History
of Eurasian Organized Crime in the U.S.
The roots of Eurasian
Organized Crime (EOC) lie with the "Vory V Zakone" or Thieves-in-Law,
career criminals elected by their fellow inmates in the Soviet prison system
to be their leaders. During the Soviet period, these "Shop Managers" were
illicitly paid a 30 percent margin to acquire scarce consumer goods and
divert raw materials and finished goods from production lines for the benefit
of "Nomenklatura" or the educated elite, and criminals. With
the collapse of the Soviet Union in 1991, EOC members allied themselves
with corrupt public officials to acquire control of industries and resources
that were being privatized. This not only gave the EOC syndicate a one-time
infusion of wealth, but supplied the infrastructure for continuing cash
flows and opportunities to launder criminal proceeds. In February of 1993,
Boris Yeltsin, the first elected president of the Federation of Russian
States, said, "Organized crime has become the number one threat to
Russia's strategic interests and to national security . . . Corrupted structures
on the highest level have no interest in reform."
EOC members first emerged
in the West in the 1970s when Soviet "Refuseniks" were allowed
to emigrate to Europe, Israel, and the United States. Among the "Refuseniks" were
criminals who sought to exploit their new found freedoms. These criminals
facilitated the expansion of the major EOC groups to the West when the
Soviet Union collapsed in 1991, resulting in increased freedom of movement
for the people of the region.
Eurasian Criminal Enterprises in the U.S. cause hundreds of millions of dollars
of economic loss to US businesses, individual investors, and tax payers through
sophisticated fraud schemes. The FBI applies the term Eurasian Organized Crime
(EOC) to identified organized crime groups operating in countries which comprised
the former Soviet Union and Warsaw Pact, or identified organized crime groups
whose members predominantly originate from those areas that are active in the
US, Europe and Africa. EOC groups based in the former Soviet Union (FSU) have
defrauded these newly formed governments of billions of dollars as industries
and resources formerly owned by the government have been privatized. These
groups also profit through continuing tax evasion schemes and using corrupt
officials to embezzle government funds. EOC activity threatens to destabilize
the emerging political institutions and economies of the FSU, where nuclear
weapons remain deployed. The potential political and national security implications
of this destabilization should not and cannot be ignored.
The eight most prevalent
criminal violations encountered in EOC investigations conducted in the
US include health care fraud, auto insurance fraud, securities and investment
fraud, money laundering, drug trafficking, extortion, auto theft, and Interstate
Transportation of Stolen Property. Based on an analysis of the crime problem,
the FBI established investigative squads concentrating on the EOC crime
problem in New York and Los Angeles in 1994, San Francisco in 1995, Miami
in 1997, Philadelphia in 1998, and in Newark and Chicago in 1999.
Investigations initiated by numerous field offices in calendar year 2000 reflect
that Eurasian groups are also involved in commercial alien smuggling and illegal
prostitution.