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Russian Mafia: A Growing Problem In U.S.

Washington, May 16 (RFE/RL) -- The Russian Mafia in the U.S. is expanding and becoming more violent, say U.S. government officials and former members of organized crime gangs in the United States.

In testimony Wednesday on Russian organized crime in the U.S., representatives from the U.S. Customs Service, the Internal Revenue Criminal Investigative Division and the Federal Bureau of Investigations (FBI) told the Senate Permanent Investigations Subcommittee that although the Russian Mafia in the U.S. is still "in its infancy," it is becoming more violent and is considered one of the fastest growing crime problems in America.

Jim E. Moody, Deputy Assistant Director of the Criminal Investigations Division of the FBI said that the problem with the Russian Mafia in the U.S. had been identified as early as the mid-1980's. However, he says law enforcement was unable to establish an effective intelligence base to monitor the situation.

He cited difficulties in finding agents who could speak the Russian language to help the FBI keep up with the translation of wire-taps, and he said that infiltration into the groups was all but impossible. However, following the collapse of the Soviet Union and the warming of relations between the U.S. and Russia, Moody said the FBI was finally able to establish the cooperation of Russian officials in 1993.

Since then, Moody said that agents of the Russian Ministry of Internal Affairs had provided the FBI with "a lot of help," even testifying during the trials of some of the criminals.

Moody cited several cases where the Russian Mafia had been tied to extortion, arson, gambling, economic and medical fraud, and even murder in the U.S. He also said that today the FBI is especially concerned with the fact that Russian criminals have been buying up real-estate, especially in Hawaii, as a method of hiding money received as profits from drug smuggling and extortion.

George J. Weise, Commissioner of the U.S. Customs Service, said that until recently most of the activities of the Russian Mafia had centered in the states of New York, New Jersey, Connecticut, Pennsylvania and Florida. But he testified that the groups were expanding rapidly across the U.S. and settling in areas of the mid-West and West. He said that their crimes were becoming more sophisticated and violent and worried that their activities would eventually dissolve into a "criminal free-for-all" in the United States.

Weise said that over the past few years Russian organized crime had begun to step up its activities in drug trafficking, money laundering, the illegal export of weapons, theft, extortion and murder.

He cited a case that began in June 1991 when two Russians were arrested at John F. Kennedy airport in New York City for smuggling 3,209 grams of heroin. A lengthy investigation followed which resulted last year in the arrest of 14 people, all members of a Russian Mafia drug cartel.

Weise also mentioned the increase of automobile thefts, saying that members of Russian crime families would steal cars, drive them to Chicago and ship them out of the country using crime-controlled export businesses. Since their investigation started, Weise said, custom officials estimate more than 25 million dollars worth of automobiles and construction materials have been stolen and shipped out of the country by Russian organized crime.

In a dramatic turn during the hearing, U.S. Marshals escorted Anthony "Gas Pipe" Casso and Michael Franzese, both former members of leading mob families in New York, into the room. Both men agreed to testify in front of the Senate committee in exchange for consideration of a more lenient prison sentence.

Casso, a former leader in the Mafia's Luchese crime family, is believed to be the highest-ranking criminal to reveal details of his organization's association with the Russian Mafia. Casso pleaded guilty in 1994 to a 72-count indictment, including racketeering, robbery, extortion, fraud and 16 counts of murder.

Casso said that his association with the Russian gangsters started in the mid-1980's when three Russians who owned gas stations in New York came to him with an elaborate plan to defraud the U.S. government for millions of dollars by developing a gas tax fraud and engage in gasoline bootlegging. The Russians wanted protection from the other crime families, said Casso, and in exchange would give the Luchese family 75 percent of the profits. Casso said he was astounded at how much money the family made from the Russians in exchange for a little muscle.

They were "good businessmen" and "highly intelligent" said Casso of the Russians.

Franzese, a former crime boss in the Colombo organized crime family of New York, was convicted in 1986 of tax fraud, gambling, labor racketeering and extortion. He told the committee of a similar arrangement with another Russian gang in New York. Franzese said that the Russians operated a gasoline tax swindle that often resulted in profits as high as nine million dollars a month. He said the Russians often brought him the cash in paper bags.

He said he also considered the Russians to be "excellent businessmen." He added that the Russians were not above being violent with each other, but were "submissive" to the U.S. crime families and even afraid of them.

Franzese admitted to ordering the murders of other Russian crime figures who tried to push their way in on the action. He said, "when they threatened our biggest moneymaker, they threatened our family." He said the Russians had "little" fear of U.S. prisons and "absolutely no respect" for U.S. law.

The Vice Minister of the Russian Ministry of Internal Affairs, Igor Nikolayevich Kozhevnikov, also testified at the hearing, saying that Russian crime organizations in the U.S. were responsible for shipping thousands of kilograms of drugs back into Russia. He said his ministry would cooperate fully with the U.S. to try and put a stop to the drug trafficking and other crimes.

An anonymous Russian criminal, a member of a U.S.-based Russian mob, also spoke at the hearing from behind a tall screen. He said he spoke on the condition of anonymity because he feared for his life and the life of his family.

In halting English, the man testified that Russian mobsters were making millions of dollars in the U.S. by engaging in medical and gas tax fraud, insurance swindles, racketeering and the extortion of Russian athletes who play sports in the United States. He mentioned prominent Russian athletes who are or were associated with the U.S. National Hockey League. The athletes often pay rather than go to the authorities, he said, because they "don't trust the police".

He also said that Russian criminals are becoming more violent and less discriminating.

"Today Russian criminals own beautiful offices," in New York City and in wealthy neighborhoods of other cities, he said. "They are not afraid. And the problem is growing."

Moody said that so far, the FBI has identified 26 groups of organized crimes from Russia and Eastern Europe that live in the United States. He said the groups are quickly consolidating, organizing and vying for dominance.

The hearing Wednesday was not expected to result in any immediate legislation and has been labeled as simply an inquiry into the status of Russian crime groups in the U.S.