Organised Crime Groups

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Organised crime groups engineer much of Australia’s serious crime. These groups are often systematic, well-planned enterprises focused on making money. They are capable, resourceful and resilient and are engaged in a wide range of activity across many sectors and at all levels of society.

Nature of Organised Crime Groups

Organised crime groups within Australia are diverse and flexible and pose a high threat to the Australian way of life.

Organised crime is often thought of as a modern, urban phenomenon. However, it can also be considered to have its roots in a more rural and ancient crime world when pirates, highwaymen and bandits attacked trade routes and roads at times severely disrupting commerce and raising costs, insurance rates and prices to the consumer.1 Similarly, organised groups whose crimes included smuggling and drug trafficking have long existed in Asia and Africa, and criminal organisations in Italy and Japan have histories dating back centuries.

Organised crime groups have emerged in different cultures and countries around the world but the way they operate and their choice of criminal activities continues to evolve.

In the 1990s, the post-cold war changes in trade, national and economic boundaries, coupled with the development of global systems of finance and communications, made it easier for organised crime groups to expand their operations internationally. It not only saw the development of new criminal markets, but also new forms of criminal organisations.

The term ‘organised crime’ was probably first used in the 1920s in relation to crime groups operating in Chicago in the United States. In Australia, the Australian Crime Commission Act 2002 interprets serious and organised crime as crimes that involve two or more offenders, substantial planning and organisation, sophisticated methods and techniques and crimes that are generally committed in conjunction with other, similar crimes. It includes the 20 ‘serious offences’ listed under Proceeds of Crime Act 2002 which range from money laundering and illegal drug dealings to fraud, cyber crime and firearms offences.

Thirty or forty years ago the groups behind these crimes were considered to be limited to certain geographical areas, common ethnic groups or particular social systems. This is no longer the case.

Organised crime groups with embedded ethnic or social commonalities are giving way to groups that are far more flexible, loosely associated networks that draw upon the skills of others, or enter into partnership with whoever may be able to help them conduct the type of crime business they need. They may even involve networks of independent criminals formed on an ad-hoc basis to exploit a specific crime market. Even the face of some of the more traditionally structured groups, such as outlaw motorcycle gangs (OMCGs) are following these trends.

Today, organised crime groups are engaged in a wide range of activity across a broad range of sectors and at all levels of society. However regardless of their activity, organised crime is always driven by money and power.

Features of Organised Crime Groups

Although they are more diverse and flexible, there are a range of characteristics common to high threat organised crime groups.

Transnational connections

Borders mean little to organised crime groups. Organised criminals have always run parallel to, and been favoured by, new patterns of international trade and progress made in communications and transportation. Globalisation and associated technological advances have enabled crime to be committed both remotely and by people with previously less access to the markets in which they operate. In Australia, many high risk organised crime groups have overseas connections to help them carry out their illegal activities, although the level of direct involvement in transnational activities varies markedly between groups.

There is also evidence of greater transnational partnerships among diverse organised crime groups such as OMCGs and Asian organised crime groups.2

Proven capabilities

More and more the workings of organised crime groups mirror that of legitimate businesses.

Like legitimate businesses, organised crime groups are motivated by profit and have capabilities to realise that profit. They do this through expanding their operations quickly in order to exploit market vulnerabilities. This is achieved by maintaining comparative advantage over their rivals. Other businessstyle operating processes they have adopted include risk mitigation strategies, the buy-in of expertise, a return on investment philosophy, distribution networks, logistics planning, aggressive marketing, and using technology as a business tool. The principal difference is that their business activities and profits are illicit.

Broad geographical presence

Organised crime groups look for opportunities and are not bound by geography. In Australia, organised crime groups can be found across the country—even in regional centres and remote communities.

Operate in multiple crime markets

Successful organised crime groups spread their operations over several markets to maximise their returns and minimise their risks.

In Australia, organised crime groups have a presence across many sectors and crime types but are typically involved in some form of illicit drug trafficking, financial crime or money laundering.

Illicit drugs—particularly the production and supply of amphetamines and the supply of crystal methylamphetamine, MDMA, heroin, cannabis and cocaine—are the major generator of profit among these groups. Approximately 50 per cent of serious organised criminal activity is dominated by drugs.

Money laundering too, comprises a large percentage of organised criminal activity and is used to conceal the origin of criminal profits. There is also a prevalence in fraud-related crimes, including identity theft.

Engaged in financial crimes

New technologies and the globalised economy have provided further opportunities for organised crime in financial sectors. Prevalent organised crime financial activities include fraud and money laundering.

Intermingle legitimate and criminal enterprises

Organised crime operates within and alongside legitimate business, making it difficult for law enforcement, government and industry to identify the criminal component.

Criminal enterprises can be established in such a sophisticated manner that they appear legitimate to the community, and at the same time that false appearance masks their criminal activities.

Another scenario is that legitimate businesses sometimes unwittingly provide facilities and financial instruments that organised crime groups use for money laundering or fraud.

Fluid and adaptable

Organised crime groups have fluid and decentralised structures that allow them not only to adapt to rapid changes in the marketplace but also to the challenges posed either by competitors, law enforcement or governments.

Much of this characteristic can be attributed to globalisation, which has transformed communications among and between individuals and groups, enhancing their ability to form and disband networks as circumstances warrant.

This has made it easier for criminals to participate in activities without the need for large hierarchical organisations to provide infrastructure and the necessary social contacts. Under these structures, operations like money laundering or manufacturing false identities can be outsourced to individual specialists who might work across multiple crime networks.

Withstand law enforcement interventions

The more resilient organised crime groups tend to have a number of interests facilitated by different networks. If law enforcement succeeds in disrupting part of the syndicate the overall enterprise can then regenerate using the surviving hubs. Organised crime groups know that rigid structures can lend themselves to focused targeting by law enforcement agencies.

Use new technologies

Technology can underpin a range of organised criminal activities. It can be used to disguise communication between criminals, create false identities or mask a criminal’s true identity.

It can be used to collect details of individuals anywhere in the world to commit fraud and theft. It can also be used to seek illicit profits through computer hacking or spreading computer viruses to disrupt business.

Innovations in technology have enabled crime to be committed both remotely and by people with previously less access to the markets in which they operate. Remoteness provides some insulation against detection and prosecution and increased accessibility means that a much broader range of people can move in and out of the market at will.

Use specialist advice and professional facilitators

As serious organised crime infiltrates various sectors of the economy, its activities are often supported, knowingly or otherwise, by a range of people with access to information, infrastructure, government services, knowledge of institutional weaknesses or access to specialist skills. ‘Facilitators’ with specific skill sets (such as information technology specialists, accountants, lawyers, bankers, chemists, licensed hoteliers or real estate agents) play a vital role, sometimes unwittingly, in assisting criminal networks to operate undetected and seamlessly across both legitimate and illicit markets.

A national security threat

Organised crime poses a threat to Australia’s national security. In the inaugural National Security Statement delivered in December 2008, the Prime Minister placed organised crime for the first time squarely in the Australian national security context—and the approach to national security since this time has focused on an all hazards approach, encapsulating organised crime.3 Internationally, terrorists have been known to fund their activities and facilitate their objectives through serious and organised criminal activity. For example, the Madrid bombings were found to be financed by drug trafficking.4 Organised crime groups and terrorist groups are known to exploit similar vulnerabilities in areas like the transport sector.

Extent

The Australian Crime Commission (ACC) estimates organised crime conservatively costs Australia between $10-15 billion every year. This figure is based on international estimates that place the cost for most western countries between one and two per cent of Gross Domestic Product (GDP). Based on the 2008 Australian GDP figure of $1020 billion, one per cent would equate to a cost in excess of $10 billion.

ACC intelligence suggests that a significant proportion of this is laundered offshore.

Profit margins at the higher level of serious and organised crime are vast. Those involved in the supply of illegal drugs can easily generate $200 from every $1 invested. Australia is currently a relatively large consumer rather than a producer in terms of the global drug supply chain.

Impact

The impact of organised crime cannot be measured in dollars alone. There is an enormous impact on society as a whole including:

• the loss of legitimate business and taxation revenue
• expenditure on law enforcement efforts
• expenditure on managing the social harms that compromise the health, safety and wellbeing of individuals and communities
• threats to the integrity of political and public institutional systems through infiltration of these systems
• loss of confidence in businesses and organisations
• emotional, physical and psychological costs to victims of organised crime, their families and communities
• community fear.

Links to Other Crime Types

Organised criminal groups in Australia exploit a number of illicit markets or activities that include, but are not limited to:

• illicit drug importation
• domestic distribution of illicit drugs
• money laundering and movement of currency and other valuables
• firearms, firearm parts and weapons movement
• smuggling fauna and flora
• theft
• tobacco smuggling
• environmental crimes
• cyber crimes
• misdescribed or counterfeit goods
• tax or duty evasion
• human trafficking
• criminal exploitation of the private security industry
• vehicle rebirthing
• murder
• serious assault
• sexual assault
• serious frauds
• extortion
• prostitution
• robbery
• receiving stolen property
• bribing and corrupting officials
• arson.

Government Response

The Australian Government launched the Organised Crime Strategic Framework in November 2009 to ensure Commonwealth agencies are working together to prevent, disrupt, investigate and prosecute organised crime. As part of the Framework, the ACC has produced two biennial classified Organised Crime Threat Assessments (OCTAs) which identify the highest organised crime threats to the Australian community. The OCTA informed the development of the Government’s inaugural Commonwealth Organised Crime Response Plan (OCRP) in 2010 to help prioritise Commonwealth agencies resources against these threats.

Recognising that organised crime is a national issue that requires a nationally coordinated response, the Commonwealth and the States and Territories agreed to the National OCRP 2010-13 in 2010 to strengthen multijurisdictional approaches, coordination, information sharing and joint activities to combat the national threat of serious and organised crime. Preventative partnerships with industry and the community are part of the strategies to respond to organised crime. These organised crime fact sheets describe the breadth and impact of organised crime activities and provide an insight into how industry and the community can help combat organised crime.

Further information on the Organised Crime Strategic Framework and the OCRP can be found at <http://www.ag.gov.au/www/agd/agd.nsf/Page/Publications_OrganisedCrime>.

This fact sheet was developed in collaboration with Attorney-General's Department, Australian Customs and Border Protection Service and Australian Taxation Office.

Endnotes

1. Lunde, P 2004, Organized Crime: An inside guide to the world’s most successful industry, Dorling Kindersley, London.
2. United Nations Office on Drugs and Crime (UNODC) 2008, Amphetamines and Ecstasy: 2008 Global ATS Assessment, UNODC, Vienna.
3. Hon. Kevin Rudd MP 2008, ‘National Security Statement’, address by the Prime Minister of Australia, 4 December.
4. United Nations Office on Drugs and Crime (UNODC), Drug Trafficking and the Financing of Terrorism, UNODC, Vienna.