L. 99-508), which substantially revised Title III and related provisions. For more information on the

ECPA, see CRS Report 98-326, Privacy: An Overview of Federal Statutes Governing Wiretapping and Electronic

Eavesdropping, by (name redacted) and (name redacted).

Remarks from Sen. John L. McClellan, U.S. Congress, House Judiciary, No. 5, Organized Crime Control, 91st Cong.,

2 sess., May 20, 1970.

Remarks from John N. Mitchell, Attorney General of the United States, U.S. Congress, House Judiciary, No. 5,

Organized Crime Control, 91st Cong., 2nd sess., May 21, 1970.

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The Organized Crime Control Act and RICO

The Organized Crime Control Act of 1970 (P.L. 91-452) strengthened the ability of the federal

government to combat and prosecute criminal organizations. It provided for Special Grand Juries

to investigate multi-jurisdictional organized crime; these grand juries are able to produce reports

outlining public corruption and organized crime conditions in their respective districts. The act

also allowed for witnesses of organized crime to be granted immunity from prosecution in

exchange for testimony. Further, it authorized security for government witnesses or potential

witnesses in organized crime cases. This measure laid the groundwork for the Witness Security

Program (WITSEC).22 The WITSEC program allows for the protection and relocation of

witnesses and their families, whose lives may be in danger as a result of their testimony in

organized and other major crime cases.

Title IX of the Organized Crime Control Act of 1970 created the Racketeer Influenced and

Corrupt Organizations Act (RICO).23 Many view RICO as the single most important piece of

organized crime legislation enacted. 24 RICO allows for the prosecution of anyone who

participates or conspires to participate in a criminal enterprise/organization through two acts of

“racketeering activity” within a 10-year period of time. The predicate offenses for racketeering

include various state and federal crimes listed in the U.S. Code. 25 Since its enactment, RICO has

been one of the dominant tools used in organized crime prosecutions.

Asset Forfeiture and Money Laundering Statutes

Since the passage of RICO, Congress has enacted legislation regarding asset forfeiture and money

laundering, both of which have increased the federal government’s ability to combat organized

crime. 26 The asset forfeiture and money laundering statutes have provided a means for the federal

government to further attack the financial structure and assets of organized crime groups.27

Although RICO included provisions for asset forfeiture, the Comprehensive Crime Control Act of

1984 (P.L. 98-473) expanded upon these provisions. Specifically, Title II of Chapter III—the

18 U.S.C. § 3521. Although the foundation for the Witness Security Program was authorized by the Organized Crime

Control Act of 1970, the program was established under Part F of Chapter XII of P.L. 98-473.

RICO is codified at 18 U.S.C. § 1961-1968. For more information on RICO, please see CRS Report 96-950, RICO:

A Brief Sketch, by (name redacted).

See Howard Abadinsky, Organized Crime, 7th ed. (Belmont, CA: Wadsworth, 2003).

See 18 U.S.C. § 1961 for a comprehensive list of the predicate offenses for racketeering. Offenses include—but are

not limited to—crimes such as murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene

matter, dealing in a controlled substance or listed chemical, counterfeiting, theft from interstate shipment,

embezzlement from pension and welfare funds, embezzlement from union funds, fraud and related activity in

connection with identification documents or access devices, mail fraud, wire fraud, financial institution fraud,

procurement of citizenship or nationalization unlawfully, obstruction of justice or criminal investigations, tampering

with or retaliating against a witness, false statements or forgery in application and use of a passport or other documents,

peonage, slavery, trafficking in persons, interference with commerce, and laundering of monetary instruments.

Federal Bureau of Investigation, “Move Over, Mafia: The New Face of Organized Crime,” press release, February

13, 2009, http://www.fbi.gov/page2/feb09/organizedcrime_021309.html.

For more information on forfeiture, see CRS Report 97-139, Crime and Forfeiture, by (name redacted). Forfeiture

comes in two forms: civil and criminal. Both result in the confiscation of property derived from or used in criminal

activities. Criminal forfeiture is confiscation accomplished as part of the prosecution of the property owner. Civil

forfeiture is accomplished through a civil proceeding ordinarily brought against the property involved in the illicit

activity.

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Comprehensive Forfeiture Act of 1984—amended RICO by specifying that proceeds (both

tangible and intangible) obtained directly or indirectly from racketeering activity were subject to

forfeiture. This act also established the Department of Justice’s Asset Forfeiture Fund in the

Department of the Treasury. The rules for civil forfeiture proceedings were later revised in the

Civil Asset Forfeiture Reform Act of 2000 (P.L. 106-185), improving the federal government’s

ability to prosecute organized crime cases. Money laundering, the primary method of concealing

the illicit proceeds from organized crime activities or placing them back into further illegal

activity, was established as a federal criminal offense in the Money Laundering Control Act of

1986 (P.L. 99-570).28 This act also established criminal and civil penalties for money laundering,

as well as procedures for forfeiting the illicit funds. It appears that these laws have all provided

effective tools, as the Department of Justice and Federal Bureau of Investigation have indicated

that the three most prominent tools relied upon when investigating and prosecuting organized

crime are RICO, money laundering, and asset forfeiture statutes.

More Recent Federal Attention to Organized Crime29

Following the terrorist attacks of September 11, 2001, congressional and national law

enforcement priorities shifted away from traditional crime fighting toward counterterrorism.

More recently, however, there appears to be an increase in national attention to the need for

fighting more traditional crime, including organized crime. 30 In fact, after a 15-year hiatus, the

Organized Crime Council met in April 2008 for the first time since 1993.31 The renewed attention

to traditional crime fighting—and specifically for purposes of this discussion, organized crime—

has increasingly shifted toward the transnational nature of organized crime. Though organized

crime has arguably always been transnational, it was not until the 1990s, following the Cold War

and the spread of globalization, that the transnational nature of organized crime surged and

criminals expanded their operations across increasingly open borders.

Federal Law Enforcement Efforts to Combat

Organized Crime

In general, domestic crime control tends to fall on the shoulders of state and local law

enforcement agencies. As mentioned above, however, the federal government began to play a

larger role in combating organized crime following the enactment of the Omnibus Crime Control

Money laundering is codified at 18 U.S.C. § 1956. The Money Laundering Control Act is Subtitle H of Title I of the

Anti-Drug Abuse Act of 1986. For more information on the federal money laundering statutes, see CRS Report

RL33315, Money Laundering: An Overview of 18 U.S.C. 1956 and Related Federal Criminal Law , by (name redacted).

In addition to the legislative efforts to control organized crime, there have been other national efforts aimed at

assessing the activities of organized crime in the United States and providing recommendations for curbing its impact

on society. Examples of advisory groups tasked with assessing the status of organized crime include the National

Advisory Committee on Criminal Justice Standards and Goals (Organized Crime Task Force of 1976), the President’s

Commission on Organized Crime that met from 1983 through 1986, and the Organized Crime Council that met from

1970 to 1993. These groups have consistently concluded that organized crime remains a significant threat.

Carrie Johnson, “Obama Team Faces Major Task in Justice Dept. Overhaul; Goal is to Restore Confidence in Law

Enforcement Actions,” The Washington Post, November 13, 2008, p. A02, Suburban Edition.

U.S. Department of Justice, “Remarks prepared for delivery by Attorney General Michael B. Mukasey on

International Organized Crime at the Center for Strategic and International Studies,” press release, April 23, 2008,

http://www.usdoj.gov/ag/speeches/2008/ag-speech-080425.html.

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and Safe Streets Act of 1968, and even more after RICO and the Organized Crime Control Act of

1970. Various federal agencies are currently involved in controlling the activities of organized

crime groups. In addition to domestic efforts to combat organized crime, the federal government

is also involved in international efforts.

Domestic Efforts

Combating organized crime is not a task handled by one federal agency or even one department.

Many agencies have a hand in tackling the threats posed by organized crime. The Department of

Justice, specifically the U.S. Attorney General’s Organized Crime Council, is responsible for

creating domestic organized crime policy.32 The council is chaired by the Deputy Attorney

General and has representatives from the Federal Bureau of Investigation (FBI); the U.S. Drug

Enforcement Agency (DEA); the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF);

the U.S. Immigration and Customs Enforcement (ICE); the U.S. Secret Service; the Internal

Revenue Service (IRS); the U.S. Postal Inspection Service; Diplomatic Security; and the U.S.

Department of Labor, Office of the Inspector General.

Although many federal and state departments and agencies are engaged in fighting organized

crime, the primary agency involved in combating organized crime is the FBI. 33 The Transnational

Criminal Enterprise Section in the Criminal Enterprise Branch of the Criminal Investigative

Division is responsible for investigating organized crime. This Organized Crime Section is

divided into three principal units investigating (1) La Cosa Nostra, Italian organized crime, and

racketeering; (2) Eurasian/Middle Eastern organized crime; and (3) Asian and African criminal

enterprises.34

As a key analytical tool, the FBI uses the Enterprise Theory of Investigation (ETI) to investigate

organized crime. ETI involves two steps: (1) identifying a criminal organization and the criminal

activities of this organization and (2) identifying the financial assets of the criminal organization

for possible forfeiture.35 This investigative technique seems to complement the RICO statutes in

that both ETI and RICO are aimed at dismantling criminal organizations. Further, ETI identifies

financial assets that may be subject to forfeiture under civil RICO statutes. This aspect of ETI is

directed at combating money laundering and thus the financial lifeline of organized crime.

See the Department of Justice, Organized Crime and Racketeering Section website at http://www.usdoj.gov/criminal/

links/ocrs.html.

Because the FBI is the federal law enforcement agency leading the fight against organized crime, much of the

discussion on federal crime control efforts in this report refers to the FBI. The examples used in this report, therefore,

do not provide a comprehensive view of the federal efforts against organized crime.

The FBI identifies organized crime threats on its website at http://www.fbi.gov/hq/cid/orgcrime/aboutocs.htm.

From remarks by Chris Swecker, Acting Executive Assistant Director Law Enforcement Services, Federal Bureau of

Investigation in U.S. Congress, House Committee on Homeland Security, Subcommittee on Management, Integration,

and Oversight, 9/11 Reform Act: Examining the Implementation of the Human Smuggling and Trafficking Center, 109th

Cong., 2nd sess., March 8, 2006.

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Domestic Working Groups and Task Forces36

Many of the FBI field offices have organized crime task forces. In those regions, the FBI works

with state and local partners as well as with other federal agencies to combat organized crime.

These task forces may be broader task forces covering a range of criminal syndicates, or they may

be more specific covering a particular organized crime group. One example of a broad organized

crime task force exists at the Minneapolis field division of the FBI; this division leads an

Organized Crime Task Force that combines the efforts of other federal agencies as well as local

law enforcement to target a number of criminal organizations involved in various crimes. 37 On the

other hand, examples of more specific organized crime task forces exist at the FBI’s New York

division; in New York, there have been designated La Cosa Nostra (LCN) task forces, some

dedicated to specific LCN families.38 Even if standing task forces are not formed, domestic

agencies work jointly and rely on the resources of one another to combat organized crime. For

example, when investigating labor racketeering, the FBI may work with the Department of Labor,

the Department of Transportation, and the Internal Revenue Service, as well as state and local

authorities.

With respect to prosecuting organized crime cases, the Department of Justice Organized Crime

and Racketeering Section has Strike Force Units dedicated to organized crime. These units

currently exist in U.S. Attorneys’ Offices in 21 of the 93 federal districts with a large organized

crime presence. The Strike Force Units operate in these particular 21 offices for historical

reasons; those are the 21 offices where the LCN has had the largest presence, and the Strike Force

Units continue to operate out of those offices. These units comprise a group of prosecutors with

particular expertise in large, multi-defendant RICO cases. 39 Ultimately, the U.S. Attorney General

is the chief law enforcement officer responsible for criminal investigations and prosecutions,

including those of organized crime.

International Efforts

The United Nations Convention Against Transnational Organized Crime40 is the main

international tool for combating organized crime. In 2005, the United States ratified the

Convention as well as the companion Protocols on trafficking in persons and smuggling of

migrants. Among other provisions, the Convention provides for greater law enforcement

cooperation and mutual legal assistance across nations where there were no previous agreements

for such assistance. With the evolving transnational nature of organized crime, this coordination

with international organizations is essential. Further, with increasingly open borders and the

While task forces tend to focus on investigating crimes, working groups tend to focus on discussing various threats

and developing strategies to counter the threats.

See the Federal Bureau of Investigation, Minneapolis Division Field Office website at http://minneapolis.fbi.gov/

taskforces.htm#organized_crime.

An example of one such task force is referenced in: Federal Bureau of Investigation, “Pedro D. Ruiz Named SAC of

New York Field Office’s Intelligence Division,” press release, September 19, 2007, http://www.fbi.gov/pressrel/

pressrel07/ruiz091707.htm.

See the Department of Justice, Organized Crime and Racketeering Section website at http://www.usdoj.gov/criminal/

links/ocrs.html.

United Nations Office of Drugs and Crime, United Nations Convention Against Transnational Organized Crime and

the Protocols Thereto, United Nations, New York, 2004.

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expansion of the Internet, organized criminals threaten American society not only from within the

borders, but beyond.

One outcome of increasing transnational crime is that domestic federal law enforcement agencies

work with international organizations to combat organized crime threats to the United States. As

one example of this cooperation, the U.S. government and federal agencies support the United

Nations (UN) Office of Drugs and Crime (UNODC) efforts to combat international organized

crime. UNODC helps UN member countries implement provisions of the Convention Against

Transnational Organized Crime to counter organized crime problems. Within the Department of

Justice, the U.S. National Central Bureau (USNCB) of the International Criminal Police

Organization (INTERPOL)41 is the point of contact for INTERPOL matters in the United States.

The USNCB can access INTERPOL’s databases, and it coordinates requests for international

investigations between U.S. law enforcement and their international partners.42 Specifically, the

USNCB Terrorism and Violent Crimes Division coordinates requests on organized crime cases.

Also, the FBI participates in several international working groups and task forces to formulate

best practices in combating organized crime.

International Working Groups and Task Forces

Federal law enforcement agencies in the United States and in Italy participate in the Italian

American Working Group, which first met in 1984. This working group addresses problems

common to both countries, including organized crime, drug trafficking, money laundering, cyber

crime, and extradition issues. The Pantheon Project furthers the law enforcement relationship

between the United States and Italy. The project provides for two FBI agents that work at the

Italian National Police headquarters and for two Italian officers that work at the FBI.

With respect to Russian organized crime, the FBI is involved in international working groups,

including the Eurasian Organized Crime Working Group, the Central European Working Group,

and the Southern European Cooperative Initiative. In addition, the FBI set up a joint

FBI/Hungarian National Police task force in Budapest, Hungary, to combat Russian organized

crime. 43 This task force was established in 2000 to counter the increasing threat of Russian

organized crime and is the only international task force in which the FBI is currently involved.

The FBI has requested additional funding for this task force in its 2011-2015 budget. The FBI, in

conjunction with other law enforcement agencies around the world, has also provided

INTERPOL with information on individuals involved in Eurasian organized crime; this

information is the basis for Project Millennium, a multinational effort, led by INTERPOL, to

combat Eurasian organized crime.

INTERPOL is the largest international police organization, composed of 187 member countries. It facilitates

international law enforcement cooperation, primarily through maintaining secure global police communication systems,

operating data services and databases for police, providing operational police support, and promoting police training

and development. For more information on INTERPOL, see http://www.interpol.int/.

The USNCB transmits, responds to, and executes requests for international law enforcement cooperation in which

the United States is involved. For more information on the USNCB, see http://www.usdoj.gov/usncb/.

From remarks by Grant D. Ashley, Assistant Director, Criminal Investigative Division, Federal Bureau of

Investigation, in U.S. Congress, Senate Committee on Foreign Relations, Combating Transnational Crime and

Corruption in Europe, 108th Cong., 1st sess., October 30, 2003.

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Federal Investigations and Prosecutions of

Organized Crime

According to the Department of Justice and the FBI, the threats posed by organized crime have

become more broad and complex than ever before. Federal resources dedicated to organized

crime matters, however, do not appear to have expanded along with the threats, and have actually

decreased since 2001. After the September 11, 2001, terrorist attacks, national priorities,

including those of federal law enforcement, shifted further toward counterterrorism-related

activities and further away from traditional crime fighting activities. Within the law enforcement

domain, this shift can be objectively seen in the field agents assigned to organized crime

casework, the cases investigated, and the cases handled by the U.S. Attorneys’ Offices.

Agent Utilization

Following the September 11, 2001, terrorist attacks, the FBI reorganized, prioritizing

counterterrorism and counterintelligence over traditional crime matters. The FBI did not,

however, significantly change its field agent allocation for organized crime matters between

FY2001 and FY2004. Agent allocation remained nearly constant at 700, 697, 698, and 720

agents, respectively, for FY2001-FY2004.44 On the other hand, the FBI utilization of field agents

in organized crime matters during this time period did not mirror that of the agent allocation.

Figure 1 illustrates that the allocation of agents remained relatively constant, while the actual

utilization decreased. The Department of Justice, Office of the Inspector General (OIG), found

that in FY2004 the FBI utilized 35% fewer agents on organized crime matters than it did in

FY2000.45 While the FBI utilized 682 agents on organized crime matters in FY2000, this number

dropped to 446 in FY2004. The questions remain, however, whether field agents continue to be

allocated to organized crime matters at similar rates to those before the terrorist attacks of

September 11, 2001, and subsequent FBI reorganization, and whether these agents continue to be

utilized at lower rates than which they are allocated.46

Department of Justice, Office of the Inspector General, Audit Division, The External Effects of the Federal Bureau of

Investigation’s Reprioritization Efforts, Audit Report 05-37, September 2005, p. 73.

Ibid., p. 14.

The specific number of agents allocated to and actually utilized on organized crime cases is not publically available

after FY2004. For this reason, CRS is unable to determine the current relationship between agents allocated to and

agents utilized on organized crime matters.

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Figure 1. FBI Allocation and Utilization of Agents on Organized Crime Matters,

FY2000-FY2004

800

700

600

500

400

300

200

100

FY2000

FY2001

FY2002

Agent Allocation

FY2003

FY2004

Agent Utilization

Source: U.S. Department of Justice, Office of the Inspector General, Audit Division, The External Effects of the

Federal Bureau of Investigation’s Reprioritization Efforts, Audit Report 05-37, September 2005, pp. 73-75,

http://www.usdoj.gov/oig/reports/FBI/a0537/final.pdf.

Notes: The data on organized crime agent allocation come from the OIG analysis of FBI Resource Management

and Allocation (RMA) Office data. The data on organized crime agent utilization come from the OIG analysis of

FBI Time Utilization Recordkeeping (TURK) data. The FBI utilized 35% fewer agents on organized crime matters

in FY2004 than it did in FY2000. FBI organized crime agent allocation data were not available to the OIG for

FY2000 because prior to FY2001, the FBI allocated organized crime and drug resources together.

This disparity between FBI field agent allocation and field agent utilization may suggest several

things. For one, it may suggest that organized crime posed less of a threat to the United States in

2004 than it did in 2000. However, recent actions and testimony by former Attorney General

Michael Mukasey suggest the opposite may be true. Former Attorney General Mukasey

reconvened the Organized Crime Council in April 2008, for the first time in 15 years.47 He stated

that he did so because organized crime—both domestic and international—remains a significant

threat. The sustained threat does not explain the decrease in field agent utilization in these

matters. A second possible reason for the disparity in field agent allocation and utilization is that

although the FBI did not intend to decrease its agent utilization on organized crime matters,

agents may have been diverted to higher-priority issues such as counterterrorism. In fact, the

Department of Justice, OIG, reported that the FBI confirmed underutilizing organized crime

resources because the field divisions committed to prioritizing counterterrorism first and

foremost. “Combat[ing] transnational and national criminal organizations and enterprises” is the

FBI’s sixth-highest priority matter.48 The FBI diverted agents from traditional crime squads—

such as organized crime—and moved them to counterterrorism squads. 49 A third potential

U.S. Department of Justice, “Remarks prepared for delivery by Attorney General Michael B. Mukasey on

International Organized Crime at the Center for Strategic and International Studies,” press release, April 23, 2008,

http://www.usdoj.gov/ag/speeches/2008/ag-speech-080425.html.

Department of Justice, Office of the Inspector General, Follow-up Audit of Federal Bureau of Investigation

Personnel Resource Management and Casework, Audit Report 10-24, April 2010, p. iv, http://www.justice.gov/oig/

reports/FBI/a1024.pdf.

Department of Justice, Office of the Inspector General, Audit Division, The External Effects of the Federal Bureau of

Investigation’s Reprioritization Efforts, Audit Report 05-37, September 2005, pp. 74-75.

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explanation is that the FBI lacks the man power and monetary resources to address all significant

threats that the country faces. This lack of resources may act in conjunction with the FBI’s

prioritization of counterterrorism. FBI Director Robert Muller has stated that indeed resources

have shifted away from traditional crime fighting, and that there is a need to restore the criminal

programs to “appropriate resource levels.”50

A follow-up report by the OIG indicates that the FBI’s agent utilization on organized crime

matters may have continued to decrease between FY2005 and FY2009.51 In FY2005, the FBI

utilized 525 agents for organized crime matters. This declined by more than 15% to 443 agents in

FY2009. Of note, the agent utilization data for organized crime matters between FY2005 and

FY2009 cannot be directly compared to the utilization data for these matters between FY2000

and FY2004 because the classifications of what constitutes organized crime for these periods

differ. For instance, data for the period from FY2005 through FY2009 include agent utilization

data for transnational organized crime matters, whereas these are not specifically included in the

data from FY2000-FY2004. Further, while the organized crime agent utilization data for FY2000FY2004 were available, the number of agents allocated specifically to organized crime matters

for FY2005-FY2009 is unknown because allocation data were only available for overall criminal

enterprise casework, encompassing gangs, criminal enterprises (including Organized Crime Drug

Enforcement Task Force cases), and organized crime.

Case Openings

In FY2000, the FBI had 682 field agents investigating organized crime, and they initiated

(opened) 433 organized crime investigations (cases) in that year, as shown in Table 1. Thus, the

number of cases per agent was about 0.6. In FY2004, the FBI had 433 field agents investigating

organized crime, and they initiated 263 organized crime investigations. Therefore, the number of

cases per agent was also about 0.6.52 Taken alone, a decrease in the number of organized crime

cases could suggest that the threat from organized crime is actually decreasing. However, the

number of agents investigating organized crime decreased proportionally to the number of

organized crime cases opened. Therefore, using data from the number of organized crime case

openings does not alone provide a reliable indication of the organized crime threat. There are

several possible explanations for the simultaneous decrease in agents investigating organized

crime matters and the number of organized crime case openings. One possibility is that a

reduction in organized crime activity—and thus a reduction in the number of organized crime

cases opened—could lead to fewer agents needed to investigate organized crime matters. On the

other hand, a reduction in agents working on organized crime cases could lead to a reduction in

the overall number of these cases opened and may not actually reflect a decrease in organized

From remarks by Robert S. Mueller III, Director, Federal Bureau of Investigation, in U.S. Congress, Senate

Committee on Appropriations, Commerce, Justice, Science, and Related Appropriations for FY2008, 110th Cong., 1st

sess., April 26, 2007, p. 305.

Department of Justice, Office of the Inspector General, Follow-up Audit of Federal Bureau of Investigation

Personnel Resource Management and Casework, Audit Report 10-24, April 2010, pp. 26-27, http://www.justice.gov/

oig/reports/FBI/a1024.pdf.

U.S. Department of Justice, Office of the Inspector General, Audit Division, The External Effects of the Federal

Bureau of Investigation’s Reprioritization Efforts, Audit Report 05-37, September 2005, pp. 73-75,

http://www.usdoj.gov/oig/reports/FBI/a0537/final.pdf. CRS calculated the number of cases per agent based on the

number of agents reported to be working on organized crime matters and the number of organized crime cases

reportedly opened for FY2000 and FY2004. More recent data on organized crime case openings is not publicly

available.

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crime activity. One possible side effect of a decrease in the number of federal agents investigating

organized crime may be an increased workload for each agent working on these cases; if the

organized crime threat is sustained—as has been suggested by DOJ officials—it is possible that

the caseloads of organized crime agents could increase if the number of agents actually

investigating organized crime is sustained or further decreased. 53

Table 1. FBI Organized Crime Cases Worked Per Agent, FY2000 and FY2004

Fiscal Year

Organized Crime

Agent Utilization

Number of Organized

Crime Cases Opened

Organized Crime

Cases/Agent

2000

682

433

0.63

2004

446

263

0.59

Source: U.S. Department of Justice, Office of the Inspector General, Audit Division, The External Effects of the

Federal Bureau of Investigation’s Reprioritization Efforts, Audit Report 05-37, September 2005, pp. 73-75,

http://www.usdoj.gov/oig/reports/FBI/a0537/final.pdf.

Notes: Data on organized crime agent utilization and case openings include data across the FBI’s three

organized crime subprograms: (1) La Cosa Nostra and Italian, (2) Asian, and (3) Russian and Eurasian. The data

on organized crime agent utilization come from the OIG analysis of FBI Time Utilization Recordkeeping (TURK)

data. The data on organized crime case openings come from the OIG analysis of FBI Automated Case Support

(ACS) data. There was about a 35% decrease in the number of FBI agents utilized on organized crime matters

and about a 39% decrease in the number of organized crime cases opened between FY2000 and FY2004.

Prosecutions

The Department of Justice, Organized Crime and Racketeering Section (OCRS), oversees federal

organized crime prosecutions. As noted earlier, OCRS has organized crime Strike Force Units in

21 of the 94 U.S. Attorneys’ Offices (USAOs) where there exists a large organized crime

presence in that district. Figure 2 graphs the number of organized crime cases referred to the

USAOs for prosecution from FY1999 through FY2010. As evidenced in the figure, there has not

been a consistent increase or decrease in the number of organized crime cases filed with the

USAOs across these years.

Many factors could influence the number of organized crime cases referred to the USAOs for

prosecution. While this number could reflect the actual activities of organized crime groups,

several factors suggest that the trends in prosecutions may not mirror the trends in organized

criminal activity—either in type or in number. Firstly, prosecutions may be driven in part by

Administration priorities, which may not emphasize all federal crimes equally. Secondly,

organized crime cases that are actually prosecuted are only a small subset (and not necessarily a

proportionate subset) of those crimes committed.54 Therefore, the number of organized crime

prosecutions alone provides little evidence as to the true trends in organized criminal activity.

The specific number of agents working on organized crime cases is not publically available after FY2004. For this

reason, CRS is unable to determine whether the workload of agents working organized crime cases has fluctuated from

the FY2004 level.

See the Bureau of Justice Statistics flowchart illustrating case flow through the criminal justice system at

http://www.ojp.usdoj.gov/bjs/largechart.htm.

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350

317

300

250

263

266

254

236

233

217

198

225

200

186

150

156

100

Organized Crime Cases Filed

Figure 2. Organized Crime Cases Filed with the U.S. Attorneys’ Offices,

FY1999-FY2010

Fiscal Year

Source: Data provided to CRS by the USAO.

Notes: These data include organized crime cases filed with the USAOs from all federal agencies.

One question that remains is whether the resources and tools for investigating and prosecuting

organized crime in the United States—as previously provided by Congress—are the most

effective tools for combating today’s threats from organized crime.

Current Organized Crime Trends

As mentioned, organized crime in the United States has taken on an increasingly transnational

nature. This shift has been facilitated by factors such as economic globalization and improved

communications technology.55 Organized crime activities across the globe do not appear to be

waning, and the National Intelligence Council has estimated that by 2025, the “relative power” of

criminal networks will continue to rise, and some countries could even be taken over and run by

these networks.56 The section below provides a detailed discussion of the organized crime groups

that operate in the United States, the activities of these groups, and the domestic industries that

have been and may continue to be threatened by organized crime.

One way of analyzing the organized crime threat is by examining the most prominent organized

crime groups operating in the United States. The FBI, for instance, provides information on the

various organized crime groups in order to present a picture of organized crime in the United

States. A second method is by examining those areas of society threatened most by the activities

of organized crime (such as the economy or national security), regardless of which group is

Committee on Law and Justice, National Research Council, Transnational Organized Crime: Summary of a

Workshop, ed. Peter Reuter and Carol Petrie (Washington: National Academy Press, 1999), pp. 1-2.

National Intelligence Council, Global Trends 2025: A Transformed World, NIC 2008-003, November 2008, p. 1,

http://www.dni.gov/nic/PDF_2025/2025_Global_Trends_Final_Report.pdf.

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committing the crime. The Organized Crime and Racketeering Section (OCRS) at DOJ, for

example, presents the organized crime threats to the United States in terms of the principal threat

areas, rather than the individual groups committing crimes. Subsequent discussion uses both

approaches to analyze organized crime.

Organized Crime Groups Operating in the United States57

Although organized crime is popularly associated with the Italian Mafia, the breadth of organized

crime in the United States includes many other criminal organizations. The FBI investigates

organized crime groups that fall into three major categories: (1) La Cosa Nostra, Italian organized

crime, and racketeering; (2) Eurasian/Middle Eastern organized crime; and (3) Asian and African

criminal enterprises.58 Figure 3 outlines the top organized crime threats to the United States, as

identified by the FBI. Threats to the United States posed by selected large-scale criminal

organizations are discussed below.

Figure 3. Organized Crime Threats in the United States

According to the FBI

Criminal Organization Threats

Russian

Asian

Italian

Balkan

Middle Eastern

African

Source: The FBI identifies and provides an overview of these various organized crime groups on its website at

http://www.fbi.gov/hq/cid/orgcrime/ocshome.htm.

As mentioned, drug trafficking organizations (DTOs) are considered by DOJ and the FBI as separate from organized

crime groups. Although many organized crime groups are involved in drug smuggling, trafficking, and distribution—

among various other crimes—DTOs’ primary involvement is drugs. For more information on the U.S. policy and

efforts to combat drug trafficking, see CRS Report RL32352, War on Drugs: Reauthorization and Oversight of the

Office of National Drug Control Policy, by (name redacted).

The FBI identifies organized crime threats on its website at http://www.fbi.gov/hq/cid/orgcrime/aboutocs.htm.

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Eurasian/Russian

The discussion of Russian organized crime tends to reference not only Russian crime syndicates,

but a variety of Eurasian crime groups as well.59 These groups began emerging in the United

States in the late 1970s and became even more prevalent following the collapse of the Soviet

Union in 1991. They are now considered by the FBI to be the top organized crime threat to the

United States.60 The Russian organized crime groups that operate in the United States exhibit less

of a traditional hierarchical structure than the Italian Cosa Nostra, and they form their networks

based more on the skills needed for particular crimes.61 In the United States, Russian organized

criminals are involved in long-established organized crime activities such as extortion, abduction,

human smuggling, prostitution, drug trafficking, and theft, as well as white-collar criminal

activities including money laundering and fraud of various types. In fact, the FBI has indicated

that roughly 60% of FBI cases targeting Russian organized crime involve fraud.62 The types of

fraud and scams that Russian criminals participate in cross industries from health care and

strategic commodities (e.g., precious metals) fraud to credit card, insurance, securities, and

investment fraud. They are also involved in scams in domains such as tax evasion and energy

price rigging. Many Russian organized crime groups operate in New York, New Jersey, Boston,

Philadelphia, Chicago, Los Angeles, San Francisco, and Miami, among other cities.63

U.S. law enforcement has relied heavily on RICO, money laundering, and asset forfeiture statutes

to prosecute Russian crime syndicates. They consider these pieces of legislation as significant for

combating organized crime activities as well as the structure of the criminal organizations. 64

Principal efforts to control Russian organized crime groups include the establishment of both

domestic and international task forces and working groups aimed at dismantling these crime

syndicates. Domestically, the FBI has set up task forces in areas such as New York City, New

Jersey, Philadelphia, Chicago, San Francisco, Los Angeles, and Miami. Also, local police

departments in major cities, including New York and Los Angeles, have set up Russian organized

crime task forces.65 In addition, the FBI is involved in international working groups concerned

For purposes of this discussion, the term Russian organized crime refers to both Russian and Eurasian crime groups

operating in the United States. The FBI and other experts also reference the combination of Russian and Eurasian crime

groups under an umbrella term. See, for example, James O. Finckenauer and Jay Albanese, “Organized Crime in North

America,” in Handbook of Transnational Crime and Justice, ed. Philip Reichel (Thousand Oaks, CA: Sage, 2005), pp.

439-456.).

U.S. Congress, House Committee on International Relations, Threat from International Organized Crime and

Global Terrorism, 105th Cong., 1st sess., October 1, 1997.

Russian crime groups in Russia have a more hierarchical structure than those groups operating in the United States.

These groups, such as the Vory V Zakone, or “thieves-in-law,” exhibit a structure more similar to the Italian Cosa

Nostra. See Alexander Sukharenko, “The Use of Corruption by ‘Russian’ Organized Crime in the United States,”

Trends in Organized Crime, vol. 8, no. 2 (Winter 2004), pp. 118-129. Also see James O. Finckenauer and Jay

Albanese, “Organized Crime in North America,” in Handbook of Transnational Crime and Justice, ed. Philip Reichel

(Thousand Oaks, CA: Sage, 2005), pp. 439-456.

From remarks by Grant D. Ashley, Assistant Director, Criminal Investigative Division, Federal Bureau of

Investigation, in U.S. Congress, Senate Committee on Foreign Relations, Combating Transnational Crime and

Corruption in Europe, 108th Cong., 1st sess., October 30, 2003.

These are the cities in which the FBI has set up special investigative units dedicated to investigating Russian

organized crime.

Federal Bureau of Investigation, “Inside the FBI: Organized Crime,” press release, February 13, 2009,

http://www.fbi.gov/inside/archive/inside021309.htm.

James O. Finckenauer and Jay Albanese, “Organized Crime in North America,” in Handbook of Transnational

Crime and Justice, ed. Philip Reichel (Thousand Oaks, CA: Sage, 2005), pp. 439-456.

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with Russian organized crime, including the Eurasian Organized Crime Working Group; the

Central European Working Group at the International Law Enforcement Academy in Budapest,

Hungary; and the Southern European Cooperative Initiative in Bucharest, Romania. The FBI is

also involved in an international organized crime task force in Budapest, Hungary, aimed at

combating Russian organized crime; currently, this is the only international task force aimed at

combating organized crime in which the FBI is involved. The FBI has indicated that this

international effort has been invaluable in developing international partnerships and intelligence,

as well as expanding its international capabilities. 66

Asian

Asian organized crime groups have had a presence in the United States since at least the early

1900s. However, there has been an increase in Asian organized crime since the 1990s.67 Research

indicates that there is not one unified Asian organized crime group; rather, there exist numerous

crime syndicates, some more traditionally organized than others.68 According to the FBI,

traditional groups include Chinese triads from Hong Kong, Taiwan, and Macau, and the Japanese

Yakuza. Less traditional groups include tongs, triads, and Asian street gangs such as the Big

Circle and the Fuk Ching. Similar to a trend seen among Russian organized crime groups, an

emerging trend seen among Asian crime syndicates is a willingness to cooperate across ethnic and

racial lines if it is profitable for the enterprise. Asian organized crime groups derive most of their

profits from trafficking in drugs—such as heroin—and people, but are also actively involved in

other criminal activities, from money laundering, counterfeiting, and fraud to kidnapping and the

theft of autos, software, and clothing. The FBI indicates that Boston, Chicago, Honolulu, Las

Vegas, Los Angeles, New Orleans, New York, Newark, Philadelphia, Portland, San Francisco,

Seattle, and Washington, DC, are examples of areas with a high prevalence of Asian organized

crime.

U.S. law enforcement has relied heavily on RICO, money laundering, and asset forfeiture statutes

to prosecute Asian crime syndicates. Similar to efforts aimed at combating Russian organized

crime groups, U.S. law enforcement participates in domestic and international working groups

aimed at combating Asian organized crime. Domestically, the Interagency Working Group on

Alien Smuggling examines policy and investigative issues surrounding the smuggling of aliens

and trafficking of women and children, including involvement of Asian organized crime groups in

these activities. The FBI is also involved in international working groups concerned with Asian

organized crime, including the FBI/National Police Agency of Japan Working Group, Interpol’s

Project Bridge, the International Asian Organized Crime Conference, the Canadian/United States

Cross-Border Crime Forum, and the International Law Enforcement Academy in Bangkok,

Thailand.69

Federal Bureau of Investigation, Remarks prepared for delivery by Robert S. Mueller, III, Director, Federal Bureau

of Investigation, 10th Anniversary of ILEA Budapest, Budapest, Hungary, May 12, 2005, http://www.fbi.gov/pressrel/

speeches/muller051205.htm.

Glenn E. Curtis, Seth L. Elan, and Rexford A. Hudson, et al., “Transnational Activities of Chinese Crime

Organizations: A Report Prepared under an Interagency Agreement by the Federal Research Division, Library of

Congress,” Trends in Organized Crime, vol. 7, no. 3 (Spring 2002), pp. 19-57.

Ko-Lin Chin, Chinatown Gangs: Extortion, Enterprise, Ethnicity (New York: Oxford University Press, 2000).

Federal Bureau of Investigation, Organized Crime: Asian Criminal Enterprises, http://www.fbi.gov/hq/cid/orgcrime/

asiancrim.htm.

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Italian

The La Cosa Nostra (LCN) is the most prominent Italian organized crime group operating in the

United States.70 Within the LCN, there are five principal crime families.71 The LCN is involved in

an array of illegal activities, from gambling and loan sharking to drug trafficking and money

laundering, that threaten American society.72 Most members of the LCN operate in the New York

metropolitan area, but there are also criminal operations in Boston, Chicago, Newark, Detroit,

Philadelphia, and Miami.73 La Cosa Nostra has been operating in the United States since the

1920s and still poses a threat today.

Early congressional and law enforcement efforts to control organized crime were aimed directly

at controlling the illegal activities of the Mafia (LCN). As discussed earlier, these early

congressional efforts involved enacting the 1968 Omnibus Crime Control and Safe Streets Act

(P.L. 90-351) and the 1970 Organized Crime Control Act and RICO (P.L. 91-452), as well as the

asset forfeiture and money laundering statutes. Civil RICO lawsuits have been particularly

effective in purging the LCN from legitimate industries and unions, such as the Las Vegas gaming

industry, the New York moving and storage industries, and the union representing truckers

servicing JFK airport in New York.74 In addition to federal RICO statutes, many states have also

adopted RICO statues. Many believe that RICO has been the most powerful tool in combating La

Cosa Nostra.75 Despite these effective tools, the LCN remains a major organized crime threat to

American society.

Balkan

The FBI identifies Balkan organized crime, and Albanian groups in particular, as among the most

formidable organized crime groups today, as evidenced, in part, by an increase in Albanian-born

individuals arrested in the United States.76 Albanian organized crime groups emerged in the

United States in the late 1980s and have evolved from being close knit families to allowing in

outsiders with particular areas of criminal expertise. These groups are active in areas such as New

York, Los Angeles, Las Vegas, Dallas, and Houston, to name a few. Balkan crime groups have

been involved in various illegal activities such as gambling, extortion, robbery, counterfeit

According to the FBI, there are four main Italian organized crime groups operating in the United States: the Sicilian

Mafia (from which the LCN was formed), the Camorra or Neapolitan Mafia, the ’Ndrangheta or Calabrian Mafia,

and the Sacra Corona Unita or United Sacred Crown. The term “Mafia” tends to be an encapsulating term

referencing all of these groups.

The five principal crime families that make up the LCN are the Bonanno, the Colombo, the Genovese, the Gambino,

and the Luchese families.

Other principal threats that the LCN poses to American society are labor racketeering, political corruption,

extortion, theft, bribery, kidnapping, fraud, counterfeiting, infiltration of legitimate businesses, murders, and bombings.

James O. Finckenauer, La Cosa Nostra in the United States, International Center, National Institute of Justice, 2007,

http://www.docstoc.com/docs/416307/La-Cosa-Nostra-in-the-Unites-States—2000.

Frank J. Marine, Organized Crime and Racketeering Section, United States Department of Justice, Washington,

District of Columbia, USA, “The effects of organized crime on legitimate business,” Journal of Financial Crime, vol.

13, no. 2 (2006), pp. 214-234.

James B. Jacobs, Christopher Panarella, and Jay Worthington, Busting the Mob: United States v. Cosa Nostra (New

York: New York University Press, 1994).

John DiStasio, “International Organized Crime Center,” United States Attorneys’ Bulletin, vol. 51, no. 5 (September

2003), pp. 2-6.

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currency, drug trafficking, human smuggling, real estate fraud, money laundering, witness

intimidation, and murder.

One emerging trend seen among Balkan organized crime groups is an increased cooperation with

other organized crime groups—further evidence that Balkan organized crime is not just

increasing, but expanding. 77 For example, the FBI has indicated that the LCN has partnered with

Albanian organized crime in New York. There, the LCN is relying on the Albanians as their

enforcers, and the Albanians have increasingly taken over some turf there that was previously

dominated by the LCN.

Other Organized Crime Groups

The federal government recognizes threats from other organized crime groups that may not have

the same notoriety as larger groups such as the LCN. For example, Middle Eastern criminal

enterprises are primarily involved in organized theft, financial fraud, money laundering, and

cigarette smuggling. Also, African crime syndicates—and particularly Nigerian groups—are

involved in heroin trafficking, money laundering, and fraud (including insurance, bank, auto,

healthcare, identity, and document fraud).

Of note, a trend among organized crime groups is that they begin by victimizing members of their

own neighborhoods and ethnic communities, and then expand their illegal activities beyond these

community lines. For example, in the 1920s Prohibition era, the Italian-American mafia began

victimizing other Italians in the Five Points neighborhood of Little Italy in New York, before

extending its activities to other neighborhoods of New York and the surrounding metropolitan

area.78 If this is indeed a common pattern across organized crime groups, then it is likely that

emerging crime groups may expand their activities rather than restrict them to the areas in which

they currently operate.

Domestic Impact of Organized Crime

The U.S. Department of Justice Organized Crime Council,79 chaired by the Deputy U.S. Attorney

General, has identified eight strategic threats to the United States posed by international

organized crime. 80 Of note, the term “international organized crime” includes not only those

Clint Williamson, “Balkan Organized Crime: The Emerging Threat,” United States Attorneys’ Bulletin, vol. 51, no. 5

(September 2003), pp. 42-48.

World Encyclopedia of Organized Crime, ed. Jay Robert Nash (Dallas: Zane Publishing, 1995).

The Organized Crime Council includes leaders from nine federal law enforcement agencies: the Federal Bureau of

Investigation; the U.S. Drug Enforcement Agency; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S.

Immigration and Customs Enforcement; the U.S. Secret Service; the Internal Revenue Service; the U.S. Postal

Inspection Service; Diplomatic Security; and the U.S. Department of Labor, Office of the Inspector General.

Organized Crime Council, Overview of the Law Enforcement Strategy to Combat International Organized Crime,

U.S. Department of Justice, April 2008. In this Strategy, the Organized Crime Council uses the broad term

international organized crime to include organized crime in the United States. Former U.S. Attorney General Michael

Mukasey has underscored the inclusion of domestic organized crime under the umbrella term of international organized

crime, citing the globalization of crime and of groups with member around the world (including the United States). See

U.S. Department of Justice, “Remarks Prepared for Delivery by Attorney General Michael B. Mukasey on International

Organized Crime at the Center for Strategic and International Studies,” April 23, 2008, http://www.usdoj.gov/ag/

speeches/2008/ag_speech_080423.html.

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organized crime groups operating outside the borders of the United States, but within the U.S.

borders as well. As mentioned earlier, the council noted that international organized criminals

have and may penetrate the energy and other strategic sectors of the economy; provide logistical

and other support to terrorists, foreign intelligence services, and governments; smuggle/traffic

people and contraband goods into the United States; exploit the United States and international

financial system to move illicit funds; use cyberspace to target U.S. victims and infrastructure;

manipulate securities exchanges and perpetrate sophisticated frauds; corrupt or seek to corrupt

public officials in the United States and abroad; and use violence or the threat of violence as a

basis for power.

Former U.S. Attorney General Michael Mukasey outlined strategic goals in combating these

threats. These goals continue to include

•

targeting the largest organized crime threats,

•

dismantling criminal organizations and removing their leadership,

•

marshalling information from all available resources, and

•

relying on all possible domestic and international tools and law enforcement

partnerships.81

One specific goal of the Organized Crime Council that may be of particular interest to Congress

is to “provide law enforcement with updated legislation and operational procedures needed to

combat international organized crime.”82 Specifically, the Organized Crime Council indicated that

laws and regulations should be expanded, updated, or modified to afford the government the

abilities to investigate and prosecute organized criminals that affect American society from

outside U.S. borders. This suggests that federal law enforcement currently may not have the

extraterritorial jurisdiction or the most effective tools to combat the evolving organized crime

threats to the United States. The section below provides a detailed discussion of some potential

impacts of organized crime, followed by possible issues that Congress may consider.

Impact of Organized Crime on the Economy

Organized crime could weaken the economy with illegal activities (such as cigarette trafficking

and tax evasion scams) that result in a loss of tax revenue for state and federal governments. This

is particularly of issue given the current state of the country’s economic health. Their fraudulent

activities in the domains of strategic commodities, credit, insurance, stocks, securities, and

investments could weaken the already-troubled financial and housing markets.

U.S. Department of Justice, “Remarks Prepared for Delivery by Attorney General Michael B. Mukasey on

International Organized Crime at the Center for Strategic and International Studies,” April 23, 2008,

http://www.usdoj.gov/ag/speeches/2008/ag_speech_080423.html.

Organized Crime Council, Overview of the Law Enforcement Strategy to Combat International Organized Crime,

U.S. Department of Justice, April 2008, pp. 14-15.

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Money Laundering

Money laundering involves concealing the nature, location, source, ownership, or control of

proceeds from an illegal activity or placing them back into further illegal activity.83 The ill-gotten

proceeds are laundered through a variety of methods to become “clean money.” With the

expansion of the Internet and increased globalization, the methods of money laundering continue

to become increasingly complex and difficult to detect. The Financial Crimes Enforcement

Network (FinCEN), under the Department of the Treasury, indicates that the routes for money

laundering include banks, check cashers, money transmitters, businesses, and casinos. Money

launderers use methods such as complex wire transfers, shell companies, and currency smuggling

to hide their dirty money. 84

Money laundering became a federal crime in the Money Laundering Control Act of 1986 (P.L.

99-570). It came to Congress’s attention that organized criminals were camouflaging their

proceeds, and Congress strengthened the federal criminal statues to better combat criminal

organizations. 85 Recently, the scope of the money laundering statute has come under examination.

Until more recently, the statute prohibited financial transactions of proceeds from illicit activities,

but it did not define what constitutes “proceeds.” The Supreme Court ruled in United States v.

Santos that in the money laundering statute, the term “proceeds” refers to profits rather than gross

receipts.86

Legislation enacted in the 111th Congress has since amended the money laundering statute. The

Fraud Enforcement and Recovery Act of 2009, or FERA (P.L. 111-21), clarifies both the money

laundering and international money laundering statutes. Namely, it indicates that “proceeds”

includes gross receipts of illegal activities. Some experts have argued that expanding the

predicate offenses for international money laundering could broaden the tools the federal

government is able to rely upon when investigating and prosecuting organized crime that is

increasingly crossing international lines. However, recently enacted legislation has not addressed

these predicate offenses.

Cigarette Trafficking

Law enforcement agencies have also noted that criminal syndicates’ participation in the

trafficking of contraband cigarettes poses a significant threat to American society. A number of

different organized crime groups are involved in cigarette trafficking. This illicit activity

indirectly threatens the American economy and American communities. Cigarette smuggling

leads to lost tax revenue.87 Businesses, in turn, compensate by raising taxes for the consumer,

Money laundering is codified as a federal crime at 18 U.S.C. § 1956.

See the Overview of Law Enforcement on the FinCEN website at http://www.fincen.gov/law_enforcement/.

For more information on the money laundering discussions in Congress preceding the Money Laundering Control

Act of 1986, see U.S. Congress, Senate Committee on the Judiciary, Money Laundering Legislation, Hearing on S. 572,

S. 1335, and S. 1385, 99th Cong., 1st sess., October 29, 1985, S.Hrg. 99-540.

“Supreme Court Narrows Scope of Money-Laundering Statute,” Criminal Justice Newsletter, July 2008, pp. 1-3.

Some experts have estimated that cigarette smuggling leads to about $40 million in lost tax revenue annually for

governments around the world. For more information, see Framework Convention Alliance, “How big was the global

illicit tobacco trade problem in 2006?,” Prepared for the Second Session of the Conference of the Parties to the WHO

FCTC, Bangkok, Thailand, June 30–July 6, 2007, http://www.fctc.org/dmdocuments/fca-2007-cop-illicit-trade-howbig-in-2006-en.pdf.

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ultimately placing the increased economic burden on the consumer. 88 Excessive economic

burdens on the consumer are of particular concern now because of the current economic

recession. Consequently, revenues that would assist in funding government programs are being

illegally redistributed because of organized crime activities. Congress has repeatedly debated

legislation to revise the Jenkins Act89 to enhance reporting requirements for the sale of cigarettes

and smokeless tobacco products as well as legislation to provide stronger penalties for smuggling

such products.

Piracy and Counterfeiting

There is evidence that organized criminals are becoming increasingly involved in the production

and distribution of counterfeit and pirated goods.90 In Los Angeles County alone, Russian, Asian,

Eurasian, and Lebanese organized crime groups are among those that have been involved in

intellectual property rights crimes.91 Industries targeted are broad, including the music and motion

picture industries, clothing companies, luxury goods manufacturers, and the tobacco industry. The

federal government has taken several steps so far in fighting these crimes. In fact, in March 2004,

the Department of Justice created an Intellectual Property Task Force to combat the increase in

intellectual property piracy and counterfeiting by organized crime groups. Also, the Office of the

United States Trade Representative (USTR) has indicated that an Anti-Counterfeiting Trade

Agreement (ACTA) is being formulated with other countries, including Australia, Canada, EU,

Japan, Jordan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, and the

United Arab Emirates. According to the USTR, one benefit of the ACTA is that it will help

combat the piracy and counterfeiting that is an “easy source of revenue for organized

crime.”92

Counterfeit currency is another example of a domain in which many organized crime groups are

involved. Asian organized crime groups in Los Angeles and New Jersey have been linked to the

production of “supernotes,” or fake $50 and $100 bills. This can not only lead to a loss in actual

money (for those paid in the counterfeit currency), but it can damage the value of the U.S.

dollar.93 Some experts and policy analysts have suggested that one possible legislative option to

help counter the involvement of organized crime in piracy and counterfeiting may be to expand

U.S. Congressman Bobby Scott, “Prevent All Cigarette Trafficking Act of 2008,” press release, September 9, 2008,

http://www.bobbyscott.house.gov/index.php?option=com_content&task=view&id=346&Itemid=89.

The Jenkins Act requires anyone that sells and ships cigarettes (to anyone except a licensed distributor) across a state

line to provide monthly reports of these sales to the buyers’ state tobacco tax administrators. It is codified at 15 U.S.C.

§ 375-378.

U.S. Government Accountability Office, Intellectual Property: U.S. Efforts have Contributed to Strengthened Laws,

but Significant Enforcement Challenges Remain, GAO-05-788T, June 14, 2005, http://www.gao.gov/new.items/

d05788t.pdf. Counterfeit and pirated goods are those that are either fake copies or copies that have been reproduced

without authorization.

From remarks by John C. Stedman, Lieutenant, Sheriff’s Department, County of Los Angeles, before the U.S.

Congress, Senate Committee on Homeland Security and Government Affairs, Counterfeit Goods: Easy Cash for

Criminals and Terrorists, 109th Cong., 1st sess., May 25, 2005, p. 8. Intellectual property rights (IPR) include

copyrights, trademarks, trade secrets, and patents.

Office of the United States Trade Representative, Anti-Counterfeiting Trade Agreement (ACTA), August 4, 2008,

http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2008/asset_upload_file760_15084.pdf?ht=.

Todd Bullock, “Narcotics, Counterfeiting Help Fund North Korea, U.S. Says: Senate hearing discusses Pyongyang’s

criminal operations,” America.gov, April 26, 2006, http://www.america.gov/st/washfile-english/2006/April/

20060426135925tjkcollub0.8716699.html.

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the organized crime and money laundering statutes to include large-scale piracy and

counterfeiting tied to other criminal activities.94

Organized Crime and Terrorists

In addition to concern surrounding the many industries in which organized criminals operate,

both analysts and policymakers have expressed concern about the potential nexus between

organized crime and terrorism. The principal distinction authorities make between organized

crime groups and terrorist groups is motivation. Money motivates organized crime, and ideology

motivates terrorism. Because of this fundamental difference, the National Intelligence Council

expects that between now and 2020:

[T]he relationship between terrorists and organized criminals will remain primarily a matter

of business, i.e., that terrorists will turn to criminals who can provide forged documents,

smuggled weapons, or clandestine travel assistance when the terrorists cannot procure these

goods and services on their own. Organized criminal groups, however, are unlikely to form

long-term strategic alliances with terrorists. Organized crime is motivated by the desire to

make money and tends to regard any activity beyond that required to effect profit as bad for

business. For their part, terrorist leaders are concerned that ties to non-ideological partners

will increase the chance of successful police penetration or that profits will seduce the

faithful.95

Despite the difference in motivation for organized crime and terrorism, the linking element for the

two is money. Terrorist organizations may obtain funding from criminal acts, similar to organized

crime groups. Also, terrorist organizations may launder these funds, similar to criminal

organizations. 96 One example of a domain in which both organized criminals and terrorists may

both benefit monetarily is piracy. Although there is currently less evidence of terrorist

involvement in piracy, this business is a high-profit, low-risk activity, attractive to both criminals

and terrorists.97

Even if organized crime groups and terrorist organizations do not form long-term alliances, the

possibility of short-term business alliances may be of concern to citizens and policymakers alike.

The FBI indicates that although it has not yet had a case of organized crime groups working

directly with terrorists, the possibility exists, and it continues to be watchful for this nexus.

Because organized criminals are monetarily motivated, the FBI believes that these criminals

would be inclined to work with terrorists if offered sufficient funds. 98

Gregory F. Treverton, Carl Matthies, and Karla J. Cunningham, et al., Film Piracy, Organized Crime, and Terrorism,

RAND Corporation, Safety and Justice Program and the Global Risk and Security Center, 2009, http://www.rand.org/

pubs/monographs/2009/RAND_MG742.pdf.

Mapping the Global Structure, National Intelligence Council, Report of the National Intelligence Council’s 2020

Project, Based on consultations with nongovernmental experts around the world, Washington, D.C., December 2004, p.

96.

Angela Veng Mei Leong, “Criminal Finance: Money Laundering and Terrorist Financing,” in The Disruption of

International Organised Crime: An Analysis of Legal and Non-Legal Strategies (Burlington, VT: Ashgate Publishing

Company, 2007), pp. 29-67.

Gregory F. Treverton, Carl Matthies, and Karla J. Cunningham, et al., Film Piracy, Organized Crime, and Terrorism,

RAND Corporation, Safety and Justice Program and the Global Risk and Security Center, 2009, http://www.rand.org/

pubs/monographs/2009/RAND_MG742.pdf.

Pat Milton, “FBI Worries About an Osama-Sopranos Link,” Associated Press, October 1, 2006,

(continued...)

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Although there are few reported instances of organized crime groups actually aiding terrorists,

there are reported instances of international organized criminals conspiring to provide support to

terrorist organizations. One such instance is Viktor Bout, an international arms trafficker who has

been charged with conspiring to sell weapons to the Revolutionary Armed Forces of Columbia

(FARC).99 As mentioned earlier in this report, federal law enforcement distinguishes between

organized crime groups and drug trafficking organizations. Although there are no reported

instances of organized crime groups directly working with terrorists, there are reported instances

of “narco-terrorism,” or terrorism funded through the proceeds of drug trafficking; the Liberation

Tigers of Tamil Eelam, members of Hizbollah, and the Al-Qaida network are all examples of

terrorist groups with close ties to drug trafficking.100 GAO reports that U.S. officials are

concerned with the threat in Eurasia of the links between terrorist organizations and organized

crime, and trafficking in persons and drugs.101 With the prevalence of drug trafficking in the

United States (via drug trafficking organizations as well as via organized crime groups that also

have a hand in drug trafficking), policymakers may question (1) to what extent there is a nexus

between domestic organized crime and terrorism and (2) what measures will most effectively

combat both terrorism and organized crime.

Potential Issues for Congress

The evolving nature of organized crime, as discussed, presents several issues that Congress may

wish to consider. One issue is whether the tools that Congress has provided the federal

government with to investigate and prosecute domestic organized crime—namely RICO, money

laundering, and asset forfeiture statutes—are still effective tools to combat today’s threats from

organized crime. As evidenced by proposed legislation, Congress is considering clarifying and

expanding these statutes so as to better equip the federal government to fight organized crime.

Federal Organized Crime Resources

Policies exist that allow federal law enforcement to investigate and prosecute organized crime

groups. What may not fully exist, however, are the monetary and personnel resources to

effectively combat organized crime—evidenced by a decrease in FBI agents used to investigate

organized crime matters and in FBI organized crime case openings.

As previously discussed, in FY2004, the FBI utilized about 35% fewer agents on organized crime

matters than it did in FY2000. Agent utilization on organized crime matters also declined by over

15% between FY2005 and FY2009. The FBI has recognized that prioritizing counterterrorism

and counterintelligence cases affects resources available to criminal investigations and that

targeting the most significant threats will allow criminal investigative resources to be used most

effectively. FBI Director Robert Muller testified to the need for restoring resources to the FBI’s

(...continued)

http://www.redorbit.com/news/general/676652/fbi_worries_about_an_osamasopranos_link/index.html.

Organized Crime Council, Overview of the Law Enforcement Strategy to Combat International Organized Crime,

U.S. Department of Justice, April 2008, p. 3.

100

Ibid.

101

U.S. General Accounting Office, Combating Terrorism: Interagency Framework and Agency Programs to Address

the Overseas Threat, GAO-03-165, May 2003, http://www.gao.gov/new.items/d03165.pdf.

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criminal programs, which include organized crime. 102 Efforts—both administrative and

congressional—can be made to this effect in several ways. One congressional option may be to

increase overall funding available to the FBI and other federal law enforcement agencies that may

be experiencing a decrease in resources dedicated to more traditional crime fighting matters,

including organized crime. If these resources are then administratively allocated to criminal

programs, organized crime agent utilization could potentially be more closely aligned with agent

allocation without taking resources away from higher priority areas. Another congressional option

may be to provide directed funding for organized crime matters. This option could ensure that any

increase in funding intended to be directed toward criminal programs or organized crime matters

would be utilized in those domains.

Yet another policy option may be to decide that the existing resources dedicated to organized

crime are sufficient, given the limited financial resources available under the federal budget and

given the national priority of combating the threats from terrorism. If, on the other hand, more

funding were available or if the link between organized crime and terrorism were more direct, the

case for reevaluating the funding directed toward organized crime might be stronger. However,

considering the current budget constraints and priorities, some may consider existing organized

crime funding as adequate.

Multilateral Crime Fighting

The federal government is already involved in several multilateral efforts—with state and local

agencies as well as with international allies—to combat organized crime. With respect to working

with domestic state and local law enforcement agencies, federal law enforcement agencies have

formed joint task forces, some that target a variety of organized crime groups and some that target

specific criminal organizations. Several of these task forces were outlined in previous sections of

this report. Some analysts have suggested that despite the benefits of multilateral crime fighting,

potential jurisdictional issues may arise. As organized crime groups have expanded their activities

beyond state and even national lines, so has the responsibility for combating organized crime

expanded. There exists a clear line between state and federal jurisdiction for prosecuting crimes.

However, jurisdiction over agency responsibility for investigating cases may at times be unclear.

This may be due in part to overlapping agency responsibilities and may also arise from the

complexity of the cases investigated. For instance, an organized crime case with a drug

component may fall under the jurisdiction of both the FBI and the DEA, potentially causing

confusion on which agency would take the lead on such cases.

An issue that may become more visible than the issue of domestic law enforcement coordination

is that of international law enforcement coordination. By ratifying the United Nations Convention

Against Transnational Organized Crime in 2005, Congress took a step in working with foreign

governments and law enforcement agencies to combat organized crime. Specifically, this

Convention provided the framework for international cooperation by requiring mutual legal

assistance between countries in fighting organized crime, as well as by requiring extradition for

those organized criminal offenses outlined in the Convention. These provisions enhance the

102

From remarks by Robert S. Mueller III, Director, Federal Bureau of Investigation, in U.S. Congress, Senate

Committee on Appropriations, Commerce, Justice, Science, and Related Appropriations for FY2008, 110th Cong., 1st

sess., April 26, 2007, p. 305.

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United States’ ability to combat international organized crime and work with countries where

there was no previous mutual assistance arrangement already in place.103

As organized crime becomes increasingly transnational, so may the need for international

organized crime working groups, task forces, and law enforcement cooperation. The benefits of

international cooperation and partnerships are twofold. U.S. law enforcement can extend its

expertise and capabilities to assist overseas law enforcement combat organized crime. Partnering

with international law enforcement will develop the intelligence needed to support domestic

investigations of organized crime. 104 However, one of the challenges, as expressed by federal law

enforcement, is the increased time required to conduct international investigations.105 Among the

various effects that this may have on investigations, organized crime groups may be inadvertently

afforded a longer time to conduct their illegal activities, potentially affecting a greater number of

victims or increasing the magnitude of damage to the victims. A second challenge relating to

international investigations may arise from the domestic practice that federal prosecutors are

involved at all stages of organized crime cases. When investigations are conducted abroad, the

involvement of prosecutors may not be as consistent.

In addition to law enforcement collaboration with foreign nations, Congress has given the federal

government extraterritorial jurisdiction to investigate and prosecute individuals who criminally

violate U.S. interests abroad (P.L. 99-399).106 This legislation was directed at combating terrorist

acts against the United States, and thus the extraterritorial jurisdiction does not necessarily cover

all crimes committed by organized crime groups. The increasingly transnational nature of

organized crime as well as the potential for a nexus between organized crime and terrorism—as

suggested by some analysts—may lead policymakers to question whether and/or how to extend

this extraterritorial jurisdiction beyond the crimes currently covered with the practical and

diplomatic challenges that such an approach may entail.

Potential Organized Crime Nexus with Terrorism

Some experts have indicated that the lines between organized crime groups and terrorist

organizations may become increasingly blurry.107 Even if organized crime groups and terrorist

organizations do not form “long-term strategic alliances,” as suggested by the National Security

103

From remarks by Bruce Swartz, Deputy Assistant Attorney General, Criminal Division, U.S. Department of Justice,

at U.S. Congress, Senate Committee on Foreign Relations, Hearing on Law Enforcement Treaties: Treaty Doc. 107-18,

Inter-American Convention Against Terrorism; Treaty Doc. 108-6, Protocol of Amendment to the International

Convention on the Simplification and Harmonization of Customs Procedures; Treaty Doc. 108-11, Council of Europe

Convention on Cybercrime; Treaty Doc. 108-16, U.N. Convention Against Transnational Organized Crime and

Protocols on Trafficking in Persons and Smuggling of Migrants, 108th Cong., 2nd sess., June 17, 2004, pp. 29-37.

104

Examples of international law enforcement partnerships can be found on the FBI’s website at http://www.fbi.gov/

hq/cid/orgcrime/lcnindex.htm#pantheon, http://www.fbi.gov/hq/cid/orgcrime/asiancrim.htm, and http://www.fbi.gov/

page2/feb09/organizedcrime_021309.html.

105

U.S. Department of Justice, The Electronic Frontier: The Challenge of Unlawful Conduct Involving the Use of the

Internet, A Report of the President’s Working Group on Unlawful Conduct on the Internet, March 2000, p. Appendix

B, http://www.usdoj.gov/criminal/cybercrime/append.htm#B.

106

See the Omnibus Diplomatic Security and Antiterrorism act of 1968, Title XII of P.L. 99-399. For more detailed

information regarding the United States extraterritorial jurisdiction as well as the specific crimes are included in this

jurisdiction, see CRS Report 94-166, Extraterritorial Application of American Criminal Law, by (name redacted).

107

Thomas M. Sanderson, “Transnational Terror and Organized Crime: Blurring the Lines,” SAIS Review, vol. XXIV,

no. 1 (Winter-Spring 2004), pp. 49-61.

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Council, 108 the links between organized crime and terrorism may still be significant. The council

suggests (as does the FBI), however, that organized criminals and terrorists may ally for business

purposes. Both criminal and terrorist organizations depend on money; organized criminals are

profit-driven, and terrorists—though ideology-driven—need money and goods to finance their

operations. It has been suggested that organized crime groups may cooperate with terrorists if the

business alliance is profitable.

Some experts have cited potential additional areas of overlap between organized crime groups

and terrorist organizations. For example, the language school that provided some visas for the

9/11 hijackers is also reported to have provided visas for prostitutes of a human trafficking

ring.109 There have also been instances of terrorist organizations drawing on the structure and

activities of organized crime groups as models for structuring their organizations and financing

their operations. Drug trafficking, for instance, has been one of the most profitable activities for

both organized crime groups and terrorist organizations. Other illegal activities include human

trafficking, weapons trafficking, endangered species trafficking, art and antique theft,

counterfeiting, and credit card fraud.110

Because there may be overlap between organized crime groups and terrorist organizations in

terms of their criminal activities and funding sources, some analysts have argued that combating

organized crime is central to combating terrorism. 111 Congress therefore may consider the

potential nexus between organized crime and terrorism when addressing the nation’s security and

determining the appropriate allocation and utilization of resources, as well as effective

information sharing and interagency cooperation, as discussed above.

Author Contact Information

Kristin M. Finklea

Analyst in Domestic Security

[redacted]@crs.loc.gov, 7-....

108

Mapping the Global Structure, National Intelligence Council, Report of the National Intelligence Council’s 2020

Project, Based on consultations with nongovernmental experts around the world, Washington, D.C., December 2004, p.

96.

109

Louise Shelley, “The Globalization of Crime and Terrorism,” Global Issues, February 2006, pp. 42-45.

110

Ibid.

111

Ibid.

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The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the

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