The OIG's Labor Racketeering Program 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
groups
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
financial
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.
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