All across the Calumet Region, shadowy men take cuts of profits from illegal gambling, drugs are imported from faraway lands and peddled on the streets, and bands of thieves cross state lines to ply their trades. It sounds like the heyday of organized crime, but investigators, prosecutors and people near the action say it's been a long time since Chicago Outfit mobsters controlled the region's criminal underworld.
Gangsters like Dominick "Tootsie" Palermo and Albert Tocco may have died in prison. But traditional organized crimes such as drug dealing, illegal gambling, prostitution and union corruption remain problems in Northwest Indiana and the rest of the country, despite efforts like last summer's Family Secrets trial that targeted some of the traditional mob organizations.
The crimes have just taken on a new face and structure, local experts say.
"When I was a kid, organized crime meant the mob. It doesn't mean the mob anymore," said Mark Becker, head of the FBI's region anti-gang task force and the Merrillville bureau's top official on organized crime. "Now organized crime does not necessarily mean Italian links. It can be Mexican cartels or street gangs like the Gangster Disciples."
Anthony Murphy, who is police chief in Chicago Heights -- the city from which the region's mob Outfit gangsters once hailed -- said he believes the FBI has "pretty much killed what was here in our city at one time" in terms of traditional organized crime.
David Capp, the acting U.S. attorney for the Northern District of Indiana, said cases including Family Secrets and the Taste of Italy prosecution in Northwest Indiana in the early 1990s helped to break the back of the traditional mob. In the trials, prosecutors alleged wide patterns of extortion and violence by Outfit associates.
A few Chicagoans aren't so optimistic. Former Chicago cop and organized crime expert John Flood said he believes the Chicago Outfit continues to control some criminal activity, such as the flow of drugs in the area from Milwaukee to South Bend.
James Wagner, director of the Chicago Crime Commission, said organized crime still thrives and could be more dangerous than ever because of the threat of international terrorism.
Gangs including the Latin Kings are selling sophisticated fake passports to buyers in Europe, and union longshoremen at some of the nation's largest East Coast ports stand accused of letting New York crime families run their organizations, he said.
Betting on crime
Gambling always has attracted organized criminals in the Calumet Region and elsewhere.
Experts say efforts to drive out organized crime by making gambling legal may have stopped some of the traditional ways the mob made its money. But new methods have developed. "There's so many different schemes, but they all center around checks, debit cards and credit cards," said Gary Scott, an Indiana State Police master trooper who spent nine years investigating fraud at Northwest Indiana's gambling boats. "It is organized crime to a certain extent."
Within two hours of stealing someone's wallet at a bar, the thieves can arrive at a casino cage with a newly minted fake ID to make a cash withdrawal on a credit card, Scott said.
Or take the case of James Hunt, who is charged in Hammond federal court with leading a group that would write large checks on bogus bank accounts and then withdraw the money at Northwest Indiana casinos before the banks realized what had happened.
Scott said groups of thieves from Nigeria and China and Chicago street gangs have perpetrated large credit fraud and identity theft schemes at Northwest Indiana casinos. Some have recruited white drug addicts, who can withdraw the cash with less suspicions and will accept narcotics as payment, he said.
"We've been doing dozens of check fraud cases over here on the casinos. It's nonstop," Capp said.
Illegal gambling in Northwest Indiana also persists.
Larry Rollins, director of the new Indiana Gaming Control Division, said illegal gambling still flourishes in Indiana bars, and some tavern owners continue to pay out on "entertainment only" video machines.
The bar owner typically takes a 50 percent cut of the profits on those machines, with the other half going to the "distributor," who regularly comes around to collect, experts have said.
Coca plants and poppies are not grown in Northwest Indiana, yet cocaine and heroin still make it to the streets of Lake and Porter counties. But if mob outfits aren't orchestrating the smuggling as they once did, how are the drugs getting here? Experts say local gang figures have been working directly with Mexican drug cartels and other illegal drug providers.
"We know of several (cartels), and almost all of them have ties either to Chicago or down in the Southwest border," said Dennis Wichern, agent in charge of Indiana for the U.S. Drug Enforcement Administration. "All roads lead back to the Southwest border."
And in recent years, federal drug agents have traced a circuitous route of drugs smuggled across the Mexican border to suspected narcotics warehousing operations in Merrillville.
In addition to that, more than two dozen members and associates of Gary's Renegades street gang have been convicted of buying and selling cocaine throughout the Midwest, federal authorities said. Among those convicted were boxing phenom Charles "Duke" Tanner and Mexican cartel member Arnulfo Castellanos.
Narcotics long have been tied to gangs, guns and the street violence that follows. The substances also have been tied to spikes in burglaries, robberies and other property crimes as addicts steal to feed their habits.
Some federal and region law enforcement officials said the narcotics pipeline from Mexico to Merrillville, Chicago and elsewhere in the Midwest continues to perpetuate the crime for which millions of dollars are spent each year to battle.
Other crimes once associated with the mob also continue to flourish in the shadows of the Calumet Region, including prostitution. In some cases, the crime has taken on an international look.
Hammond Police Chief Brian Miller said the Mafia appears to have lost its grip on local prostitution rings, but the practice still persists on an independent basis.
Federal authorities recently broke up four so-called massage parlors in Dyer and Highland, claiming the business owners were harboring women imported from Korea who lived on site and worked as prostitutes.
From his vantage point at the Chicago Crime Commission, Wagner doesn't see organized crime fading with the mob.
"I've been telling everyone that I can talk to that (organized crime) is still a factor -- and is always going to be a factor -- as long as there is money to be made and there is power," Wagner said. "You're always going to find the younger generation willing to take the risks of prosecution in order to make that money and have that power."
Thanks to Joe Carlson
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