EAST EUROPEAN-BASED ORGANIZED CRIME

Highlights

• East European-based organized crime (EEOC) groups have exploited technology to conduct sophisticated credit and debit card fraud schemes.

• EEOC groups are becoming increasingly involved in the illicit drug trade, including cocaine, steroids and ecstasy.

• EEOC groups in Canada remain integral parts of international EEOC organizations but have also formed working relationships with Traditional, Asian and Aboriginal-based organized crime groups and outlaw motorcycle gangs.

• EEOC groups are increasingly using legitimate businesses to conceal and launder criminal proceeds.

East European-based organized crime groups in Canada are primarily based in the Greater Toronto Area, Southern Ontario and Montreal, but are also active in British Columbia, Alberta and the Atlantic provinces.

EEOC criminal enterprises have expanded beyond extortion, prostitution and other street crimes and now include a variety of sophisticated white collar crimes.  EEOC groups are involved in organized immigration fraud, organized theft and smuggling of automobiles, as well as large-scale smuggling of drugs and consumer commodities.  They are also active in sophisticated fraud schemes involving counterfeit credit cards and debit cards.

EEOC groups in Canada continue to function as integral parts of East European-based organized crime worldwide and maintain an international network of contacts.  Some of these groups have formed working relations amongst themselves as well as with other criminal organizations in Canada.
 
 

Police have noted increased EEOC involvement in drug smuggling.  As EEOC groups expand operations, they are increasingly using legitimate businesses to conceal and launder criminal proceeds and to erect a facade of legitimacy.

EEOC groups are expected to expand  their criminal activities in Western Canada.  Their activities include extortion, murder, prostitution, drug smuggling, weapons smuggling, fraud and various types of financial crime.

In December 1999, the Ontario Provincial Police, York Regional Police, Toronto Police Services, the RCMP, Peel Regional Police and Citizenship and Immigration Canada, uncovered a major EEOC operation.  Their investigation resulted in 47 arrests and over 90 charges.  Among the charges laid were conspiracy to commit fraud and obtain credit by fraud, possession of counterfeit currency, and forging and uttering false documents (credit and debit cards).  There were also immigration charges and charges of participating in a criminal organization.  Four Quebec residents were among the 47 individuals arrested.  Over 250 police officers from the Greater Toronto Area, Windsor, Ottawa and Montreal took part in the arrests of the targets and the searches of their businesses and residences.

A Russian immigrant recently pleaded guilty to conspiracy to commit fraud and was sentenced to 15 months in prison for his role in a sophisticated credit and debit card scheme in which banks lost more than $500,000.  The individual, one of 49 arrested, was involved in a group that developed technology to steal encoded information on debit and credit cards, including personal identification (PIN) numbers.  Seven other individuals have been convicted in the operation.  Canadians own 34 million credit and debit cards and made more than 1.6 billion transactions in 1998.

Outlook
 

• EEOC will continue to seek ways to conceal and launder criminal proceeds, some of which come from abroad.

• EEOC will continue to seek out joint criminal ventures with other organized criminal groups in Canada, notably Traditional and Asian-based organized crime groups.

• EEOC groups will continue to make enormous profits through technology-based fraud schemes, as well as the smuggling of drugs, stolen cars and other consumer products.

2000 report