Criminal Hierarchal Structures. Models of Organized Crime in the Baltic Sea Region

.SIAK-Journal – Zeitschrift für Polizeiwissenschaft und polizeiliche Praxis

Pullat, Risto (2009): Criminal hierarchal structures. Models of organized crime in the Baltic Sea Region

SIAK-Journal − Zeitschrift für Polizeiwissenschaft und polizeiliche Praxis (2), 24-30.

doi: 10.7396/2009_2_C

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Pullat, Risto (2009). Criminal hierarchal structures. Models of organized crime in the Baltic Sea Region SIAK-Journal − Zeitschrift für Polizeiwissenschaft und polizeiliche Praxis (2), 24- 30, Online: http://dx.doi.org/10.7396/2009_2_C.

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Online publiziert: 3/2013 .SIAK-JOURNAL 2/2009

Criminal hierarchal structures Models of organized crime in the Baltic Sea Region

Stable criminal hierarchal structures have given up their place for flexible and changing organizations and networks in the Baltic Sea Region, that can be created for performing certain single “projects”. Criminal structures can fulfill economic, social and quasi-state tasks. The different social embedded ness determines the structure of organized crime. The author distinguishes between four main criminal networks. First are the criminal networks that have no social support structure in their countries of operation. Second are the criminal networks based on a sub-culture. Third are the criminal net works that exist in the society in a hidden form that includes seemingly law RISTO PULLAT, Project manager in the Estonian abiding individuals who have no obstacles for using the legitimate social Ministry of the Interior. infrastructure. Fourth, the networks intertwined with the elite in power, the participants of which have a direct access to the decision processes of poli tics, business and media.

INTRODUCTION hierarchal structures have given up their The discourse of criminal networks is place for flexible and changing organiza based on the point of view that organized tions and networks that can be created for crime manifests itself in the cooperation performing certain single “projects”.3 Cri of criminals and criminal groups in diffe minal cooperation is carried out either in a VOCABULARY rent combinations. Hence, criminal net relationship of a supplier-consumer or in a works are groups of people connected relationship of a temporary employer law-abiding gesetzestreu with criminal networks.1 Fresh research employee, in a partnership of two persons confirms the earlier assessments that in in pairs or in small groups of a small hori key players Hauptakteure Europe, including in the Baltic Sea Re zontal or vertical integration. This is par gion, the ruling form of criminal coopera tially also confirmed by official sources. It tion is the network of personal relation doesn’t of course mean that the criminal ships that the criminals successfully take organizations would have terminated their advantage of. Criminal networks have the activity; they have just transferred it to the following features: the nucleus that coor countries where it is possible to operate dinates the activity of the network; key undisturbed. In an environment with an players making up the nucleus of the net efficient system of internal security, emer work; subgroups carrying out different gence of criminal organizations is excep tasks; members on the intermediate level tional, except in the cases when they are carrying out the daily work to communi based on some legal structure.4 cate with the members of the lower level Europol considers the so-called oriented and protect the key players; the network is clusters, bunches of criminal groups with provided with information and resources a central management, to be major threat. by members separate from the network; a Clusters are united by the strong sides of large number of members.2 Timo Kyntäjä hierarchical structures and criminal net is of the opinion that the stable criminal works, as a result of which a big criminal

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capability is achieved. In the opinion of zation called “Mutual Fund” all by himself Europol, the threat of formation of the for almost twenty years. The below men clusters is caused by the partial lack of tioned quote should complement the pic control over domestic economy and social ture of the leader of the Estonian under dynamics. As the second dangerous phe world. nomenon, the cell type criminal organiza “He lives alone with his books as women tions which operate in the EU countries are not to be trusted. He reads a lot, en but which are lead from outside of its bor gages in sports on a daily basis, is in super der are to be mentioned. physical and mental shape for his age. He VOCABULARY has two driver-body guards. K.9 (corr.) sustainable Due to a deep conspiracy, it is solves mutual disputes, usually making nachhaltig extremely difficult to combat sure that both parties are happy and that rough-handed the activity of cell type MF is also happy. He is a rough-handed hier: mit rauen criminal groups. diplomat, polite, modest. A group of busi Umgangsformen nessmen turns over the money. The to turn over Europol distinguishes also their in-be money can be in a safe-box, in Russia or übergeben tween model where the mainly ethnic cri on the accounts of seven people. Each 24 minal groups are trying to leave the frame members of the MF have probably got work of their community. Apart from the their own smaller ‘Mutual Fund’. With the above mentioned structures, there are also money from this fund, current expenses criminal networks which lack the influ and lawyers’ fees are paid and those in pri ence of oriented clusters, but which are son are helped. Money is made above all sustainable due to regenerating member with the means of MF. (…) K. (corr.) ship and absence of not easily determined makes the most important decisions. The central leadership.5 elder is responsible for a common mem ber. Friendship and money are kept apart. UNDERWORLD HAS ITS OWN Everybody is included in communication BOSSES (…)”10. Criminal structures can fulfill economic, “He keeps a low profile and this has social and quasi-state tasks.6 The economic earned him respect. People also appreciate criminal structures are oriented towards that he ‘takes less than he could’. Histori profit and they should be distinguished cally he has grown to be a leader. K. (corr.) from the criminal structures filling the has essentially the functions of a ‘legal social functions, like the Finnish and Swe thief’”11. dish biker gangs or the “legal thieves”7. The “criminal high league” is made up The so-called Mutual Fund controlling a of 24 persons, knowingly to whom more big part of Estonian organized crime can serious crimes are committed in Estonia. also be counted in this group. For instance, the G. and B. groups control One form of organizing the criminals at ling the market of amphetamine, MDMA large is a “Mutual Fund” (MF), the central (ecstasy) and hashish in Narva and in its point of Estonian organized crime.8 In Esto close neighborhood were not subordinate nia, a unique situation in the Baltic Sea to anybody; they had however to pay the region has formed where the nucleus of the compulsory fee to the “Mutual Fund”.12 underworld is one person surrounded by a The hierarchic structure of organized crime dozen persons belonging to his immediate has apparently been possible only due to circle. This man has managed the organi the small size of the Estonian illegal market

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and to the leadership quality of the person rules of conduct and solve the points of managing it. Organized crime in Estonia dispute in some area or market.15 In the must be regarded separately from the Rus following extract from an interview we sian organized crime and there can be no shall see that also in Estonia, the “Mutual talk of any subordination. Estonian Rus Fund” gets involved in solving of all kinds sian speaking organized crime operates of conflict situation. still in the realm of the so-called subcul “At the same time, in the year 2006 the ture of thieves. The Estonian speaking unwritten rules of the underworld are still in organized crime operates in the space of force in Estonia. Let me bring an example. “Western” crime; some of their concepts, This year, an X said about a Y, that the latter however, originate from the subculture of ‘is providing roof’ to an object. Because “thieves”. The carriers of the criminal sub of that, Y who was an influential person in culture are undoubtedly penitentiary insti the underworld, had X beaten up and fined, tutions;13 first and foremost the camp type as he had dared to mention the name of Y. (i.e. Gulag type) prisons (e.g. Murru pri Or another, recent example. A car was son in Estonia). The “Mutual Fund” has its embezzled by a person, after which this VOCABULARY own contact persons in the prisons and the person claimed that the car had been prison administration keeps an eye on bought for the resources of the Mutual deviant abweichend them. Fund. For those words, the man lost his car and in addition to that was also fined. At to embezzle veruntreuen, Estonian organized crime can the same time one can firmly state that the auf die Seite schaffen be differentiated by fields of older criminal bosses avoid violence as it activity and not by territory. attracts the unnecessary attention of the police. The killing of K. K. (corr.) was dis Specialization is a phase of development approved of by many.”16 of crime that is characterized by growth of The author is however of the opinion professionalism of the criminals, and the that in the very near future the Mutual strict internal distribution of labor in a cri Fund will fall apart, as in the circumstan minal organization. The forms of expres ces of the deepening internalization of cri sion of a cross-border crime is above all minal activity, a longevity of such a form drug trafficking and crime against pro of organization is in the long run not very perty. likely. Based on the threat assessments of These structures indirectly support their the year 2008, the Estonian Central Crimi members in their illicit activity by serving nal Police is of the same opinion.17 as intermediary for contacts, ensuring the Beside legal norms, there are also un status, emphasizing deviant values and official social norms competing with the providing a forum for exchanging infor legal norms in society. Differently from mation. Hence, a former Estonian criminal the legal norms, the state does not perform police officer is of the opinion that “the surveillance over fulfilling of social norms. underworld boss does not have to do the Certain social norms may be valid also in killing and extortion by himself; it is various subcultures (e.g. the “Mutual enough if he solves the disputes between Fund”) and the criminals can consider groups with his opinion. This is where his them legitimate and obligatory similarly to influence has its roots.”14 The quasi-state the legal norms. It is the duty of the state criminal structures support the illicit eco to apply countermeasures concerning nomic activity by creating and establishing those social norms.18

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Organized criminal groups may have a ted from prisons and rural areas, forma monopoly in the illegal market on the tion of the groups and training of the local level; often they have concluded a group’s members take place usually out mutual agreement of exclusive right to side of the control of the system of in operate in a given territory or in a given ternal security. Such conditions facilitate field of activity.19 In the Baltic Sea Region, formation of complicated organizational monopoly of the market of illegal products structures and internal distribution of work is a rare phenomenon; an exception is for as well as distribution of work among the instance the Estonian organized crime groups. dominating the Finnish drug market (a major part of the synthetic drugs smug Second are the criminal net gled into Finland comes from Estonia20). works based on a sub-culture. The Lithuanian criminal networks dealing with drug trafficking have directed their In such cases, the criminals can rely on activity towards Sweden (towards Western the social support structures separate from Europe, in case of illicit trafficking of the society and its institutions; and those cigarettes) and the Estonian networks have support structures are broader than their focused mainly on Finland. One could add immediate criminal environment. The that the main source of income of the Italian examples of such groups, for instance, are Mafia is extortion and not illicit business. the networks of drug trafficking that rely VOCABULARY For instance, the Palermo Mafia controls on the Finnish,24 Swedish and Norwegian25 the fish market located at fixed premises, alien communities. On the one hand, the extortion Erpressung but the mobile taxi business remains out criminals take advantage of the relative side of its grip.21 The data confirmed that isolation of an ethnic minority for hiding Latvian organized crime connected to their criminal activity, and on the other Russian organized crime appears in the hand they know the local infrastructure form of a criminal network.22 (e.g. transport system, banking). Third are the criminal networks that MODELS OF CRIMINAL exist in society in a hidden form that COOPERATION includes seemingly law-abiding indivi The different social embeddedness deter duals who have no obstacles for using the mines the structure of organized crime. legitimate social infrastructure. Such net The author distinguishes between four works are above all connected to orga main criminal networks on the basis of the nized economic crime, for instance, the classification provided by Klaus von “invoice factories” discovered recently in Lampe. It is based on two assumptions: Estonia. According to the scheme, the a) criminal networks are relatively homo managers of the so-called invoice factory genous, and b) the social position and the allocated money to the people communi criminal possibilities of the criminals are cating with the missing traders for which in correlation.23 frontmen where hired. The notary registered First are the criminal networks that have the bogus or missing trader company in no social support structure in their coun the name of the frontman who received tries of operation. Such are for instance approximately 500 kroons26 for the deal. the Estonian gangs of burglars that or Next the documents of the company ganize burglaring trips from Estonia to moved on to the managers of the invoice Western Europe. The members are recrui factory who began communicating with

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companies needing “service”. After that corruption neutralizes legislation and the the necessary invoices where compiled system of internal security, then its effi showing the sale of services or goods to a ciency regarding criminals has also been bogus company. Via the managers of the neutralized.28 invoice factory, the bogus invoices reached Louise Shelley writes that the collapse the person who had ordered the “service”. of the communist system led to the situa That legal company now transferred tion where in some transitional societies money to the account of the bogus com organized crime assumed the control func pany, withdrew it from a cash machine and tion of the Communist Party.29 According forwarded it to the managers of the invoice to the hypothesis of the state failure theory, VOCABULARY factory. Eventually the client received a when a state fails to provide the main poli certain amount of cash from which a ser tical products – e.g. security, judicial area bogus company Scheinfirma vice fee of five percent of the amount of and stability –, criminal groups will start the deal had been deducted. The business to fulfill the functions of the state. Accor to intertwine verflochten sein held a strict conspiracy; for instance, the ding to the hypothesis of economic failure, frontman knew only the person who went poor economic results, like a high level of to harass belästigen to the notary to sign the documents. At the unemployment and a low living standard, beginning of 2007, the Tax and Customs and a black economy facilitate criminal to cut a deal ein Geschäft machen Board estimated the total amount of syndicates as the providers of the neces annual VAT fraud in Estonia to be close to sary goods, services and jobs.30 The crimi 450 million kroons. nal networks that are able to influence Fourth, the networks intertwined with international decisions and take advantage the elite in power, the participants of of the favorable opportunities opening up which have a direct access to the decision in what should be legitimate business processes of politics, business and media. areas, should be given more attention by Such a model is well characterized by the the institutions of internal security. cocaine transit targeted to the market of the United States, where Puerto Rico was Organized crime is a compli the intermediate station between South cated social phenomenon America and North America. After the US which has a significant impact administration began to harass the drug on economics and politics. traffickers of Puerto Rico as of an asso ciated country, they moved on to Port The development of the organizational au-Prince in Haiti. Soon the drug dealers structure of crime is a global and a natural cut a deal with the military belonging to process which corresponds with the deve the elite of Haiti. This fact confirms that lopment of legal social systems and sub the criminal syndicates have a skill to systems, including politics and the struc identify the “weak” countries, to immerse ture of enterprises. Research confirms that in them and corrupt the legitimate social the factors influencing the level of deve institutions and networks.27 lopment and the nature of crime are the same across the world.31 COMPLICATED SOCIAL PHENOMEN As to the countries of the Baltic Sea Re gion, some countries have problems with corruption. Joseph Albini warns that if

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1 Bruinsma, G., Bernasco, W. (2004). Cri 5 European Organised Crime Threat has described the world of “thieves“ of the minal groups and transnational illegal Assessment (OCTA) 2007. Soviet Union ( ) as a social markets. A more detailed examination on http://www.europol.europa.eu/publications/ institution with internal unity and a code the basis of Social Network Theory, European_Organised_Crime_Threat_ of ethics. The most influencial representa Crime, Law & Social Change (41), 79. Assessment_(OCTA)/OCTA2007.pdf tive of the criminal world is the so-called 2 Canter, D. (2004). A Partial Order Sca (30.11.2007). legal thief (вор в законе). Chalidze, V. logram Analysis of Criminal Network 6 Lampe, K. von (2005). 407. (1977). Criminal Russia. Essays on Structures, Behaviormetrika, vol 31, no 2, 7 The criminal subculture called “the tra Crime in the Soviet Union, New York, 34; 131–152. dition of thieves“ was formed in the 45. The “legal thief“ is a professional cri http://www.jstage.jst.go.jp/article/bhmk/ Soviet penitentiary institutions in the minal and an active promoter of the cri 31/2/31_131/_article (30.06.2007). 1920’s–1930’s and reached its peak minal way of life who has an experience 3 Kyntäjä, T. (2004). Rikollisuus ja rikos during the following decade. The central of confronting the institutions of internal kontrolli. Sosiologisia kartalehtiä. Toimit term of the subculture is the “thief“, security. Nowadays, many “thieves“ have taneet Ismo Kantola, Keijo Koskinen ja which denotes a professional criminal no prison experience and young crimi Pekka Räsänen. Tampere: Vastapaino, belonging to the underworld and who fol nals purchase the membership card of the 284. lows the norms and customs of the so-cal “brotherhood“. The power of the “thie 4 Lampe, K. von (2005). Organized Crime led thieves world. The representatives of ves“ depends on whether they have a pos in Europe. Handbook of Transnational the criminal subculture were called thie sibility to demonstrate power if needed or Crime and Justice. Ed. Philip Reichel, ves mainly because initially most of them not. Therefore, many “thieves“ have joined Thousand Oaks, 406–407. used to be pickpockets. Valery Chalidze territorial criminal groups. Varese, F.

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(2005). The Russian Mafia. Private Protection in and Measurement. Petrus C. van Duyne, Almir a New Market Economy, Oxford, 64–65. Maljevic, Maarten van Dijck, Klaus von Lampe 8 See also: Pullat, R. (2003). Järjestäytynyt rikol and James L. Newell (Eds.). Nijmegen, 010–011. lisuus nyky-Virossa ja naapurimaissa. Poliisiam 22 Outcome of the proceedings from the meeting mattikorkeakoulun tiedotteita, 23. Helsinki: Oyj of the Operative Committee on 29th-30th March, Edita; Pullat, R. (2008). Organiseeritud kurite 2007 in Tallinn, Estonia. The Baltic Sea Task Force gevusega seotud uimastiäri Läänemere maades. on Organized Crime, Tallinn, 21.05.2007, 25. Politseiline vaade. Tallinn: Politseiamet. 23 Lampe, K. von (2005). 415–416. 9 In the following names are expressed by abbre 24 See also: Hietaniemi, T./Korpisaari, H. Rikosten viations. ehkäisy järjestäytyneen rikollisuuden torjunnassa. 10 Interview conducted by the author in the Estonian Rikostutkimus 2003–2004. Keskusrikospoliisi Central Criminal Police, Tallinn, 02.08.2006. (KRP). Helsinki. http://www.poliisi.fi/poliisi/krp/ 11 Interview conducted by the author in the Estonian home.nsf/files/Rikostutkimus_2003-2004/$file/ Central Criminal Police, Tallinn, 04.08.2006. Rikostutkimus_2003-2004.pdf (14.11.2007). 12 Ranne, R. Filippov, J. (2007). Hullud päevad 25 Outcome of the proceedings from the meeting Virumaal. Eesti Ekspress, 12.04.2007 of the Operative Committee on 30–31, January, http://www.ekspress.ee/viewdoc/8BA4209CBD5A 2007 in Tallinn, Estonia. The Baltic Sea Task 7425C22572BA004028E4#close (10.07.2007). Force on Organized Crime. Tallinn, 14.03.2007, 13 See also: Hietaniemi, T./Korpisaari, H. Rikosten 7–8. ehkäisy järjestäytyneen rikollisuuden torjunnassa. 26 500 Kroons about 31. Rikostutkimus 2003-2004. Keskusrikospoliisi 27 Gros, J. G. (2003). Trouble in Paradise: Crime (KRP). Helsinki. http://www.poliisi.fi/poliisi/krp/ and Collapsed States in the Age of Globalization, home.nsf/files/Rikostutkimus_2003-2004/$file/ The British Journal of Criminology, vol 43, no 1, Rikostutkimus_2003-2004.pdf (14.11.2007). Winter, 66. 14 Kressa, K. (2007). Koit Pikaro – pealilma auto 28 Organized Crime: Uncertainties and Di riteet. Eesti Päevaleht, 06.01.2007. lemmas. Appendix I – The Most Critical Unre 15 Lampe, K. von (2005). 407. solved Issue Associated with Contemporary 16 Interview conducted by the author in the Cen Organized Crime. Edited by Stanley Einstein and tral Criminal Police, Tallinn, 17.07.2006. Menachem Amir. Chicago: Office of International 17 See also: Kagge, R. (2007). Vaher: kuritegevus Criminal Justice, 1999, 465–466. on saanud uut hoogu. Postimees, 17.12.2007. 29 Shelley, L. I. (1999). Post-Soviet Organized http://www.postimees.ee/171207/esileht/ Crime. Implications for Economic, Social and siseuudised/301873_2.php (17.12.2007). Political Development. Transnational Crime, 18 Kyntäjä, T. (2004). 269–270. Aldershot, 177–178. 19 Lampe, K. von (2005). 407–408. 30 Sung, H.-E. (2004). State Failure, Economic 20 Siseministeeriumi valitsemisala arengukava Failure, and Predatory Organized Crime: A 2008–2011. Comparative Analysis, Journal of Research in http://www.siseministeerium.ee/17410 Crime and Delinquency, vol 41, no 2, May, 111. (03.12.2007). 31 Gilinskiy, Y. (2006). Crime in Contemporary 21 Duyne, P. C. van (2006). Introduction: Coun Russia, European Journal of Criminology, ting clouds and measuring organised crime. The vol 3 (3), 279. Organisation of Crime for Profit. Conduct, Law