Chapter 9: Consensual Crimes

1. Chapter 9: Consensual Crimes

2. Chapter Outline • Introduction & Overview • Illegal Gambling • Loansharking • Smuggling

3. Learning Objectives After reading this chapter, you should have an understanding of: • The nature of organized consensual criminal activities (excluding drug trafficking) & how they differ from predatory crimes • Different consensual crimes carried out by criminal organizations • What makes consensual illegal activities associated with organized crime unique compared to more rudimentary predatory crimes • Factors that give rise to consensual criminal opportunities • Common denominators among different organized consensual crimes

4. Gambling • “… games of chance, where luck determines the outcome more than skill” (Albanese, 2015: 40). • the state has always had reasons to control & criminalize this vice, pushing it underground • Illegal gambling is one of the most widespread & profitable organized (consensual) crimes • Operating “a large-scale gambling operation for a prolonged period requires a stable & significant level of organization” (Spapens, 2014: 406). • Two categories of illegal gambling: games of chance & bookmaking

5. Gambling

6. Gambling • Bookmaking the most widespread & lucrative form of illegal organized gambling in Canada • betting on individual sports events is still illegal • First half of 20th Century: Canada part of a continent-wide bookmaking syndicate connected to the LCN (& facilitated by the wire service) • Italian mafia, Chinese criminal networks & OMGs all active in bookmaking & operation of underground casinos in Canada • OC groups active in operating video lottery terminals in legal (bars) & illegal establishments

7. Loansharking • Usury: the lending of money at inflated & hence illegal rates of interest • Interest rates levied by loansharks could run anywhere from 100 to 2000 percent annually. (In Canada, it is illegal to charge more than 60% of the credit advanced). • Loansharks also called ‘shylocks’ based on Shakespeare’s (anti-Semitic) villain in Merchant of Venice Shakespeare’s Shylock

8. Loansharking • Operates on two principles: exorbitant interest rates & the use of threats & violence to collect debts (Goldstock & Coenen 1980: 2) • Crime groups are central to loansharking because: • They have access to money to be lent out • Their power & violent reputation • Loansharking is closely tied to gambling: borrowed money is lost at games of chance, but still must be re-paid to the lender • Also tied to business racketeering: loan sharks take over businesses of debtors • Loansharking practiced by major mafia-style criminal groups in Canada: Italian mafia, Chinese triads, OMGs

9. Smuggling • Long associated with OC due to the need for organization, esp. in large-scale conspiracies • A generic operational technique essential to (transnational) organized crime • Central to a range of illegal (& legal) “goods” in Canada: drugs, precursor chemicals (for drug production), liquor, cigarettes, weapons, jewellery/gold, vehicles, humans, wildlife, prescription drugs, works of art, artefacts, cash, etc. • Smuggling takes place through official ports of entry & unofficial entry points • Marine ports (through containers) & land ports (via tractor trailers) facilitate large shipments of illegal goods into Canada

10. Smuggling • All major crime groups involved in smuggling • Some groups specialize in smuggling (regardless of the product) • West End Gang in Montreal • Mohawk Warrior Society & other indigenous groups in Akwasasne • Smuggling embodies the network approach: multiple criminal groups & individuals may be involved (e.g. French Connection) • Other crime groups are transnational in scope to expedite smuggling (e.g., Colombian or Mexican drug cartels, OMGs) • Internal conspiracies at official ports of entry (i.e., corruption of labourers, management, & government border officials) facilitate large-scale & ongoing smuggling conspiracies

11. Smuggling Factors causing & facilitate smuggling: • Illegal products: need to move from source to consuming country • Legal products: smuggled due to strict regulation in one country or price & tax differences between two jurisdiction

12. Smuggling Canada has numerous conditions conducive to smuggling: • Domestic consumers of imported (contraband) goods • Domestic production of illegal goods consumed abroad (e.g., marijuana) • Long undefended border with U.S. • Consumer goods priced & taxed higher in Canada relative to U.S. • Disproportionate size of Canadian population living close to US border • Thousands of miles of unguarded coastline • Marine ports on both Pacific and Atlantic oceans • Internal conspiracies at official ports of entry • Canada’s legal economy is dependent upon exporting/importing

13. Smuggling When America outlawed liquor, millions of gallons was smuggled from Canada (where it was legal)

14. Smuggling • Cigarettes: Canada’s largest smuggled consumer good • Low tax cigarettes illegally transported from the U.S. • Contraband cigarettes smuggling from China • In the period following US Prohibition, liquor smuggled into Canada in massive quantities due to tax differential between US & Canada • Migrants smuggled (primarily from Asia) into Canada, which is often used as a transit country to the U.S. • Illegal weapons increased dramatically in Canada the last few years • Many firearms restricted or prohibited in Canada legally purchased in the US