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Asian Criminal Enterprises

By Sergeant Marcus Frank*
Special Investigations Unit
Intelligence/Organized Crime
Westminster Police Department, California

Criminal syndicates have conducted illegal activities based on business models for hundreds of years. Such criminal enterprises have tended to be more efficient in operation and produce more profit for its members than gang-directed activities on the street.

The concept of the Asian Criminal Enterprise (ACE) has existed in Asian countries for centuries. When the concept of the ACE was first recognized in the United States, it was most often identified with activities being conducted by named organized crime groups. An unfortunate stereotype often promoted by law enforcement officials was that systematic organized crime could only be conducted by "named" gangs or organizations. For years, officers working in the field of Asian organized crime were stymied in their efforts to prosecute identified Asian Criminal Enterprises because they were unable to link the suspects to "named" groups such as the "Wo Hop To" or the "14K."

In recent years, experts have begun to recognize that many ACEs are organized crime structures that merely lack a formal name. A number of years ago, the FBI developed a definition of an Asian Criminal Enterprise that defines the concept as:

"A continuing criminal enterprise, motivated by profit. Criminally diverse, the members engage in a variety of hi-tech organized criminal activities. They are multi-jurisdictional and/or international in nature. They engage in a pattern of racketeering activities, which usually focus on one type of highly profitable criminal activity while committing other ancillary crimes to further the enterprise and/or for personal gain. The enterprise is often comprised of a network of highly mobile, diverse and loosely linked criminal cells. The lack of structured hierarchy and membership with many of these ACEs creates a challenge for law enforcement."

Varying regional cultures throughout Asia play a significant role in the establishment and the success of ACEs. Most ACE members are recruited via familial, social, or geographic ties, and these relationships require allegiance by individuals to the enterprise. Traditions of trust between individuals of a social circle or a geographical area allow agreements, contracts, or other economically related pacts to be sealed with a handshake or a nod. This creates challenges for law enforcement agencies tracking an ACE due to an absence of a paper trail detailing member status and benefits accrued.

Initially, ACEs were classified as "traditional" and "non-traditional" depending on which "named" organized crime structure could be associated with the enterprise. Traditional ACEs were linked to groups such as Chinese triads, Japanese Boryokudan, and the Korean mafia. Non-traditional ACEs were linked to groups such as Chinese tongs and Asian street gangs. In the past 10 years, the evolution of crime groups from Southeast Asia has necessitated a re-evaluation of ACEs and their role in the criminal subculture.

The largest influx of Southeast Asian refugees into the United States occurred between 1975 and 1990, and consisted mainly of populations from Vietnam, Cambodia and Laos. As with most ethnic groups, only a very small percentage of youths within these refugee populations chose to join the criminal subculture. Initially, these youths banded together to commit crimes for economic gain. These individuals quickly learned it was more efficient to commit crimes for economic gain as a group, as opposed to operating alone.

At first, these early bands did not adopt official names, identification signs or symbols. Due to legal rules governing "gang" classifications, these criminal youth groups were initially not classified as such, but were termed "bandit groups" by law enforcement.

However, as these youths became assimilated into American culture, they began to emulate Occidental, or non-Asian, street gangs. The "bandit groups" began to adopt gang names and started to pattern themselves after the street gangs dominating the attention of the American media. In addition, Asian gangs began attracting increasing numbers of first-generation American-born youths.

As the numbers of the first-generation Asian-American youths grew, they slowly began to displace the refugee youths in the gang structures. The American-born youths saw no reason to concentrate only on crimes for economic gain, having not experienced the severe economic hardships of their refugee predecessors, and they changed the focus of the Asian gangs towards activities that would increase their "face" within the criminal subculture.

"Face" is a concept that is similar to "respect" in a western culture, but encompasses far more than that. It includes one's reputation, social status, economic standing, and position of influence. Increasing "face" in the world of gangs can involve committing the most sophisticated crimes, having the most members, being the most feared, making the most money, having the most guns, and similar actions and characteristics.

Many of the younger gangsters opted for life in the criminal subculture, where they could obtain the "face" they might not receive in ordinary life. For these individuals, the ultimate "face" that could be achieved within the criminal subculture was to be identified with organized crime. Someone like John Gotti of the New York mafia was considered to have the ultimate "face" because of his perceived power and standing in the criminal underground.

In the quest for increased "face," gang leaders began trying to move their gangs into an organized crime role, and individual members of street gangs started to set up their own organizations and syndicates. Because of legal consequences in being identified with a "named" gang in the eyes of law enforcement, many Asian gangsters attempted to create organized entities recognized as organized crime "gangs" in their respective communities, but without any name, identifying sign, or symbol.

Law enforcement officials working in the field of Asian organized crime have related stories of criminals bragging about knowing the legal system and the ability to get around it. For example, young Asian street gang members in California liked to demonstrate their knowledge of the Street Terrorism Act (186.22 PC) by telling officers which street gangs had qualified in state courts, and then bragging about their immunity because their gang had not been so qualified. Older individuals involved in organized criminal ventures have boasted to officers that they will never be federally prosecuted because they do not belong to the "magic 14," referring to the number of named Asian organized crime groups they believe the federal government is willing open a case on.

All of these factors have contributed to the rise of a new type of Asian Criminal Enterprise seen most frequently in the Southeast Asian crime groups. These new ACEs are usually organized or led by an individual with prior street gang experience. One of the significant differences between ACEs and named organized crime structures or gangs is lack of allegiance to a "name." The new type of ACEs take in anyone who can provide a benefit to the enterprise, including one-time street gang rivals. There have been cases where evolving Southeast Asian ACEs have been identified with former members of as many as five different street gangs. Some of those street gangs had been bitter rivals for years, with all of the accompanying gang violence often associated with those feuds. Nonetheless, when the one-time street gang member joins the ACE, wars and loyalties are placed to one side, and the members act for the common good of the enterprise. Unlike members of organized crime groups or gangs whose loyalty is to the named entity to the exclusion of all others, members of these new ACEs demonstrate only economic loyalty to their enterprise.

A majority of the ACEs begin by concentrating on a single area of criminal endeavor and build the enterprise in the same manner as a business would evolve. The organizers seek out members who can bring an area of expertise to the enterprise that will enable it to grow and become more efficient. Targeted "recruits" who belong to opposing gangs are lured into the enterprise with offers of financial gain and the belief of increasing "face" through affiliation with organized crime.

ACE organizers usually have a street gang background and rely on contacts and associations made while in gangs to initially staff their own organizations. When the ACE is established and viable, the organizers use these same street gang contacts to expand their areas of control and to establish business alliances with other ACEs.

Investigators working Asian Criminal Enterprises have found an informal "word of mouth" association between ACEs across the country. This informal network is so efficient that deals involving thousands of dollars can be arranged with a single phone call. Examples of identified Asian Criminal Enterprise activities include prostitution, extortion, loan sharking, narcotics, bank fraud/identity theft, piracy, and gambling enterprises. In many cases, an ACE will start up dealing with one criminal aspect of a larger field, and later expand out to encompass other areas. For example, a number of Asian Criminal Enterprises have been set up relating to prostitution. Some started out by concentrating only on the recruitment and smuggling of females from Asia to the United States but did not get involved in operating the brothels themselves. Instead, the criminal enterprise involved in recruitment and smuggling would "sell" the girls to ACEs set up to operate brothels in this country. On the other end, the ACE involved in smuggling the girls might have to deal with an enterprise that specialized in counterfeiting documents in order to obtain papers used in the smuggling activity. The ACEs would interact with each other in the same way businesses deal with other businesses for supplies and services.

As the initial ACEs become more established and experienced, they are able to expand and move into other areas of organized crime. An enterprise with several local brothels may make enough money over time to set up prostitution houses in other cities. As it grows, the enterprise will look to control its own sources of supplies. The enterprise might expand into transporting its own girls without using a smuggling enterprise.

In another scenario, an ACE involved in prostitution may contract with a drug trafficking ACE for narcotics to satisfy requests of customers visiting the brothels. Over time, a steady customer base is created, and members of the prostitution ACE may attempt to expand into the trafficking of narcotics themselves. Situations like this usually trigger violence between ACEs on the same level that law enforcement has seen occur between street gangs.

For members of Asian Criminal Enterprises, threats to their economic gain also threaten their "face" and cannot be left unchallenged. The use of violence to deter other enterprises from encroaching on their "economic turf" also serves to enhance the "face" or standing of the enterprise's members within the criminal sub-culture. Law enforcement is experiencing a surge in violent crimes where the victims and suspects are identified Asian street gang members from different groups, but whose conflict is the result of a clash between ACEs over economics rather than an incident of gang warfare.

As time progresses, the ACEs of today must be monitored to determine if they will follow the patterns of the early Southeast Asian youth gangs. The earliest formations of these gangs started out as "bandit groups" interested only in crimes of economic gain. They evolved into named street gangs because of changing demographics and media attention. The economically based ACEs of today operate efficiently within their own communities as organized crime syndicates without identifying names, signs or symbols. As the ACEs continue to evolve and grow, interaction with the Occidental crime world becomes increasingly likely. Such interaction may eventually cause some ACEs to adopt the names, signs or symbols that give them recognition outside of their respective cultures.

Frank holds a Bachelors Degree in Criminal Justice from California State University at Fullerton and is a certified instructor in the field of Asian Gangs and Southeast Asian Culture for the state of California. He instructs in those fields for the University of Southern California (USC), for the California District Attorney's Association, for the California Commission on Peace Officer's Standards and Training, and for the Orange County Peace Officer's Academy.

Frank has been qualified as an expert in the field of Asian Gangs and Asian Organized Crime in the Superior or District courts for the states of California, Colorado, Idaho, Texas and Florida. He has conducted specialized training in Asian Gangs for law enforcement officers and district attorneys in 24 states. He has also done training for constables and crown prosecutors in four of Canada's provinces, for the State Judicial Police in the state of Baja California in the Republic of Mexico, for the Bavarian State Police in the province of Bavaria in the Federal Republic of Germany, and for the General Department of the People's Police in Hanoi, Vietnam.

Information in this paper was presented at the 25th International Asian Organized Crime Conference held in Boston, Massachusetts, May 25-30, 2003.

Reprinted with the consent of the author. Do not duplicate without consent of the author.