Klaus von Lampe

Organized Crime and Trust:: On the conceptualization and empirical relevance of trust in the context of criminal networks

Organised crime networks are often characterised as being held together by bonds of trust, but the conventional wisdom regarding the relation between trust and organised crime lacks a comprehensive theoretical and empirical underpinning. The purpose of this paper is to explore where deeper research on this issue may lead and how it can potentially contribute to a better understanding of organised crime in general. Drawing on the general sociological literature, it provides a preliminary conceptualisation of trust in the context of organised crime centred around a fourfold typology along the micro-macro dimension. The authors use anecdotal evidence from their research on illegal markets for highly taxed goods in Norway and Germany to illustrate that there are different types of trust, that there are different consequences of the violation of trust, and, finally, that there are criminal relations not based on trust at all.Organised crime networks are often characterised as being held together by bonds of trust, but the conventional wisdom regarding the relation between trust and organised crime lacks a comprehensive theoretical and empirical underpinning. The purpose of this paper is to explore where deeper research on this issue may lead and how it can potentially contribute to a better understanding of organised crime in general. Drawing on the general sociological literature, it provides a preliminary conceptualisation of trust in the context of organised crime centred around a fourfold typology along the micro-macro dimension. The authors use anecdotal evidence from their research on illegal markets for highly taxed goods in Norway and Germany to illustrate that there are different types of trust, that there are different consequences of the violation of trust, and, finally, that there are criminal relations not based on trust at all.

The cigarette black market in Germany and in the United Kingdom

Purpose – The research aims at providing a comprehensive assessment of the cigarette black market in Germany and the UK within the framework of the study of organized crime.Design/methodology/approach – The particular approach upon which this paper is based is a systematic, cross‐national review of open sources, including media reports and government documents. The information gleaned from these sources is transferred into a classificatory scheme derived from the analysis of organized crime.Findings – While similarities exist regarding the inner workings of the cigarette black market, interesting variations between the two countries emerge, including an asynchronicity of the developmental process and differences in modus operandi. In addition to cross‐national differences, striking regional variations in the prevalence and character of black market activity exist within each country. This leads to the conclusion that a multitude of factors have to be considered to account for the overall dynamics and spec...

The application of the framework of Situational Crime Prevention to ‘organized crime’

This essay and review examines to what extent the conceptual framework of Situational Crime Prevention can be meaningfully applied to the phenomena variously labelled ‘organized crime’. Several approaches are identified which in different respects imply modifications to the situational framework in order to accommodate assumed specificities of ‘organized crime’, including ‘organized’ criminal activities transcending space and time, and ‘organized’ criminals being capable of selecting and shaping crime settings. It is argued that while a situational approach to the study of ‘organized crime’ is useful in some respects, in other respects the conceptual framework of Situational Crime Prevention needs to be modified to a point where its universal applicability is called into question.This essay and review examines to what extent the conceptual framework of Situational Crime Prevention can be meaningfully applied to the phenomena variously labelled ‘organized crime’. Several approaches are identified which in different respects imply modifications to the situational framework in order to accommodate assumed specificities of ‘organized crime’, including ‘organized’ criminal activities transcending space and time, and ‘organized’ criminals being capable of selecting and shaping crime settings. It is argued that while a situational approach to the study of ‘organized crime’ is useful in some respects, in other respects the conceptual framework of Situational Crime Prevention needs to be modified to a point where its universal applicability is called into question.

The illegal cigarette market in a socioeconomically deprived inner-city area: the case of the South Bronx

Objective To determine the scope of the cigarette black market in a socioeconomically deprived inner-city area in the US, taking the South Bronx in New York City as a case study. Design The South Bronx Litter Pack Survey collected discarded cigarette packs (n=497) along 30 randomised census tracts to quantify the prevalence of counterfeit, legal and out-of-state tax stamps. Results It was found that 76.2% of cigarette packs collected avoided the combined New York City and State tax. More specifically, 57.9% were untaxed (counterfeit or bearing no tax stamp), for 15.8% taxes were paid outside of New York City (including other states and New York State only). Only 19.4% of tax stamps collected indicated that New York City and New York State taxes were paid. 4.4% of the cigarette packs could not be analysed because the tax stamps were not discernible. The finding that the majority of cigarettes did not have a tax stamp or bore a counterfeit tax stamp suggests that these cigarettes were being bootlegged, most likely from Native American Reservations. Conclusions The present study highlights the importance of examining the illegal cigarette market in socioeconomically deprived regions of the US, where tax avoidance and black market activities appear to far exceed levels found elsewhere in the country including Chicago and New York City at large.

Investigation of lead and cadmium in counterfeit cigarettes seized in the United States

Information of toxic elements such as lead (Pb) and cadmium (Cd) in counterfeit cigarettes offers insight on the potential public health impact of consuming counterfeit cigarettes and the technology used by counterfeiters in the illicit cigarette trade. In this study, the concentration of Pb and Cd in twenty-three packs of counterfeit cigarettes seized in the US by various law enforcement agencies were evaluated and compared with their genuine equivalents using microwave digestion followed by inductively coupled plasma - mass spectrometry (ICP-MS) analysis. Both Pb and Cd concentration in counterfeit cigarettes were markedly higher than those in their genuine equivalents, and exhibited greater sample to sample variability. The average Pb and Cd mass fraction values in counterfeit cigarettes were (5.13 ± 2.50) mg/kg (n = 23) and (5.13 ± 1.95) mg/kg (n = 23) respectively, compared with (0.59 ± 0.08) mg/kg (n = 9) and (1.08 ± 0.08) mg/kg (n = 9) respectively in the genuine equivalents. Results suggest that counterfeit cigarettes may impose higher risks to public health. Studying these toxic elements could provide important information regarding the illicit trade, including the level of organization among counterfeiters, who broker between availability of supplies and consumer demand for a cheaper product that is assumed to be genuine.

The Intended and Unintended Consequences of a Legal Measure to Cut the Flow of Illegal Cigarettes Into New York City: The Case of the South Bronx

OBJECTIVES We examined the impact of a change in New York tax law on the numbers of untaxed cigarettes bootlegged from Native American reservations and resold in the South Bronx. METHODS Discarded cigarette packs were systematically collected in 30 randomized South Bronx census tracks before and after the amended tax law went into effect in 2011. Also, administrative data were gathered on the number of taxed cigarettes sold in New York State, including sales to Native American reservations. RESULTS Before the tax amendment, 42% of discarded cigarette packs collected in the South Bronx had no tax stamp. After the tax law went into effect, the percentage of cigarette packs without tax stamps declined to 6.2%. Simultaneously, the percentage of packs with out-of-state tax stamps rose from 18.3% to 66.3%. The percentage of packs with a combined New York State and New York City tax stamp did not change after the tax amendment. CONCLUSIONS After the tax amendment, the supply of contraband cigarettes appears to have quickly shifted from one lower-priced jurisdiction to another without a change in the overall prevalence of contraband cigarettes.

The changing role of china in the global illegal cigarette trade

This study explores the history of the illegal production, distribution, and smuggling of cigarettes in mainland China. Data were obtained from a content analysis of 931 media reports retrieved from LexisNexis for the time period 1975 until 2010, and from other open sources. The illegal cigarette trade first emerged in the form of violations of state tobacco monopoly regulations. In the course of the restructuring of the legal tobacco sector, which occurred under external political pressure to open the Chinese market to foreign competition, an illegal cigarette industry emerged which at first primarily produced fake Chinese brand cigarettes for the domestic black market. At the same time, China became a destination country for smuggled genuine Western brand cigarettes. It was only after effective crackdowns against cigarette smuggling and domestic distribution channels in the late 1990s that the Chinese illegal cigarette industry shifted to exporting large numbers of counterfeit Western brand cigarettes to black markets abroad. China’s current role as a leading supplier of counterfeit cigarettes is a result of the contradictions of the economic reform process and of external licit and illicit forces that worked toward opening up the Chinese tobacco sector to the outside world.

Spring Breaks and Cigarette Tax Noncompliance: Evidence From a New York City College Sample

OBJECTIVE Estimate cigarette tax noncompliance (tax avoidance and evasion) before and after mid-semester recesses in a New York City college campus, where the majority of students are residents of nearby lower-tax states, using data derived from garbology, an archaeological method that reconstructs patterns of human behavior from discarded materials. DESIGN We systematically divided the college campus into four geographic areas and established a total of 12 transects (survey lines) and five quadrats (survey spheres) in those areas to encompass 74 outdoor trash cans. Weekly collections of discarded cigarette packs (n = 174) in the four areas during Spring 2012 and 2013 were conducted to quantify the percentage of cigarette packs that were tax noncompliant. RESULTS Overall, we find that 72.4% of the cigarette packs collected in Spring 2012 and 2013 did not bear the required joint New York City and New York State tax stamp. Additionally, we find that cigarette tax avoidance significantly increased after recesses (mid-March and early April) in Spring 2012 and subsequently declined. We also find that packs with a Virginia tax stamp became more prevalent as time elapsed after each recess. CONCLUSION College students practice tax avoidance, drawing on legal purchases from their own home states as the primary source of cheap cigarettes. As stocks decline, some students shift to tax evasion by illegally purchasing cigarettes in New York City that have been bootlegged from low tax states (eg, Virginia). IMPLICATIONS Our study adds to the growing literature on cigarette tax noncompliance (ie, tax avoidance and evasion). First, we provide evidence that college students in our New York City sample avoid the payment of taxes in high tax states by purchasing low taxed cigarettes in their home state. Second, we find that once those sources are depleted, students find access to the black market nearby campus. This black market functions through cigarette tax evasion: the resale of cigarettes purchased in low tax states. Our study suggests that institutions of higher education operating in states with high cigarette taxes and a student body that resides in lower tax states should increase cessation services prior to breaks to discourage bulk purchases of cheap cigarettes.

“I Wouldn’t Take My Chances on the Street” Navigating Illegal Cigarette Purchases in the South Bronx

Objectives: This article examines the decision-making of consumers of illegal goods and services, using the illegal cigarette market in the South Bronx as a case study. Methods: Sixty-seven adult smokers residing in the South Bronx (New York City) were purposively recruited and placed into 13 focus groups stratified by gender and age to discuss their purchasing patterns of cigarettes. Results: Our participants routinely buy and consume illicit cigarettes. They prefer to purchase these illicit cigarettes in legitimate stores rather than from street vendors. In their decision-making, our participants are guided by various concerns, including reliable access to illicit cigarettes, minimal exposure to the police, the ability to purchase cigarettes on credit, reduced risk of being sold low-quality cigarettes (i.e., stale, counterfeit), and the chance to successfully complain in case of poor product quality. Conclusions: Consumers make rational decisions to purchase illicit cigarettes within the constraints they face as a result of their socioeconomic position. They base their decisions on a set of factors of which the lowest retail price is not a primary concern.

Big business: scale of operation, organizational size, and the level of integration into the legal economy as key parameters for understanding the development of illegal enterprises

This study examines variations in the scale of operation, size of organization and the degree to which illegal enterprises are integrated into the legal economy. Data were obtained from two sources, pertaining to the illegal cigarette trade in the area of Berlin, Germany, during the 1990s: case statistics of the German Customs Service on cigarette related investigations (n=47,632), and criminal files (n=69) on illegal enterprises involved in the smuggling and wholesale distribution of cigarettes.Most operations in the cigarette black market in the Berlin area during the 1990s were small scale and involved for the most part individual offenders or partnerships of two co-offenders. Some illegal enterprises, however, operated at a large scale. The larger the scale of operation the more co-offenders tended to be involved and the greater the likelihood that illegal entrepreneurs drew on outside logistical support via transactions with legitimate third parties. There appear to have been threshold levels in the scale of operation, defined by the number of cigarettes handled at a given point in time, beyond which illegal entrepreneurs felt the need to adapt their way of doing business. Beyond a volume of about 250,000 cigarettes illegal entrepreneurs tended to obtain logistical support from outside their social networks, namely by renting transport vehicles and storage space, and beyond a threshold of about one million cigarettes, smugglers in particular felt the need to integrate their businesses into the legal economy through the use of front companies in the import-export sector.