Organized Business Crime Prosecution and Investigation

Anytown is a hypothetical American city with fully functional systems, including public transportation and garbage collection. For an ordinary citizen, it appears as an incredibly good place to do business. However, deeper scrutiny reveals how the municipal council that helps in facilitating the daily activities of the city has become part of a criminal enterprise, which participates in extortion, public corruption, murder, intimidation, and the embezzlement of municipal workers union’s resources (Von Lampe, 2015). Headed by Mr. Big, the criminal enterprise ensures that no one gets promotion or employment without the approval of the head or paying bribes. A refusal to collaborate in the bribery scheme attracts intimidation or murder. While fully aware of these risks, from the position of an experienced investigator attached to Anytown District Attorney’s office, this paper provides a prosecution memo for presentation to my supervisor with history, facts, law, and an investigative plan. As revealed in the memo, Mr. Big is charged with operating a criminal enterprise that engages in illicit business activities, which amount to embezzlement, accounting fraud, torture, and bribery. The memo proposes the use of undercover operatives and the mini Spy Bug Audio Surveillance Gadget A8 as part of the investigative plan to obtain relevant evidence.

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History

The Meaning of an Organized Crime

Understanding the meaning of organized crime is necessary before examining laws that should be applied for a successful prosecution of racketeering criminal activities conducted by Mr. Big and his accomplices. After considering various descriptions from different authors, Albanese (2015) contends that organized crime entails “a continuing criminal enterprise that rationally works to profit from illicit activities that are often in great public demand” (p. 16). Those who take part in it deploy force, monopoly control, and intensive threats, including corrupting various public officials, to sustain it. It encompasses criminal activities such as providing illegal goods or services and infiltrating legitimate government or business enterprises. Although Albanese (2015) asserts that organized crime typologies mainly focus on ethnic structures, Von Lampe (2015) argues that criminal syndicates possess lose-structure relationships that function with a primary goal of ensuring that each of the involved parties pursues its welfare. Hence, the structure of organized crime depends on the illicit activities undertaken, as opposed ethnic ties.

How Organized Crimes Break Down Along Ethnic Lines

Ethnicity denotes the culture or ancestry of a specific group of people. Although it may constitute the main approach to categorizing organized crimes, Albanese (2015) asserts that the approach is misleading. Arguably, organized crimes are committed by people from diverse ethnic backgrounds. This situation indicates that it cannot be categorized along ethnic lines. Organized crimes committed over the last 50 years provide evidence that they are not committed within the confines or boundaries of any one given ethnic group. Therefore, such crimes go beyond interethnic lines. Indeed, in support of this line argument, Albanese (2015) reveals factors such as the condition in the local markets and the opportunity for conducting a criminal activity, which involves the provision of illicit services and goods as part of variables that predict organized crimes in more reliable ways compared to ethnicity. Organized criminals, for instance, prison gangs, Vietnamese gangs, Canadian thugs, and Russian organized groups support the assertion that the offense does not apply to one ethnic group or even a few racial classes.

Similarities or Differences Between Transnational Organized Crimes and Domestic Organized Crimes

Domestic organized crimes involve unlawful activities perpetrated by disciplined and structured groups or individuals with a well-established association. The objective entails engaging in an illegal trade of services and goods, including gambling, narcotics, and prostitution within the confines of a given nation’s boundaries (Albanese, 2015). In some situations, the activities of domestic organized crimes do not extend beyond a local city. However, in a transnational organized crime context, structured criminal groups engage in activities that go beyond national boundaries in search of illicit power and profits. From the 1970s, globalization and the emerging geopolitical climate created softer borders for the extension of organized criminal activities to incorporate international dimensions. Domestic organized crimes that had a hierarchical and regional structure changed to take the transnational domains (Albanese, 2015). Transnational organized crimes have a flat structure that is characterized by networked groups of criminals located in different nations but all working in collaboration to achieve their interest of profits and power by engaging in the illegal provision of services and goods. The activities here include prostitution, narcotics, money laundering, and the smuggling of weapon.

How Mr. Big’s Enterprise Fits Within the Definition of Organized Crimes

Mr. Big’s enterprise fits the definition of organized crime since it lies within the transnational and domestic domains (Albanese, 2015). Mr. Muscle, Mr. Accountant, and Mrs. Mayor meet weekly in the conference room located in Mr. Big’s office suite where they participate in criminal activity discussions with a high level of secrecy. Indeed, even Mr. Big’s secretary who is the other person in attendance is also part of the criminal enterprise. The enterprise loots from the municipality workers’ welfare and pension fund. They also charge union members exorbitant dues. Mr. Muscle responds to any complaints by union members using brutal means, intimidation, murder, and extortion. These enforcement mechanisms thrive in organized crimes.

Mr. Accountant engages in the illicit business of corrupting public officials. For example, in return for 10% of the amount deposited, the president of the National Bank of Anytown, Mr. Greene, has agreed not to alert the government about cash deposits, which can trigger the filing of the Currency Transaction Reports (CTRs). Such deposits, which are collected from the payments made in respect to promotions, are made in a fictitious account. Mr. Accountant uses Anytown Money Wire Services store to send money to Russia for financing organized crime operatives in Europe and the Far East. The syndicates engage in activities such as human trafficking, money laundering, and selling major assault weapons and bombs. All these activities of Mr. Big’s enterprise fit within the definition of an organized crime within the transnational and domestic domains (Albanese, 2015).

Facts

Kubasek et al. (2016) regard facts as events that lead to an intended litigation. In the context of the current organized crime situation, prosecution is triggered by an array of Mr. Big’s and his accomplices’ actions that breach the law with their knowledge. Some of Mr. Big’s accomplices, including Mr. Muscle together with his crew, do not file any Currency or Monetary Instrument Reports (CMIRs) with the respective authority. This situation ensures that money sent abroad to fund Russian organized crime operations in Europe and the Far East remains concealed. This fact indicates that Mr. Big and his accomplices engage in illegal activities that amount to organized crimes. There is systematic looting of welfare and pension funds of the municipality workers. Instead of the money being channeled to pension benefits coupled with retirement paybacks, it is channeled to fund Mr. Big’s transnational and domestic enterprise activities that are criminal in nature (Von Lampe, 2015). Mr. Accountant has established an investment corporation, which masquerades to manage pension and welfare fund by investing in stocks and bonds. However, in the actual sense, it handles stolen money from the workers. Mr. Big’s criminal enterprise is well organized.

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He issues commands and instructions. Through their subordinates, Mr. Muscle, Mr. Accountant, and Mrs. Mayor implement the commands and instructions to ensure that the organized crime continues without any authority interventions. Mr. Account prepares fraudulent or falsified government federal filings such as tax returns. He takes charge of illegal corporations, bank accounts, and businesses, which are all aimed at profiting and increasing Mr. Big’s power. Deposits of fraudulent money from promotion briberies by union members are transferred into fictitious bank accounts. Mr. Greene provides the necessary cover-up to ensure that the filings are not made to the Currency Transaction Reports (CTRs). Mr. Accountant ensures that money sent to Russia on a regular basis is not filed with the Currency or Monetary Instrument Reports (CMIRs). Criminals in Europe and the Far East use the money to fund human trafficking activities, the selling of bombs and other assault weapons, and in money laundering.

In return, Mr. Big receives heavy gains from these activities (Von Lampe, 2015). Through Mrs. Mayor, Mr. Big has established mechanisms for the cover-up of his organized crimes. Besides keeping off union power competition, she ensures that Anytown’s rules, laws, and regulations continue to promote the organized crimes. For example, she develops and enacts labor laws coupled with union regulations that are cumbersome to comply with. The aim is to ensure that Mr. Big remains in control of the union. She has an immense repository of power, which she uses effectively to obtain information about complaints tabled before the government against the union. When she relays such information, Mr. Muscle uses it effectively to silence witnesses. The above facts establish that Mr. Big is capable of taking charge of a continuing criminal enterprise that participates in illicit business activities amounting to embezzlement, accounting fraud, torture, and bribery (Albanese, 2015). He uses force, monopoly controls, intensive threats, and corrupting various public officials to guarantee the continuity of his organized criminal activities.

Law

Racketeer Influenced and Corrupt Organizations (RICO): Organized Crime Control Act (1970)

Section nine of the Crime Control Act of 1970 establishes laws on Racketeer Influenced and Corrupt Organizations (RICO) with the aim of dealing with organized crimes. It “makes it unlawful to acquire, operate, or receive income from an enterprise through a pattern of racketeering activity” (Albanese, 2015, p. 168). By definition, a racketeering activity includes bribery, extortion, murder, gambling, embezzling union funds, money laundering, drug trafficking, and terrorism among other many offenses that fit within the scope of organized crimes. RICO targets continuous activities. For example, it provides that people or individuals in the form of an organized enterprise committing two and/or more offenses, for which they can be indicted, within a time span of 10 years, are subject to imprisonment for a term of 20 years, including a penalty of 25, 000 USD. They can also face the forfeiting of their enterprise’s interests and civil damages, including having their project dissolved.

The applicability of the RICO law to Mr. Big’s enterprise requires the availability of facts concerning any engagement in activities that amount to racketeering being conducted over a period of 10 years (Albanese, 2015). Facts have been tabled proving that Mr. Big and his accomplices engage in the embezzlement of union funds, extortion, money laundering, arson, and murder through his enterprise. Their activities of money laundering have both transnational and domestic features. Based on the facts from the enterprise, these activities have been conducted within a period of ten years and hence the possibility of prosecuting Mr. Big and his accomplices (Mr. Muscle, Mr. Accountant, and Mrs. Mayor) as defendants for breaching the RICO laws and regulations on organized crimes. However, just as it is observed in the case of John J. Connolly Jr., the former FBI agent, as discussed by Albanese (2015), a successful prosecution requires one to establish a pattern of two or more organized criminal activities. Rather, a proof of two isolated racketeering acts is not sufficient. A proof of the defendants’ knowledge of their engagements in the racketeering crimes is also important.

Bank Secrecy Act (1970)

Albanese (2015) discusses the example of a successful application of The Bank Secrecy Act of 1970 citing cases of New York Check Company and its owner where the business parties admitted being guilty of a $19 scheme and their subjection of Citibank Group to an enforcement action. The Act constitutes a federal law enacted to deter or prevent organized criminals from participating in laundering cash that is illicitly obtained through legitimate banks or businesses. The law accomplishes this goal through three main requirements. Firstly, “banks must file a Currency Transaction Report (CTR) for every deposit, withdrawal, or exchange of funds greater than $10,000” (Albanese, 2015, p. 171). Mr. Accountant, in collaboration with the president of Anytown’s national bank (Mr. Greene), violates this provision of the Bank Secrecy Act of 1970. Mr. Greene agrees not to report or inform the government about the fraudulent money deposited in fictitious accounts by Mr. Accountant. The goal is to ensure that filings are not made on the CTR. Mr. Greene must receive 10% of the total amounts deposited into the accounts as a bribe. The two should be prosecuted as defendants for breaching the CTR provisions.

Secondly, the Act provides, “a Currency or Monetary Instruments Report must be filed with the US Customs Service if the amount exceeds $10,000 in cash or cashier’s check” (Albanese, 2015, p. 171). This provision applies to all monies entering or leaving the United States. Following intimidations and threats by Mr. Muscle’s crew, the owner of the Anytown’s wire transfer service failed to comply with the Act because of the fear of filing CMIR reports with the government. Hence, the money transferred to Russia or received from criminal operatives outside the country is not reflected in the CMIR reports. Mr. Big, Mr. Muscle and his crew, and Mr. Account should be prosecuted for this offense. Mr. Big is the defendant since his accomplices act on his behalf or following his instructions. Through his crew, Mr. Muscle uses threats and intimidation to ensure non-compliance while Mr. Accountant actually sends money illegitimately using the Anytown Money Wire Services store. The owner of money transfer service qualifies as the key witness in the prosecution. Thirdly, the Act provides for all people holding accounts in foreign countries to declare them on their federal tax returns. Facts concerning the organized criminal activities do not establish that Mr. Big or his partner in crime holds bank accounts in foreign countries where he extends his criminal operations. Therefore, there are no grounds for prosecuting any person as the defendant based on this provision.

Money Laundering Control Act (1986)

Section 1956 of the Money Laundering Control Act of 1986 deters people from participating in financial transactions involving proceeds derived from particular illegitimate actions (Albanese, 2015). Mr. Big’s activities are concealed. Besides, brutal force is deployed to deal with those who report their discontent to authorities. Section 1956 of Act prohibits any participation in financial transactions knowing they are in part or wholly designed to “conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity” (Kluwer, 2016, p. 2121). It also prohibits any involvement in a transaction while knowing that its intention is to avoid reporting requirements as specified in the federal and/or state law.

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The Act provides that people violating these laws shall be fined not more than 500,000 USD or an amount that is twice the value of the total property of the alleged or the confirmed transaction, whichever value is greater. Those found guilty can also be punished by imprisonment for twenty years or given both the fine and the incarceration penalties. Mr. Greene and Mr. Accountant participate in fraudulent transactions knowing that the proceeds are looted and that the dealings are meant to conceal the nature and source of the proceeds. Mr. Accountant has established an investment corporation, which engages in activities amounting to some specified illicit activities (Albanese, 2015). The corporation pretends to manage pension and welfare funds by investing in stocks and bonds while in the actual sense, it handles stolen money from the municipality workers’ union and money acquired through bribes. Therefore, I would consider prosecuting Mr. Accountant, those in charge of the daily activities of the investment corporation, and Mr. Greene as defendants for violating the provisions of the Money Laundering Control Act (1986) section 1956.

Investigative Plan

Telephone Wiretap or Room Bug

The operations of Mr. Big’s enterprise are highly secretive to the extent that the main accomplices avoid telephone conversations to remain immune from possible wiretaps. Hence, an investigative plan that deploys telephone wiretaps may face immense challenges in the execution of an electronic surveillance strategy. This situation leaves room bug, specifically, the mini Spy Bug Audio Surveillance Gadget A8, as the only main reliable mechanism for conducting electronic surveillance in Mr. Big’s boardroom. The strategy can be effective after considering that Mr. Big’s captain only engages in direct and free discussions only during the frequent weekly meetings held at Mr. Big’s boardroom. As small as the size of a matchbox, the gadget accepts a SIM card.

The plan is to use a worker at the municipality, a cleaner, or an electrical systems maintenance employee of the boardroom to plant the device in an empty space of one of the socket outlets of the assembly area. The objective is to avoid any possible suspicion. The preferable employee for the job should be one of the complainants about the deals of Mr. Big’s enterprise whom the investigator trusts. Witness protection under the Witness Security Program (WITSEC) through the US Marshals Service assurances as discussed by Albanese (2015) is guaranteed to such a person.

The main challenge is whether the statute under Title III of the Omnibus Control Act (1968) (Electronic Surveillance) will provide a leeway to mount the device to guarantee the admissibility of the evidence gathered during the prosecution. This problem is solved by obtaining a warrant from a judge (Albanese, 2015) upon demonstrating that confidential informants’ (CI) information and witness’ statements show situations where observers either did not want to cooperate or could not be located. This strategy convinces the judge “normal investigative procedures have been tried and have failed or reasonably appear to be unlikely to succeed if tried or are too dangerous” (Kubasek et al., 2016, p. 67). An organized crime is committed during weekly meetings when Mr. Big and his captains review and discuss various operations of the enterprise both domestically and in the transnational context.

Undercover Operatives

The strategy of undercover operatives will be deployed in Russia, Europe, and the Far East where the enterprise conducts its organized crime activities in a transnational context. Here, the plan is to employ the Transnational Organized Crime Rewards Program of 2013 as the potential source of informants to provide information on various key players in the international organized crime headed by Mr. Big. A reward of 100, 000 USD will be given to an informant who positively gives information on one key player in Russia, Europe, and/or the Far East. Undercover agents will create mutual friendships, including repeated and consistent contacts with suspected organized criminals (Von Lampe, 2015). This plan creates their possibility of engaging in business activities, which they will later resist to avoid possible suspicion by the criminals. The organized crime gangs insist that detectives should take part in the business consistently. They (detectives) finally give in, despite their fear of landing in trouble with authorities. After repeated direct observations of the business going on, such detectives demonstrate their mastery of the trade to the extent that allies can ultimately introduce them to the main captains (Mr. Big, Mr. Muscle, Mr. Accountant, Mrs. Mayor, and others). Armed with the Spy Bug Audio Surveillance Gadget A8 and hidden mini ultra high-resolution cameras, eventually, after a long time, possibly 5 years and above, an undercover agent acquires a chance to take part in discussions with the main masterminds of the enterprise (Von Lampe, 2015). An arrest would be made timely when parties depart after a major business transaction has taken place. The discussions and events of monetary exchange will be captured using the cameras and the spy bug device.

Conclusion

Mr. Big’s criminal enterprise engages in massive looting from the municipal welfare and pension funds where it charges exorbitant union dues to members. Massive cover-ups through accounting misstatements ensure that relevant authorities do not have information about such lootings. Organized criminals also participate in transnational crimes such as money laundering, human trafficking, and the smuggling of weapons. Unfortunately, attempts to investigate and prosecute the criminal enterprise are met with challenges of brutal force, intimidation, and in some situations, the murder of key witnesses. Therefore, the investigative grand juries’ approach has failed in the past. As the new experienced investigator attached to Anytown District Attorney’s office, I plan to investigate and charge Mr. Big and his accomplices with racketeering crimes using investigative techniques such as undercover detectives and telephone wiretaps or room bug.

References

Albanese, J. (2015). Organized crime: From the mob to transnational organized crime (8th ed.). London, England: Routledge.

Kluwer, W. (2016). Department of justice manual (3rd ed.). Chicago, IL: Wolters Kluwer Law & Business.

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Kubasek, N., Browne, M., Herron, D., Dhooge, L., Williamson, C., & Barkacs, L. (2016). Dynamic business law: The Essentials (4th ed.). New York, NY: McGraw-Hill.

Von Lampe, K. (2015). Big business: Scale of operation, organizational size, and the level of integration into the legal economy as key parameters for understanding the development of illegal enterprises. Trends in Organized Crime, 18(4), 289-310.

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