Mafia bust: How do mobsters make a living in the 21st century?

Answers to your questions about the news.
Jan. 21 2011 4:58 PM

Modern Mafiosi

 How does the Mob make a living these days?

Court room sketch of John Gotti. Click image to expand.
On the left, former Gambino crime boss John Gotti, who was not involved in Thursday's Mafia roundup.

Nearly 125 Mafia members were arrested in New York, New Jersey, and Rhode Island on Thursday morning as part of what is being claimed as the largest organized-crime shakedown in F.B.I. history. According to early reports from the New York Times, the mobsters were arrested for standard crimes like extortion and racketeering, as well as "more sophisticated schemes." With the Boardwalk Empire bootlegging days a distant memory, street gangs selling drugs, and Vegas prostitution only a short Southwest flight away, a startled public is left wondering: How does the modern Mafioso make a living?

Craigslist sex trafficking, offshore Internet gambling, and wind energy. Sure, the Mafia still traffics heroin, extorts businesses, and kills people. But today's gangster—like any good venture capitalist—has adapted to the times. It's not that the Mob is necessarily branching into new industries. It's just that they've pushed age-old breadwinners—prostitution, gambling, and money laundering—to new levels (or depths) in order to compete in an increasingly globalized economy.

In a crowded industry like prostitution, you have to put the customer first. Last April, members of the Gambino family—one of five major New York crime families whose members were handcuffed by the feds on Thursday—were charged with interstate sex trafficking. (That was a first for the Mafia.) The gangsters are alleged to have recruited young women as prostitutes, advertised on Craigslist, driven them to appointments across New York and New Jersey, and then kept half of the proceeds. They are also said to have made the girls available at weekly high-stakes poker games. Dubbed "a new low" by the feds, the endeavor underscored increasing Internet use by organized crime.

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More so than prostitution, illegal Internet sports gambling generates huge profits. Legally speaking, online gambling is a gray area. Last June, Congress enacted the Unlawful Internet Gambling Enforcement Act, barring the transaction of "unlawful Internet gambling" funds through banks. Although the wording is vague, there is no doubt that wagering on sporting events and races across state lines is illegal. Seeing an opportunity, the Mafia set up Web sites in Costa Rica—one of several South American and Caribbean countries where online sports betting is legal—to process online bets placed back home in New York. The Costa Rican computer servers effectively operated as digital wire rooms, keeping track of stateside betting accounts while bouncing data through different server nodes to evade U.S. law enforcement detection. In 2008, the Queens District Attorney charged the Gambino family with illegal sports and casino-style gambling operations, stating the offshore wires were processed and managed by Lorri's Lounge and Bikini Bar in Brooklyn, whose owner lent money to borrowers at 200 percent interest.

Meanwhile, across the Atlantic, the Mafia has begun stealing millions from the EU through a sure-fire scheme—wind energy. Enticed by government underwriting of renewable energies—Brussels ordered all 27 EU nations to use one-fifth renewable energy by 2020—the Mob has focused on its own backyard. (Italian wind power sells at Europe's highest rate, a guaranteed 300 euros per megawat-hour. *) In 2008's Operation "Eolo"—named after the Greek god of winds Aeolus—eight alleged Mafiosi in the Sicilian coastal town of Mazara del Vallo were charged with bribing officials with luxury cars for a piece of the wind energy revenue. Police wiretaps recorded one man saying, "Not one turbine blade will be built in Mazara unless I agree to it."

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Correction, Jan. 21, 2010: Due to a production error, a photograph of John Gotti's lawyer was originally mislabelled as Gotti. Correction, Jan. 24, 2010:The article originally stated that Italian wind power sells at 180 euros per kilowatt-hour.

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Stayton Bonner is a writer in New York.

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