13 Ch. 13 Cybercrime, White-Collar Crime, Organized Crime

Ch. 13

Cybercrime, White-Collar Crime, Organized Crime

Introduction

Cybercrime, white-collar crime and organized crime are often misunderstood (and overlooked) areas of crime and the criminal justice system. Street crimes, property crimes and violent crimes often gain more attention and notoriety by news sources and public attention and interest. While these crimes may be less of a focus in society, they play a substantial role in crime in the United States and globally. This chapter will discuss these areas of crime, providing insight into their prevalence and possible sources of causation.

True Crime Stories: The Entertainment Factor of Crime

Figure 9.1 Photo collage of Anna Sorokin’s mugshot (a.k.a. Anna Delvey), Elizabeth Holmes at TechCrunch Disrupt conference in 2014, actor Rami Malek as Eliot Alderson in Mr. Robot, and actor Anthony Gallo on the set of Sons of Anarchy.

The dramatization of white-collar crime, cybercrime, and organized crime is popular in the entertainment industry. The exploits of savvy or vicious criminal minds make for thrilling stories for those not directly impacted by the outcomes.

Inventing Anna (Netflix) follows the mystery of alleged German heiress Anna Delvey, a young woman who convinced New York’s rich and elite she was a hip, up-and-coming entrepreneur.  She played up family wealth, socioeconomic status, and extensive business networking. Delvey claimed to be financially secure and backed by investors and a wealthy father. She wove a complicated web of overextended credit, fraudulent business plans, financial lies, and precarious business agreements before the truth of her actual lack of money toppled her entire scheme.

The Dropout (Hulu) explores the rise of Theranos, a billion-dollar health technology company, and its CEO, Elizabeth Holmes. Holmes promoted an innovative blood-testing technology, promising to revolutionize the field of medical diagnoses. An investigative report exposed doubts about the technology and illuminated how Holmes misled and defrauded investors and the government through false and exaggerated claims about the technology. Holmes was later convicted of defrauding investors, wire fraud, and conspiracy to commit wire fraud. She was recently sentenced to eleven years in prison.

Mr. Robot (Prime Video) is the fictional story of Elliot Alderson who is a cybersecurity engineer for his day job and a vigilante hacker for his side hustle. Alderson joins a group trying to take down corporate greed by encrypting data of a giant financial company, canceling all consumer debt. The show was widely praised by cybersecurity firms for its technical accuracy. They hired a team of ethical hackers and experts to conduct “real” hacking scenes that were recorded for the show. Of course, those scenes were not so real that they actually canceled out all consumer debt.

The list of TV shows and movies on organized crime, both real and fictional, is too long for this chapter. The idea of the mob or the mafia has always been a fan favorite. Classics like The Godfather in 1972, Scarface in 1983, and Goodfellas in 1990 continue to feed the glamor associated with criminal enterprises. Sons of Anarchy (2008-2014) brought the concept of motorcycle gangs into the arena of organized crime as well. We can’t seem to get enough of watching the outlaw lifestyle…from the comfort of our law-abiding homes.

It is the categories of crimes in each of these shows and movies that will be covered in this chapter. Although real life is often less glamorous than depicted on the big screen, these are still crimes that carry a lot of intrigue.

Licenses and Attributions for Chapter Overview and Learning Objectives

“Chapter Overview and Learning Objectives” by Jennifer Moreno is licensed under CC BY 4.0.

Figure 9.1 Photo collage of Anna Sorokin’s mugshot (a.k.a. Anna Delvey), State of New Jersey, Copyrighted free use, via Wikimedia Commons; Elizabeth Holmes at TechCrunch Disrupt conference in 2014, Photo by Max Morse for TechCrunch TechCrunch, CC BY 2.0, via Wikimedia Commons; actor Rami Malek as Eliot Alderson in Mr. Robot, Rabih, CC BY-SA 4.0, via Wikimedia Commons; and actor Anthony Gallo on the set of Sons of Anarchy, Punkinfo, CC BY-SA 4.0, via Wikimedia Commons.

Greed, the Internet, and Prohibition

“He who wishes to be rich in a day will be hanged in a year.”

Leonardo da Vinci (1452-1519) Italian painter, engineer, scientist, theorist, sculptor, and architect

There have always been people who try to find a faster, easier road to riches. As Leonardo da Vinci said, though, in the opening quote, it rarely works out well for them. It is a different perspective to look at the same circumstances as the rest of society but see an opportunity to get away with something for personal gain, no matter the harm to others. Laurence Peter (1919-1990), a Canadian writer and educator lamented, “It’s strange that men should take up crime when there are so many legal ways to be dishonest.”

White-collar crime is as old as greed itself, cybercrime is as old as the internet, and organized crime is as old as Prohibition (although this has existed globally arguably since the earliest of civilizations). In each case, people see an opportunity to take advantage of others for their own ego and financial benefit. We will cover all of these unique crime areas in the following sections.

Licenses and Attributions for Greed, the Internet, and Prohibition

“Greed, the Internet, and Prohibition” by Jennifer Moreno is licensed under CC BY 4.0.

White-Collar Crimes

The image of white-collar crime was traditionally a man in a business suit who worked in finance and stole from his clients or the company. Although this still applies, the category of white-collar crimes (sometimes also referred to as “corporate crimes”) is broad enough to include all those crimes committed in the corporate world to exploit others for financial gain. These crimes use concealment or deceit within a business relationship or enterprise to defraud others.

The term “white-collar crime” was coined in 1939 by sociologist Edwin Sutherland, who defined it as a “crime committed by a person of respectability and high social status in the course of his occupation” in a speech entitled “White Collar Criminality” delivered to the American Sociological Society. Comparatively, “blue collar” workers were considered the uniformed laborers who worked in plants, mills, and factories, not in a position to pull off corporate espionage. Sutherland also claimed it was the blue collar workers who got their hands dirty in crime, historically associated with the direct, more violent crimes of assault, homicide, robbery, and vandalism.

Attached is a document from the US Department of Justice highlighting measurement of white-collar crimes using the Uniform Crime Reports (UCR) system. https://ucr.fbi.gov/nibrs/nibrs_wcc.pdf

Much of Sutherland’s work was to separate and define the differences in blue-collar street crimes like arson, burglary, theft, assault, rape, and vandalism, which he blamed on differential association. Instead, Sutherland explained that white-collar criminals are opportunists, who learn to take advantage of their circumstances to accumulate financial gain. They are educated, intelligent, affluent, and confident individuals whose jobs involve unmonitored access to large sums of money (Sutherland, 1939).

In many ways, the distinction between “white” and “blue” collar crime is becoming less clear as technology and societal changes provide increasing access and opportunity for online entrepreneurship. However, white-collar crime is still largely considered a more sophisticated and higher esteemed type of crime committed by masterminds and strategic professionals rather than “criminals.” The intellectual sophistication attributed to white-collar crime is one of the greatest myths contributing to the characterization of white-collar criminals as not “real” criminals. Instead, white-collar criminals are often portrayed as savvy, misunderstood masterminds rather than serious threats.

Increasingly, however, the perception of white-collar crime has expanded beyond Wall Street and the boardrooms of corporate conglomerates. With technological advancements and the movement of business into the hands of citizens through investment and banking apps, cryptocurrency, online businesses, and internet sales, white-collar crime finds itself frequently alongside traditional blue-collar financial crimes like the physical thefts of robberies.

Because of the tendency for the larger-scale, widespread impact of corporate crime as part of a global economy, corporate crime in the United States is investigated and prosecuted more commonly at the federal level through agencies like the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD), and the Federal Bureau of Investigations (FBI). Common to all types of white-collar crimes is transactional depth, concealment of criminal exploits through often complex and convoluted financial bookkeeping, digital manipulation, and strategic maneuvering. These agencies are more likely to have the tools and personnel necessary to track components of crimes at this level of intensity.

Mens Rea in White-Collar Crime

Mens rea in white-collar crimes require that the offender have specific knowledge and intention to produce financial gain. This awareness is what demonstrates both the desire and motivation to do the actions necessary to facilitate financial gain. This mens rea may seem a little confusing since it aligns with the mental state of almost everyone in business, which is to try to make money. When paired with the actus reus, however, it is quite different.

Actus Reus in White-Collar Crime

Actus reus in white-collar crimes requires that the offender act in a way that demonstrates concealment or exploitation against a victim who trusted or relied upon them and their actions. This violates the fiduciary relationship, which is one in which someone holds a legal or ethical relationship where they are trusted with managing the money or assets of another person. Showing concealment or exploitation by the offender is often accomplished by demonstrating the actions of lying, exaggerating, down-playing risk, breach of duty, misrepresentation, or misusing fiduciary responsibilities or authority.

Types of White-Collar Crimes

White-collar crimes traditionally include forgery, fraud, embezzlement, money laundering, extortion, and bribery. We will discuss each of these crimes in this section. Some additional white-collar crimes are tax evasion and insider trading. Simply put, tax evasion is trying to avoid paying your taxes and insider trading is buying or selling in the stock market using confidential information that gives you an unfair advantage (figure 9.2).

Figure 9.2 Photograph of Dennis Levine, a former investment banker convicted of insider trading in the 1980s.

Forgery

Forgery is the practice of producing or using a fake version of a real document to try to get some benefit. This could involve modifying part of a document (like trying to change the birthdate on a driver’s license) or creating a completely new fake document from scratch and trying to pass it off as the real version (such as a fake birth certificate).

When forgery involves money, it is called counterfeiting. When forgery involves personal data and documents, it is often accomplished by acquiring information through theft (actual theft of a wallet or mail), phishing (seeking data through email), skimming (stealing dating through ATMs or card swiping devices), or other forms of computer and data hacking we will discuss in the section on cybercrime.

The basic criminal components of forgery are the actus reus of making, altering, using, or possessing a fake version of a real document. The document does not have to be changed very much for it to still be considered forgery. The standard is a “material” alteration, changing the nature of the document to such an extent that it changes the legal or original purpose. The mens rea is the intent to assume a benefit through deceit. The presentation of the fake version with the intent to deceive is key to the crime of forgery.

Forgery can be treated as a felony or misdemeanor depending on the extent to which the fake version was altered and the purpose of the forgery.

Fraud

Fraud is a broad term that covers a wide variety of behaviors designed to deceive for the purposes of gaining some benefit, usually money. Fraud can take many forms, including:

Medical fraud (faking an injury or illness to wrongfully obtain prescription medications)

Tax fraud (lying about income or deductions to manipulate tax laws for financial gain)

Voter fraud (assuming the identity of a legally registered voter to unlawfully cast a ballot in an election)

Insurance fraud (making an insurance claim for property that was intentionally damaged or destroyed in order to get money)

The fundamental criminal components to fraud are the actus reus of deceit, paired with the mens rea of the offender of seeking a benefit.

Like forgery, fraud can be treated as a felony or misdemeanor depending on the extent of the fraud, how much money was involved, what was done to accomplish the fraud, or the amount of deceit involved in committing the fraud.

Embezzlement

Embezzlement involves using officially obtained financial assets for purposes outside the scope of their intended use, usually for personal gain. In other words, when money is contributed toward a fund for a specific reason, but is used for a different purpose, that is embezzlement. Examples of this are when someone with access to a pension fund or charitable donations spends the money on something for themselves instead of the pensions or the charity for which it was intended.

Embezzlers can take funds in small amounts over time, can intend to pay the assets back, can borrow or manipulate assets, and can use assets transactionally that appear as legitimate. There are many different ways to skim funds off the top, but it eventually adds up and can cause great harm to those who were counting on that money.

The basic criminal components of embezzlement are the actus reus of misusing assets, paired with the mens rea that the offender was entrusted with the assets and that they used their position of trust to purposefully misuse the assets for their personal benefit. Embezzlement is a direct violation of fiduciary responsibility.

Embezzlement can be treated as a misdemeanor or felony, depending on the amount of the misused assets.

In a Student’s Own Words:

Question: How is white-collar crime viewed and treated?

“White-collar crime is treated much differently that street crime, even though in some aspects it can be just as dangerous if not more than street crime is or how dangerous people believe street crime to be. White-collar crime can have a significant impact on society. It often involves financial fraud, embezzlement, or corporate misconduct. This kind of crime can harm individuals, businesses, and even the economy as a whole. It can tear down the financial system which in turn can lead to economic instability. It can also cause individuals and businesses to face financial losses because of the varying results which can create significant hardships for the victims and people affected by these white-collar crimes. I truly believe it’s extremely important to fight against these white-collar crimes just as much as our justice system does for street crimes. I definitely think that the justice system doesn’t criminalize white-collar criminals nearly as much as they do street criminals, and I think that needs to change. Instead of just fining people who are committing white-collar crimes and taking them to civil court take them to criminal court where they can be charged with heavier sentences; because the only way to stop these criminals from committing these crimes and cause lots of potential harm to society and specific people is the set the precedent of high sentences for these crimes.”

Money Laundering

Money laundering is taking illegally obtained, or “dirty” money and making the money appear “clean” by running the money through recognized channels and businesses to make the money appear legitimately earned and sourced.

The criminal components to money laundering are the actus reus of the steps in the laundering process which include placement, layering, and integration. Placement is putting the “dirty” money into the financial system (which could be a bank deposit or taking it into a legitimate business as supposed income). The next step, layering, is a complicated process of hiding the “dirty” money among the clean money by creating complicated transitions that make it hard to track. Finally, the “dirty” money is returned to the source but now appears to be legitimate income or profit instead of a gain from criminal activity.

The criminal act is paired with the mens rea of knowing the origin of the money and initiating the money laundering process to conceal that origin to further the criminal enterprise. Money laundering can be treated as a misdemeanor or a felony depending on the number of illicit transactions involved in the layering and the total of the assets being laundered.

Money Laundering with Drug Cartels

Figure 9.3 Photograph of Jason Bateman, who played Marty Byrde on Ozark.

Like the examples of shows, movies, and docu-series in the True Crime Stories discussed in the Chapter Overview, money laundering became more widely known thanks to a popular show, Ozark. In this wildly popular Netflix series, a fictional family becomes involved in a money laundering scheme with a Mexican drug cartel. Character Marty Byrde, who was simply a financial advisor, ultimately chooses to move his family to Lake of the Ozarks and get deeper involved with local crime and the drug cartel (figure 9.3).

Some real life examples also involve drug cartels, but it seems to be banks that have paid the biggest price. HSBC, the biggest bank in Europe, was fined $1.9 billion in 2012 because they allowed approximately $8 billion to be laundered through their banks over a seven year period by one Mexican drug cartel, one Columbian drug cartel, and possibly even terrorist organizations.

Similarly, Wachovia Bank, which is now part of Wells Fargo, was fined $160 million for allowing a Mexican drug cartel to launder roughly $390 million through their bank between 2004 and 2007.

Extortion

Extortion involves situations where a person is threatened with some kind of harm unless they do a specific action or provide a benefit to the offender. Because extortion involves the pursuit of a benefit and the offender taking the benefit through threatened harm, extortion is a type of theft. The offender uses fear to motivate the victim and facilitate the taking. In the case of extortion, the threatened harm can include a threat to inflict a personal injury, a threat to accuse someone of a crime, a threat to reveal a secret, or any threat to cause personal, reputational, financial, or physical harm. A new common example is occurring over the internet with someone setting up another person to send embarrassing or private photos or videos, then threatening to send those items out to all their social media contacts unless they pay a certain amount. The use of technology to commit this extortion makes it also fall under the umbrella of cybercrime, which we will discuss in this chapter as well.

The basic criminal components to extortion are the actus reus of making the threat, paired with the mens rea of the offender of seeking a benefit. Extortion is typically considered nonviolent in that the threat is of future harm to the victim. An immediate threat of harm would align the act more with robbery. Extortion is generally treated as a felony in most jurisdictions.

Bribery

Bribery is often compared to extortion, however, while extortion involves threatening harm to gain a benefit, bribery specifically involves financial incentive to gain a benefit. Typically, financial incentives are offered to people in positions of power who are capable of giving a benefit to the other. Interestingly, while extortion tends to characterize one person as a clear victim trying to avoid harm and another as the offender threatening the harm, bribery recognizes both the person offering the bribe and the one taking the bribe both as offenders.

The basic criminal component to bribery is the quid pro quo relationship, meaning each party engages in both the terms and benefits of the bribe agreement (“You scratch my back, I’ll scratch yours” agreements). Bribery consists of actus reus on both sides of the bribe by the person making the offer and the person making the choice to accept or negotiate the offer. Both parties accept the potential to benefit from the bribery agreement. This duality is also present in the mens rea in that each party makes an affirmative choice to engage in the bribe agreement, each intending to receive a benefit. Demonstrating that choice and intent to receive a benefit is often difficult to prove. Often one party claims they only accepted the bribe to avoid harm. Bribery is typically considered nonviolent in that the bribe is usually of financial origin. Bribery is generally treated as a felony in most jurisdictions.

Licenses and Attributions for White-Collar Crimes

“White-Collar Crimes” by Jennifer Moreno is licensed under CC BY 4.0.

Figure 9.2 Photograph of Dennis Levine, a former investment banker convicted of insider trading in the 1980s, Ken Rutkowski, is in the Public Domain, via Wikimedia Commons.

Figure 9.3 Photograph of Jason Bateman, who played Marty Byrde on Ozark, MTV UK, CC BY 3.0, via Wikimedia Commons.

Cybercrime

Cybercrime is the use of computer technology to commit a crime. Cybercrime has evolved and become more sophisticated as a result of advancements in computer technology. As technology advances, so do the crimes involved.

There are two types of cybercrimes: those that are cyber-dependent and those that are cyber-enabled. Cyber-dependent crimes require the use of computers or computer technology to commit the crime. Cyber-enabled crimes are those that can be facilitated by computers or computer technology, but do not necessarily require it.

Cybercrimes have practically nonexistent jurisdictional boundaries. The expanse of online networks and complexity of routers, internet protocols, network pathways, and global infrastructure make investigating and prosecuting cybercrimes very difficult. To make detection even more challenging, cyberthreats are vast, opportunistic, and cunning in design, making legitimate cybercommunications hard to differentiate from cybercrime.

Mens Rea in Cybercrime

Mens rea in cybercrimes require that the offender have specific knowledge of computer networks, information technology, or technological prowess, and have the intent to use this knowledge to facilitate the commission of a crime. This knowledge of technology is what demonstrates the cyber component of a cybercrime.

Actus Reus in Cybercrime

In cybercrime, the actus reus is the use of computer technology to commit a crime. Specifically taking advantage of online systems, technological infrastructures, and cyber networks is what characterizes the criminal actions.

Types of Cybercrimes

With advances in technology, cybercrime is not only relatively new, but it has also affected the manner in which long-existing crimes may be committed. Extortion is a good example of this advancement. What used to be done on a smaller scale can now ruin a person’s career and personal life because the secret they want to protect can be instantly shared on a massive scale.

Figure 9.4 Photograph of former Congressman Anthony Weiner at the New York City Gay Pride Parade in 2009.

Former U.S. Representative Anthony Weiner is a prime example of someone widely sharing secrets he wanted to keep hidden. In 2011, Weiner used his Twitter account to send sexually explicit photos of himself to women, which were then leaked to the media. This act cost him his seat in Congress. Later, he was caught in another sexting scandal after returning to politics. During his run for mayor of New York City, he sent sexually explicit photos and sexting messages to more women and even a 15-year old girl. With these revelations, he lost both his political career and his marriage. Weiner has since served approximately two years in a federal prison and is now a life-long registered sex offender.

Although it is debatable whether he is actually a victim in this case, this example shows how quickly harmful information can be spread with the use of technology. There are now cyber variations to all sorts of crimes that have been committed for centuries. This is in addition to the new types of crimes that have come into existence with different technologies like the use of viruses to corrupt computer systems or steal personal data. This is an area that is constantly and quickly evolving, causing all manner of unique challenges for law enforcement.

In a Student’s Own Words:

Question: What are methods to protect personal and/or companies information?

“Since becoming a bank teller I have become more aware of technology when it comes to crime. I am assigned monthly online seminars, by my boss, which pertain to safeguarding our technology and software. I personally have started applying these practices to my daily life. I have stopped automatically saving passwords on every website, and I do not save any debit card information. I only use a reloadable debit card with very minimal amounts of money on it to purchase anything online. I have also started creating harder passwords that I do not repeatedly use for everything.

The most common type of scam, and the most dangerous, I encounter at my bank are phishing emails. They are very easy to create, and they are very easy to accidentally click. It does not take an advanced computer engineer to know how to work a phishing email, and if my work computer was compromised, they would have access to hundreds of bank accounts.

I am actually very thankful that I started working at the bank, because I have learned so much about safeguarding technology.”

Cyber Variations of Traditional Crimes

Social networking has created relational opportunities not previously experienced in society. Where traditional crimes were once committed based on opportunity or with specific motive against a particular person, online environments have created an artificial means of connecting people, sometimes for the sole purpose of perpetrating a crime against another.

Most existing crimes can be planned, solicited, conspired, or attempted online. For a crime to be considered a cybercrime, it must be substantially accomplished through the use of cybertechnology. When a crime has moved beyond being cyber-enabled with the use of technology to a cyber-dependent necessary use of technology, it will more readily be designated a true cybercrime.

Common cyber variations of traditional crimes include:

Online predators

Fraudulent sales or theft

Threats, intimidation, or bullying

White-collar crimes as online financial schemes

Network engineering and manipulation

Cyber versions of fraud are those that illegally obtain personal information and data for illegal use and benefit of the offender. Cybercriminals design elaborate programs called viruses that can infect personal devices (computers or cell phones), creating ways to steal sensitive private data and information. The programs get onto our personal devices by looking like well designed, legitimate, or harmless links, sites, or downloads. Once a victim opens the attachment, clicks the link, or downloads the picture or program, the cybercriminal has almost unrestricted access to an unsuspecting victim and their information.

Common network engineering and manipulation schemes include:

Spoofing and phishing (schemes aimed at tricking people into providing sensitive information to scammers)

Ransomware (malicious software, or malware, which looks safe but once downloaded, prevents someone from accessing computer files, systems, or networks in exchange for a financial ransom)

Cyberterrorism and cyberattacks

Larger scale cybercrimes that are more sophisticated and destructive in nature include those that are designed to wipe out massive online infrastructure and technology availability. Electromagnetic pulses powerful enough to neutralize entire power grids, disrupting internet and online technology are the talk of modern warfare and terrorism. Also, the collection of private data and information threatens national security and the right to privacy.

Cyberterrorism can include:

Bringing down major websites, including social media platforms

Unauthorized access to disable or modify communications the control military or other critical technology

Bringing down critical infrastructure systems like the power grid or water treatment plants

Spying on rival nations to gather intelligence

The Center for Strategic and International Studies maintains a list of significant cyber incidents that have been identified since 2006 and include losses of over $1 million. The list is publicly available on their website at https://www.csis.org/programs/strategic-technologies-program/significant-cyber-incidents.

Licenses and Attributions for Cybercrime

“Cybercrime” by Jennifer Moreno is licensed under CC BY 4.0.

Figure 9.4 Photograph of former Congressman Anthony Weiner at the New York City Gay Pride Parade in 2009, Boss Tweed from New York, CC BY 2.0, via Wikimedia Commons.

Organized Crime

The rise in organized crime is an example of unintended consequences of what people thought were good intentions. In the early 1900s, an influential group determined that alcohol was causing too many problems in society and should it be abolished. Eventually, that movement led to the 18th Amendment of the U.S. Constitution (U.S. Const. amend. XVIII). By 1920, it became illegal to conduct production, importation, transportation, and sale of alcoholic beverages. With a complete ban (or prohibition) on alcohol, others saw this as an opportunity for personal gain. Illegal production and sale of alcohol, which was called “bootlegging” as well as the sudden creation and growth of “speakeasies” (secret bars) meant big business for those willing to take the risk. This special opportunity is often credited with the prominent rise of organized crime syndicates and the solidification of organized crime in this country.

Organized crime consists of gangs, mobs, mafia, or any sort of criminal syndicates that are an association of individuals who work together to make money through illegal means. They work to gain power, influence, and money usually through criminal activity that includes corruption and violence. There is often a tight-knit family mentality or even blood ties that keep members from turning on one another. The structures and make-up vary, as well as the legal and illegal activities of each group, often with international ties. However, when we talk about organized crime, these are typically groups that operate at a much higher level than smaller street gangs.

Despite the variety across groups, the U.S. Department of Justice has identified the following features as common to all types of organized crime (OCGS, 2021):

Reliance upon violence, threats of violence, or other acts of intimidation;

Exploiting political and cultural differences between nations;

Gaining influence in government, politics, and business through corrupt means;

Holding economic gain including investment in legitimate business; and

Insulating leadership from prosecution through hierarchical structure.

The Organized Crime and Gang Section (OCGS) of the Department of Justice is a specialized group of prosecutors charged with developing and implementing strategies to disrupt and dismantle the most significant regional, national, and international organized crime groups and violent gangs (OCGS, 2021).

The Federal Bureau of Investigation (FBI), Interpol, the United Nations Office on Drugs and Crime, the National Security Council, and international agencies around the world all work together to combat organized crime. The main enforcement efforts are directed against international organized crime groups, which pose serious threats to the well-being of Americans and the stability of our economy. International organized crime (IOC) promotes corruption and violence, jeopardizes our border security, and causes untold human misery. IOC undermines the integrity of banking and financial systems, commodities and securities markets, healthcare systems, and internet commerce.

OCGS attorneys prosecute organized crime cases in cooperation with United States Attorney’s offices across the country. These cases involve a broad spectrum of criminal laws, including extortion, murder, bribery, fraud, money laundering, narcotics, and labor racketeering. In addition, OCGS reviews all proposed federal prosecutions under the Racketeer Influenced and Corrupt Organizations (RICO) law and provides extensive advice to prosecutors about the use of this powerful statute. The RICO Act is a federal law designed to combat organized crime in the United States that was passed in 1970. Interestingly, it was originally designed to address corruption within leadership of labor unions, but was quickly expanded to prosecute criminal organizations of varying types.

The RICO Act is distinct in that it includes conspiracy, which allows the connections among crimes that may appear unrelated. Previously, crimes would have to be prosecuted in a way that allowed them to only be grouped by the person who was carrying them out. RICO changed that in a very significant way. Through RICO, prosecutors can tie together seemingly unconnected activities that have the same goal of furthering the criminal syndicate and bust not only the person carrying out the crime, but the one who ordered them to do so. By bundling these crimes together, RICO allows law enforcement to take down the boss calling the shots, ordering their underlings to actually commit the crimes while they keep their hands clean (Remember that last feature identified by the Justice Department of “insulating leadership from prosecution through hierarchical structure.”). All these crimes can be linked together in a way that demonstrates the existence of a criminal enterprise and prosecutors can go directly to the head of that group. Also, RICO allows for a condition of no further contact with others involved in the same “racketeering” enterprise, making it difficult for members of criminal organizations to continue their work together.

9.5.1 RICO and the Mafia

Figure 9.4 FBI Booking photo of John Gotti, head of the Gambino crime family.

In the fifty years that RICO has existed, it has reportedly been a key tool in taking down notorious mob bosses.

In 1977 and 1978, The Cowboy Mafia across Texas, Tennessee, and Florida got busted for importing marijuana on shrimp boats. Twenty-six members were convicted and the boss was brought down under RICO.

In 1979, RICO was used to go after Sonny Barger and the Hell’s Angels motorcycle gang. It didn’t quite work, at least not the first time. Prosecutors keep coming after them.

In 1980, the head of the Genovese crime family was taken down by RICO. Then, prosecutors went after the heads of five more Mafia families in New York City and successfully convicted them as well.

In 1984, the Key West Police Department, including Deputy Police Chief Raymond Cassamayor and several high-ranking officers, were convicted using RICO for running a protection racket for cocaine smugglers.

In 1992, John Gotti and Frank Lacascio of the Gambino crime family were convicted under RICO (figure 9.4). Later, in the mid-1990s, the Lucchese crime family faced the same fate.

Then, in 2004, Bonanno crime family boss Joseph Massino was busted by RICO and agreed to cooperate with law enforcement to flip on more of the crime syndicate (ratting on his own family) in order to keep himself off death row.

Mens Rea in Organized Crime

Mens rea for organized crime requires that the offender have specific knowledge and intention to promote and further the goals of the criminal syndicate and recognition that the objectives of the organization are superior to the desires or potential consequences for the individual. In other words, members will do anything for the good of the group, no matter the risk involved. They are 100% devoted, far and above their own individual interests or concerns.

Actus Reus in Organized Crime

Along with the mens rea, organized criminals must commit any criminal action as part of an ongoing criminal enterprise. Commonly, those crimes are financially motivated in nature, like fraud, money laundering, or counterfeiting, but more vicious and dangerous criminal syndicates commonly participate in murder, human trafficking, and drug smuggling.

Types of Organized Crimes

Organized crimes are any crimes that are committed in compounding number and seriousness, specifically performed with the overall goal of furthering the criminal enterprise to exert power, control, and influence.

While individual members of the organized crime unit can be investigated and prosecuted for basic violations of criminal law, the greater aspiration in the fight against organized crime is the prosecution of high-level bosses, the illumination of complex criminal networks, and the dismantling of highly coordinated, dangerously exploitative criminal syndicates.

Organized crime enterprises commit basic crimes at all levels, but they tend to rely on more complex criminal ventures including:

Drug dealing and trafficking

Human and migrant smuggling or trafficking

Exotic wildlife smuggling

Illegal firearms trafficking

The sale of stolen goods and artifacts

These crimes provide revenue for organized crime syndicates. While the distribution and sale of illicit items is common, more complex versions of these crimes help increase the power and income of the group. Computer technology has also created a new frontier for organized criminals. Crimes once limited by the physical location of the group can now occur worldwide via the internet, social media platforms, and dark web operations.

Offenses at the organized crime level are generally treated as a felony in most jurisdictions. More specifically, the combined size and complexity of the crimes on a large scale, common to organized criminals, increases the crimes from lower-level offenses to major inter-jurisdictional schemes – especially under RICO.

Rules of the Mafia (Traditional Cosa Nostra Style)

The Mafia operates with a pretty strict set of internal rules, kind of like a dark version of a fraternity. Some may vary by family or region, but these are the classic rules that most mafia families will follow;

1. Absolute loyalty to the family – Blood or oath comes first, “family” comes before your actual family.

2. Respect the hierarchy – Obey your superiors without question, follow the chain of command.

3. No contact with authorities – No talking, no leaking, no snitching to law enforcement or outsiders.

4. Family secrets stay secret – Never reveal the organization’s business, period.

5. Honor and respect – Especially for other made men; disrespect can get you killed.

6. No dealings with drugs (traditionally) – Some bosses banned it to avoid heat, though many broke this.

7. Only made men can kill made men – Needs approval from higher-ups.

8. Don’t mess with another man’s wife – A big no-no.

9. You must always be available for the family – No matter what.

10. Initiation is sacred – Becoming a “made man” involves a ritual, blood, and burning a saint’s image in your hands while swearing loyalty.

Sources for this information (including the 10 rules) come from witness testimony, movies and books written about the subject by people that have left the mafia. A good example is the testimony and work of Sammy “The Bull” Gravano, Tommaso Buscette and others. Hours of FBI surveillance, court testimony and documents also add to this narrative.

Licenses and Attributions for Organized Crime

“Organized Crime” by Jennifer Moreno is licensed under CC BY 4.0.

Figure 9.4 FBI Booking photo of John Gotti, head of the Gambino crime family, FBI New York, Public domain, via Wikimedia Commons.

Conclusion

Although white-collar crime, cybercrime, and organized crime are sensationalized in the media, television shows, and movies, they actually cause a significant amount of harm. Technology continues to change the way in which crime is committed in each of these areas, making it important to use caution and stay informed of tips for personal safety. Perhaps one benefit of watching the shows and movies on these topics (beyond simply for entertainment) is to learn more about how these crimes have occurred in the past so we can work to prevent them in the future.

Application Exercises

Watch the TEDTalk “Where is cybercrime really coming from?” to hear security expert Caleb Barlow explain the challenges of and suggested solutions for cybercrime, then discuss whether you agree with his ideas. https://www.youtube.com/watch?v=FqrLUtIFVjs

Discuss various shows and movies on the topics of white-collar crime, cybercrime, and organized crime. What stereotypes or “tropes” are in the shows? Are these accurate?

Discussion Questions

Which types of white-collar crime do you think would be the hardest to prosecute and why?

Why is cybercrime especially difficult to investigate and stop?

Why is prohibition linked to the start or rapid growth of organized crime?

What is the goal of the Racketeer Influenced and Corrupt Organizations (RICO) Act and how is it used?

Why do you think shows or movies about white-collar crimes, cyber crimes, and organized crime are so popular? What is appealing about these stories?

Key Terms

Bribery

Counterfeiting

Cyber-dependent

Cyber-enabled

Cybercrime

Embezzlement

Extortion

Fiduciary

Forgery

Fraud

Money laundering

Organized crime

Phishing

Racketeering Influenced and Corrupt Organizations (RICO)

Skimming

White-collar crimes

Summary

The category of white-collar crimes is broad enough to include all those crimes committed in the corporate world to exploit others for financial gain. Forgery is the practice of producing or using a fake version of a real document to try to get some benefit. Fraud is a more generalized term encompassing a wide variety of behaviors designed to deceive for the purposes of gaining some benefit, usually money. Embezzlement involves using officially obtained financial assets for purposes outside the scope of their intended use, usually for personal gain. Money laundering is taking illegally obtained, or “dirty” money and making the money appear “clean” by running it through recognized channels and businesses to make the money appear legitimately earned and sourced. Extortion addresses situations where a person is threatened with some kind of harm unless the victim does an action or provides a benefit to the offender. Bribery involves financial inducement to gain a benefit.

Cybercrime is the use of computer technology to facilitate the commission of a crime. Any existing crime can be planned, solicited, conspired, or attempted online. For a crime to be considered a cybercrime, it must be substantially accomplished through the use of cybertechnology. Common cyber-variations of traditional crimes include online predators, fraudulent sales or theft, threats, intimidation, or bullying, and online financial schemes. Cyber versions of fraud are those that illegally obtain personal information and data for illegal use and benefit of the offender. Spoofing and phishing are schemes aimed at tricking people into providing sensitive information to scammers. Ransomware is malicious software, or malware, which looks safe but once downloaded, prevents someone from accessing computer files, systems, or networks in exchange for a financial ransom.

Organized crime consists of gangs, mobs, mafia, or any sort of criminal syndicates that are an association of individuals who work together to make money through illegal means. They work to gain power, influence, and money usually through criminal activity that includes corruption and violence. The RICO Act is a federal law designed to combat organized crime in the United States that was passed in 1970. This law allows for prosecution of the heads of criminal organizations, even when they do not commit the crimes themselves. Organized crime enterprises commit basic crimes at all levels, but they tend to rely on more complex criminal ventures including drug dealing and trafficking, human and migrant smuggling or trafficking, exotic wildlife smuggling, illegal firearms trafficking, and the sale of stolen goods and artifacts.

Resources

The Organized Crime and Gang Section (OCGS) of the Department of Justice provides news alerts about all their work related to organized crime and the prosecution of criminal syndicates at https://www.justice.gov/criminal-ocgs/ocgs-press-room/2022.

The FBI provides resources on how to protect yourself from cybercrime at https://www.fbi.gov/investigate/cyber.

Licenses and Attributions for Conclusion

“Conclusion” by Jennifer Moreno is licensed under CC BY 4.0.

References

Organized Crime and Gang Section [OCGS]. (2021). International organized crime. https://www.justice.gov/criminal-ocgs/international-organized-crime

Sutherland, E. (1939). The white collar criminality. Paper presented to the annual meeting of the American Sociological Society in Philadelphia, PA.

U.S. Const. amend. XVIII