Much is written about the threat posed by organized crime. If you are involved in fraud detection and investigation for any length of time, you will investigate organized crime, whether you know it or not.

There is a certain mystique surrounding organized crime. It has been romanticized in numerous Hollywood epics, and portrayed for years in the highly successful HBO series, the Sopranos. In the earlier part of this century, J. Edgar Hoover built his entire career, and the FBI based on the threat posed by organized crime. To be sure, organized crime is a force to be reckoned with. Let me be clear here that by organized crime I am not just referring to the Mafia. It is any group of criminals that works together to perpetrate their crime.

What organized crime does exceptionally well is collude. Whether the collusion is based on a well defined hierarchy or merely the short term collusion to “hit” a specific target, organized crime knows how to cooperate, communicate and ultimately run circles around many corporations’ attempts to stop their activities.

Let me put it this way, how many fraud specialists are worried about disorganized fraud? Imagine presenting a list of concerns regarding organized crime and their attempts to defraud the bank to your CEO? Now, replace “organized crime” with “disorganized crime”. I am certain that the CEO would react much differently to the “disorganized crime” presentation.

Banks as well as the general public are scared of the organization. Why? Because along with the violent side, organized crime syndicates are ruthlessly efficient in their approach to fraud. I remember reading an interview with a senior member of an Eastern European crime syndicate where he discussed the investment in technology needed to steal from banks. He stated that his boss would not allow him to spend $1 if it did not generate at least $10. “Why should he?” the criminal remarked, “He is in the business to make money”. I’d also suggest looking at the current Bank Fraud Forum weekly feature. A 45 person fraud ring created an organized, efficient, “fraud assembly” line to steal over $12 Million in the last year alone!

Now think about your bank, how well do you collude? Let’s replace collusion with cooperate? I am not just talking about cooperation within the fraud department. Do the lines of business communicate and share intelligence from the front line regarding fraud trends. Does the fraud department do the same from their perspective? Does your bank only invest when it can generate a 10 fold return? You get the idea, is your bank organized, or just loosely affiliated?

How would you rate your bank’s ability to cooperate?

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