Regulatory Regimes and Organised Crime: Consultation Paper

2. The nature of organised crime

2.1 This chapter examines the meanings of ‘organised crime’ and ‘criminal organisations’, and outlines the main types of criminal activity allegedly engaged in by organised crime groups in Australia.

Defining ‘organised crime’

2.2 There is no settled definition of ‘organised crime’—definitions vary among jurisdictions, law enforcement agencies, and research bodies. At a high level, definitions of organised crime commonly require that:

• the criminal activities are undertaken for financial or other gain

• the offences are serious

• the groups involve no less than two or three people, and

• the offending is planned and often ongoing, and is distinct from the offending of groups that are formed for the immediate or opportunistic commission of an offence.^[1]

2.3 Some of these features are embodied in the key definitions of organised crime in Victorian and Commonwealth legislation.

2.4 The Major Crime (Investigative Powers) Act 2004 (Vic) (MCIPA) contains the main definition of organised crime in Victorian legislation.^[2] The MCIPA provides powers to Victoria Police to investigate and prosecute ‘organised crime offences’. Under section 3AA of the MCIPA, an ‘organised crime offence’ is an indictable offence against the law of Victoria that is punishable by level 5 imprisonment (10 years maximum) or more, involves two or more offenders and:

• involves substantial planning and organisation, forms part of systemic and continuing criminal activity, and has a purpose of obtaining profit, gain, power or influence or of sexual gratification where the victim is a child, or

• two or more of the offenders involved in the offence are, at any time, either declared individuals or declared organisation members.^[3]

2.5 The Australian Crime Commission Act 2002 (Cth) (ACC Act) establishes the Australian Crime Commission (ACC), including its powers to investigate and gather intelligence in relation to ‘serious and organised crime’. Section 4(1) of the ACC Act defines a ‘serious and organised crime’ as an offence that:

• involves two or more offenders and substantial planning and organisation

• involves, or is of a kind that ordinarily involves, the use of sophisticated methods and techniques

• is committed, or is of a kind that is ordinarily committed, in conjunction with other offences of a like kind

• is a ‘serious offence’,^[4] an offence involving the use of postal or carriage services for sexual activity with a person under 16 years of age or the distribution of child pornography or child abuse material, an offence of a kind prescribed by the regulations, or an offence involving any of the things specified in section 4(1) of the ACC Act,^[5] and

• is punishable by imprisonment for a period of three years or more or is a ‘serious offence’ as defined by the Proceeds of Crime Act 2002 (Cth).

Defining ‘criminal organisations’

2.6 ‘Criminal organisations’ is not expressly defined in Victorian or Commonwealth legislation. The Commission understands this concept to mean a group, body or association, whether incorporated or unincorporated, which is involved in serious criminal activity, and may include individuals who are related to one another.^[6] The terms ‘organised crime group’ and ‘criminal organisation’ are used interchangeably throughout this paper.

2.7 Contrary to early conceptions of organised crime, criminal organisations/organised crime groups do not necessarily have stable organisational structures with well-defined member roles and fixed group identities based on common interests or activities, place of origin (such as prisons), or familial relationships and ethnicity. Instead, ‘a shift has been detected away from strongly hierarchical crime groups based on ethnicity, place, or activity toward more flexible, entrepreneurial groups that are open to instrumental associations across ethnicities and that operate in multiple criminal markets and across jurisdictions’.^[7]

2.8 By its nature, the supply of illicit goods and services ‘tends to prevent the consolidation of large-scale, durable criminal enterprises’ due to the threat of disruption by law enforcement agencies or rival organised crime groups. A more flexible organisational model, characterised by ‘loose associations’, allows group members to be added or discarded according to organisational needs.^[8]

2.9 Organised crime groups may operate across several jurisdictions, domestically and/or internationally.^[9] However, not all forms of organised crime have national or transnational dimensions.

2.10 In Victoria, certain types of organised crime groups have been a particular focus for law enforcement agencies. During the mid- to late 2000s, the activities of gangland organisations were a major concern for Victoria Police. This resulted in several high-profile prosecutions of murder and major drug trafficking offences.^[10]

2.11 In more recent years, the alleged criminal activities of certain motorcycle clubs have received particular attention from Victoria Police, and from law enforcement agencies in other states and territories.^[11]

2.12 A distinction should be drawn between, on the one hand, socially oriented, recreational motorcycle clubs and, on the other hand, economically oriented motorcycle clubs that may be involved in criminal activity. The latter group is often referred to as ‘outlaw motorcycle gangs’ (OMGs) by law enforcement agencies.^[12] However, criminal activity is not synonymous with membership of an OMG, and any criminal activity by an OMG may be restricted to a limited number of current or former group members, and may extend to people outside the group.^[13]

2.13 During 2013–14, the Victoria Police Echo Taskforce conducted operations targeting the Hells Angels, Comanchero and Rebels motorcycle clubs. Among other things, these operations investigated the alleged trafficking of illicit drugs by national crime syndicates linked to OMGs and the alleged trafficking of firearms by OMGs in Victoria and interstate.^[14]

2.14 In its 2014 inquiry into the supply and use of methamphetamine, the Parliament of Victoria Law Reform, Drugs and Crime Prevention Committee examined the involvement of organised crime groups (including OMGs) in the Victorian methamphetamine market. The Committee received anecdotal evidence indicating the involvement of OMG members in ‘all aspects of the ATS [amphetamine-type substances] market’, including ‘the importation of precursors, robbery of pharmacies to procure pseudoephedrine, manufacture of ATS in clandestine laboratories, infiltration of the security industry to facilitate distribution and sales, and recruitment of drug users to settle debts.’^[15] However, the Committee received limited specific evidence of the involvement of organised crime groups (including OMGs) in methamphetamine supply, and recommended further investigation of the matter.^[16]

Organised crime activities

2.15 Organised crime can include a wide range of criminal activity, given the broad legislative definitions of organised crime set out in the MCIPA and the ACC Act.

2.16 While ‘organised crime groups have a presence across many sectors and crime types’,^[17] the ACC has identified four main types of criminal activity committed by organised crime groups in Australia:

• illicit ‘enabling activities’ such as money laundering, which enable or facilitate other criminal activity but are not an end in themselves

• trafficking in illicit commodities, particularly illicit drugs, firearms, and wildlife

• crimes in the mainstream economy, including securities and investment fraud and mortgage and loan fraud

• crimes against the person, particularly human trafficking, maritime people smuggling, and child sex offences.^[18]

2.17 The illicit drug market reportedly remains the principal source of profit for organised crime groups in Australia.^[19]

2.18 The broad variety of organised crime activity reflects the adaptive and flexible nature of modern organised crime groups, which may seek to engage in criminal activity across numerous illicit markets in order to maximise profits and diversify their interests.^[20]

2.19 A similar observation was made by the Parliament of Victoria Law Reform, Drugs and Crime Prevention Committee in its 2014 report on the supply and use of methamphetamine in Victoria, which referred to the National Criminal Target List compiled by the ACC. The Committee noted that the majority of Victorian targets involved in the methamphetamine market were identified as being involved in multiple criminal activities, including multiple illicit drug markets.^[21]

1. See, eg, United Nations Convention against Transnational Organized Crime, opened for signature 12–15 December 2000, 2225 UNTS 209 (entered into force 29 September 2003) art 2 (definitions of ‘organized criminal group’ and ‘structured group’); Shona Morrison, ‘Approaching Organised Crime: Where Are We Now and Where Are We Going?’ Trends & Issues in Crime and Criminal Justice no. 231 (Australian Institute of Criminology, 2002).

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2. Major Crime (Investigative Powers) Act 2004 (Vic) s 3AA. The MCIPA definition appears in the same or similar form in other Victorian Acts such as the Summary Offences Act 1966 (Vic) s 49F (consorting with a person found guilty of, or reasonably suspected of having committed, an organised crime offence) and the Sex Work Act 1994 (Vic) s 26(ab)(iii) (referral of allegations and information about organised crime offences to Victoria Police).

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3. ‘Declared individual’ and ‘declared organisation member’ have the same meaning as they have in s 3 of the Criminal Organisations Control Act 2012 (Vic): Major Crime (Investigative Powers) Act 2004 (Vic) s 3. A declared organisation member means a member, former member or prospective member of a declared organisation. The Supreme Court may make a declaration that an organisation is a declared organisation for a range of reasons, including that the organisation has engaged in or supported serious criminal activity or that any two or more members, former members or prospective members of the organisation have used the organisation for a criminal purpose. An individual may be declared by the Court to be a declared individual if, for example, the Court is satisfied that the individual is a member of an organisation, that the individual and another member of the organisation are using that organisation for a criminal purpose, and their activities pose a serious threat to public safety and order: Criminal Organisations Control Act 2012 (Vic) ss 3(1), 19.

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4. In this context, a serious offence has the meaning given by the Proceeds of Crime Act 2002 (Cth): Australian Crime Commission Act 2002 (Cth) s 4(1) (definition of ‘serious offence’).

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5. The definition of serious and organised crime in section 4(1) of the Australian Crime Commission Act 2002 (Cth) refers to offences involving any of the following: theft; fraud; tax evasion; money laundering; currency violations; illegal drug dealings; illegal gambling; obtaining financial benefit by vice engaged in by others; extortion; violence; bribery or corruption of, or by, a Commonwealth, state or territory officer; perverting the course of justice; bankruptcy and company violations; harbouring of criminals; forging of passports; firearms; armament dealings; illegal importation or exportation of fauna into or out of Australia; cybercrime; and ‘matters of the same general nature as one or more of the matters listed above’.

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6. Adapted from the Criminal Organisations Control Act 2012 (Vic) ss 1, 7, 19.

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7. Julie Ayling and Roderic Broadhurst, ‘Organized Crime Control in Australia and New Zealand’ in Letizia Paoli (ed), The Oxford Handbook of Organized Crime (Oxford University Press, 2013) 612, 615. See also Victoria Police, Organised Crime Strategy 2005–2009 (2005) 22.

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8. Letizia Paoli, ‘The Paradoxes of Organized Crime’ (2002) 37 Crime, Law & Social Change 51, 63, 67. See also Australian Crime Commission, Organised Crime Groups (2013).

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9. Australian Crime Commission, above n 8.

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10. See: Chris Corns, ‘Combating Organised Crime in Victoria: Old Problems and New Solutions’ (2005) 29 Criminal Law Journal 154, 154–5; Victoria Police, above n 7, 5; Barbaro v The Queen (2014) 305 ALR 323; R v Mokbel [2012] VSC 255 (3 July 2012); R v Williams [2007] VSC 131 (7 May 2007).

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11. See, eg, Julie Ayling, ‘Pre-emptive Strike: How Australia is Tackling Outlaw Motorcycle Gangs’ (2011) 36(3) American Journal of Criminal Justice 250.

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12. Australian Crime Commission, above n 8.

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13. Julie Ayling, above n 11, 260–1; Law Reform, Drugs and Crime Prevention Committee, Parliament of Victoria, Inquiry into the Supply and Use of Methamphetamines, Particularly Ice, in Victoria, Final Report (2014) 358–9.

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14. Victoria Police, Annual Report 2013–14 (2014) 35.

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15. Law Reform, Drugs and Crime Prevention Committee, Parliament of Victoria, above n 13, 360–1.

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16. Ibid 363.

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17. Australian Crime Commission, above n 8. See also Australian Crime Commission, Organised Crime in Australia 2013 (2013) 7.

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18. Australian Crime Commission, Organised Crime in Australia 2013 (2013). This report is the public version of the classified Organised Crime Threat Assessment.

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19. Australian Crime Commission, Organised Crime in Australia 2011 (2011) 54.

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20. Australian Crime Commission, above n 18, 7; Attorney-General’s Department, Commonwealth Organised Crime Strategic Framework: Overview (2009) 7; Law Reform, Drugs and Crime Prevention Committee, Parliament of Victoria, above n 13, 356–7.

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21. Law Reform, Drugs and Crime Prevention Committee, Parliament of Victoria, above n 13, 357.

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