Law enforcement, modern technology, and a changing American demographic have affected the things the Mafia controls. But what does the Mafia control today? Whole cities like New York, Chicago, and Las Vegas formerly exposed their residents to daily interaction with some element of organized crime influence and corruption. But even though it seems like the Mob has lost its grip on American society, there are some things the Mafia still controls.
The Mafia's dominance has been decreasing partially because of an improved law enforcement response and partially because of competition from other organized crime elements like the Russian Mafia, El Salvador's MS-13, and urban street gangs that have all taken over urban neighborhoods once ruled by the Mob. But recent FBI arrests indicate that while down, the American Mafia is still not out. Here are some of the ways the Mob still makes money.
Gambling has always been the financial cornerstone of the Mafia. While lotteries have cut into the numbers racket and horse racing, boxing, and baseball have waned in popularity, other sports like professional football and college football and basketball have added huge potential revenue streams. While the corner bookmaker is also a thing of the past, the Mafia has adapted to new technologies and the Internet to facilitate multi-million dollar sports-betting operations. In 2012, several high-ranking members of the Genovese crime family were arrested and brought up on racketeering charges related to an illegal betting website.
The Narcotics Trade
Narcotics - specifically heroin - have been a Mafia profit center for as long as any substance has been classified as illegal. Some high-level mobsters initially decreed that any soldier involved in drug trafficking would be killed, but this edict was not out of any code of honor. Instead, the fear was that legal penalties were so severe that any mobster arrested for trafficking would certainly turn into an informant rather than serve decades behind bars. But those same powerful mobsters couldn't resist the cash flow and eventually got involved in the drug trade.
Heroin trafficking is still a major element of the Mafia's profit portfolio. Domenico Cefalu, the reputed current head of the Gambino crime family, has a long history of narcotics trafficking and was even convicted of heroin smuggling in 1982. He served six years in prison for the offense. In 2008, more than 80 members of the Gambino crime family were indicted on charges including drug trafficking and murder.
The Mafia dominated what is politely called the sanitation industry throughout the twentieth century. Even in 1993, when Houston-based sanitation company Browning-Ferris attempted to expand into New York City, the wife of a company executive found the severed head of a German Shepard on her lawn. In the animal's mouth was a note that read, "Welcome to New York." Although New York specifically has addressed many of the problems historically associated with crooked garbage hauling, the Mob is by no means out of the garbage business. If arrests indicate a prevalence in any particular industry, then a 2013 crackdown on the Genovese, Gambino, and Lucchese crime families indicates that garbage can still be a very dirty business.
Gasoline and Cigarette Tax Scams
Cigarette tax scams are another surefire Mafia moneymaker because the scheme is so lucrative and simple. Because each state regulates and collects cigarette taxes, these taxes can vary widely. Missouri has one of the lowest taxes at 17 cents a pack; New York has one of the highest at $4.35 a pack. Because taxes are typically the highest in urban areas where the mob operates, it is a given that fraud will occur. Even a small-time criminal can fill up a truck with thousands of cheap cigarettes bought in a state like Virginia, transport them to New York, stamp them with a phony tax stamp, and sell them at a huge profit. Cigarette tax scams are still very much alive and well in America and even abroad.
Another scheme notable for its simplicity was the gasoline tax fraud employed by one mobster in the '80s and '90s. It was so lucrative it has been copied by other criminal syndicates throughout the US. By law, gasoline wholesalers must charge sales tax to retailers up front. These funds are then turned over to the US Government. But one enterprising mobster formed his own distribution entity, sold the gas wholesale, and then pocketed the tax. When the feds came looking for the money years later, the wholesaling company had disappeared in a blizzard of corporate filings. This crime was so lucrative and so difficult to trace that it quickly spread throughout the US.
Prostitution is another bedrock operation at the core of organized crime activity. But, unlike the brothels run in the days of Al Capone and Lucky Luciano, the Mafia has adapted to the modern world. Recent arrests of gang-connected individuals indicate an involvement with high-end prostitution, with customers and even employees being solicited via the Internet. One such individual, who was arrested in 2016, controlled over 58 active domain names and had been in business for ten years. Even Craigslist has not been immune to Mafia-run prostitution, occasionally even involving underage girls. Criminals would book the appointments through the website, drive the women to their liaisons, and then pocket half the proceeds.
Just like the sanitation business, the Mafia gained control of the construction industry through its infiltration of labor unions. A mob-run construction company will bid on business and include union rates in these contracts. Once successful, the company will then pay its workers far less and intimidate anyone who complains. Cement and building materials companies are still controlled by mob influence and will tack on additional costs to any project with inflated prices. Mob-controlled businesses were even involved in the rebuilding of the World Trade Center.
High Stakes Poker
With the financial excess of the twenty-first century and the rapid increase in the popularity of poker, another illicit Mafia market was created. Seemingly overnight, hundreds of high-stakes poker clubs opened, especially in New York and Los Angeles. The clubs were almost entirely operated by mob-connected individuals or paid protection money to stay open. They were so lucrative that when one was busted and cash was confiscated, the owner subsequently offered to reimburse his customers. Of course, big losers at the club, who typically were extended credit, would be natural customers for another illicit Mafia activity: loansharking.
Whenever organized crime is publicly prosecuted, one of the most prevalent offenses is the transgression known as "loan sharking." Most banks won't loan money to people who really need it, especially desperate people who are in a serious financial bind. Because the Mafia deals with businesses that generate a lot of cash, most mobsters are more than happy to put this cash to work. And who else but a desperate person would agree to the terms usually meted out by your friendly neighborhood loan shark?
Typically, a loan shark will charge two "points," or percent, a week on money lent. Let's say you borrow $50,000, payable in six months. Every week, you owe the two points, or $1,000. That's just the interest. If you miss a payment, it is added to the loaned amount and the weekly payment is readjusted. After six months, you will have needed to make all of the interest payments plus pay back the original loan. If you can't, the loan shark will then begin seizing whatever assets you do have and frequently not even credit you for these amounts. Loan sharking is at its most lucrative when the economy is down, so, as you can imagine, the Mafia had a great few years in the late '00s.