Russian Organized Crime

RUSSIAN ORGANIZED CRIME (ROC) Introduction

Russian organized crime has become a significant problem for California law enforcement agencies. During the past several years, some Russian emigres have established a growing number of loosely structured criminal networks in this state that are involved in sophisticated criminal activities. The law enforcement intelligence community has also become aware of at least four structured Russian criminal organizations operating in California. Russian organized crime includes crime groups from all the republics which comprised the former Soviet Union. These crime groups are operating in many of the major cities in California including Los Angeles, San Francisco, San Jose, Sacramento, and San Diego. Russian crime figures have been identified in cases involving extortion, prostitution, insurance and medical fraud, auto theft, counterfeiting, credit card forgery, narcotics trafficking, fuel tax fraud, money laundering, and murder. Russian organized crime networks are also operating in New York, Boston, Chicago, Miami, Cleveland, Philadelphia, and Seattle. Many of the California-based networks communicate and, in many cases, are connected with these out-of-state groups in their criminal activities.

Many Russian organized crime groups in the United States have ties to organized crime groups in Russia. 1 A report on organized crime presented to President Boris Yeltsin by Russia's Analytical Center for Social and Economic Policies, stated "The growth of organized crime threatens the political and economic development of Russia and creates conditions that could help bring the national socialists to power." 2

An estimated 80 percent of the private enterprises and commercial banks in Russia's major cities are forced to pay a tribute of 10 to 20 percent of their profits to organized crime. 3

On April 21, 1994, during a Senate hearing, CIA Director R. James Woolsey said, "Organized crime is so rampant in Russia that it threatens Boris Yeltsin's presidency and raises concern that syndicates will obtain and smuggle Russian nuclear weapons to terrorists or foreign agents." 4

Wooisey revealed that organized crime syndicates from Russia, Asia, and Africa are forming alliances with traditional Italian and Latin American organizations, creating a formidable threat to international peace and stability.

In recognition of this threat, the FBI recently established a Moscow office that will focus on Russian organized crime encroachment into the United States along with the potentially disastrous threat of trafficking in nuclear weapons. 5 U.S. Aftorney General Janet Reno has named Russian organized crime groups in the United States a priority target for the U.S. Department of Justice. 6 Law enforcement agencies throughout the U.S. now consider Russian organized crime a major threat and are developing strategies and forming task forces to counter that threat.

During the 1970s and 1980s, according to the U.S. Immigration and Naturalization Service, approximately 200,000 Soviet citizens, many who were Russian-Jewish refugees 7 , immigrated to the U.S. Although the Soviet government liberalized its Jewish immigration policy, it is believed that under this guise the KGB also emptied their prisons of hard-core criminals, much like Cuban dictator Fidel Castro did during the Mariel boatlift of 1980. 8 Many of these criminals are believed to have continued their life of crime in the United States.

The flow of Soviet refugees increased following congressional enactment of the Lautenberg Amendment in November 1989, which allows up to 50,000 Soviet refugees to enter the U.S. each year. This was followed by the adoption in May 1991, of Russia's first law granting its citizens the right to immigrate and travel freely. 9

In 1994, according to the U.S. Immigration and Naturalization Service, the majority of former Soviet emigres and refugees entering the U.S. declared as their intended state of residence New York, followed by California, Washington, Illinois, Pennsylvania, Massachusetts, Maryland, New Jersey, Ohio, and Oregon. (See charts)

According to an April 1986 report by the President's Commission on Organized Crime, the first indication of an organized crime element among Russian immigrants came in 1975 when a gang from the Odessa region of Russia was discovered to be involved in major fraud. The victims were other Russians living throughout the United States. The group became known as the "Potato Bag Gang" because victims believed they had bought a sack of gold coins but actually received only a bag of potatoes.

Soviet criminal networks gradually expanded into other criminal activities such as extortion, theft, prostitution, and actively preyed upon newly arriving groups of Russian emigres by extorting money from them. The Brighton Beach area of New York City became the hub for Russian organized crime in this country during the mid-1970s. There, Russian criminals developed a working relationship with the La Cosa Nostra (LCN) which allowed them to establish fuel tax fraud schemes in certain areas of New York. The LCN forced the Russian criminals involved in these frauds to pay a large portion of their proceeds as a "tax" to operate. 10

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2 Washington, D.C. Times, January 28, 1994 back

3 U.S. News and World Report, March 7,1994 back

4 Washington, D.C. Times, April 21, 1994 back

5 San Francisco Examiner, May 25, 1994 back

6 U.S. News and World Report, March 7, 1994 back

7 Refugees are persons who are outside their country of nationality and are unable to return to that country because of a well-founded fear of persecution. back

8 President's Commission on Organized Crime, April 1986 back

9 Special Report on Russian Organized Crime by Middle Atlantic-Great Lakes Organized Crime Law Enforcement Network, August 1992 back

10 New York Daily News, April 6, 1993 back





