Inside the Financial Hierarchy of Organized Crime

The Role of Low-Level Grunts

Low-level grunts in organized crime gangs typically make money by committing various crimes such as theft, drug dealing, and extortion. These activities generate income that is then partially handed over to their superiors. This practice, known as "kicking up," ensures that the higher-ups in the criminal hierarchy receive a steady stream of income without directly involving themselves in street-level crimes. This hierarchical structure is essential for maintaining order and discipline within the organization.

Career criminals are required to give a cut of their earnings to the guy above them in the hierarchy, which is a common practice in organized crime. This system not only ensures a continuous flow of money to the top but also provides a level of protection and resources to the lower-level criminals. The higher-ups can offer legal assistance, bail money, and even protection from rival gangs, making the "kick-up" system mutually beneficial.

The Made Men and Their Perks

"Made men" in Italian mobs enjoy a higher status within the organization. They have people kicking up to them, and they, in turn, kick a portion up to a capo. This creates a multi-tiered financial structure that ensures money flows smoothly up the ladder. Made men are often provided with legitimate income sources by the family, giving them access to a criminal infrastructure to clean money and work more lucrative scams. This dual-income stream allows them to live more comfortably and securely.

The family can provide made men with legitimate income sources and access to a criminal infrastructure to clean money and work more lucrative scams. This setup not only helps in laundering illegal money but also provides a cover for their illicit activities. By integrating illegal earnings with legitimate businesses, made men can evade law enforcement scrutiny more effectively.

Modern Organized Crime and Its Focus

Modern organized crime, especially under the RICO Act, often involves gangs that primarily sell drugs, with a focus on physical territory. These gangs operate like small armies, controlling specific areas and ensuring that no other gang can encroach on their territory. This territorial control is crucial for maintaining their drug operations and other illicit activities.

Money laundering at the street level is not as prevalent; it usually involves simple businesses like strip clubs or laundromats and crooked lawyers. These businesses provide a convenient way to clean dirty money, making it appear as legitimate income. By using these fronts, organized crime groups can funnel large sums of money through seemingly legal channels, thereby avoiding detection.

Living Conditions of Low-Level Criminals

Low-level criminals often live a poor lifestyle with some occasional splurges, and they can deposit cash in banks without specifying the source. This allows them to maintain a facade of normalcy while engaging in illegal activities. However, their financial instability often makes them vulnerable to law enforcement and rival gangs.

Protection rackets, prostitution, and drug dealing require the ability to escalate violence and respect territorial ownership. These activities are not only profitable but also help in maintaining control over specific areas. The ability to use violence as a tool for enforcing rules and collecting debts is a crucial aspect of these operations.

The Pyramid Scheme of the Mob

In organized crime, money flows up the ladder, not down. Rank-and-file members make illegal income and pass it up to their superiors. This system operates much like a pyramid scheme, where lower-level associates pay a portion of their earnings to captains, who then pay up to the boss. This ensures that the top echelons of the organization remain financially secure without directly involving themselves in criminal activities.

Associates in the Italian American mob run various crimes and scams and pay a portion of their income to a captain as a form of tax. This "tax" is essentially a fee for the protection and resources provided by the mob family. Special jobs, like hits, may be paid by contract, but regular activities like hijacking trucks or extorting businesses require paying the mob family that controls the territory.

The Importance of Earners

Good criminals who consistently make money for their bosses are referred to as earners. These individuals are highly valued within the organization because they provide a steady stream of income. Earners often receive more protection and resources from the family, making them key players in the criminal hierarchy.

Associates belong to crews run by a captain (capo), and they all pay the captain, who then pays up to the boss of the family. This multi-tiered payment system ensures that money flows smoothly through the organization, providing financial stability for all involved.

Modern Gangs and Drug Packages

In modern gangs, the guy running the drug package gets points or the package fronted to him at an agreed price and pays a daily wage to his crew. This system ensures that everyone involved in the drug operation gets paid, from the street-level dealers to the higher-ups who control the supply.

The prevalence of cash in earlier times meant there was less concern about the IRS, allowing for easier money handling without online banking. This made it simpler for organized crime groups to manage their finances without attracting attention from law enforcement agencies.

Part-Time Jobs and Self-Employment

Low-level criminals may have part-time or paper jobs to explain their income or to supplement their earnings. These jobs provide a cover for their illegal activities, making it harder for law enforcement to track their illicit income. The smarter criminals can easily be "self-employed," making it easier to explain their cash flow. This flexibility allows them to evade scrutiny while continuing their criminal activities.

Organized crime schemes are more profitable when there's no undercutting and the right people are paid off, ensuring smooth operations. By maintaining a strict hierarchy and ensuring that everyone gets their cut, organized crime groups can operate more efficiently and profitably.

The Role of Fences

The fences, who buy stolen goods from thieves, do not employ them but pay them for what they bring, providing a steady income source for the thieves. This relationship benefits both parties: the thieves get a reliable buyer for their stolen goods, and the fences can sell these items at a profit. This system ensures that stolen goods are quickly converted into cash, providing a steady income stream for the thieves and the fences alike.