Police: Organized crime cashing in on legitimate businesses around Israel

“Criminality is in their DNA. Even when they are legit these guys can never be totally legit,” senior police intelligence officer says.

May 19, 2014 16:01
2 minute read.

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Police are seeing growing efforts by organized crime families to diversify their illicit activities to include muscling in on legitimate businesses, particularly in construction and real estate, according to a senior officer in the intelligence and investigations branch.

The officer said organized crime figures are especially interested in “pinui binui” projects, getting in on the ground floor of projects to replace older buildings with new towers. Throughout the field of construction they can go in without investing money, using their name, reputation and muscle to work as middle-men and arbitrators helping move construction deals across the country.

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It’s unclear how much money in the construction field is invested by people linked to organized crime, though it is believed that the protection racket for job sites alone is worth tens of millions of shekels annually.

The officer said that most organized crime families are attempting to go into legit businesses and construction projects in Israel and abroad as a sort of rainy day fund, as a way to possibly transition away from illegal dealings and police scrutiny. Nonetheless, their potential to do so is limited, and as of now, he doesn’t know of any organized crime family that has managed to make itself entirely legal.

“The thing is that criminality is in their DNA. Even when they’re legit these guys can never be totally legit,” the officer said, adding “when the time comes and they have to pay 40 or 60 percent in taxes, they won’t and that’s where they fall.”

The attempt to move more into legitimate businesses is part of what police see as the constant ability by organized crime figures to quickly adapt and change their methods to reach greener pastures. It is one of the reasons police cite for what they say is a growing migration of Israeli mobsters to countries across the world, where the local authorities don’t know them and where they can blend into the Jewish and Israeli ex-pat communities. There they can make millions in legitimate businesses such as real estate, manufacturing and casinos, in countries where gambling is legal.

By police estimation there are around a dozen senior organized crime figures and many lower level affiliates who run legal and illegal business operations in a series of countries in Europe, Asia, the Americas and Africa.

Closer to home, the officer pointed out, as an example of criminal adaptability, the high number of indoor marijuana grow rooms busted by police across Israel on a weekly basis, saying “just like they moved from shootings to bombings, they moved to hydro [from hash and outdoor marijuana].”

He added “for us [police] we’re like a very large ship, it takes a long time for us to turn around, but they [criminals] can do it instantly.”

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