The OIG at the Department of Labor is unique among
inspectors general in that it has an "external" program function
to conduct criminal investigations to combat the influence of labor
racketeering and organized crime in the nation's labor unions.
Labor racketeering is the infiltration, domination,
and/or use of a union or employee benefit plan for personal benefit
by illegal, violent, or fraudulent means. Organized crime is defined
as activities carried out by groups with a formalized structure
whose primary objective is to obtain money through illegal activities.
Traditionally, organized crime has been carried out by La Cosa Nostra
(LCN) groups, also known as the "mob" or the "Mafia". However, new
groups are emerging and organizing. For example, organized crime
groups now include Asian, Russian, Eastern European, Nigerian, and
West African groups.
Labor racketeering activities carried out by organized
crime groups affect the general public in many ways. Because organized
crime's exercise of market power is usually concealed from public
view, millions of consumers unknowingly pay what amounts to a tax
or surcharge on a wide range of goods and services. In addition,
by controlling a key union local, organized crime can control the
pricing in an entire industry. Moreover, the public also suffers
when organized crime orchestrates illicit strikes and work slowdowns
or resorts to violence to maintain its operation of labor rackets.
Over the past two decades, the OIG has conducted
extensive criminal investigations of labor racketeering. Traditionally,
organized crime has been involved in loan sharking, gambling, benefit
plan fraud, violence against union members, embezzlement, and extortion.
OIG investigations have uncovered millions of dollars of workers' dues
and benefit monies that have been siphoned off by organized crime
through embezzlement or more sophisticated devices such as fraudulent
loans or excessive fees paid to corrupt union and benefit plan service
providers. Our investigations continue to identify complex financial
and investment schemes used to defraud pension assets, resulting
in millions of dollars in losses to plan participants.
According to the Department of Justice, there
has been a rapid rise of transnational organized crime groups
that are engaging in new criminal enterprises. These nontraditional
from Asia, Russian, Eastern Europe, and West Africa have engaged
in racketeering and other crimes against workers in both union
and nonunion environments. These groups are engaging in complex
schemes, immigration fraud and exploitation of undocumented aliens,
and fraud against government benefit programs. Specifically, OIG
investigations have found that nontraditional organized criminal
groups are exploiting the Department of Labor’s foreign labor
certification and Unemployment Insurance programs.