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Keeping the mob at bay.

Mr. X is the shipping and receiving manager for a large plant that manufactures audiovisual equipment. His annual salary is about $30,000.

Mr. X has accumulated significant gambling debts, especially to several people he knows little about, and he is unable to make good on these debts. One day, an individual approaches Mr. X with this proposal: If he assists in diverting a shipment of stereo components, his gambling debts will be forgiven.

Several weeks later, the corporate security director receives a report that $100,000 in stereo equipment is missing from the company warehouse.

Ms. A is the president of a medium-sized manufacturing company. Business has been bad because of the lagging economy, and she has been unable to get credit extensions from several financial institutions. After serious deliberation, Ms. A decides to borrow money from people she knows have ties to organized crime. The interest rate is 60 percent per week.

Within six months a mob takeover has occurred at Ms. A's company. The new owners keep her on as a figurehead and use her good name to order merchandise worth thousands of dollars with no intention of paying vendors. Within another six months, Ms. A's company files for bankruptcy.

Organized crime bosses long ago realized the potential for controlling and infiltrating legitimate businesses. While the history of organized crime is filled with bloodshed, violence, and corruption, syndicate figures no longer wield power through the barrel of a Thompson submachine gun. They can touch the very fabric of American society by manipulating the business economy to their benefit.

Today's syndicate figures may be well educated, businesslike, and progressive, but they are still motivated by the prospect of making large profits from illegal activity.

Such crimes as labor racketeering, unwelcome infiltration of unions, fencing stolen property, gambling, loan-sharking, drug trafficking, employment of illegal aliens, and white-collar crimes of all types can signal syndicate involvement.

Today's mob figures are becoming adept at manipulating a business's computers. Organized crime groups are active in cargo theft, for example, using unlawful access to a company's data processing system to divert shipments of drugs, alcohol, precious metals, and other valuable cargo.

Organized crime families know how to commit the most sophisticated computer crimes, such as theft of data, industrial sabotage, and diversion of corporate funds. Sometimes the perpetrator is an employee who owes money to loan sharks, has gambling debts, or uses drugs. Eventually that employee may cooperate with members of organized crime to pay off debts or support a drug habit.

Most computer crimes are discovered by accident, sometimes long after the act was committed. The trusted employee who transfers corporate assets to a bank controlled by organized crime may be long gone by the time the loss is detected by internal auditors.

THE THREAT FROM ORGANIZED CRIME TO the survival of legitimate businesses should be addressed as part of any comprehensive loss prevention program. While private security departments are not responsible for controlling organized crime, they must provide a variety of services that will prevent organized crime activity from occurring on company property. They must also be able to uncover suspicious activity that may adversely affect the corporation's survival.

Security directors can minimize the possibility that their company might be infiltrated by organized crime in a number of ways. Ultimately, security directors must make recommendations to top management that will help preserve the company's integrity.

A well-run basic security program is the first step in minimizing organized crime infiltration. While security directors can easily become engulfed by state-of-the-art technology, they must never lose sight of the basics of a good security program: setting up an efficient key control system; ensuring proper patrol procedures; maintaining the integrity of locking devices, alarm systems, and barriers; and upgrading security officer training programs.

The security executive must keep abreast of the developments in computer security and investigation techniques. Many corporate security departments have added a computer security officer to the staff specifically for that purpose.

A basic understanding of electronic information processing is needed to successfully plan computer security procedures and investigate breaches of that security. Basic procedures--such as key control, alarm system integrity, barriers, guard posts, access codes, computer room logs, computer audits, and employee screening--must be applied in the sophisticated world of computer systems and networks.

Although time-consuming, background investigations can be an effective tool in keeping organized crime out of the workplace. When the Employee Polygraph Protection Act severely limited the private sector's use of the polygraph, background investigations became an important component in a well-planned security program for all organizations to follow.

Most security departments routinely perform background investigations on current or prospective employees. Depending on the sensitivity of the position, these investigations may be updated periodically to ensure that a good employee has not fallen under the influence of organized crime.

Background investigations may help identify job applicants with criminal histories who are capable of perpetrating similar crimes as employees.

The personal histories compiled through these investigations can reveal that an applicant has been involved in on-the-job gambling or drug abuse, is living beyond his or her means, is the subject of a conflict-of-interest case, or is involved in shady business practices on the side.

Because organized crime can be introduced into a business organization through a vendor relationship, background investigations should also be conducted on vendors and their managers. A careful background check may reveal that an otherwise reputable vendor has been the recent victim of a mob takeover.

In-service security training programs should include procedures for combatting organized crime infiltration and threats on company property. Security officers must be trained to know how their duties contribute to controlling organized crime within the facility they work.

Security staffs are not immune to the monetary attractions that organized crime offers. As a result, security officers should be rotated so the threat of collusion is minimized.

Security investigators must acquire the expertise necessary to investigate intricate white-collar crimes through company programs, college courses, or industry seminars. Training and counseling should also be given to top managers, computer managers, key computer operaters, and middle managers. Information involving ongoing investigations should be divulged only on a need-to-know basis.

If the security director suspects that organized crime activity exists at a facility, top management should be alerted, and the suspicious activity should be reported to law enforcement officials.

Organized crime investigations should be left to the police, even if corporate security personnel are sworn peace officers. But security can provide assistance through comprehensive reports and log book entries so the police can act in the company's best interests. Many law enforcement officials, particularly in smaller communities, depend heavily on the security director's expertise in business crime.

Finally, if an employee is found to be involved in crime sponsored by the syndicate, top management must be willing to prosecute, despite the employee's level or length of service. with the company.

TRADITIONAL ORGANIZED crime syndicates are not the only threat to corporate America. Terrorism has been used to effect political change for centuries. While some of today's terrorists profess to be patriots opposed to tyranny and injustice, they also perpetrate crimes with a profit motive, such as bank robberies, armored car hijackings, computer crimes, and kidnappings. The international terrorist network is made up of many ethnic and political groups that have been responsible for bombings at corporate property, financial institutions, airports, and restaurants. They have kidnapped American business executives overseas and have been involved in arson, extortion, and murder.

Security directors must plan for such emergencies and be prepared to implement those plans. To gain adequate information, security directors must study national and international trends on terrorism and terrorist operations. Top management should become involved in the planning as well as the implementation stages, especially concerning the kidnapping of corporate executives.

No one concerned with the protection of life and property can afford to remain ignorant of how organized crime or terrorist groups operate. This knowledge will give security directors direction on planning and implementing a program that can signal problems, pinpoint culprits, and eradicate the threat.

James J. Kouri, CPP, is chief of security and safety for the New York Hall of Science in Corona, NY.
COPYRIGHT 1992 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:protecting your company from organized crime
Author:Kouri, James J.
Publication:Security Management
Date:Jun 1, 1992
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