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Ex-Mobster Sheds Light on Organized Crime in Retail

Retailers need to vigilantly watch for organized crime infiltration of their business activities on both the front and back ends of the enterprise.

Chain Store Age recently spoke with John Pennisi, a former member of the New York-based Lucchese Mafia family, about the extent of organized crime’s involvement in retail and specific ways criminal enterprises attempt to exploit the industry for profit. Pennisi was blunt about organized crime having an established retail presence.

“Organized crime is heavily involved in retail,” stated Pennisi. “They used to be even more involved in areas like the [New York City] Garment Center and fish market, but [former federal prosecutor] Rudy Giuliani chased them out of those areas.”

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However, based on Pennisi’s comments, retailers should be sure to partner with established, trusted providers in transportation and waste disposal.

“Trucking is an essential part of retail,” he said. “Retailers may have to pay a higher shipping rate because the Mob puts a tax on moving goods, which goes to them. You pay the cost to move the product; it’s their way to get involved.”

In some cases, Pennisi said organized crime figures have owned trucking companies which retailers were then forced to use. Criminal organizations may also attempt to impose a “tax” on legitimate shipping providers, which is then passed along to the retailers.

“The shipper is not going to take the loss,” explained Pennisi. “They will charge a higher amount to their customers.”

Pennisi said retailers also need to be careful of schemes that involve paying a higher fee to dispose of garbage because either a criminal group controls the waste removal company or collects a “tax” from the provider, which in turn is factored into the cost paid by the retailer. On the distribution end…  Chain Store Age

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