- Models and structure of organized crime
- Hierarchical model of organized criminal groups
- Local, cultural model of organized crime
- Enterprise or business model of organized crime
- Focusing on groups versus activities
- New forms of organized crime: networked structures
Published in May 2018
Regional Perspective: Pacific Islands Region - added in November 2019
This module is a resource for lecturers
Case studies and exercises
Case study 1 (Operation Onymous)
In November 2014, law enforcement and prosecutors in the European Union and the United States launched Operation Onymous, an international operation aimed at taking down online illegal markets and arresting vendors and administrators of such markets. The operation was coordinated by Europol's European Cybercrime Centre (EC3), Eurojust, the FBI, and the United States Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI). The operation culminated in the arrest of 17 individuals and the seizure of Bitcoins amounting to USD 1 million, drugs, gold and silver.
Among the marketplaces brought down was Silk Road 2.0, an online black market used to sell drugs and other illegal items. In 2013, the FBI shut down its predecessor, Silk Road 1.0 and arrested its founder Ross Ulbricht, who was convicted in February 2015 in the United States. Silk Road 2.0 was launched in November 2013 after the shutdown of its previous version. On 5 November 2015, the alleged administrator of Silk Road 2.0, Blake Benthall, was arrested by the FBI in San Francisco. According to the FBI, as of September 2014, Silk Road 2.0 had sales of at least approximately USD 8 million per month and approximately 150,000 active users. As part of the investigation, an undercover agent infiltrated the administration of Silk Road 2.0 and obtained access to restricted information.
Silk Road 2.0 and other online marketplaces shut down as part of this investigation were operated as TOR hidden services. The TOR (i.e. The Onion Router) network is a worldwide network that allows users to establish anonymous communication. A TOR hidden service does not reveal the IP address of the server used. TOR is used for both illicit and licit purposes, with the latter including members of the military as well as activists and journalists evading censorship.
Most transactions on the shuttered marketplaces were carried out in Bitcoins. Bitcoin is a decentralized cryptocurrency, i.e. there is no centralized authority and Bitcoin transactions are processed and validated by a peer-to-peer network. Bitcoin users are anonymous but all their transactions are stored in a public ledger. Information on Bitcoin users can be obtained from exchanges - i.e. institutions converting Bitcoin into other currencies or vice versa - and other points of intersection with the regulated financial system.
- Organization of illicit online trade
- Given the nature of their criminal conduct, what model of organized crime would best describe the administrators of the Silk Road? Can Ulbricht be considered a leader of an organized criminal group?
- According to the line of Ulbricht's defence, he was merely involved in the Silk Road website, which he claimed to administer as an economic experiment. Other motivated individuals interested in selling illegal goods and services, however, transformed the website into a massive criminal marketplace. Those individuals are the real offenders. Support or refute this position.
- Meghan Ralston, a former "harm reduction manager" for the Drug Policy Alliance, was quoted as saying that the Silk Road was "a peaceable alternative to the often deadly violence so commonly associated with the global drug war, and street drug transactions, in particular." Proponents of the Silk Road and similar sites argue that buying illegal narcotics from the safety of your home is better than buying them in person from criminals on the streets. Do you agree or disagree with this position?
Case study 2 (structure of a drug trafficking organization)
The organized criminal group in question consisted of 21 members, citizens of the Serbia, Bosnia and Herzegovina and Montenegro, operating on the territories of Montenegro, Bosnia and Herzegovina, Serbia and Croatia. Serbian authorities brought criminal charges against five citizens of the Republic of Serbia and one citizen of Montenegro; other members of the organized criminal group were prosecuted by the competent authorities of Bosnia and Herzegovina. Two criminal proceedings were conducted simultaneously and in coordination by authorities of both countries.
The leader of the group, a Serbian citizen, was managing the whole group's business from the territory of the Republic of Serbia, but no drugs were seized in the country. He had direct contacts with his partners and group members in Montenegro who were sending drugs to affiliates in Bosnia and Herzegovina. The latter were distributing and selling drugs in Bosnia and Herzegovina as well as in Croatia. This organized criminal group also had good connections in the local police, as it is demonstrated by the fact that some of the defendants prosecuted in Bosnia and Herzegovina were police officers.
The group had a pyramidal, hierarchical structure with clear roles for every member and adopted a strict, almost military, way of command. The leader of the group communicated with a limited number of members and most members were communicating with their superiors only via mobile phones. This group formed specific cells in order to perform particular illicit activities. In particular, they were involved in trafficking in cocaine, purchasing bombs and explosive devices, as well as stolen goods such as vehicles, mobile phones etc. At the time of the arrest, the group was suspected of organizing a robbery, kidnapping and murder. In February 2009, the police launched operation "Valter," in close cooperation with the Serbian Prosecutor's Office for Organized Crime. From the initial stages, Serbian authorities were in contact with the competent authorities of Bosnia and Herzegovina and exchanged data and information on the activities of the criminal group.
The prompt and coordinated action of law enforcement agencies from Serbia and Bosnia and Herzegovina prevented a number of serious crimes and brought the members of this criminal group to justice. This group is seen as a one of the criminal groups with the highest level of organization in the Balkan region.
- Organization of cross-border drug trafficking activities
- What model of organized criminal groups discussed in the Module best fits this case?
- What are the advantages of this model?
Regional perspective: Pacific Islands Region
Case Study 3 (Operation Eagle, Cook Islands)
Between September 2010 and May 2011, the Cook Islands Police, assisted by the New Zealand Police, conducted an undercover operation that successfully dismantled a cannabis trafficking ring in the Cook Islands. The operation involved around thirty officers, eighteen of them from New Zealand. It was set up because of concerns about the spread of cannabis use in the Cook Islands with the possible involvement of police officers in drug-dealing.
In July 2012 - part way through what was expected to be a two-week trial - the three defendants pleaded guilty to several counts of importing cannabis, conspiring to import cannabis, selling and offering to supply cannabis, and cultivation of cannabis plant. The High Court of the Cook Islands sentenced Giovanni Marsters, the main offender, to 6 years of imprisonment. His wife Inano Matapo, a Senior Sergeant of the Cook Islands Police force, was sentenced to 2 ½ years' imprisonment for corruption charges in addition to a minor cannabis-related charge. Samuel Tangaroa, an employee of the Post Office, was sentenced to 4 years' imprisonment.
The sentencing judge considered Marsters the primary offender "if not the ringleader" of the criminal enterprise. He arranged and financed imports of cannabis, engaged in retail selling of it, and cultivated cannabis using paraphernalia of some sophistication. He imported cannabis from New Zealand for its better quality meant higher profit in the Cook Islands. Marsters also imported seeds to set up his growing operation.
The judge also pondered the role of Tangaroa, considering him an important player. Because of his employment at the Post Office, he was able to intercept imported contraband before it got to Customs. Tangaroa was paid in cannabis, which he used for personal consume as well as for dealing on his own. Concerning Matapo, the judge considered that her insider knowledge as a high ranked police officer allowed her to protect the illicit activities of her partner. Also, she was involved in a one-off sale of cannabis.
This case was the first of its kind in the Cook Islands, setting a precedent on sentencing guidelines for drug offenses.
In paragraph  of his sentencing notes, Judge Doherty states:
"There is no evidence (because this is the first case in what might be termed major drug dealing) of what the extent of commerciality is in the Cook Islands. But I have been provided by the Probation Service with a list of recent convictions in this Court for all matters relating to cannabis. That list tells me that for the last 12 months there have been 27 sentencings in this Court for cannabis related matters. There were 8 sentencings in the previous 12 months. That means either that cannabis is becoming far more prevalent in this society or policing has improved and more people are being caught." [emphasis added]
Case Study 4 (Human Trafficking, New Zealand)
Fifteen persons were trafficked from Fiji to New Zealand between August 2013 and September 2014, in a criminal scheme perpetrated by several people: Faroz Ali, considered the principal offender, and Jafar Kurisi, Ali's wife Geeta, and her twin sister Sanjana.
Ms. Geeta Chandar (Geeta) operated the travel agency Deo's Travel Agency. Her twin sister, Ms. Sanjana Ram (Sanjana), operated another travel agency named Ram's Travel & Immigration Services. Both businesses were in the same office building in Suva, Fiji. At various times, on behalf of their respective agencies, Geeta and Sanjana placed advertisements in the Fiji Sun newspaper. The advertisements were aimed at the vulnerable and designed to excite the interest of people living in Fiji who wanted to travel to Australia and New Zealand to earn a significantly better income than they could earn in Fiji.
The fifteen victims responded to those advertisements. Each consulted with Geeta or Sanjana (or one of their respective employees) about traveling to New Zealand to undertake the advertised work. All of them wished to travel to New Zealand to work and make more money to provide a better lifestyle for themselves, their families, and wider village communities. Based on representations made to them, most expected to earn up to seven or eight times more money per week than what they were able to earn in Fiji.
In most cases, the victim would be required to pay a consultation fee to receive further information. The victim incurred in additional costs when someone at the travel agency filled out the visa application to travel to New Zealand, and when their passports and visas were ready. In total, those fees varied between about $FJ1500 and $FJ4000. Those amounts were extortionate and grossly disproportionate to the money that the victim could earn in Fiji. Many borrowed significant sums from relatives, or from communal funds operated in their respective villages, to meet those costs.
The general thrust of the evidence was that each victim was asked to sign a blank visa application. The required information was filled in by Geeta, Sanjana, or one of their employees. In all cases, the applications contained false or misleading information. A visitor's visa was sought on the basis that the applicant intended to travel to New Zealand to visit friends and family. A visitor's visa offered no right to work in New Zealand. The false statements concealed the fact that the applicants intended to work in New Zealand.
Several victims noticed when the visa was obtained that it was not a working visa but a visitor's visa. They were assured that they could travel to New Zealand to work on the visitor's visa, and/or work permit would be available on their arrival.
Most victims understood that the costs of food and accommodation, unlike their airfares, were covered by what they had paid in Fiji. On the contrary, food and accommodation were unlawfully deducted from monies paid to each, in almost all cases.
Most victims were met at Auckland airport by Mr. Ali or an associate. Mr. Ali operated a construction business in Auckland. Some went to live at his home, a small unit in Papatoetoe, and worked in his business. They slept on the floor or on a sofa in the lounge area of that unit. On more than one occasion, Mr. Ali took a victim to a solicitor in Auckland to prepare documentation to extend the visitor's visa. No attempt was made, at any time, to have their working status legitimised.
Other victims went to work for another man in Tauranga, Mr. Jafar Kurisi (also known as Tauranga Ali) pruning kiwifruit vines. He housed a group of three women and one man in sub-standard rented accommodations, made them sleep on the floor in a basement area that was originally a garage, and pay them poorly.
Faroz Ali faced 57 charges, including trafficking in persons, labour exploitation, and immigration offences. At the start of the trial, he pleaded guilty to some charges; on the others, he was tried and found guilty. Mr. Ali received a sentence of 9 years and six months in prison, and an order of reparation to the victims was issued.
Jafar Kurisi also pleaded guilty to charges involving the exploitation of employees and was sentenced on a different day, 2 February 2017.
The sisters face in Fiji 35 criminal counts, including 17 counts of trafficking persons, 16 counts of obtaining property by deception and two counts of money laundering. Ms. Sanjana Ram appeared before the High Court of Fiji; since her sister Geeta moved to Australia, the Fiji Police is working with INTERPOL to extradite her.
Exercise 1 (Japan's Yakuza)
Tokyo-based American journalist Jake Adelstein wrote in 2017:
"Contrary to recent news reports, Japan's organized crimes groups, "the yakuza" aren't vanishing - they're transforming. They are finding ways to morph from honor-bound tribal outlaws into common criminals who will do anything for money. The shrewder ones are simply turning less visible. That isn't necessarily a plus for Japan or the world."
Source: Jake Adelstein. "Japan's yakuza aren't disappearing. They are getting smarter." The Washington Post, April 8, 2017.