Corruption and Global Financial Systems

rom Audible Originals, I'm Lindsey Grah This is American Sandal In mucharch of the twentieth century, organized crime in the United States was almost synonymous with the mafia. A small number of powerful families dominated cities around the country, and their influence ran through gambling, labor, and local politics Today, those families still exist they are a shadow of what they once were, and the organized crime landscape is far more complex and far more powerful criminal activity now moves through gangs that stretch across borders, through cyber operations that never touch a physical street corner, and through networks that can sit uncomfortably close to legitimate businesses and even state governments My guest today is Jay Albanes. He's a professor at Virginia Commonwealth University and one of the country's leading scholars on organized crime, criminal justice, and corruption He's advised the United Nations on transnational crime and spent decades studying how criminal organizations form, adapt, and survive Conversation is next. Whether you' exploring your fascinations or discovering new ones, Otawa has stories that will introduce you to your most fascinating self. Tap into a whole new world of heated conversations with a saucy romantasy series. Know how true the latest blockbuster movie stayed to the sci fi story it was based on, or find unexpected reveals through an exclusive trrue Crime podcast However you listen, Audible keeps you fascinated, so you can be just as fascinating. Select any audio book every month, plus exclusive podcasts. pllans now start at eight dollars ninety nineents Audible. be fascinated. be fascinating I heard a rumour that the CIA poisoned my granddad. Gordon Banks the world's number one goalkeeper. It happened in Mexico, supposedly, at the World Cup in nineteen seventy. Sounds crazy? I'm an investigative journalist on the hunt for evidence. We needed to do some extraordinary things to counter these sovians This is Foul playay, an unbelievable tale of sports, spies and family secrets Listen now wherever you get your podcasts or early and ad free on audible Jay Albanies., Thankks for speaking with me today on American Scannle Thank you. It's great to be here Now the mafia certainly had a hyday, and the creation of Rico laws is often credited as one of the keys to weakening the mafia I'm just wondering how much of the credit for the mafia's decline is due to law enforcement action versus maybe economic, technological or social changes Yes, it's a very difficult thing to sort out The mafia clearly is not the force it once was. and the law enforcement effort of the eighties and nineties, which was clearly the most significant law enforcement effort against organized crime in the history of the U. S. A lot of it was made possible by the racketeering laws was passed in nineteen seventy, but it was used for the first time to my knowledge in nineteen eighty It's a long complicated law. But it enabled law enforcement be much more effective in the way that rather than going after somebody for illegal gambling or conspiracy and the usual offenses if the prosecution can prove that they were engaging in know three or more crimes over a period of ten years, I could prosecute you as a criminal enterprise. And that could dramatically increase the penalties of up to twenty years in prison So the stakes went up dramatically. And given all the changes in contemporary society and technology since the year two thousand There is no single group in the modern world in organized crime. And that's due to all the changes that have occurred over the last generation So you're correct in saying, you know the mafia is not what it once was and perhaps will never be what it once was. But you know, I think know rumors of its demise are premature. Let me just give you a quick example just from the past year in New Jersey, right? A big case. thirty nine defendants was multiple locations of illegal poker games in the rear of legitimate restaurants And there was also an illegal online sports book involved And of course it was associated with members of the Lukesy crime family. These are all very traditional organized crime activities, illegal gambling extortion by having to you have to threaten sometimes people to make them pay. And then you have to do something with the illeas of proceeds, right You can't go to a car dealership with ten thousand dollars cash and put it down toward a car anymore. All right? Be we have money laundering laws. So money laundering has become a separate art in itself to disguise the source of illicit proceeds. So when I see this case, which again, happened just a year ago I said, this is about as traditional organized crime as it gets. So the structure is changed That is there's many more legitimate characters and businesses involved in this. So there's fewer mob guys, but more Business people in this Jersey case, there was some councilman of some town in New Jersey who was in on it But the underlying activity is pretty much what it's always has been Let's dive into some of the other changes that might have affected the mafia's for lack of a better word, effectiveness as an organization. How about recruitment or maybe lack thereof? Are younger people less interested in getting involved in organized crime? Certainly, in the popular conception, this was almost a neighborhood job opportunity Yes, it was. You might recall the opening line of Good feells, when Henry Hill says, as long as I can remember, I always wanted to be a wise guy because in many of these working class urban communities, especially in New York and Chicago and the big cities People driving the nicest cars, wearing the nicest clothes who everybody would be very accommodating toward were the guys who were affiliated with the mob And so that became sort of an alternative pathway, you know, to success And when you look at the history over the sixties, seventies, eighties, you know, you had people who would say, well, okay, I got caught by the cops. running an illegal gambling enterprise, maybe some extortion, and I got a sentence of five years There were lots of people willing to do the five years I'm a stand up guy. I'll protect the family, protect the enterprise As time goes on into the eighties and nineties There are fewer people willing to do that That is the younger people saying, Hey, look at, you know, I'm your friend, We commit crimes together, but I'm not going to do time for you And then you combine that with the racketeering laws that had sentences of twenty years. you say, well Maybe I'll do a few years for you, but I'm not nobody's doing twenty years for you. So you have many more people saying, well, I'm not going to play this game So that the hold of that tradition of the mob, we have so many people who are interrelated Aunts, uncles, friends, even in the mafia cops case, as you know, the two detectives at the center of that case bothoth of their lives before they became cops involve close associations and sometimes relatives who had strong connections with mafia figures. So all of that is tied together. As time went on, there were fewer young people with that Italian family tradition that you do anything for the family. peopleeople increasingly said, hey, I'll do it if it's good for me, but I'm not going to be doing time for somebody else I'm glad you brought up our two protagonists or antagonists in this story Louis Eppito, as you mentioned, did come from a mafia family, but he went on to become a police officer of some ill repute But why would his ties to organized crime not be a red flag for law enforcement Great question. I've often thought about that You know, the two detectives, I mean, Karacapa, right? He was a childhood friend of Tommy Blloti. Tommy Blladi was probably the closest person to Paul Casalano. He was Paul Casalano's driver, and Caslano was of course head of the Gambino Cime family. And at the very end, Casalano was going to make Bllati his underboss So that to me, that should come up as a major red flag on a background check. I just don't understand that. And then you look at Epolito and his ties are even stronger I mean, his father was an enforcer for the Gambinos. His uncle was a captain in the Gambino family. So you have all of this mixed together and you say, these guys might have had a career doing something. Maybe they, I don't know, mayaybe they could have gone to law school and become a mob lawyer or something. I don't know. but a police officer, Yeahah, you it is shocking. that somehow they made it to become detectives in the NYPD I think you could perhaps invent a story in which these individuals with their mafia ties decide to rebel against that tradition and become police officers. But that wasn't the case for these two gentlemen. There were repeated warnings about both detectives' allegiance and behavior, but repeatedly dismissed Is this unique in this time and place in the New York Police Department? Is there some sort of code that even the fledgling cops get looked after by other cops Back in that day, I think it was more the case. I mean, look at the case of Frank Serico the same kind of thing and there it was accepting payoffs rather than mafia related crimes. but it was the same kind of thing where You said, God, it took a long time for what was clear corruption to come to light I mean, for a while there, every twenty years, there was a major corruption investigation in New York that has slowed down. I attribute that to the professionalization of policing. But, you know, there are some bad people everywhere. and you know, that's the way it is. And when you look at, you know, the mafia cops, What is shocking was the extent to which they engaged in criminal behavior. I mean, they were actually involved in homicides, which is rare. Most of the other corruion, if you look over the years, has been involved with you taking money and payoffs from suspected criminals Jo there 'is I, Queen Mortuana of the Night Realm, AKA Kate McKn. And her Reaven minion Jojo, AK Emily Lyinn Do not download and binge my show heads will roll air apparent on audible. I will cut off your head! Oh no. Maybe just tell them about the guest stars like Richard K, Karry Koon, Jimmy Fallon at all. But they weren't. And if you don't listen to them, then I will cut off your tongue, then cut off your head and then put the tongue in the head hole Ah, you tried. Listen now exclusively on Audible and D of the audible after today are off with your head. I'm kid Whether you're exploring your current fascinations or discovering new ones, Audible has all the stories that willll introduce you to your most fascinating self. Tap into a whole new world of heated conversations with a Sucy romantasy series. Become your friend group's sci fi expert on the latest blockbuster book to screen adaptation Or find unexpected reveals through the exclusive episodes of a viral true crime podcast. However you choose to listen, Audible keeps you fascinated, so you can be just as fascinating. All in one easy app, with plans now starting at eight doll ninety nine cents, you'll get access to over one million audioobooks and podcasts, including trending bestestsellers Hottest new releases and exclusive podcasts you won't find anywhere else. Sign up now to become a member and get any audiobo book every month plus exclusive podcasts. Plans now start at eightll ninety nine cents. Aible. Be fascinated, be fascinating Let's discuss where the mafia is today. if its dominance has faded What might have replaced it? Who are the major players in organized crime today? and where are they For me, the major difference from the days when the mafia controlled things to now has been territory. You control territory So if I wanted to run some illegal game or a prostitution ring or whatever it was in that area I better have you on board and normally you would say no or you would allow me to do it for some piece of the illegal enterprise. So it was a very territorial bas. And what has happened now, the nature of organized crime has changed. For example, now If somebody said, well, one word characterizes organized crime today, I would say that one word would be trafficking. All right, it's moving stuff around. So whether you're in The human trafficking, sex trafficking, labor trafficking, drug trafficking, trafficking in you know, in antiquities, endangered animals, all kinds of stuff All of that stuff has to move across borders. So it's changed the nature. So that whole territorial part of traditional organized crime is much less important For example I asked a university class. I said, OK, how many of you have ever been to New York on a field trip when you were in school Ebody's been to New York on a field trip. And I said, okay, when you go there There's always guys with a blanket on the sidewalk. selling, you know, fake purses or whatever, you know, stuff like that Where do those purses come from This guy on the sidewalk had nothing to do with those purs. where did they come from All right, so then you show them the data and there's been great empirical studies by academics and NGOs and a few governments showing that the vast majority and these are like counterfeit Louis Vuittons and all these high end purses, the vast majority of them are made in Southeast Asia Most are made by people working in sweats shop conditions It's human trafficking, it's underage workers, the whole thing Those purses are then to countries with money like North America and Europe, especially Well, how did they get them there? Well, you have counterfeit labeling, you have bribery at the border, you have all the ways to scam it in to get it into the country. Then when it gets into the country, you need people to distribute these And then there are people around and they find dudes willing to sell stuff on the street and you have a whole distribution network So the guy selling them on the sidewalk in New York is getting a very small piece of the action. point and my point to my students and to any regular person is that by buying that purse, you are in fact funding a transnational criminal enterprise that begins in Southeast Asia and ends with you on the streets in New York. So if these more traditional revenue streams for the mafia still exist, gambling and extortion, are they the prominent forms of crime for organized criminals across the world? Or has it moved, like you perhaps mentioned to newer forms like trafficking Yeah, absolutely. Trafficking in everything has become like a virus around the world People like banned and stolen property, guns, animals, all kinds of stuff. And then of course, now we have trafficking and information whether it's social security numbers, whether it's patient records, that a hospital will pay a fortune for me not to release And there are sites all over the internet If you go in the Dark web, you can buy almost anything you want and you see some of these cyber crrime cases, some of the people participating in the scheme have never met one another And then along the way, somebody invented cryptocurrency which for me is simply a way to hide a transaction So then you would say, well, why would any regular person need to hide a transaction? Well, you'd only need to do it if you, of course, were doing something illegal. So that enables the Dark Web. That enables me to pay somebody in some other country through crypto. I could never do it otherwise without having bags of cash problems And this stuff is very hard. You know, a whole new set of enforcement skills is required You know, this has taken some time to develop, but you know, I think we're better than we were twenty years ago If you were looking twenty thirty years ago and said, well, I'm going to make money and I don't care how I make it. You would have to have a physical presence somewhere You have to rob from people, steal from people I asked students in my university class. I said, how many people here E carry cash. Not a single hand goes up They don't carry cash. I said how many of you carry a wallet Almost nobody carries a wallet anymore, right? It's all on their phone and their phone is password protected This is why pick pocketing has gone out of style because if I grab what's in your pocket, it gets me nowhere So I would argue People are just disposed to steal as they were one hundred years ago, but the opportunities have changed dramatically. If you're disposed to stealing to get ahead You can sit in your pajamas at home. All you need is a Wi Fi connection So you could do it at the coffee shop and not even have to pay for the Wi Fi and send spam emails to people invvestment schemes, romance schemes, all the things that we all know and hear about So the new communications technology that we've been spoiled by has given the criminally minded people opportunities to exploit and I never have to leave my house. I never have to get out of my pajamas Well let me pose a question to you If it does seem that it's easier to become a criminal in the modern age What would you prefer? Would you rather investigate the Gambino family in nineteen eighty five or a modern transnational cyber fraud network today It makes you long for the old days. Law enforcement was easier back then because of the physical presence needed You know, when you think back to, you know, the three Goti trials and all the big mob cases of the eighties and nineties, You know, wiretapping and informants were at the center of all of that. Becauseuse when we look at major drug trafficking cases, most of them started at the bottom somebody gets grabbed And they inform their way up the chain. Well, now, with these transnational schemes, you don't even know who's up the chain. You've never met the person. You know you've got some contact information, which has, you know long since expired, and that's the end of it. So it's just much more difficult to make a case now than it was back then. And this is why you need people with cyber skills You need all kinds of skills that were not relevant back in the day As Americans, we're constantly grappling with a fundamental question, do we settle for the world as it is Or do we strive to create the world as it should be Our answers tend to ebb and flow through the decades. but once Just after a war that nearly tore us apart We came as close as we've come to answering it And it's a story worth a closer look I'm Michelle Obama, and I'm proud to announce Higher Ground's new podcast, Reconstruction the unfinished promise. guided by bestselling author, Malcolm Gladwell and featuring my husband, Barack Obama This limited series uncovers the untold stories of Reonstruction what they mean for us today and how our past can shape the future we choose to build Reconstruction, the Unfinished promise is available now on audible or wherever you get your podcast. Whether you're exploring your current fascinations or discovering new ones, Audible has all the stories that'll introduce you to your most fascinating self. Tap into a whole new world of heated conversations with a Sucy Romantasy series. Become your friend group's sci fi expert on the latest blockbuster book to screen adaptation Or find unexpected reveals through the exclusive episodes of a viral true crime podcast. However you choose to listen, Audible keeps you fascinated so you can be just as fascinating. All in one easy app, with plans now starting at eight doll ninety nine cents, you'll get access to over one million audioob books and podcasts, including trending bestsellers hottest new releases and exclusive podcasts you won't find anywhere else. Sign up now to become a member and get any audio book every month Plus exclusive podcasts. plans now start at eight dollars ninety nineents Be fascinated, be fascinating corruption, the biggest problem in the world Why is that Yeah, that's because it creates every other problem. when the UN and many other groups internationally have ranked the problems of the world, right? We live in a world of limited resources, so we should spend time on the most important problems. And they rank them. They go through them all, whether it's climate or poverty or inequality or disease, And you can give them all metrics and rank them But when I look at all those Corruption either caused a problem or made the problem much worse in every single case And the corruption sometimes was governmental corruption, sometimes it was for private sector. Cruption, Sometimes it was malfeasons, sometimes it was noneasons. failure to act when action was required. So that's to me why corruption is the most important problem and the one that we should be going after proactively all the time, because Corruption rarely results in a complaint to the police,? These always require proactive investigations, involving following the money, following people doing suspicious things Law enforcement and prosecution agencies have to be very patient because these cases take time to build And in all the cases It's people in positions of authority abusing their position for personal gain Usually it's money Sometimes it's power and influence, but the motivors are much more similar than they are different Now in the last few years, the Panama papers and the Pandora papers have also exposed how global financial systems help hide wealth and enable corruption and organized crime What do you think these revelations Tell us about how the modern illicit economy works One, it shows that even in quote unquote non corrupt locations around the world, there are still people engaging in self dealing that violates laws against corruption, bribery, nepotism, obstruct of justice, all the offenses in the orbit of corruption. So it just shows it exists everywhere when you read about the Panama Papers and the others, to me the most interesting thing I always look for what it took for them to get this information Usually it takes months and months and months, sometimes years. of digging to get information and to put it together And when the government isn't doing it proactively, well, then it's up to civil society And when you look at the cases you mentioned They were brought by journalists by and large. And I mean, take the big picture. There's only three segments of society. There's the government with the power. There's business with the money and civil society the vast majority of people are We rely on the government our rights We rely on business. provide an economy that people can all work and make a living And when those are not working well, when they're corrupt When they're self dealing and they're ignoring civil society or persecuting or exploiting civil society. Well, then you need civil society to rise up. And so when I see something like the Panama Papers, I said, this is civil society making noise. This is civil society saying This is happening And of course, with those cases, some actual criminal cases were made point is You can't just rely on the government and business to make things better. Civil society is the biggest segment of society and they have a loud voice and they're responsible for making a bunch of very important cases all usually involving corruption. Now another element that has become more and more modern is the integration of geopolitics with organized crime. During the Cold War, organized crime was often very separate. There was no real national identity to the mafia other than heritage, their Italian or Sicilian heritage Today, though, things like sanctions, evasion and cyber operations are criminal organizations that are sometimes state led So are criminal organizations just becoming geopolitical actors in their own right Yeah, although I'm not sure it's criminal organizations. I did a study that came out last year Loo at this corruption organized crime link