Organized Crime: Definition & History

Instructor: Christine Serva

Christine has an M.A. in American Studies. She is an instructional designer, educator, and writer with a particular interest in the social sciences and American studies.

This lesson discusses how organized crime developed in the United States, and it explores what constitutes a crime organization. You will learn what fuels the development of many groups, and how even an everyday job shares a few basic organizational elements in common with the structure of organized crime groups.

Definition of Organized Crime

While organized crime families such as the ones you have seen in mafia movies are one version of organized crime, there are many other ways in which organized crime is a part of our world. In sociology, organized crime refers to secretive organizations that have the primary objective of criminal activity.

When you work for a company that is performing legal activities, like an employer, you'll notice that there are multiple levels in the organization, known as a hierarchy, and that you have to follow the policies of the company to stay employed. Like in your own job, organized crime also involves hierarchy, rules and expectations, and it has consequences for those who do not follow them. Their responsibilities could include illegal activities such as drug trafficking, human trafficking, money laundering, blackmail, fraud, corruption, loan sharking, labor racketeering, illegal gambling activities, and even murder.

Drug trafficking is a common activity of many, though not all, organized crime groups
Stacks of cocaine

History of Organized Crime

So how does a criminal organization start? How does a whole band of people willing to engage in criminal activity, including violence and corruption, get initiated and structured? And in secret, no less!

Organized crime has evolved in many different societies. For the purpose of this lesson, we will look at the origins of syndicate organized crime in the United States, but it's important to keep in mind that this type of activity has roots in many different societies, from Chinese street gangs to drug cartels in Mexico.

In the 19th century, businessmen called robber barons found that they could take advantage of their already powerful positions to create ever greater monopolies on certain industries. For instance, if you were a robber baron who could profit from the further development of the railroad, you would find ways to squash any opposition to the development of the railroad and work to limit any competition, even if this meant payment to those in the way. A backlash to this corruption ultimately put some restrictions on robber barons, but the corruption seen during that time period was the precursor to what the Mafia would later accomplish in the 1930s and beyond.

As agents of prohibition destroyed supplies of alcohol, crime organizations were presented with a product in demand by the public.
Prohibition agents destroying barrels of alcohol

When the public demands illegal goods, criminal organizations can thrive. This was the case in the United States during Prohibition when alcohol was illegal. The combination of limited opportunities for immigrants in low-income areas and high demand for illegal alcohol helped to fuel the development of Italian crime families who became more established over time. Just as with any organization, challenges arose when the structure and hierarchy were disorganized, motivating those in leadership roles to work on better methods to keep operations running smoothly.

Other industries were also ripe for the involvement of organized crime, with plenty of opportunities to blackmail, intimidate, or assault those who presented opposition. Gambling casinos were particularly good for activities such as money laundering, the process of taking money obtained illegally and making it seem like it came from a legitimate, legal source.

Gambling casinos, such as in Las Vegas, have often been associated with organized crime because of opportunities to perform money laundering and other illegal activities there
The Las Vegas strip

Fast forward to the present-day United States. Other industries have presented opportunities to organized criminals, such as drug trafficking, health care fraud, prostitution, and more recently, online scams. Crime organizations include those from a variety of ethnic backgrounds and have been impacted by historical forces, such as the collapse of the USSR in the case of Russian mobsters migrating to the United States and continuing their operations.

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