The Global Initiative Against Transnational Organized Crime published a report by Professor Mark Galeotti, an expert on organized crime and Russian intelligence services, titled “Gangsters at War: How Russia Uses Organized Crime as a Tool of State Policy.” Galeotti warns that the alliance between Russia’s state apparatus and organized crime “will have serious consequences not only for Russia’s neighbors and adversaries but also for the country itself.”
Historical Background
Since the 1970s, the KGB leveraged criminals as domestic assets. Pimps, money changers, and currency traders interacting with tourists were often required to report on foreign nationals’ activities and attitudes to identify potential recruits or hostile spies. At the time, the state—especially corrupt Communist Party officials—firmly controlled these arrangements.
The KGB also used criminals to establish numerous shell companies to channel operational funds. For example, Grigory Luchansky, as detailed by Anastasia Kirilenko on OpenRussia.org in 2016 using Swiss intelligence sources, was recruited by the KGB after prison to create an international network of companies. In 1989, he founded Nordex in Vienna, which officially traded raw materials but served as an intermediary for funneling Communist Party funds through shell firms. Similarly, Boris Birshtein’s Seabeco Group, accused in the Soviet Union of embezzlement, facilitated such activities after his emigration to Israel.
Evolution of Russian Organized Crime
By the late 1990s, Russia’s criminal structures evolved. Traditional tattooed gangsters, including “thieves-in-law,” were replaced by a new generation of criminal businessmen known as “authorities.” While “thieves-in-law” adhered to a traditional criminal code, these “authorities” focused on both illegal and legitimate business ventures, abandoning the criminal honor code in favor of maximizing profits.
During this period, organized crime wielded significant power in Russia. President Boris Yeltsin warned in an interview with Associated Press that Russia risked becoming a “criminal superpower.” Organized crime infiltrated government, law enforcement, business, and even the Russian Orthodox Church.
Professor Sergei Cheloukhine and co-author Professor Maria Haberfeld, in their work on Russian organized corruption networks, described Russia’s post-Soviet political-economic system as a “network of organized corruption,” comprising a hierarchical structure involving state officials, businessmen, and criminals. By the 2000s, chaotic street violence had given way to targeted killings. Criminal figures swapped tattoos and tracksuits for designer suits.
Organized Crime as a State Instrument
As Galeotti noted in a post for the European Council on Foreign Relations, Russian security agencies began fully exploiting organized crime networks after 2000. Both sides recognized their mutual benefits. During the Second Chechen War (1999–2009), Moscow coerced Chechen criminal groups to refrain from supporting insurgents under threats of business destruction. By the 2011 State Duma elections, criminal groups were overtly used to manipulate votes and disrupt opposition campaigns.
Russian organized crime’s value to the state has grown, particularly with its global reach. Post-Soviet groups rapidly integrated into international criminal networks, conducting lucrative operations across Europe, South America, and Africa, from drug trafficking to arms smuggling.
Ties to Hybrid Warfare and Cyber Operations
Non-military tools like intimidation, deception, and elite corruption are integral to Russia’s hybrid warfare. Russian criminals, some of whom acquired EU citizenship through “golden passport” schemes, have leveraged this to expand their operations within Europe.
In the cyber domain, criminals provide key capabilities for Russian intelligence. While the SVR developed sophisticated cyberespionage tools, the FSB pioneered the use of criminal hackers. According to the Carnegie Endowment for International Peace in 2018, hackers could escape prosecution by cooperating with the FSB, which provided them immunity and logistical support.
Impact of Sanctions and Russia’s Criminal Economy
The 2022 invasion of Ukraine intensified Russia’s reliance on criminal networks. Criminals facilitated sanctions evasion, smuggling dual-use microchips, and cryptocurrencies. Third-party nations like Turkey and the UAE enabled the rerouting of sanctioned goods to Russia via parallel markets.
A joint report by the International Working Group on Russian Sanctions and the Kyiv School of Economics revealed that despite sanctions, imports critical to Russia’s defense industry fell by only 10% in 2023. For certain items, imports remained higher than pre-sanction levels.
Proxy Operations Abroad
With Western diplomatic expulsions limiting Russia’s intelligence network, Moscow increasingly relies on criminal groups for sabotage, disinformation, and assassinations abroad. These operations, conducted through proxies, have alarmed Western intelligence agencies.
Russia’s collaboration with organized crime continues to underpin its domestic and international strategy, revealing the deep entanglement of its state apparatus with criminal enterprises.
