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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.

Source: Federal Bureau of Investigation

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