Original subtitles

Is savage methods of persuasion

often include torture and brutality?

Vyacheslav Ivankov

is one of the most feared and respected criminals

to emerge from the former Soviet Union.

There are those who save Ivankov's reputation

is more fiction than fact.

What is clear?

Vyacheslav Ivankov of Russia came

to the United States with an agenda.

During the days of communist Russia,

the government did not officially acknowledge the existence

of organized crime.

Racketeering was thought to be an American occurrence,

giving Soviets a sense of pride.

But towards the end of Perestroika,

a strange new phenomenon began to surface.

Restaurants were blown up,

people were gunned down in the streets.

Rumors of a Russian mafia

began to circulate throughout the Soviet Union

and the world.

In 1996, the US government scored a major victory

with a conviction of alleged Russian crime boss,

Vyacheslav Ivankov.

Vyacheslav Ivankov was born

in the early 1940s in the Soviet Republic of Georgia.

As a child growing up in Moscow,

he resisted the rhetoric of communism

and the reputed greatness of Stalin.

Many of Ivankov's family members,

including his grandfather,

had suffered immensely under the ruthless dictator.

Maturing into adulthood,

Ivankov continued on the path of resistance,

never accepting the legitimacy of communism.

He excelled in sports

and had a very successful amateur wrestling career.

Eventually, he was crown champion

and attained a celebrity type status among many Russians.

He did not, for example,

come up as part of some kind of street gang

or adolescent gang or whatever.

He was from all outward appearances

of fairly typical normal person who

after what he claims was getting involved

in defending a woman's virtue,

got arrested and he was sent to jail.

And it was then that he began to make contacts

with fellow inmates in the jail,

and this began to develop his sense of the possibilities

in criminal activity.

James Finckenauer is a professor

of criminal justice at Rutgers University in New Jersey.

He has authored six books most recently,

"The Russian Mafia in America,"

which takes an in-depth look at Soviet emigre

in the United States and their roots in the former USSR.

Vyacheslav Ivankov's nickname is Yaponchik.

Yaponchik in Russian means little Japanese.

As I understand it,

the attachment of this nickname to him

came about because his face

has a certain Asian cast to it.

Upon his release from prison,

Ivankov began his life of crime

capitalizing upon the Soviet Union's

thriving black market economy.

In the 1970s, a black market emerged,

and this was partly because the money supply

was increasingly getting out of the control

of the authorities in Moscow.

They were providing too much money,

and this money fueled a demand within the public

for more consumer goods,

demands which couldn't be satisfied

by the increasingly inefficient Soviet production system.

Yeah, Yaponchik began to rise

in the Soviet criminal world

and was reportedly involved in schemes of extortion,

racketeering, and drug trafficking.

He eventually formed a gang in Moscow called Solntsevskaya.

One of their scams was impersonating Soviet police officers

and burglarizing the homes of wealthy Russians.

People would've reported burglaries or whatever

they were going to investigate these burglaries,

and then they would steal stuff out of the home.

They saw this, you know,

this role playing as police officers,

as being an avenue to get into commit criminal activity.

He was seen by his fellow professional criminals

as a tough guy, as a smart guy,

as the kind of guy, a standup guy, if you will,

the kind of guy that if you are performing criminal groups,

this is the kind of guy you want,

kind of guy who doesn't back down,

kind of guy who can impose his will on others,

both physically and mentally.

And he's this kind of guy.

In 1981, Ivankov was arrested

and convicted for robbery, drug trafficking,

possession of firearms and forgery.

He was sentenced to serve 14 years

in one of the Soviet union's toughest Siberian prisons.

While imprisoned,

Ivankov's statue and reputation continued to grow.

He was a hardened criminal who stood up to communists

and fought to reform the Soviet prison system.

Admired by other prison inmates,

Yaponchik was elected to the status of vor v zakone

or thief in law,

a position held by an elite few professional criminals

who are powerful, charismatic, persuasive leaders.

These are professional criminals

who reject any relationship or involvement

with what they consider to be the establishment.

They refuse to cooperate with the authorities in any way.

They refuse to work,

they refuse to participate in education.

They just simply reject all formal status quo,

you know, initiatives,

and they adopt a life of crime.

Reject their family, family ties, all those kinds of things.

Jim Moody is a former deputy assistant director

of the FBI Criminal Investigative Division.

He spent nearly 30 years fighting organized crime

and is believed to be the first FBI agent

to officially visit the Soviet Union.

Yaponchik was a thief in law.

He went through the coronation ceremony.

He had been serving a prison sentence

and Soviet prison for torturing

and extorting individuals out of their money.

So he is a great extortionist and was in Russia,

and that's what we convicted for last time.

Like his predecessors,

Ivankov conducted business from prison.

Reportedly, he fought for a more aggressive participation

in drug trafficking

and advocated a war against the Chechens

and other gangs in order to break their drug monopoly.

While Yaponchik was serving his time in prison,

the Soviet Union was undergoing massive progressive reforms

by his newly elected leader Mikhail Gorbachev.

Gorbachev's reforms in the 1980s

were an absolute prescription

of how to make an organized crime problem.

I mean, the first thing he did the month he came into office

was institute prohibition,

and that allowed organized criminals to acquire 10%

of the national revenues each year.

There was an enormous amount of capital flight from Russia

during these years,

including money which belonged to the Communist Party,

which disappeared into foreign bank accounts.

In 1991, Ivankov was released from prison.

In that same year,

the curtain finally dropped on the Soviet Union,

which signified the end of an era.

The Federal Bureau of Investigation was informed

by the Russian Ministry of Internal Affairs

that Ivankov was sent by other vory

or thieves to the United States.

His mission to take control

and organize Russian criminal activities in America.

But in order to better understand Ivankov

he must first understand the origins

of Russian organized crime.

An old Russian mafia leader once said,

the Soviet communists were able to get rid

of the bourgeoisie and the intelligentsia

that they could never, ever completely crack us.

We had our own coves

in our individual way of collective living.

We were for Russia and not for communism.

By the turn of the 20th century,

Russia's borders extended from Afghanistan to China

with extensive territory along the Pacific coast.

In 1894, Nicholas II,

Russia's last czar ascended to the throne.

There has always been a great divide

between the haves and the have nots in Russia.

After the Russell Japanese War,

Nicholas's second was forced to make concessions

to reformers, including the creation

of an elected legislature called the Duma.

With the industrialization of many Western cities,

Russian workers began to organize

in local political organizations,

or Soviets united under the Social Democratic Party.

In 1912, the social Democratic party

divided into two separate parties.

The Radical Bolsheviks led by Vladimir Lenin

and the more moderate Mensheviks.

Russian organized crime was always

from the beginning of this century,

very closely tied with the government.

Veteran foreign correspondence,

Stephen Handelman spent six years in Moscow

as a bureau chief of the Toronto Star.

He is the author of "Comrade Criminal,"

which takes a comprehensive look into

post-Soviet organized crime.

The early Menshevik conspirators,

the early Marxists saw Russian crime groups, Russian gangs

as a model, in effect,

for many of their proletarian organizations.

One of the reasons was because of

their very close hierarchical paramilitary structure.

They were almost impenetrable to outsiders.

They were very small groups, small cells

who were very effective in what they did.

We know that both Lenin and Stalin saw value

in using the early crime groups, early criminal societies

as a way of furthering their own cause.

The Russian Revolution came about

for one important reason,

and that was the impact of the First World War,

which led to enormous human and physical losses,

which disorganized the political system

and which weakened the czar.

Although the Bolsheviks

had great support in Moscow and St. Petersburg,

there were by no means in control of the country,

which collapsed into Civil War.

Many of the early Russian crime groups

began fighting against the early Bolsheviks,

and they began operating in all parts of the country,

harassing communist officials.

After the death of Lenin in 1924,

Joseph Stalin became dictator of the newly formed union

of Soviet Socialist Republics or USSR.

A decade and a half later,

Vyacheslav Ivankov was born under Stalin's ironclad rule.

Young Ivankov would suffer great family losses

due to the strict totalitarian policies

of Eastern Europe's most feared rule.

Today you find some of the older veterans gangster leaders

calling themselves the early dissidents.

They were the real dissidents in the Soviet state

because they actually felt

that the communist system was anti-Russian, anti-God,

anti, just about everything they believed in.

They saw themselves

as the real carriers of the Russian tradition.

They themselves called the vorovskoi mir,

which was the thieves world,

and it was a world of very small,

tightly organized criminal groups,

which were brought together by

a very strict and hierarchical code.

The leaders of these groups who were called thieves in law,

which meant really thieves within their own law

they were called vory.

The thieves world has a deeply rooted history in Russia,

which some say dates back to the 18th century.

It is a legacy of political resistance

and lawlessness that can also be linked to

Vyacheslav Ivankov.

The vory or thief is bound by a strict code of honor,

the vor v zakone or thieves code.

He must forsake his family, refrain from marrying

or having a family of his own.

This does not preclude him from having a lover.

He must never work.

He must survive by criminal activities alone,

help other thieves, and recruit

and train young beginners in the trade.

Limit his drinking and not amass gambling debts

that he cannot cover.

The thief can have nothing to do with the authorities

or serve in the military.

He must keep his promises made to other thieves

and abide by punishment determined by other thieves in law.

The thieves in law survive the gulag

of the soundless labor camps

and maintain the traditions of future thieves in law.

Within one century, Russia had experienced two revolutions,

the latter having a transnational crime effect,

which quickly spread across the globe.

In America,

Russian organized crime activities have been reported

in more than 20 states

with staggering economic criminal activities in New York,

Los Angeles, San Francisco, and Miami.

In 1991, Ivankov was released from a Siberian prison

after serving only 10 years

of his original 14 year sentence.

Like so many prominent Russian mobsters in the late 1980s,

he had high level political connections.

Again, the claim,

the basis of his ostensibly early release from prison

is that he,

through some others, bribed the judge

to order his release,

and he consequently did get his release.

He was well connected at high levels.

For example, one of his contacts was with a person

by the name of Yuri Churbanov.

Yuri Churbanov was Brezhnev's son-in-law.

Churbanov himself ultimately went to prison

for being involved in various kinds of frauds

and schemes in Uzbekistan.

But it shows you that Ivankov is not a nobody,

that Ivankov, because nobody's were associated

with people like the son-in-law

of the head of the Soviet Union.

It has been reported

that soon after Ivankov is released from prison,

a meeting of major significance took place

in a region called outside of Moscow

in December of 1991.

In the last month of 1991,

the same month that

the hammer and sickle came down over the Kremlin,

a large group of Soviet mafia leaders,

Russian mafia leaders, met in a dacha outside Moscow.

They had many councils

and many meetings in the past.

This was one of their ways of arranging

the government, so to speak,

or the governing bodies of crime in the old Soviet Union.

And on their agenda,

and the top of the agenda was what to do

as the system was imploding around.

These powerful Russian mobsters gathered

to plan the criminal migration into the US.

The individual allegedly chosen

to organize a Russian's criminal enterprises

in the United States with Russian high ranking

for Vyacheslav Ivankov.

So in this meeting and over a series

of other meetings in 1992, the early part of 1992,

they began working out how to develop a new structure.

But with this structure came conflicting interest

for the first time among the various groups.

By early 1992, Ivankov entered the US

and settled in the Brighton Beach section

of Brooklyn, New York.

Brighton Beach houses one of the largest Russian communities

outside of Russia's borders,

sometimes referred to as little Russia or little Odessa,

it is frequently cited by the New York press as the hub

of Soviet emigre organized crime.

In the early part of the eighties,

Brighton Beach in Brooklyn became a focal point

for Russian immigration.

Well, Brighton Beach is really

the premier Russian community in the United States.

This is where that most of the emigres who came,

and they've come in various waves,

but particularly those who came in the 1970s,

when you had an opening up of the immigration by Jews

from the former Soviet Union,

they would come typically to Kennedy Airport

and they would arrive at Kennedy Airport.

And as many has often been the case historically

with emigres,

they spread out within a narrow range

of the port of entry into the country.

I remember going to Brighton Beach in the 1970s

and visiting a restaurant,

and the manager of the restaurant came up to me,

and I knew that this restaurant was one of the centers

of organized crime in Moscow.

And he had been the vice director of the restaurant

and started to tell me about

how many times he'd been arrested under Soviet rule,

and every time he'd managed to get himself out of it.

Once in Brighton Beach,

Ivankov wasted no time in setting up

and organizing the Russian community's criminal activities.

By the mid 1990s, due to the fall of communist Russia,

many Russians were free to leave the country.

This mass exodus also allowed many former Russian criminals

to exit as well.

Late mid 1970s to late 1970s, early eighties,

there were about 200,000 Russian immigrants

that came to the United States.

About 2000 of those were hardcore criminals.

However, by the 19, mid 1990s

when the Russian Communist system broke down

and it was free and open for anybody to leave the system,

you began to see

the formal classical Russian crime groups leaving

sometimes on assignment from the godfathers in Russia

to settle in the US

and to begin to invest money

and get involved in criminal activities.

And they often shoulder aside these small time gangsters

who began in Brighton Beach

and took over more and more and more of their operations.

To gain entry into the United States,

Ivankov claimed he was a film director on his visa.

Ivankov was probably at that time

one of the larger members of Russian organized crime

that was operating in the United States.

He had capabilities of having support

with other members of organized crime in the Russian area,

and he was able to infiltrate

the ethnic communities in the United States,

the Russian ethnic communities,

because of his notoriety and his reputation in Russia.

Russian organized crime members came to the US

and more than just a plan of how they were gonna make money,

they're also armed with years of experience

in manipulating bureaucratic red tape.

These Russian criminals had a wealth of knowledge

and forgery, counterfeiting, and fraud.

Richard Ward is the executive director

of the College of Criminal Justice at Sam Houston University

in Huntsville, Texas.

The Russian mafia is an extremely problematic group

for law enforcement, and what makes them different

is that here you're talking about

some extremely bright individuals

who are experts at carrying out a whole range of activities

that are illegal.

Everything from illegal immigration, to insurance fraud,

to crimes within Russia,

to a growing involvement here in the United States.

Russian organized crime in the United States

is very violent.

All organized crime is violent,

there's just different elements of sophistication,

like the American La Cosa Nostra.

One time we had five La Cosa Nostra members

that cooperated with us

and started telling us about murders,

and they told us about over 230 murders,

but we only had about three or four bodies,

most people just disappeared.

The Russians are different in that they kill people

and they're not as sophisticated about it,

but they also do a lot of torturing of people

before they kill them.

One of their most profitable

and sophisticated schemes was so complex,

it confounded all but the highest levels of law enforcement.

This scheme was called the daisy chain.

Russian criminals perpetrated this fraud

by first creating a fictitious company,

which would purchase fuel from the state of New Jersey

and transport it across state lines into New York.

There the fuel was shipped to a second fictitious company,

which was set up to forge tax documents

sent to a third fictitious company.

This third company would then distribute the fuel

to the public and then collect the federal and state taxes.

These taxes were pocketed by the criminals.

By the time the government attempted to collect the taxes,

the companies had banished without a paper trail.

The daisy chains are, I mean, this is the personification

of the Russian criminal mentality

because I mean,

these guys who are now involved in crime here,

for the most part,

came out of the old black market system

that operated in the Soviet Union.

And this scheme is made to order for them.

For one bug that was placed on John Gotti

revealed that he wanted to hire some of these smart Russians

to run a tax evasion scheme on the gasoline.

So they controlled the gas stations within their territory,

but they couldn't do the complex mathematical computations

to deprive the US government of tax revenues.

So teaming up with these smart Russians, as they said,

they were able to deprive the US

of a quarter of a billion dollars in tax revenues.

The Russians,

in exchange for protection from the Italian mafia,

gave Gotti a piece of the fuel scam action.

Vyacheslav Ivankov, who in Russia

had admired the New York mob boss

would attempt to emulate his idol

and take control of Russian organized crime in America.

Ivankov poses a police officer

and entered Holmes under the guise of official business.

He was a thief, he was a thug, but he was smart

and he was in New York.

He became the personification

of the so-called Russian Mafia in America,

particularly in the eyes of law enforcement

and the New York press.

As the highest ranking member

of the thieves world in America,

Ivankov brought with him a legacy of brutality

and a tradition of surviving outside of governing rules.

To say that he was the major figure in the United States,

yes, he was.

There's no question in our mind about it,

there was no question in the Russian authorities mind

about it.

You have to kind of understand that Ivankov's reputation

is even bigger in Russia than it is in the United States.

The news of his arrival in Brighton Beach

sent fear throughout the community,

which would ultimately become his base of operation.

Yaponchik quickly began to organize

and establish front companies for his illegal activities.

The illegal activities that he was in were extortion,

prostitution, some gambling, narcotics,

and he never really left extortion,

he was always involved in extortion.

And he also was very active in money laundering.

Some of the companies that he used in money laundering,

we don't know whether they were actually participants in it

voluntarily because he's still a strong arm man.

He noted for torturing people

and extorting them at the same time.

So some of the people that were working with him

were actually victims at the same time.

He paid a Russian woman

who had become an American citizen, $15,000 to marry him

so he could gain resident status.

It was business as usual for the career criminal,

but the FBI had become aware of his presence in New York

and quickly began building their case.

Primarily his base of operation

was throughout the metropolitan area, New York City,

but obviously because of his ethnic background

in the Russian community,

he spent a lot of time in Brighton Beach

because of the community nature,

'cause of the people that were there.

He also spent a lot of time in Miami, Los Angeles

and Denver,

and he was able to utilize contacts in those communities

with other members of the Russian community

to foster his criminal activities.

I first became aware of Ivankov

whenever I was talking to the Russian authorities

and asked them to help us identify

the major criminals in the United States

that came outta Russia,

and they provided me the name of Ivankov.

When we first started looking at Ivankov,

he was bouncing from one city to another.

He was primarily in New York City,

but he was in Boston

and he was in Denver, and he was in Los Angeles

and he was in Miami, and he in San Francisco.

Then he may go back into Russia to meet with other thieves.

So he was bouncing around,

and we had a difficulty in identifying where he really was

or who he really was

and we found out later whenever he was arrested

then he actually had seven passports.

As you investigate organized crime,

there's a few things that you have to understand,

dealing with professional criminals.

Their strength is their secrecy,

their weaknesses is their secrecy,

but their weaknesses also

is they cannot stop conducting illegal activity.

If they ever stop conducting illegal activity,

they lose their position in organized crime.

So regardless of what's going on,

they have to continue conducting illegal activities.

The Ivankov investigation was initiated

in the early 1993 timeframe.

We were working primarily ad hoc investigative activities

with the New York City Police Department

to focus on Ivankov's criminal enterprise.

We were able to utilize the investigative expertise

from the FBI in Manhattan

and also the New York City Police Department

to focus on Ivankov's activities.

He was primarily active in Russia,

but he also had some involvement in some activities

in Israel and the United States.

Kevin Donovan is a special agent

in charge of the New York division of the FBI,

which houses the Russian organized crime task force.

In operation since the early 1990s,

the special branch investigates organized crimes

perpetrated by Soviet emigres.

Since the early 1990s,

we have worked ad hoc task forces with members

of the New York City Police Department

and other law enforcement agencies

to focus on criminal activities.

The use of task forces by the New York office is not

something that's new.

We have focused on criminal activities in drugs,

organized crime, terrorism,

and violent crimes through the use of task forces.

In 1995,

three years after Ivankov entered the United States,

he became involved in a scheme

to extort several million dollars

from a Wall Street investment advisory firm

operated by two Russian born businessmen.

- Who is this? - Clearly, they were targeted

because they were Russians.

They were targeted because they were seen

to be successful businessmen in this country.

If they're successful businessmen,

they must have financial wherewithal,

therefore, they make lucrative targets for this.

They also were targets

because they still had family

back in the former of Soviet Union.

Apparently the money that was at target

of the extortion had roots in Moscow.

Ivankov learned that the two businessmen

had been wired several million dollars

from Moscow Bank without the usual paper trails.

Therefore, everyone involved

assumed that the money had been transferred illegally.

Wanting to capitalize on the situation,

Ivankov had an associate attempt to arrange a meeting.

The men refused.

Ivankov reverted back to some of the street tactics

he perfected in Moscow.

The father of one of the businessmen was beaten

to death on a Moscow subway station platform.

The murder has never been solved.

It became brutally apparent that there was no way

of escaping Ivankov as associates or was there.

We became aware of the scheme

that he was involved in through the victims.

The victims came forward,

and as a result of the victim's cooperation,

we were able to again,

engage in sophisticated investigative techniques

to bring this case to a logical conclusion.

From his cellular phone,

Ivankov ordered his associate

to set up a meeting with a two businessmen.

The message was given and the men submitted

to paying him three and a half million dollars.

Another Ivankov henchman then drew up the papers

documenting the amount of money that was to be paid.

Everyone agreed and the papers were signed.

A few days later on June 8th, 1995,

Ivankov was charged with extortion.

We hope to identify his entire organization

and to develop a significant prosecution of them,

and we really wanted to put him in jail

for the rest of his life.

In Russia, they don't have long prison terms.

You know, 20 years is a very long prison term

and the concept of life imprisonments not known over there.

However, we were unsuccessful doing that

because of the investigation,

the way the investigation went,

we developed an extortion case on him

and we thought people were about to get killed

and to save their lives,

we brought the case down early.

The arrest of Ivankov

sent shockwaves through the city

and added to the growing fascination

surrounding Russian organized crime in America.

The reported godfathers incarceration

was a leading story in Moscow

and generated in-depth television profiles

on his criminal activities in Russia and abroad.

Defense was so weak that they knew

that if I was given a chance to speak,

I would dispose all the lies.

That's why they didn't let me speak.

They not only didn't let me speak,

but moreover, they authorized my defense to convince me

to give up my right to speak.

It's been a long time.

I figured out it was a conspiracy against me.

I was often interrupted,

they did not let me deliver in full volume the body effect

in chronological order,

so that I would prove that it was all falsified,

that it was a cynical and cruel crackdown on me.

A professional criminal,

an organized crime member in a day-to-day basis is involved

in illegal activity.

He must maintain the conduct

of his illegal activity on a day-to-day basis

to maintain his position in the organized crime group.

Consequently, if you go after him and target him,

you will be able to identify the illegal activities he's in

and develop evidence for successful prosecution.

Mr. Ivankov has pled not guilty.

We expect that we trust the jury

and we start the process today.

Ivankov's case is a major case

because it demonstrated the ease with which members

of the Russian organized crime,

families have been able to infiltrate the US communities.

We were able to focus on his criminal activities

through the cooperative efforts of members of the community,

other law enforcement,

entities throughout the United States

and throughout the world.

We specifically were able to develop cooperation

in this investigation with members of the MVD,

the Royal Canadian Mountain Police,

and other international entities that continue to allow us

to track and focus on Ivankov's activities.

Ivankov was sentenced for 10 years

and is currently in the Allenwoods Prison in Pennsylvania.

Vyacheslav Ivankov's arrest in 1996 conviction

is viewed as a significant victory

in a fight against Russian organized crime.

Until that time, there had been no major arrests

of any Russian crime figures.

There have been a number of killings

that had taken place in Brighton Beach

or in the New York metropolitan area.

Nobody had been arrested for these.

There was more and more mystery that was developing.

For example, some of these killings

took place in public settings,

in nightclubs, in full view of people,

and yet no one saw anything.

No one was willing to come forward

and say anything about this.

Ivankov was a Russian godfather, no question about it,

and I think we were successful with his arrest

and with his conviction and with his sentence,

although it's not as much as we wanted,

it sent a message back within the criminal community

in Russia that you better watch out

coming in the United States.

A question surrounding the scope

of Ivankov's criminal activities in the United States

may never be answered,

but experts agree that with the demise

of the Soviet Union

and the formation of the independent states,

Russian organized crime is a growing phenomenon.

It's the most diversified form

of organized crime activity one sees in the world today.

The Colombians are concentrated in drugs.

The Mexicans are concentrated in drugs,

the Russian organized crime out of Russia

and Ukraine has the greatest variety of illicit activity

of any criminal groups in the world today.

What I find doubly fascinating about Russia

is that you have a phenomenon

where you once had a classic crime world,

where it was a classic underworld,

which is basically located in the prison camps of Russia

who ran, for the most part,

the black economy of the Soviet Union, 40, 50 years

knew very well how to act as manipulators

and wheelers and dealers in that system.

They have in effect handed on their power

and their influence and their methods to,

in what is in a sense a new generation of Russian criminals

who are in Russian called avtoriteta,

or authorities

who are much closer linked with the government itself.

Many of them are former KGB, former army,

former communist party, apparatchiks,

who are very well versed in the official world

of operating in Russia.

Handelman calls him comrade criminals

because they have one foot in legitimacy

while the other foot walks in the underworld

that thrived in the shadows of communism.

The Russians are particularly different

than other mafia groups

because they have a level of professionalism

that really comes from their long record of being able

to deal with a very difficult totalitarian system.

They know how to get around it,

they know how to get around the police,

they know how to suborn and corrupt officialdom,

and most of them are quite shrewd

and intelligent businessmen.

Part of the problem, as we've seen,

is the laundering of Russian money

into legitimate businesses

and their criminal activity through legitimate businesses.

What is especially pernicious for the former Soviet Union

is that the money moves only out in Italy, in Columbia,

in Mexico,

organized crime groups invest in the country,

but they don't invest hardly anything

in any of the countries of the former Soviet Union.

So they're just parasites on their economy

without returning any of the capital.

A lot of business transactions are cleared in Russia,

in offshore banks, in Cyprus,

and another offshore havens.

The reason for this is quite simple,

to avoid paying taxes.

The mafia does this,

but also perfectly public businesses,

private businesses do so.

In part, it's illegal,

but there are ways of doing,

using offshore havens, which are not illegal.

The reason is just straightforward profit maximization.

If you pay less tax, you have more profits to keep,

and that's essentially why

some islands in the Mediterranean

have been making so much money

at the expense of the Russian economy.

Post-Soviet organized crime is involved

in all kinds of activities.

You can find them in the construction industry

in different parts of the world.

That's one of the prime areas they've moved into

to launder money.

You can find them in the stock market.

We just had a criminal convictions

of organized crime manipulating stocks,

which is sort of the most advanced side

of organized crime activity that you'll see.

There are just so many ways for organized crime

to obtain huge amounts of money very quickly

in an undeveloped, inexperienced banking system.

There was always a Russian mafia.

It's not like it's new,

it's just that the breakdown, if you will,

of the social structure.

The breakdown of the economy offered opportunities

for the organized criminal groups to take over,

and they've taken over a whole large segments,

if you will of the economy.

There isn't global law enforcement, that's the problem,

and so therefore

there isn't a international law enforcement effort

that is capable of addressing this problem.

The United States is gearing up to fight organized crime,

but they're dependent on dealing with the law enforcement

of other countries,

and sometimes these crime groups

are committing their activities in seven

or eight different countries simultaneously.

It's impossible to keep track

of a lot of Russian activities,

the laundering of money from country to country

because much of what Russians do is overtly legitimate,

overtly legal like many other transnational crime groups.

Lately, law enforcement in America has had some success,

has been able to get into some of these groups,

and they've been able to nab

a couple of key leaders who've operating in America,

but it's still a very much of an uphill battle.

To this day,

Ivankov proclaims his innocence

and believes that his arrest

and subsequent conviction was a result

of a conspiracy concocted by the FBI

and the Russian government.

They would never treat in the same way

a representative of any other nation.

My right for the final word was taken away from me.

I tried several times to say something,

my defense said no to that,

but I was not given the right to,

through the restrictions of trial regulations.

They tried to play on the side of Russia's Secret Services.

My defense, who were American,

played on the side of Russian Secret Services.

They said, we are Americans, help us with this trial

and next time we'll help you with what you need.

According to various law enforcement agencies,

the Vyacheslav Ivankov

is just one of the many sharks swimming in an ocean

of transnational crime.

It is estimated that Russian organized crime is operating

in 50 countries around the world.

Well, I can hardly think of any place in the world

that they don't operate.

I mean, one of the things that they're extremely good at is

operating an offshore islands in the Caribbean,

or the South Pacific that you may never even have heard of.

The challenges facing law enforcement

in dealing with organized crime

really focus on communication, intelligence

and cooperation in the legal systems.

We don't have an international court,

criminal court, for example,

so there's no place to take criminals, if you will.

So jurisdictions change.

One of the real problems

is the legal definitions of crime.

What is a crime in one country

might not be a crime in another country.

But according to author Stephen Handelman,

the greater threat is to the stability of Russia itself.

The one thing that has to be emphasized is that

although Russians have come to the United States,

Russian criminals have come to the United States

in great numbers,

this for them is not a major center,

United States is for them,

is not a major center of operations.

For them, it's a good place to bank,

it's a good place to keep money

in case things get really bad,

but their interest

and their attention is still focused on

the power politics of Russia,

where the fight for the spoils of the old Soviet system

still goes on,

and where people are still in a vicious fight

for power and for economic control

of the old of Russia's resources.

According to the Russian Ministry of Internal Affairs,

roughly two thirds of the Russian economies

under the sway of crime syndicates,

Swiss banks are estimated to hold $10 billion

of Russian organized crime money.

Russia has truly become a superpower of crime

and Vyacheslav Ivankov is just one figure in a country

riddled with criminals.

I'm Robert Stack.

Thanks for joining us.