U.S. Mobsters, Behind in Cybercrime, Could Win Tuesday

ruth_parasol.jpg [image: PartyPoker founder Ruth Parasol]

I know what patriotic Americans reading about the lucrative feats being pulled off by organized cyber criminals in Russia, Ukraine and elsewhere are thinking. Can't mobsters from the good old U.S. of A. compete in today's fast-moving global marketplace?

It's a sad fact that the West is lagging behind in giant-scale Internet fraud. But I don't think we need to lobby for a Five Families bailout just yet, especially if the Republicans capture the House tomorrow and kill Rep. Barney Frank's effort to legalize online gambling.

True, the other side has unfair advantages, including stunningly corruptible business-oriented law enforcement and the lack of a Silicon Valley to siphon off programming talent with high-paying straight jobs. In fact, some countries essentially sport a pre-fabbed mob infrastructure. Even legitimate enterprises typically hire their own mafia patron to negotiate cop-shakedowns and fend off other mobsters wanting handouts, so a greater union is pretty much the natural course of things once a hacking group gets big.

Going up against that sort of trade barrier, our wiseguys actually have done okay for themselves. U.S. prosecutors have said the biggest money-making enterprise in Gambino family history--netting some $650 million--was a combined pair of scams run by soldier Richard Martino. One was pretty straightforward: Enter your credit card number, just to prove you're 18, to see some free Web pr0n, then prepare to be shocked when charges from innocuous-sounding businesses show up on your statement. The other showed more initiative. Callers looking for free phone sex were tape-recorded saying "yes", they were 18, and then stuck with bogus monthly phone services. When regulators inquired, the "yes" was played back, this time appearing to accept recurring fees.

Mainly, though, U.S. mobsters have moved on only gradually from what they know, taking to online sports betting and more recently online poker. BetCRIS, serving U.S. customers from Costa Rica, has been controlled by No. 1 American bookie Ron Sacco, who the FBI says worked with the Gambinos. And even London Stock Exchange-traded PartyPoker, for years the biggest card site, grew to dominance with the help of a key player in Martino's scams who avoided prosecution.

PartyPoker founder Ruth Parasol, another veteran of sketchy 1-900 and Web sex outfits, recommended her friend for the job, I've reported elsewhere.

So bettors shouldn't be stunned if they fall prey to cheating on online sites, or are unknowingly matched up against robots, or simply find that the site they put deposits in has disappeared. All of those things have already happened, and they will keep happening at least until online gambling is legalized and regulated. Because that no longer appears to be in the offing, our mobsters should continue to prosper. Now they just need to reinvest, diversify and pursue win-win partnering opportunities. Let's get those business-school applications in, people.


  1. “So bettors shouldn’t be stunned if they fall prey to cheating on online sites, or are unknowingly matched up against robots, or simply find that the site they put deposits in has disappeared. All of those things have already happened, and they will keep happening at least until online gambling is legalized and regulated.”

    Right, because legalization and regulation always makes thing run perfectly and reduces fraud to zero.

    I’m not saying online gambling should or shouldn’t be legalized or regulated. I’m saying less than scrupulous operators will always exist. In fact, one could argue that as the number of gambling sites increases (presumably once they’ve been legalized), the incidents of fraud will increase as well.

    1. Yeah, the idea that legality cuts out the Mafia was pretty much disproven by Las Vegas in the “Goodfellas” era…

  2. Hey wait? Didn’t we just pull off the biggest swindle the world economy has ever seen? We sold triple-A rated investments larded up with toxic assets all over the civilized world. I think our national ability to commit mayhem is being vastly underestimated here.

  3. Online gambling is like televangelism, or usurious payday loan operations. It’s a money:sense equalizer. This is a function that will be served by someone. But that doesn’t mean we need to legalize it. Accepting that it will exist still doesn’t answer the question of who it should be served by, and in what manner.

    The mob? Or legitimate businessmen?

    I prefer the mob. They’re disreputable, not accepted in polite society, yet I will grudgingly admit that they display a certain amount of bravery in putting their own freedom on the line to pursue their business. And we don’t have to listen to them whining about all the good they do for society. Some things just should be underground. Sewers are necessary to society, but we don’t run them in clear plastic tubes at sidewalk level, you know?

    Now, about outlawing televangelism…

  4. So we will only get this bill if the Republicans take over the house? I thought they’d be against this sort of thing since it’s obviously more big government.

  5. People are going to gamble.

    Yes, less than scrupulous operators will always exist. But if gambling is illegal and unregulated then, by definition, the unscrupulous operators are the ONLY choice. There may be some honorable outfits out there, but with no licensing board finding such outfits is hit or miss. And with legitimacy come legal consequences for those that break the rules. If a customer is ripped off, he can go to the authorities or sue for damages, or whatever.

    Legalization and regulation of on-line gambling is nothing but a win for people who want to gamble (many of whom will gamble whether it’s legal or not).

    The only people who don’t want it legalized and regulated are those who believe it’s morally wrong and that people who get ripped off are getting what they deserve, or the outfits that are taking in a fortune BECAUSE on-line gambling is illegal/unregulated and people like to gamble.

    1. It is ridiculous to think that internet gambling will be properly regulated. I live in Nevada and have had dealer friends show me what they can do with a deck of cards. CANCEL that David Copperfield show….I will stay and watch the card tricks….

  6. Great – yet another thing for the politicians to mischaracterize (lie about) in order to get elected.

  7. uh, we don’t need the mob in this country anymore.

    We have AIG, Bank of America, Sachs and Chase stealing more money than any mafioso could in 100 years

  8. Online poker players are pretty eager for legitimate corporations to get in on the deal. The big poker sites have lousy customer service and opaque policies for investigating wrongdoing, both of which should go away with more sunlight and regulation.

    Botting is a separate and more intractable issue. Winning bots have been around for years, both at extremely high limits in heads-up poker games, and at lower limits in standard 6- and 9-player games. It’s only a matter of time before they end up crowding out the humans at online poker.

  9. I don’t see why bots should be banned. We use machines to compete all the time (see: nascar). They just need to ensure that competitors are classed into appropriate groups.

    Perhaps a crypto-based ID system and automatic classification based on performance history. The higher the stakes, the stronger the ID system required before play is permitted.

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