Mobs battle for spoils of the fallen empire

Click to follow
While evidence grows that Russian organised-crime groups are laundering their ill-gotten millions through unregulated banks in the Caribbean, it is equally clear that they are also stashing their wealth away in many other parts of the world.

Money generated by the Russian mafia's rackets - ranging from drugs and prostitution to diamond and weapon smuggling - has found its way to the United States, Switzerland, Israel and elsewhere in the years since the break-up of the Soviet Union. As the flow of tainted cash has increased, so has the web of connections woven by the Russians with other groups overseas as they seek to muscle their way into international criminal operations.

The mafia's success is reflected in crime statistics; Russia's interior minister, Anatoly Kulikov, said this week that so far in 1996, more than 12 tons of drugs and related products had been seized in Russia.

One of the foundations on which the Russians are believed to have built their foreign operations are the old criminal structures run by mostly Jewish emigres from the Soviet Union living among Russian communities in cities like Antwerp, Los Angeles, New York and Tel Aviv.

Newsweek, which investigated the Russian mafia's global expansion, said mobsters had seized control of these networks, which were mostly engaged in white-collar scams and money-laundering, and that they were expanding.

Mafia tentacles have also reached out into cyberspace. Impoverished and under-employed Russian computer scientists have reportedly been signed up to delve into systems at US banks and securities firms. One allegedly stole $400,000 (pounds 266,000) from a New York bank by using his laptop computer, although his mafia connections are uncertain. What is certain, though, is that the Russian mafia has exploded in the past few years as competing groups fight for control of the spoils of the former Soviet Union. Organised crime existed under Communism but it has grown with extraordinary speed, aided by links with bureaucracy and corrupt and under-funded law enforcement.

Last year the government said there were 8,000 organised-crime groupings, involved in activities ranging from gambling in Moscow to weapons-dealing and banking scams in Chechnya, to running the huge second-hand Japanese- car business in Vladivostok. Most areas of retailing have been penetrated by organised crime which, according to some analysts, is involved in up to 80 per cent of all private business and banking.

Figures are unreliable, not least because the term "mafia" is used for an assortment of evils. But no one disputes that the mobsters are hindering Russia's crippled economy from rising to its feet. Last week the Moscow Times published an open letter by the chairman of an American company, Americom Business Centres, to the Mayor of Moscow, Yuri Luzhkov, which provided a telling example of the problem.

Saying his shareholders stood to lose all of his company's $17m investment in Moscow, he appealed for the city to become instead a place where companies could operate "without someone showing up at your door to take it away in the name of your own protection".

Although he did not use the word "mafia", his remarks appear to refer to the krysha (roof) system. When new businesses open in Russia mafia thugs are liable to appear with a demand for 10 to 20 per cent of gross revenue, regardless of whether a company is making a profit or loss, in return for supplying gun-toting security guards.

Bosses that refuse risk having their buildings burnt down, bombed, or worse. Contract killings can be organised for as little as $2,000 and are so commonplace in Russia that they barely merit a mention in the newspapers.