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More brain, less brawn: Russian mafia gets into big business
POSTED: 1:20 p.m. EDT, February 1,2007

Russian mafia groups are taking over hundreds of major industrial companies as part of a move away from the violent criminal business of the early post-Soviet years, police and analysts said.

"Our analysis shows that more than 2,000 industrial entities have fallen under criminal control," Alexander Yelin, deputy head of the interior ministry's department on organised crime, told the Izvestia daily.

The businesses, mainly in far eastern Russia and the Volga region, include firms producing chemicals and metals, as well as transport companies and ports, an official from the interior ministry's press office told AFP.

Yelin said that up to 400 companies under mafia control were major industries in one-factory towns.

Organised crime groups, many based on Soviet-era prisoner networks, have long been influential in Russia but have traditionally concentrated on racketeering, drug-trafficking, prostitution and gambling -- but not industry.

Last year, police broke up a mafia group that controlled Volzhsky Orgsintez, a large chemical firm with annual revenue of about 160 million dollars (124 million euros), the official said.

Mafia owners were investigated in a total of 200 industrial enterprises in 2006 but police face a difficult task because "you need to analyse more documents, you need specialists", said the official.

In 2002, when Russian food and drinks company Wimm-Bill-Dann listed in New York, the firm was forced to reveal that its main shareholder, Gavril Yushvayev, did prison time for mafia crimes in Soviet years.

"A very large part of the Russian economy has criminal origins and a number of former godfathers are now locomotives of the Russian economy," said Vladimir Ovchinsky, head of the Russian office at international police organisation Interpol from 1997-1999.

Yelin estimated that there are around 450 mafia groups with a total of 12,000 members in Russia.

"Criminal leaders and active operatives ... are aiming to put their money into business, aiming for political power," he said in the interview.

Mafia shoot-outs -- frequent in the 1990s -- have become rare in Russian cities but officials said this only means the mafiosi have found subtler ways of operating.

Anvar Amirov, an independent expert on relations between the Russian state and the business community, likened the shift to the development of the fictional Don Corleone's mafia empire in the "Godfather" film series.

"We have reached the stage where our Don Corleones want their sons to occupy seats in the Russian senate," the upper house of the Russian parliament, Amirov said.

Yelin said that the increase in "reiderstvo" -- a practice of taking over businesses through illegal bankruptcy proceedings -- was evidence of Russian mafia involvement in white-collar business.

The Russian mafia is made up of several major local groups that are built up around rigidly hierarchical structures often headed up by "godfathers" who were already powerful criminals in Soviet times.

From:AFP
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