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Chapter 2 - The character of organised crime groups in Australia
Introduction
2.1
This chapter outlines the character of organised crime groups operating
in Australia, and explores the trends in their practices and methods.
Defining organised crime[1]
2.2
Organised crime in Australia has changed since the 1970s.[2]
The Australian Crime Commission (ACC) notes that the fundamental
characteristics of serious and organised crime are that it involves substantial
planning and organisation and the use of sophisticated methods and techniques,
and is primarily motivated by financial gain. The nature of the criminal
activity undertaken by organised criminal groups is fluid, responding to a
range of influences including market dynamics, law enforcement focus and
emerging opportunities.[3]
2.3
A profit motive is at the heart of serious and organised crime.[4]
To make money, organised criminal groups usually trade in commodities which will
provide maximum profit while posing the lowest risk of detection and
prosecution. Organised crime groups will adapt to legislative change and will exploit
new opportunities.[5]
2.4
Mr Frank Costigan QC, appearing in a private capacity, noted that the 'major
object of organised crime...in the widest possible definition...is to acquire cash
and hide it from the authorities'.[6]
Detective Superintendent Stephan Gollschewski, Queensland Police Service, added
that organised crime have 'distribution networks that they can...exploit to be
able to meet market demand'.[7]
2.5
Mr Christopher Keen, Director, Intelligence, Queensland Crime and
Misconduct Commission, observed that the profit motive has led organised crime
groups and networks towards diversification of their activities.[8]
Crime groups therefore no longer have a loyalty to a particular type of
activity—for example, car rebirthing—but will move to enterprises which they
see as profitable.
2.6
This assessment was endorsed by Assistant Commissioner Tony Harrison,
Crime Service, South Australia Police, who noted that for organised crime it is:
...a matter of taking whatever opportunity presents itself at any
given time. There do not seem to be the loyalties within any particular
industry area or in relation to a commodity...[9]
Membership and structure of organised crime groups
2.7
The ACC submission notes that organised crime groups in Australia continue
to evolve from being communally based, strongly hierarchical, and easily
defined by ethnicity or ethos, towards more flexible, loosely associated and
entrepreneurial networks. These networks bring together groups and individuals
with differing roles and levels of involvement in the criminal activity, and
generally involve individuals of different ethnicities, skill sets and criminal
interests. Some groups form for short periods for specific activities, while
others are more enduring.[10]
2.8
The Australian Institute of Criminology (AIC) argues that organised
crime in Australia today is perpetrated by a combination of:
- local criminal milieux that are typically loosely structured
groups involved in a variety of illicit enterprises;
- networks or secret societies based in other countries that have
local networks in Australia and are characterised by shared ethnic backgrounds;
and
- other criminal groups such as paedophile networks and outlaw
motorcycle gangs.[11]
Entrepreneurial networks
2.9
Much of the evidence received by the committee emphasised the dynamic
and shifting membership and structures of organised crime groups, as opposed to
the traditional or stereotypical notion that they are exclusive hierarchies.[12]
2.10
The evolution of these groups is closely connected with the
profit-centred purpose of organised crime. Organised crime is increasing in
sophistication and, as Professor Adam Sutton, appearing in a private capacity,
observed, 'will exploit opportunities and any kinds of niches'.[13]
2.11
The South Australia Police,[14]
the NSW Police Force[15]
and the Queensland Crime and Misconduct Commission[16]
all noted that traditional crime group allegiances are giving way to
entrepreneurial networks formed around profit opportunities. Rather than
organising hierarchically, they 'consist of many smaller interdependent and
adaptable enterprises willing to share methodologies and expertise'.[17]
Further, they are 'willing to trade in different commodities...work across
regions [and] are quite willing to work with a business partner who may have
been a competitor last week'.[18]
These groups now tend to seek 'some advantage for their various business
enterprises' over notions of brotherhood, loyalty or honour.[19]
2.12
Professor Rod Broadhurst, appearing before the committee in a private
capacity, made a similar observation and gave the example of the Asian triad
gangs, which now display sophisticated and recognisably modern or commercial
modes of organisation and operation:
...amongst triads...the traditional role of the chair was to
actually order things to happen. Now they act as negotiators. They become the
umpire, and they charge fees to resolve problems between gangs, between project
groups, whatever you want to call them.[20]
2.13
These changing modes of interaction and operation present significant
challenges to police. A 2005 report provided to the committee by the Corruption
and Crime Commission of Western Australia observes that groups which previously
operated independently now 'increasingly work collaboratively, and across state
borders, not unlike legitimate businesses'.[21]
This has significant ramifications in terms of the level of threat and
complexity that organised crime now represents.
2.14
Further challenges are a result of the increasing sophistication of
modern organised crime groups and their ability to 'respond to legislative
change by adapting their methodologies'.[22]
The ACC submission notes:
Higher threat organised criminal groups are typically flexible,
entrepreneurial and resistant to law enforcement intervention. They are
innovative and able to identify and enter new markets and create opportunities
for profit from illegal activity. The sectors or goods targeted by organised
crime are often areas where little criminal activity has been detected, or
where regulations or criminal penalties are yet to be fully established or
currently provide insufficient deterrent.[23]
2.15
Certain consequences flow from the characteristics of organised crime
groups in present-day Australia, as identified in the preceding discussion.
Although traditionally recognised organised crime such as ethnic and club based
groups continue to persist in Australia, their adaptable and opportunistic
pursuit of profit means that their membership and identity is neither fixed nor
predictable. Equally, it should be recognised that the dominance or notoriety
of a particular group at any given point in time is almost certainly temporary,
and must not be allowed to obscure the activities of other organised crime groups.
While the inquiry identified a number of organised crime groups operating in Australia
today, the committee urges caution in taking the following discussion of
organised crime groups in Australia as either definitive or prescriptive.
Outlaw motorcycle gangs
2.16
The committee's inquiry confirmed an Australia-wide growth in the
membership and illegitimate activities of outlaw motorcycle gangs (OMCGs). Both
Detective Chief Superintendent Ross Barnett, Queensland Police Service,[24]
and Assistant Commissioner Tony Harrison, Crime Service, South Australia
Police,[25]
told the committee of increased OMCG membership and participation in criminal
activity in their respective states, and about the significant threat to
community safety these gangs pose.
2.17
The quasi-military modes of organisation and discipline of OMCGs make
them particularly difficult to deal with from a law enforcement perspective. Detective
Superintendent Kim Porter, Divisional Superintendent, Organised Crime
Division, Western Australia Police, explained that OMCGs emerged after the Vietnam
War and were formed by people seeking a similar camaraderie to what they experienced
in the military. He concluded: 'In fact...[OMCGs] are frighteningly like the
police, except their motives are different. They are very strictly controlled
and disciplined.'[26]
Expansion of outlaw motorcycle
gangs
2.18
Assistant Commissioner Graeme Morgan, Commander, State Crime Command,
NSW Police Force, told the committee that OMCGs have broadened from being motorcycle
club members that are involved in crime to being leaders in syndicates that are
national and international.[27]
2.19
This shift in the organising principles of OMCGs has seen an expansion
of their criminal associations and 'all serious organised crime...bar none...have a
linkage with outlaw motorcycle gangs'.[28]
OMCGs continue to have significant connections with more traditional crime groups
and seek to establish opportunistic connections to enhance their reputations
and ability to perpetrate illegal activities:
I think the outlaw motorcycle gangs see it as improving their
status within the serious organised crime world...From the perspective of the
more traditional serious organised crime figures, they can call upon the outlaw
motorcycle gangs for...debt collection, extortion, blackmail, intimidation and
violence. There is no doubt that it is a twoway process and that the outlaw
motorcycle gangs are infiltrating more widely into serious organised crime, but
also the more traditional serious organised crime figures want to be seen and
want to have linkages with outlaw motorcycle gangs.[29]
2.20
The committee also heard evidence that expansion of OMCG activities into
businesses such as security companies is occurring in Western Australia.[30]
Australian Crime Commission: focus
on OMCGs
2.21
The committee received evidence of continuing efforts to establish a
better understanding of OMCGs in Australia. The ACC has established an outlaw
motorcycle group task force. This intelligence and investigative task force is
working closely with jurisdictions, and is able to use its coercive powers to
support its operations.
Ministerial Council for Police and
Emergency Management—Police
2.22
The committee was also informed that the Ministerial Council for Police
and Emergency Management—Police (MCPEMP) has recently supported the
establishment of a working party to assess the current measures in place to
address OMCGs and, crucially, to develop recommendations on proposals to
enhance police and legislative responses.[31]
The committee considers that such assessments at this level will contribute to
the process of assessing and designing effective laws, and commends this recent
undertaking.
Ethnic organised crime groups
2.23
The committee was told that in recent years there has been an increase
in ethnic based groups involved in serious organised crime. The challenges for
law enforcement of ethnic organised crime groups include language, culture and
community barriers to intelligence gathering, and particularly in infiltration
and communication.[32]
Middle Eastern organised crime
groups
2.24
The existence of Middle Eastern Organised Crime (MEOC) groups was noted
in NSW[33]
and Western Australia,[34]
and they are seeking to obtain a foothold in Queensland.[35]
Both NSW and Queensland noted an increasing involvement between Middle Eastern
groups and OMCGs. The major criminal activities of these groups include drug
trafficking, property crime and vehicle rebirthing.
2.25
The committee notes that law enforcement for these groups presents
significant challenges. Detective Superintendent Porter said of Middle Eastern
groups in Western Australia:
We have some very strong Middle Eastern and other ethnic groups
who...come from backgrounds where the police do not ask you questions; they shoot
you. We do not have that ability and, as a consequence, they look at us, laugh
and say: ‘We know you can’t do anything to us. We’re not going to talk to you.’[36]
Asian organised crime groups
2.26
Historically and stereotypically, Asian organised crime groups have been
associated with extortion and protection rackets largely within their own
communities. Evidence received by the committee suggests that these groups are
involved in a broad range of activities including the manufacture, importation
and trafficking of amphetamine type substances (ATS),[37]
fraud, identity crime and money laundering. They also appear to be involved in
hydroponic cannabis growing.[38]
2.27
Further, the Western Australia Police reported that the increased demand
for crystal methylamphetamine in Australia is:
...being reflected in an increase in the number of attempted
importations from Asian countries. Intelligence reports also lend support to
the reputation of South East Asian syndicates based in WA being able to source
high quality crystal methylamphetamine'.[39]
Romanian organised crime groups
2.28
The submission from the Western Australia Police notes that European
crime syndicates, commonly of Romanian origin, are involved to a significant level
in drug trafficking activities, particularly high purity methylamphetamine. In
particular, 'Romanian and Serbian crime syndicates remain prominent within WA
and have strong links to international and interstate crime figures'.[40]
2.29
The Queensland Crime and Misconduct Commission also commented upon the
involvement of Romanian crime groups in drug trafficking; the commission
observed that their activities appear to be extending to Melbourne and Perth
and involve drugs other than ATS, notably cocaine.[41]
Practices and methods of organised crime in Australia
2.30
The ACC submission notes that, consistent with global trends, organised
crime groups operating in Australia are adopting business practices and
methodologies that enable them to adapt to changes in demand for illicit goods
and services and, in some cases, influence the shape of the markets.[42]
2.31
In evidence to the committee, Mr Alastair Milroy, Chief Executive
Officer, Australian Crime Commission, noted:
Organised crime is a business. Some of the people who run them
are just as good at it as people who run businesses in the private sector.[43]
2.32
The business model and the use of legitimate business structures to commit
organised crime were the subject of extensive comment during the inquiry.
Infiltration of legitimate business
2.33
Infiltration of legitimate business has always existed as an element of
organised crime operations, primarily as a means to launder money and
ultimately as a vehicle of movement into the legitimate economy.[44]
Deputy Commissioner John Lawler, National Security, Australian Federal Police,
told the committee that criminals might have a long term involvement with
organised crime and, once they have accumulated sufficient wealth, either move
into legitimate businesses or interweave their criminal activity with a
legitimate business enterprise.[45]
The 2005 report of the Corruption and Crime Commission of Western Australia makes
a similar observation.[46]
2.34
The committee notes that the combination of legitimate business with
organised crime activity supports money laundering, which is critical to
enabling criminals to use their profits. The committee was informed that there
is a move by organised crime into industries such as transport, the security
industry and, more recently, finance, money lending and telecommunications for
the purpose of laundering the proceeds of their criminal activities. This
pattern is found across all jurisdictions within Australia as well as in
countries such as the UK, Canada and New Zealand.[47]
2.35
The committee identified an increasing use of professional support to
establish and maintain the business structures of organised crime groups. Recognisably
commercial in nature, such arrangements involve 'delinquent professionals' such
as IT practitioners, accountants and lawyers assisting organised crime groups.[48]
The ACC argued:
[Such Assistance]...may be legitimate with the service provider
unaware of the organised crime association, or collusive, where the service
provider is a knowing participant in the criminal activity. Increasing
complexity in the regulatory environment will continue to drive the demand for
the acquisition of such professional services.[49]
2.36
A similar development was identified as occurring internationally. For example,
in Hong Kong organised crime groups are project driven and operate in a
networked environment, which allows the assembly of expertise as required.[50]
2.37
Clearly, once organised crime groups or individuals become established within
legitimate businesses it is far harder for law enforcement to investigate,
detect, gather evidence and subsequently prosecute any illegal activities.[51]
Transnational crime
2.38
The role of globalisation in the expansion of serious and organised
crime cannot be underestimated. The Attorney-General's Department noted that
the same processes that support economic growth and diversification also
provide opportunities for the participation of organised crime.[52]
2.39
The Australian Federal Police observed that such opportunities can
flourish in locations with poor governance, justice systems and social
conditions. 'Such environments both mitigate the risks of operation for
organised crime groups and provide ready access to potential members'.[53]
2.40
In particular, the Queensland Police Service argued that political
instability in the South Pacific region supports organised crime by providing
offshore opportunities to produce and ship illegal drugs and precursor
chemicals. Detective Chief Superintendent Barnett noted that 'Australia
generally and Queensland specifically, due to its geographic proximity, loom as
likely markets for both, based on the expanding demand for amphetamine type
substances'.[54]
2.41
The committee heard that organised crime developments in Asia will be
'pivotal' to defining trends in Australia.[55]
Further, as modern organised crime becomes increasingly internet based, as
discussed in the following chapter, their activities are effectively
'borderless' and will be increasingly difficult to police and address.[56]
Links between organised crime and
terrorism
2.42
While not central to this inquiry's terms of reference, terrorism's
relationship to organised crime was canvassed. In particular, there is evidence
that ideologically motivated groups are attempting to fund potential terrorist
activities via partnerships with established organised crime groups. The
Australian Federal Police submission notes that, recently, philosophical
beliefs have provided another significant motive for organised criminal
activity. In this instance, the economic and social effects are potentially
dramatic. Such groups may rely on criminal connections that are more motivated
by financial return to provide resources for terrorist activity.[57]
2.43
The Attorney-General's Department submission links vulnerabilities to criminal
activity with vulnerabilities to terrorist activity:
...many of the opportunities that may be exploited by organised
criminal groups may also be exploited by terrorists. In 2002, the Council of
Australian Governments (COAG) acknowledged this link in its Agreement on
Terrorism and Multi-Jurisdictional Crime...The Agreement recognised that presumptions
about terrorism that existed prior to 11 September 2001, in particular about
the nature of its links with organised and multi-jurisdictional crime, were no
longer valid...[58]
2.44
Professor Leslie Holmes, Deputy Director of the Contemporary Europe
Research Centre at the University of Melbourne, also identified links between
terrorism and organised crime. In his analysis, organised crime can link-up with
terrorism through 'so-called transmutation'. He continued:
Not a lot of people know that the triads...were originally
political activists who then switched to more economic activity, if you like,
after they had largely achieved their ends. Much more recently, the IRA in Ireland
and ETA, the Basque terrorist group, have become what one American analyst has
called ‘fighters turned felons’, not completely but that transmutation is
occurring.[59]
The ACC approach
2.45
Mr Milroy emphasised that the targeting of criminal organisations is
aimed not at specific identities or groups but at any potential for the
committing of serious and organised crime. This is in keeping with the ACC's
awareness of the changes to organised crime group membership and structure, as
discussed above, and their practices and methods.[60]
Conclusion
2.46
The committee received substantial evidence about the nature of
organised crime groups in Australia and their methods of operation. Serious and
organised crime groups are dynamic and motivated by profit, and have developed highly
adaptable organisational structures and modes of operation. The current trend
towards greater transnational crime has provided new opportunities for
organised crime groups within Australia and internationally.
2.47
While this chapter has described the characteristics of serious and
organised criminal groups and how they operate, the following chapter examines
the trends in their activities.
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