How La Cosa Nostra Makes Money

Racket• An illegal business or scheme

Labor Racketeering• The infiltration, domination, and/or

use of a union or employee benefit plan for personal benefit by illegal, violent, or fraudulent means

Labor Racketeering• Basically, the mob uses their power

and influence to control unions

Labor RacketeeringYou may be saying, “Interesting, but how does that affect me, Joe Highschool?”

I’m glad you asked…

Labor Racketeering• FBI investigations have shown that

labor racketeering costs the American public (aka you and me) millions of dollars each year.

How you ask? Like this…

Labor Racketeering• Organized Crime can control the

pricing in an entire industry• Manipulate value of shares on the

stock market• Orchestrate strikes and work

slowdowns• Rig bidding for contracts

Extortion• Unlawfully obtaining

money, property, or services through intimidation or coercion– Shakedown

• Making a threat of violence to require a payment in order to prevent future violence

Protection Racket• Extortion scheme• Coerce the victim to pay money for

protection against violence or damage to their property

• Racketeers convince victim to pay by showing them what will happen if they don’t

• In most cases, the racketeers are only protecting the victim from the racketeers themselves

Gambling• Point-Shaving– Difficult to pull off– Convince a player, coach, or official to

prevent his team from covering the betting line

Gambling• Book-Making– Establishing the odds, point spread, or

over/under for a variety of events– Usual goal is to have a “balanced book”• As much coming in as is going out

–Mob bookies get unsuspecting bettors to gamble on their “skewed” lines

Loan Sharking

• Offering loans at extremely high interest rates

• Sometimes enforce payments with the threat of violence

• People who “go to the sharks;”– Businesses who need money for

protection– Gamblers to pay bookies

Unfortunately, we give the mafia its power. We need, and want, what they provide. They know this, and that knowledge allows them to drive up prices, make exorbitant amounts of money, wield power, and avoid law enforcement

Skimming

Taking cash “off the top” and reporting a lower total

amount

What is Labor Racketeering?• The infiltration, domination, and/or

use of a union or employee benefit plan for personal benefit by illegal, violent, or fraudulent means

What is Extortion?• Unlawfully obtaining money,

property, or services through intimidation or coercion– Shakedown

• Making a threat of violence to require a payment in order to prevent FUTURE violence

What is Loansharking?• Offering loans at extremely high

interest rates

Skimming• Cashier doesn’t ring up transaction

and instead, pockets the money• Businessman needs money to pay off

extortionist—can’t record transaction—skims money to pay bribe

• The larger the business, the more susceptible it is to skimming–Why?

Counterfeit

To imitate something; produce fake replicas

Counterfeit• Depends on the naiveté of the buyer• Often of low quality• Types of things commonly

counterfeited–Money– Clothing– Purses– Art– Electronics

Fraud

Deception for personal gain

Link Chart

Created during an ASSOCIATION ANALYIS to identify organized

crime members

Link Chart

Numbers Racket• “Running the numbers”• Illegal lottery game• Preceded state-run lotteries• Popular in poor communities• Bookies extended credit to bettors

Numbers Racket• Match your number to the selected

number• Payouts were usually 600 to 1• However, odds of winning were 1000

to 1

You can see how the mob could make a lot of money with a numbers racket

Vigorish or The VigJuice, The Cut, The Take

• Amount charged by a bookie for his services– Allows the bookie to make money in the

event that the payout is more than the intake• Interest on a loan shark’s loan• Difference between the the dollar amount

of tickets and payout in a Numbers Racket