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Introduction

Foundations of the Criminal Marketplace

Businesses in legitimate economic sectors use a variety of techniques to identify opportunities, coordinate with other agencies, manage risk and adapt to changes in the marketplace. Organized crime groups operate within both the criminal and legitimate marketplaces and function in the same way as legitimate business but choose to exploit legal/regulatory loopholes or vulnerabilities to manage their activities. While not exhaustive, below are some consistent factors of how organized crime groups operate within illicit and licit marketplaces.

Evolution of criminal groups and networks
Organized crime portrayed as a homogeneous ethnic group with distinct rules of conduct was most popularly expressed in the film, The Godfather. However, with globalization and increasingly multi-cultural communities, organized crime is now best understood as small, loosely structured and often multi-ethnic networks that adapt quickly to any pressures or changes in the criminal or legitimate marketplaces. These networks re-group, merge or disband on a regular basis due to law enforcement intervention, competition, and other pressures within the marketplace.

The varying threat from street gangs
Most street gangs across Canada operate with relatively low criminal capabilities, a defined area of operation, and involvement in street-level crimes such as drug retail, theft or armed robbery. Some, however, are more sophisticated and undertake crimes like drug importation or manufacturing with an expanded geographical scope. Street gang activities often impact the general public more directly than other organized crime groups, particularly as some gangs pose a public safety threat through their high propensity for violence. The gangs use a wide variety of weapons, ranging from firearms, knives and machetes to hammers and baseball bats. While their activities are generally not sophisticated, their criminality in many jurisdictions is a daily occurrence requiring a consistent allocation of police resources.

Measuring risk
Criminal groups that insulate themselves from risk tend to be less visible and more difficult to link to criminal behaviour. Organized crime groups attempting to manage the risks of their criminal enterprises will employ methods to deter law enforcement and mitigate the threats from rivals. Common methods include: off-loading risky activity to subordinates or "expendable" individuals; conducting counter-surveillance on law enforcement and rivals; dealing only with trusted associates; and exploiting lawyers and accountants to facilitate their activities, particularly the laundering of proceeds.

Targeting legitimate sectors
The dividing line between illegality and legality is fine and can be redrawn with changes in regulation or legislation. As a result, some criminal groups undertake a series of enterprises that are on the margins of legitimacy or entirely legitimate. Some operate businesses that are primarily intended to facilitate criminal activities while others offer legitimate trade but also facilitate illicit enterprise through, for example, laundering funds, income tax fraud, enabling frauds or the illicit manipulation of stock markets. Criminal groups may own or operate these businesses openly, conceal their dealings through nominees, or collude with, coerce, or deceive the owners or employees. These businesses can also enable criminal groups to distance themselves from criminal activities and provide an appearance of legitimacy.

Organizational resiliency and criminal market disruption
Most criminal markets appear highly resistant to long-term disruption. Temporary voids in criminal markets will continue to be areas of opportunity for crime groups that have the capability to exploit or expand into these voids. Some organized crime groups continue to display an organizational or operational resiliency in their ability to recover from law enforcement disruption, or, in some cases, to remain criminally active during incarceration. In addition, incarceration can be the basis for new criminal collaborations and the upgrading of criminal skills.

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Introduction: Enabling Factors