Atlantic City, N.J. — Organized crime is gaining ground in both illegitimate and legitimate businesses in Atlantic City, according to top local law enforcement officials. Loan-sharking -- illegal money lending at exhorbitant interest rates -- has increased substantially here since the advent of casino gambling 20 months ago, these officials say. But this is merely the tip of the iceberg of organized crime's growing presence in "Las Vegas east," where $2.5 billion is being invested in casino construction.
Two of New York City's five major crime "families" now are active here, state and local law enforcement officials say. These elements are in fact muscling in on what had been -- before the casino boom -- the traditional turf of Philadelphia organized crime figures, investigators say.
The basic reason for organized crime's growing stake in the subterranean and legitimate economies here, including land speculation and restaurant and pizza parlor ownership, is the enormous return on investment to be made from them, explains assistant Atlantic County prosecutor Jeffrey Blitz.
Two activities which law enforcement officials such as Mr. Blitz are confident organized crime has been kept out of here are casino operations and the sale of liquor. This, they say, is because of stringent state and local regulation of those two industries.
Not so with unregulated businesses such as real estate and the traditional illegal sources of revenue:
In an effort to curb organized crime's inroads into real estate, the US Internal Revenue Service will soon computerize all available information on the buyers and sellers of property. Then, if federal investigators can prove that the money to purchase the land "was obtained from illegal sources," Mr. Blitz says, the speculators can be prosecuted under the Racketeer Influence and Corrupt Organizations Act (RICO).
"We've seen loan-sharking increase here," Mr. Blitz says. "We've returned several indictments in dealing with it and are now working on similar cases involving loan- sharking activity. I also have several loan- sharking cases coming up for trial in the next few weeks."
The Atlantic City victims of loan sharks up to now, he says, have been small-business men and, to a growing but undetermined extent, gamblers who frequent the casinos.
One of the major dangers in the mob's real estate activity, law enforcement officers say, is that growing control of any one segment, such as pizza parlors, would squeeze out competitors. Thus, organized crime interests would be free to charge whatever they pleased.
"The more regulated an industry is, the less incursion of organized crime there is," Mr. Blitz notes. "A joint task force, for instance, reviews all the purchases of liquor licenses here to determine if the purchasers are fit people to be in the industry.
"At the other extreme is real estate, where there is really no regulation at all. So in that particular area we have seen some incursions of organized crime."
Loan-sharking, which accounts for $10 billion of organized crime's $25 billion annual net revenue from illegal sources nationwide, was virtually nonexistent in Atlantic City before casino gambling made land values skyrocket. One reason it is thriving now, according to William Eames, managing director of the Greater Atlantic City Chamber of Commerce, is that many businessmen were "not prepared" for the economic boom in the city and are turning to loan sharks for quick money.
"I am quite sure that a number of our members are victims of it, but it's not a problem that a businessman tends to share with anybody," Mr. Eames says.