Tag Archives: Mafia

The Mafia Ruling Ukraine’s Mobs

Organized crime helped Putin grab Crimea, and may open the way for him to take more of Russian-speaking Ukraine.

DONETSK, Ukraine—I was talking to some young black-clad pro-Russian agitators at a checkpoint they’d set up on the outskirts of this city in eastern Ukraine when a shiny black Mercedes pulled up a few yards away. Some of the men from the group walked over and stuck their heads into the car. I couldn’t see who the capo was, couldn’t hear what orders he was giving, but the scene was like something from a movie about the mob. Nobody wanted to say who that was in the car. Nobody wanted to repeat what he’d said.Such scenes are increasingly common in this contested part of Ukraine near the Russian frontier. “Bosses are starting to appear on the fringes of the protests, they are middle-aged, older and better dressed than the younger men who are in the vanguard of the protests,” says Diana Berg, a 34-year-old graphic designer. The grassroots agitation in favor of Russia has become less spontaneous and more focused in recent days.Before and since Russia’s move to annex the Crimea, many who favor the pro-European government in Kiev have argued that these “bosses” might be provocateurs from Russia’s FSB intelligence service or Spetsnaz special forces infiltrated into Ukraine to orchestrate pro-Russian sentiment. But Berg, an organizer of the pro-Ukrainian rally last week where pro-Russian thugs stabbed a student to death, says there’s a different and in some ways more frightening explanation: the ominous hand of organized crime.A public prosecutor, who declined to be named in this article for reasons of personal safety, says local hoodlums are operating among the pro-Russian protests in the restive eastern Ukraine, helping to direct them on the instructions of Kremlin-linked organized crime groups. He points the finger specifically at the notorious Seilem mob, which has been closely tied over the years to ousted Ukraine President Viktor Yanukovych, a onetime governor of Donetsk, who is now in exile in the Russian city of Rostov-on-Don.

“We have already seen organized crime working hand-in-hand with the Russians in Crimea,” says the prosecutor. In that breakaway Black Sea peninsula, Moscow helped install former gangland lieutenant Sergei Aksyonov as prime minister, and his background is well known. Aksyonov and his Russian separatist associates share sordid pasts that mix politics, graft and extortion in equal measure and together they helped steer Crimea into the Russian Federation. Police investigations leaked to the Ukrainian press accuse Aksyonov of past involvement in contract killings. Back in January 1996, Aksyonov was himself injured after his car overturned on the Simferopol-Moscow road during a shootout.

“Why should it surprise you,” the prosecutor in Donetsk asks, “if the same dynamic [as in Crimea] is playing out here? … Maybe there are Russian intelligence agents on the ground, but Moscow through crime networks has an army of hoodlums it can use, too.”

The international media were late to pick up on Crimea’s toxic nexus of organized crime, political corruption and politics. But across post-Soviet Ukraine the three have long been regarded as interchangeable and inseparable. And the eastern and southern parts of the country are the worst of all. “Political corruption is ingrained in eastern Ukrainian political culture,” the Jamestown Foundation, a Washington-based think tank, noted in a 2012 study.

The three regions most notorious for the closest relationships between gangsters, oligarchs and politicians—Crimea, Donetsk and Odessa—were the most resistant to the Euro-Maidan revolution that led last month to the ouster of Yanukovych. And now all three regions are at the forefront of the pro-Russian fight-back against the new national leaders in Kiev.

Taras Kuzio, a research associate at the Canadian Institute of Ukrainian Studies at the University of Alberta, who wrote the Jamestown report, says the internal political turmoil in Ukraine should be viewed through the lens of the hand-in-glove relationships between politicians, mobsters and the so-called “red directors,” managers-turned-businessmen who are steeped in the ways of Soviet-style public sector corruption and deal-making.

The red directors also have their protégés: men such as billionaire Dmytro Firtash, the gas-trading mogul who was arrested by Austrian police on suspicion of mob activity earlier this month following Yanukovych ‘s ouster. Nor are the ties limited to the Ukraine. Their tentacles embrace Moscow: Firtash has joint business ventures with Russian billionaire Arkady Rotenburg and his brother, Boris, close friends and judo sparring partners of President Vladimir Putin. The Rotenburg brothers, not coincidentally, are prominent on a U.S. sanctions list announced Thursday by President Barack Obama to target  Putin cronies.

The symbiosis of politics, organized crime and unscrupulousbiznesmeni developed quickly in Ukraine after the collapse of the Soviet Union in much the same way as it did in Russia. The ambitious, the greedy and the powerful lunged for the huge profits that could be made. The state was disintegrating. The big industries – energy, mining and metals – were being privatized, and may the most ruthless man win. “Individuals such as Yanukovych, Aksyonov and their Donetsk and Crimean allies literally fought their way to the top,” says Kuzio. In Donetsk, Yanukovych as governor “integrated former and existing organized criminal leaders into his Party of Regions,” says Kuzio.

In Crimea, “every level of government was criminalized,” according to Viktor Shemchuk, who served for many years as the chief public prosecutor in the region. “It was far from unusual that a parliamentary session in Crimea would start with a minute of silence honoring one of their murdered ‘brothers,’” Shemchuk recalled in a December interview with the Organized Crime and Corruption Reporting Project, a consortium of investigators and journalists tracking developments throughout Eastern Europe.

Donetsk was no different. A March 2006 cable from the US embassy to the National Security Council – one of several on Ukraine released by WikiLeaks—noted that Yukanovych’s Party of Regions was a “haven for Donetsk-based mobsters and oligarchs” and had commenced an “extreme makeover” with the help and advice of U.S. political consultants, including “veteran K Street political tacticians” from Washington D.C. and a onetime Ronald Reagan operative, “hired to do the nipping and tucking.”

According to the cable, Yanukovych was “tapping the deep pockets of Donetsk clan godfather Rinat Akhmetov.” Now supposedly Ukraine’s wealthiest oligarch, Akhmetov has been keeping a low profile in these early post-Yanukovych days, staying out of the limelight and issuing inoffensive statements on how important it is for everybody to get along.

Another US embassy cable from then-Ambassador William Taylor in September 2007 drilled down on how Yanukovych was centralizing Donetsk crime and political and business corruption in his party – something he would go on to do on an even larger national scale when he was subsequently elected as President in 2010. After Yanukovych became president, according to Ukrainian officials, more than $20 billion of gold reserves may have been embezzled and $37 billion in loans disappeared. In the past three years, they claim, more than $70 billion was moved to offshore accounts from Ukraine’s financial system.

The Americans have sent teams of experts to Kiev to help Ukraine’s interim leaders follow the money. “We are very interested in working with the government to support its investigations of those financial crimes,” U.S. Ambassador to Ukraine Geoffrey Pyatt told reporters last week, “and we have already, on the ground here in Ukraine, experts from the FBI, the Department of Justice and the Department of Treasury who are working with their Ukrainian counterparts to support the Ukrainian investigation.”

Many of the financial crimes are likely to trail back to Moscow. Yanukovych confidant Firtash (the gas mogul picked up in Austria) admitted during a December 2008 meeting with then-US Ambassador Taylor that he had entered the energy business with the assistance of the notorious Russian crime boss Semyon Mogilevich, who, he said, worked with Kremlin leaders.

“Many Westerners do not understand what Ukraine was like after the break up of the Soviet Union,” Firtash told the ambassador. When a government cannot rule effectively, the country is ruled by “the laws of the streets,” he said.

That’s still the rule. The old order has much to fear from reform and change and will do all it can to preserve its wealth and power—and its best bet for that to happen is to look to Russia.

For precisely that reason, rights campaigners and reformers in Ukraine’s interim government are racing against time to uncover as much of the mob story as possible. An anti-corruption panel headed by Tetyana Chornovol, an investigative journalist who was nearly beaten to death in December for her reporting, is starting in earnest to recover billions of dollars of stolen money and piece together the financial crimes of the Yanukovych regime.

The Daily Beast learned something about these operations first hand when a team from the organized crime police raided a discreet boutique hotel in downtown Kiev where this correspondent was staying.  According to the police the hotel is owned by Eduard Stavitsky, Ukraine’s former energy minister. He is now believed to be in hiding in Russia. The police searched all the rooms looking for any Stavitsky documents and combing through financial records. As one of the investigating officers told me, “We need to move fast before the cover-ups start.”

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Mafia Killer’s Autobiography Malerba Outrages Sicilian Literary Award Judge

The autobiography of a jailed Mafia killer has been selected as finalist for a Sicilian literary award, prompting the resignation of a juror who claimed the choice offended the memory of the author’s victims.

Literary critic Gaspare Agnello said that the decision to admit a book by cosa nostra affiliate Giuseppe Grassonelli to the final has soiled the name of the prize dedicated to Leonardo Sciascia, a late Sicilian writer who helped raise awareness on Mafia issues through his work.

Noting that the mobster never repented of his crimes, Agnello said that awarding him “would be an offence to his many victims, whose blood is still fresh”.

To add to the controversy, one of the other selected finalists, Caterina Chinnici, is the daughter of a prosecutor killed by the Mafia in a 1983 bomb attack in Palermo.

Grassonelli, from the southern port town of Porto Empedocle, was arrested in the early 1990s over a series of murders he allegedly committed in revenge for the killing of members of his family during a turf war.

The 49-year-old Mafioso was sentenced to life without parole, as he refused to cooperate with Italian authorities as a pentito (informer).

His book, Malerba – Italian for “bad grass”, the nickname Grassonelli was given in his youth – tells of his vengeance and criminal life.

Almost illiterate when he entered jail, the mobster has dedicated time behind bars to study and recently graduated in literature and philosophy, the book publisher said.

According to critic Agnello, the killer’s new life however did not cleanse his past atrocities.

“How is it possible that a life convict who committed brutal crimes … takes part in a literary award that had in Sciascia one of its leading figures?” Agnello wrote in a letter announcing his resignation to newspaper La Sicilia.

Malerba’s co-author, journalist Carmelo Sardo, dismissed the criticism as fuelled by “unexplainable envy” and accused the literary critic of failing to understand the book’s value and message.

The president of the jury, Gaetano Savatteri, said that the names of the three finalists were agreed by all board members, including Agnello.

The winner is to be announced at the weekend in the picturesque Sicilian town of Racalmuto, near Agrigento.

Italy’s Newest Strategy Against The Mafia Is To Take Away Sons

LOCRI, Italy (AP) — First Italy fought its mafia mobsters by confiscating their wealth. Now judges are taking away something more precious: their sons.

Riccardo Cordi’, a shy 18-year-old scion of one of Italy’s most notorious mob families, is a pioneer in a new strategy to fight the mafia by exiling crime clan sons from their homes and families.

Riccardo is the first of about 20 sons sent into a kind of rehab away from the mob by juvenile courts in the southern region of Calabria, home to the dangerous ‘ndrangheta syndicate

Riccardo Cordi
In this June 26, 2014 photo, Riccardo Cordi’ stands on a terrace in Reggio Calabria, Sicily, Italy with the Strait of Messina in the background. Cordi’ was exiled to Messina during a pioneering anti-mafia program for juveniles, a kind of rehab away from the mob.

By age 16, Riccardo seemed destined to go the way of his father, a reputed boss gunned down in a turf war, and three elder brothers in prison on mafia-related convictions.

Their photos line the wall of the fortress-like Cordi’ home in Calabria, seen in an exclusive visit by The Associated Press, in a testimony to the rule of blood in the powerful ‘ndrangheta.

But when Riccardo was charged with attempted theft and damage to a police car, judge Roberto Di Bella followed up his acquittal with a startling order: The ‘ndrangheta family prince would be sent away to Sicily until he turned 18.

Di Bella had sent Riccardo’s three brothers to prison and wanted to spare the last son a similar fate. He cited legal provisions that allowed courts to remove minors from families incapable of properly raising them.

Riccardo’s mother seethed, but there was nothing she could do.

“If you don’t like it, we’ll take him away anyway,” the judge told her.

Riccardo was placed in a Sicilian facility for troubled youths where nobody cared that he was a Cordi’. Rules were rigid, including no going out at night. Everyone made their own bed and sat down for meals at a communal table.

“It was tough. I was counting the days,” Riccardo said in interviews with The AP.

The judge put Riccardo under the wing of a fledgling psychologist, Enrico Interdonato. The psychologist had helped launch a courageous band of youths who encourage Sicilian business owners to stop paying “protection” money to the Mafia.

It was an audacious pairing, because the Cordi’ crime clan was itself alleged to be in the protection racket. This unlikely mentor helped Riccardo understand the terrible human toll of organized crime, taking him incognito to ceremonies for Mafia victims.

If the psychologist acted as a surrogate brother, a construction company owner practically became Riccardo’s second father. Mariano Nicotra told Riccardo what happened when he refused to pay protection money: His car was torched, his daughter ostracized. Nicotra even gave away the family dog, because Mafia threats made walks dangerous.

Nicotra saw something in Riccardo that few back home even bothered to look for: a normal kid.

Slowly Riccardo began to change. Twice a week, he helped out at an after-school center for children from broken homes, even though doing something for nothing is an alien concept in the ‘ndrangheta.

He moved stiffly, always buttoned up, wearing a jacket even at outings at the sea. But he came willingly, a supervisor recalled. One day, he surprised everybody by clucking like a hen to make the children laugh.

Riccardo’s exile wasn’t all hard work. On Saturday nights, Interdonato took Riccardo out for pizza and beers, and even to discos. There, he earned respect because of his personality, not his name.

Just weeks before he was due to leave, Riccardo rebelled. He packed his bags. He wanted out. His mother helped persuade him to stay.

On his 18th birthday — Feb. 8, 2014 — Riccardo’s exile ended. The after-school center treated him to a birthday cake with strawberries. Soon afterward, he returned home to Locri.

In a letter to Corriere della Sera in May, Riccardo made clear he wasn’t repudiating his family. But he wrote that he now wants a “clean” life.

He recalled how one morning in exile, he went to the sea, from where he could see Calabria.

“This time, however, I saw it from another perspective: I was seeing it from another place,” he said. “But it was I who was different.”

Mafia neighbours are bad for business, new report finds

Research into impact of organised crime groups on global economy found their presence in a region can reduce GDP per capita by 20%

When mafia bosses move in, it’s bad news for the local economy as well as for law and order, according to academic research which suggests the presence of organised crime in a region can slash GDP per capita by a catastrophic 20% over three decades.

A series of articles in August’s Economic Journal brings together the latest research on the impact of organised crime groups on the global economy.

Professor Paolo Pinotti of Bocconi University in Milan, focused on two regions in southern Italy, Apulia and Basilicata, which were dramatically affected by the arrival of organised crime groups, such as the mafia, Camorra and ‘Ndrangheta, from the 1970s.

Pinotti quantified the costs attributable to organised crime by comparing the economic performance of these areas with that of the rest of the country.

Before the arrival of organised crime groups, Apulia and Basilicata were two of the fastest-growing economies in the country, with low levels of crime.

Afterwards, their growth rates fell from the highest to the lowest in the country, while the murder rate quadrupled to more than four per 100,000 inhabitants.

According to Pinotti, his research suggested the presence of organised crime has a long-term impact on GDP-per-capita. “The estimated effect remains in most cases around 16%, increasing to 20% when matching on a longer time span,” he said.

Pinotti attributed this stunting of economic growth to the contraction of private investments due to an increase in mafia violence. The crime groups would seize control of politics, and replace private with public capital, so that their profits increased.

Giovanni Falcone, an Italian prosecuting magistrate who led the 1986/87 Maxi trial against the Sicilian mafia and was killed by the mafia in 1992, said at the time:

“More than one-fifth of mafia profits come from public investment.”

Separate research by Gianmarco Daniele and Benny Geys used data from Italian municipalities between 1985 and 2011 to show that the presence of organised crime also leads to less-educated politicians taking charge.

On average, politicians are 18% more educated in the absence of mafia infiltration, they found – equivalent to a year’s education.

“In areas with active criminal organisations, the average quality of elected politicians is significantly depressed, because they’re faced with bribes and punishments,” said the authors. “This makes better (or more highly educated) politicians opt out of a political career, and instead pursue an alternative vocation.”

Pinotti suggested that the expansion of criminal organisations towards the south east of Italy in the 1970s and 1980s was caused by three main factors:

  • The increasing importance of tobacco smuggling in the 1970s meant the ports in the south gained a strategic importance to criminal groups, while a major earthquake that struck the region in November 1980 led to mafia members flocking to take advantage of public funds set aside for reconstruction.
  • The influx of criminals to the region was also due to suspected or convicted mafia members being sent to the region in “confino”, a measure designed by the Italian police to keep the suspects from continuing to engage in illegal activities by moving them to areas with little criminal activity. Pinotti argued it backfired, simply spreading mafia presence to other regions.
  • The United Nations estimates the total profits of transnational criminal organisations may be as high as $1.6tn (£1tn) , making up 1.5% of global GDP, and 70% of all criminal proceeds.

A third article by Dr Giovanni Mastrobuoni of the University of Essex, used declassified data on 800 mafia members’ finances, to assess their place within the criminal hierarchy, on the basis of the value of their property.

“We have used economic status to work out how much of a key player each member is,” said Mastrobuoni. “Mobsters who are more central in the criminal network are found to live in more expensive housing – an exception being the bosses of mafia families who tend to keep a lower profile by officially residing in more humble housing.”

With the Sicilian Mafia in Decline, Who Is Running the Mob in Montreal?

Vito Rizzuto was the Steve Jobs of organized crime: charismatic, visionary, and shrewd enough to run a billion-dollar enterprise with tentacles reaching from Montreal to New York, South America, and Europe.

Because of its location along the St. Lawrence river and proximity to US markets, Montreal has always been a major point of entry for drugs, guns, and basically whatever else you can fit into a shipping container.

And for the good part of three decades, Rizzuto had his hand in almost every racket in the city, heading a “consortium” of organized crime which included Colombian cartels, Irish gangs who controlled the city’s port, and Hells Angels who took care of distribution of drugs across Quebec and Ontario.

Rizzuto’s death in December 2013—from natural causes—has left many speculating about his replacement and sources VICE spoke to hinted at a dramatic decline in the Sicilian Mafia’s power in Montreal and Canada since his passing.

With the rise of Haitian street gangs, the imminent release of numerous Hells Angels from prison, and rival Italian factions, there is no shortage of conspiracy theories surrounding Vito Rizzuto’s replacement.

Chief among those theories is that the Ontario-based Calabrian mafia, also known as the ‘Ndrangheta, is moving in and getting revenge after having been violently pushed out of the city by Vito’s father in the 1970s.

But this line of thinking is deeply flawed, said RCMP Staff Sergeant Chris Knight, because it assumes that Vito Rizzuto can even be replaced.

“No one’s got the credibility, no one’s got the clout, and certainly no one has the charisma that Vito Rizzuto had—and I’ve met him—to make allies out of enemies. No one has that right now,” Knight told VICE.

Knight has been with the RCMP for 34 years and works with local, provincial, and international law enforcement to monitor organized crime in Quebec.

His squad has seen no sign of rival Italian gangs moving to replace the Rizzuto’s, as certain media and observers have speculated.

“We haven’t seen attempts or power moves from Hamilton or Toronto on establishments or persons here. And we haven’t received any information on the street to that effect either. It’s a myth. I’ve always heard these things about New York and Toronto controlling Montreal but nothing could be further from the truth.”

Antonio Nicaso agrees. He has authored 27 books about organized crimes and acted as a consultant for the government on these. In his most recent book Business or Blood he writes extensively about the final years of Rizzuto’s life and the implications of a post-Vito world.

“I don’t see anyone with the same vision as Vito Rizzuto. His mafia was the real one, not a cheap imitation,” Nicaso told VICE. “Rather than fighting over turf, they are now trying to create a balance of power where different organizations will work together.

So it’s a group of people rather than one person like Rizzuto who was a master mediator capable of striking alliances and reaping huge profits through criminal enterprises.”

What is certain, for both Knight and Nicaso, is that the Sicilian Mafia no longer wield the power they once did in Canada. All signs point to a decentralization and instability—not a replacement.

“Their monopoly or their stranglehold is not what it used to be. It’s greatly diminished. They have lost a lot of power and there have been a lot deaths in the family,” said Staff Sergeant. Knight.

“You’re going to get struggles for street corners like you see in New York. In New York, it’s basically whoever has the biggest gun or the most soldiers gets the street corner for the distribution of narcotics and other organized crime activities.”

In 2010, Vito Rizzuto’s father and his son, both named Nick, were gunned down within months of each other.

The murders took place during a period of intense fighting wherein rival Italian factions, namely New York’s Bonanno family tried to take advantage of the power vacuum created after Rizzuto’s imprisonment in Colorado.

He had been deported and was serving time for his involvement in the triple murder of Bonanno family captains in 1981.

FBI surveillance photo of Vito Rizzuto (in black) from 1981, the same year he was involved in a bloody triple murder immortalized in the film ‘Donnie Brasco.’

Earlier this month, Raynald Desjardins pleaded guilty to conspiracy in the murder of Sal “the Iron Worker” Montagna.

Desjardins was Rizzuto’s right-hand man during the golden years of his reign and, according to wiretaps, one of the only two non-Italians to be “made” in the Mafia.

Montagna was the acting head of New York’s Bonanno crime family who tried—and failed—to replace Rizzuto as the boss in Montreal. Obviously, their relationship soured and Desjardins’s car was showered with AK-47 fire north of Montreal in 2011.

Two months later, Montagna’s body was found floating in the Assomption River. Desjardins’s case is a salient reminder of just how complex and delicate the balance of power can be for organized crime in Montreal.

The city has seen a period of relative calm in recent months but that doesn’t mean that it’s stable or lasting. Based on the RCMP’s analysis, all signs point to splintering drug turf and increased instability.

“It’s very volatile on the street. Whereas ten years ago, if there’s one thing that Vito Rizzuto had it was the ability to gather people, negotiate truces, and make arrangements that everyone made money. With him being gone, it’s more volatile now.”

Ironically, this volatility is directly linked to the effective police work done by the RCMP who arrested almost 100 suspected mobsters in Project Colisée and pretty much every Hells Angels patch member during Operation Sharqc.

Obviously, these arrests did nothing to curb the demand for drugs and, according to sources who spoke with VICE, all of that demand was absorbed by notoriously unstable Haitian street gangs who are plagued with internal Bloods-Crips rivalries and have effectively replaced the Hells Angels on the street.

Sources also pointed to the fact that the notoriously racist Hells Angels will want their old drug turf back and will not be pleased with the fact that black gangs are now in control. There’s trouble a’brewing in la métropole.

“The Hells Angels will definitely become more and more important, that goes without saying,” said Antonio Nicaso.

Knight agreed: “They’re going to want more territory and more cheap drugs and a monopoly over extortion or illegal gambling. There will be conflict for sure. It’s all about money and power. And the more players you have, the less you have to go around.”

Without Rizzuto’s unifying and stabilizing influence, the current period of relative calm is likely to be short-lived. And in order to survive in a post-Vito world, the Sicilian Mafia will have no choice but to rebrand.

Unlike stereotypes propagated in the media, the Mafia in Montreal isn’t all about guns, drugs, and prostitutes—it’s actually more boring than that.

Last September, the Charbonneau Commission wrapped up.

The inquiry heard testimony from almost 200 witnesses and exposed a massive criminal conspiracy involving the mob, construction companies, unions, and high-ranking municipal employees—a reminder that crime in Montreal was able to fester in an environment of political collusion.

In fact, the findings of the Commission led to the resignation of mayor Gerald Tremblay and to the arrests of Laval’s former mayor and Montreal’s interim mayor on gangsterism and corruption charges, respectively (all of which makes Rob Ford seem pretty benign, Toronto).

“The Mafia is strong and powerful is because they were capable of infiltrating our society and our politicians. What they used to do with the gun, they now do with corruption, relationships, and contracts,” Antonio Nicaso said.

“They are not as strong and powerful anymore mainly because they are not able to replace Vito Rizzuto but without connections to those who hold the power and money, the Mafia would just be a bunch of hooligans.”

How the mafia crushed it during the Great Depression

Lucky Luciano

Many people are aware that the mob made a fortune in illegal alcohol due to Prohibition in the Roaring ’20s.

But most aren’t aware of how they made their greatest profits during the Great Depression: They became loan sharks.

One of the rising mob bosses was “Lucky” Luciano in New York. With the help of Meyer Lansky — the ultimate financial genius, also called the “Mob’s Accountant” — and the infamous Bugsy Siegle, he implemented a strategy that helped the mob thrive during one of the worst downturns in history.

It was a simple matter of supply and demand. When the Depression hit, people and businesses couldn’t get loans. So the mob took the money they got from bootlegging and started lending it out at shark rates of 20%-plus.

To put it in perspective, that’s similar to what credit cards charge over-spenders with questionable credit today!

The mob was able to enforce these high rates for one simple reason — they were the frickin’ mob!

It’s not that people and businesses didn’t have previously existing loans from the banks. Some even got money from relatives and other lenders. But they can’t kick your ass and break your legs like Luigi can!

So who do you think got paid first? That advantage reduced their risk in a high risk period.

And even when borrowers couldn’t cough up the cash after breaking their legs, the mob just took a chunk of their business to create future cash flow for when the economy ultimately turned around again.

So not only were these mobsters raking in high cash flow from high interest rates, they were taking over businesses in dynamic growth cities like New York when they were the cheapest they would ever be.

Lending high and buying low — it’s the perfect winter season strategy.

Just think about how Joseph Kennedy made his family fortune during the same period. He made much (if not most) of his money bootlegging in the ’20s, then sold his stocks in late 1929 when a shoe shine boy started giving him tips — a sign that speculation had really gone berserk!

Finally, when the stock market went down by as much as 89%, he reinvested that money. With that cash, he bought the bargains of a lifetime in financial assets when no one else did, and few could.

Think about it: He became so successful, he switched from an illegal business to a legal one and even had a kid become President. He went from near-mob to a royal family.

I’m not telling you to break people’s legs or start an illegal business venture to make money! I’m telling you how powerful a depression can be if you have the cash and cash flow to take advantage of it.

But cash isn’t the only strategy the mob used. They also practiced the delicate art of consolidation. And they did it during a winter season, when market share shifts long-term to the largest and most efficient businesses (legal or illegal) while most fail.

Coming out of the Roaring ’20s, the top crime boss in New York was Joe Masseria. For awhile, Lucky Luciano worked under him.

But there was a new ruthless up-and-coming mob boss that came to America when Mussolini started locking up anyone even suspected of being in the mob in Italy.

In New York, Luciano “took care of” Masseria to get closer to the new rising boss — Salvatore Maranzano, from Sicily. And when Maranzano got greedy and refused to share the top spot as promised, Luciano killed him too. That’s what I call consolidation!

Meyer Lanksy

With Meyer Lansky and his new mob family, Luciano became the “Godfather,” or “boss-of-bosses” in New York… like Michael Corleone in the infamous Godfather movie (which, mind you, has facts mixed with some fiction, but it’s characteristic over the same time period).

Luciano was driven by greed and power. But in practical terms, he consolidated his illegal industry during the most economically trying period of the 20th century.

That’s not all — he created a new long-term mob empire and growth path for decades to follow, by being stronger when everyone else was getting weaker.

So what can you learn from this as we get closer and closer to the next great depression?

Sell financial assets, speculative real estate, and parts of your business you don’t dominate now. Do it ahead of the next crash which could start as soon as this summer and accelerate in 2016.

In your business, focus on your strongest sectors. Now’s the time to get lean and mean. Doing this should darn-near guarantee you’ll survive and out-live your competitors. And you’ll make money doing it, too — in the short term, but even more so over the long term.

There’s an old joke: “If a bear is chasing you, you don’t have to outrun the bear, just your friend.” That’s what the bear market and winter season is about — narrowing the economy down to the strongest and most efficient competitors.

Finally, do what you can now to protect your income and financial assets from rising taxes. They’re sure to come, especially in the next two administrations.

One way to do that, is sell highly appreciated financial assets before the government raises capital gains taxes to ordinary rates. Those rates will only rise in the years ahead for the more affluent.

Our country is about to face some hard economic choices. Seeing them coming before they happen will help you protect your income, your retirement, and your cash. Rodney goes in depth into this in July’s Boom & Bust, which we release Monday.

Read the original article on Economy & Markets.

Mafia holidays: Southern Italian tourist resort seized in anti-‘Ndrangheta operation

Beverly Village Italian Mafia 'Ndrangheta
Detectives with Italy’s Guardia di Finanza seized the Beverly Village resort in Calabria.

A popular beachside resort on the picturesque Calabrian coast was seized by Italian police in an anti-mafia operation targeting the local ‘Ndrangheta syndicate — Europe’s largest drug cartel.

The few tourists enjoying the mild, late-spring weather of the southern Italian coast at the Beverly Village, near the town of Palmi, had quite an unusual holiday experience when officers with the Guardia di Finanza (finance police) showed up in the morning to take control of the pool and other premises.

Authorities allege the entire resort was the property of Candeloro Gagliostro, the nephew of a late ‘Ndrangheta boss Gaetano Parrello, aka “u lupu i notti” (the night wolf).

Gagliostro is accused of registering the property to a dummy owner to evade unwanted attention from the authorities.

Detectives believe the village, which has high reviews on booking websites and boasts two swimming pools, a large garden and a “sweet Italian breakfast”, was initially purchased with ‘Ndrangheta money.

“When a company is bought by a person with no means there is a presumption that illicit funds were used,” Guardia di Finanza Col. Domenico Napolitano told IBTimes UK.

The Beverly Village was one of four apparently legitimate businesses worth a total of €6m (£4.4m, $6.7m) seized as part of the same operation.

Police allege Cagliostro directly controlled also a car dealership with 50-vehicle fleet, and two cleaning companies, which ironically took care of Palmi’s courthouse and the prosecutor’s office.

Although not charged with mafia related crimes, Gagliostro is presumed to be a mob affiliate due to his family links and criminal record.

“‘Ndrangheta is a criminal group based on family ties,” Napolitano said. “And Gagliostro is the nephew of the notorious boss of the local clan, the Cosca Parrello.”

Holidaymakers who have already booked a summer stay at the Beverly Village can rest easily though as, pending trial, the resort will remain open under the management of a state-appointed director.

“Proceeds will go to the state,” explained Napolitano.

Thanks to its secretive nature, in recent years, ‘Ndrangheta has overtaken the Sicilian Cosa Nostra to become Italy’s most powerful mafia group.

The strict family relations joining its members mean that affiliates rarely turn informers, making detectives’ work harder.

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