Russian Mafia
"The Russian mafia dominates economic life in Russia, . . . exerting control over key economic sectors." This is the situation that Russia is currently facing, according to a 1998 study on crime done by the Federal Bureau of Investigation. It is no secret that Russia is in an economic crisis, but the source is not widely known. Many experts have pinpointed the source of the depression to organized crime groups. Emilio Viano, professor of Criminology at American University has said that "These groups are taking advantage of the political uncertainty in Russia, and are using it to their advantage. They see the transition from communism to capitalism as a chance to make some money, and this is having a negative effect on their economy." There is no doubt that the main source of the depression is coming from the Russian mafia, and they are having a crippling effect on the economy. The crime groups do many things to restrain the economy, but the main items are laundering funds to avoid paying taxes, demanding protection money from small start-up privately owned businesses, and using bribery and coercion to obtain favorable government contracts and tax exemptions. A main source of income for the government is through taxation. In Can
These organized crime groups in use the banks to launder money and avoid paying taxes desperately needed by the government. An estimated 550 Russian banks - about half of the nation's credit and financial organizations - are now controlled by organized crime groups. The Russian mafia uses the control over these institutions, and then extends it to offshore banks in Cyprus and Antigua to launder the money. In 1998, five Russian-owned banks opened branches on the Caribbean island of Aruba. From these locations they electronically launder large amounts of cash around the world. It has been noted by the FBI that this form of transitional banking has been accompanied by a high level of violence directed against senior banking officials in Russia. Considering all the factors, it is no surprise that the Russian economy is in such a mess. The cause of the current depression in Russia is certainly caused by the presence of organized criminal groups. Through their use of laundering funds to avoid paying taxes, demanding protection money from small start-up privately owned businesses, and using bribery and coercion to obtain favorable government contracts and tax exemptions they are crippling the entire economy, and preventing its growth. ada alone, almost 65 percent of the operating income comes from tax revenue. In turn, this money is then placed back into the economy through social spending programs such as healthcare, welfare, and education. In Russia, a great deal of this valuable capital is lost through illegal money laundering. The protection money not only has an effect on domestic businesses, it also reaches companies with foreign investments. Foreign companies that are looking to build inside Russia are not willing to pay the required protection fee,
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Approximate Word count = 1193
Approximate Pages = 5 (250 words per page double spaced)
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