Chinese triad syndicates.  KGB hitmen turned New Russian mobsters.  North Korean drug smugglers with a reputation for ruthlessness. All are flourishing in Southeast Asia and the the Far Eastern region of Russia, where authorities seem powerless to stop organized crime from spreading its tentacles.  Here are a few fascinating but not-so-cheery articles about the growing underworld of mobsters in Asia and Far Eastern Russia that few people know about.

This article is from about 11 years ago.

The Russian Mafia in Asia

By Bertil Lintner (3 February, 1996)

"In Russia, the brigand is the only true revolutionary. He is a revolutionary without phrases, without bookish rhetoric...the brigands of the forests, towns and villages, scattered throughout Russia, together with the brigands confined in the innumerable prisons of the empire - these constitute a single, indivisible, tight-knit world, and in it alone, there has always been revolutionary conspiracy. Anyone in Russia who seriously want to conspire, anyone who wants a people's revolution, must go into this world."

- Russian 19th century anarchist Mikhail Bakunin.

Every month, Valerian, a Russian gangster, pays a tenth of his income to the Church in Ho Chi Minh City. "That's why I'm still alive. I believe in God," he says sipping at a glass of vodka in one of the city's many newly opened bars. "I don't like what I'm doing. But for us there is no other choice if we want to make money."

Only a few years ago, Valerian was an academic in Vladivostok on the Japan Sea in eastern Siberia. We discuss Mayakovsky's poetry and the wars between Peter the Great and Charles XII of my own country, Sweden. But Valerian's speciality is Asia. In fact, he holds a Ph.D. in East Asian studies. He also speaks fluent Vietnamese - and that was the why he was hired by the group to which he now belongs: a gang of Russian mobsters who have established themselves in Vietnam. His burly boss sits in the middle of the crowd at the bar, drink in his hand and surrounded by Valerian and other gang members. When the Boss speaks - which he does often and loudly - his underlings remain silent, nodding their heads.

"Do you want to know about a Russian patriot who loved his country? A person who said, 'fuck you, Russia' and went to Vung Tau to become rich?" the Boss says, clinking his glass of vodka against my mug of beer. "You must be talking about yourself," I say with Valerian as the interpreter. The Boss laughs uproariously at his rather meaningless joke, but his followers have to laugh politely and nod in agreement.

Valerian and his gang, like all other organised criminals, are engaged in a wide variety of both legal and illegal activities. Their company rents out Russian helicopters in Vung Tau, a Vietnamese port and beach resort where many foreign oil companies exploring in the South China Sea are based. They also import diamonds from the mines in Siberia and sell them to the many nouveaux riche in today's Ho Chi Minh City, which has regained its freewheeling lifestyle of the pre-war era.

"But why are you so afraid of losing your life?" I ask Valerian. A tenth to the Church every month? He fixes his eyes upon me and looks serious for the first time since we met in this racy bar in Ho Chi Minh City. "Do you want to know how we make big bucks? If Russian businessmen want to set up shop here, we provide protection. Competitors, we can eliminate." He purses his mouth and makes a sudden sweeping movement with his right hand.

Most Russian criminal organisations use former KGB agents as hitmen, and Valerian's gang is no exception. Following the collapse of communism in the Soviet Union in 1991, the old KGB was replaced by a new, more professional spy agency called the SVR, or the state intelligence bureau. The SVR was modelled after its Western equivalents, the CIA and Britain's MI-6: a tightly knit group of analysts attached to embassies abroad. But back home in Russia, this reorganisation meant that over 200,000 former informers, street detectives and gunmen lost their jobs. It is those thugs who the Russian mafia now uses all over the world to carry out "special assignments," as Valerian puts it.

The Russian mafia in Vietnam is reputed to collect millions of dollars every month in protection money from their many countrymen who want to set up business in the only country in the booming Far East where the Russians have had power and influence for years. I ask Valerian where they "eliminate" their targets: in Vietnam or in Russia.

"We don't want to upset our arrangements here. We do things cleanly, we have good connections with the police," he says. "So we wait until they return to Russia. We can even have undesirables expelled by the Vietnamese authorities. In Russia, you can have an ordinary person killed there for 200, 400 or 600 dollars. A police chief or a bank director? Perhaps as much as 20,000 dollars. But nothing is impossible. That's why I don't want to go home. I'd be killed immediately by people who have become my enemies. You just can't imagine how dangerous it is in Russia today. No one is safe. At least 20 people get killed in Moscow alone every day."

It soon becomes obvious that contract killings are not the only criminal activity they direct from Ho Chi Minh City and Vung Tau. As they talk openly about their business, and the levels in the vodka bottles sink, a couple of Australians join us at the bar. They look rough, like oil workers, with tattoos on their arms. The Boss recognises them immediately. "Rudy!" he says, slapping the oil worker on the back. But because the Boss's English is fairly limited, Valerian has to intervene. I hear the word "white pussy" and the name of a hotel in town where the oil workers are told to go and wait. I have already learned from a bicycle-taxi driver that there are many Russian prostitutes in Ho Chi Minh City. They stay in small, discreet hotels where they are protected by gangs such as Valerian's.

Nobody know how many Russian gangsters - or prostitutes - there are in Vietnam today. But since the fall of communism in the former Soviet Union four years ago, there has been a dramatic rise in the number of Russians in Asia. The exodus has been more massive than after the first Russian Revolution in 1917, when hordes of defeated anti-communist fighters, and their families, arrived in the Far East. Most sought refuge in the International Settlement in Shanghai, where the Russian population by the mid-1930s numbered 25,000. As author Lynn Pan puts it, "dispossessed, deprived of citizenship, socially, they occupied a grey area between white expatriates and Chinese." The men became bodyguards and riding instructors; the women hair-dressers, cabaret dancers and prostitutes, selling their services to all buyers, Chinese and Europeans alike.

In the present second wave of migration to the Far East, it is not only Vietnam which has received a massive influx of Russians. The number of Russian visitors to Thailand has increased from only a few hundred in the late 1980s to 24,000 in 1993, 31,000 the following year and nearly 50,000 in 1995. Entire Russian quarters have sprung up in the beach resort of Pattaya east of Bangkok. Officially, they are "tourists". Most of them are small-scale merchants who buy electronics and textiles in Asia and sell them in Russia for a modest profit. But many remain behind in Thailand to run restaurants which serve borsch, shashlik and, when available, Russian caviar. Some talented young men find jobs as jazz musicians in clubs catering to the Bangkok's affluent, new middle class. Many Russian girls work as entertainers in Bangkok's numerous night clubs, or can be hired as "escorts".

The police in Bangkok estimate that there are now at least 5,000 Russian prostitutes in Thailand, and the number is likely to increase the wealthier the country becomes. According to a Bangkok-based diplomat: "There's no shortage of local prostitutes in Bangkok. But rich Thai, Chinese, Japanese and Korean businessmen prefer white girls. It gives them prestige." The prices they charge - US$ 200-400 as opposed to US$ 20-30 for a Thai girl - contribute to their special value in terms of social status.

The girls are believed to have come to Asia through networks operated by the Russian mafia. But in the Far East as well as in North America and in Europe - and even in Moscow and Vladivostok - it is hard to say what the term "mafia" actually means in today's chaotic Russian context. Stephen Handelman, a journalist who was Moscow Bureau Chief of The Toronto Star from 1987 to 1992 and an expert on Russian organised crime, estimates that total active gang membership today is actually not more than 100,000 people. Between 3,000 and 4,000 gangs operate all over Russia, which means that most of them are fairly small, most probably loosely organised and that their activities - as well as members - often overlap.

Valerian and his colleagues are a typical example of this phenomenon: a small gang which is engaged in a variety of criminal and legal businesses to survive in today's Russia, a society where the law has little meaning. Following the collapse of communism in the Soviet Union in 1991, and the break-up of the former empire into 15 separate republics, there was no new system that overnight could replace the old one, which for all its flaws and shortcomings had still provided a functioning administrative superstructure.

The new Russia that emerged was not the democratic state which many had hoped for: gangsterism reigns, and corruption and abuse of power has followed the breakdown of social and civil order. Handelman argues in his book about the Russian mafia, "Comrade Criminal", that "the second Russian revolution is not over; it has only been stolen." The communist system has been overthrown, but the mafia, not the people, became the new rulers.

The Russian criminal underworld is actually not new: it existed during the communist regime as well when gangsters of all kinds were running the ubiquitous black market in the former Soviet Union. But, as Handelman points out, "their cohesiveness and wealth enabled them to survive the collapse of the old regime, and to profit from the disarray of the new one."

Criminal cartels, despite their haphazard structures, are believed to control as much as 40% of Russia's wealth. They run their own banks, they manipulate stock exchanges and the real-estate market and they have managed to turn crime into the only really profitable growth-industry in the post-Soviet era. According to Handelman: "As the hopes engendered by the dismantling of communism turned sour, demokratiya practically disappeared from everyday Russian usage. Instead of democracy, the new word sprinkled through conversations was bespredel (literally, without limits) - a word which captured Russians' sense of living in a frontier where all the comforting signposts were missing."

The new hero in Russia is the gangster, sometimes outlandishly dressed in a striped suit and dark sunglasses, today's version of the old Russian brigands of the 19th century. During the communist regime, it was fashionable for Russian girls to have an artist, a rock singer or even a journalist as a boyfriend. Now, trendy young females want mafia boys.

The strength of the Russian mafia lies in its undisputed role in its home country, its ability to operate openly and with impunity in a society which has collapsed. Moreover, as Major Sergei Avdienko, Russian liaison officer at the Interpol European Secretariat, said in a speech in late 1993: "From Siberia in the north to the Afghanistan frontier in the south, from the Far East of Russia to what was East Germany in the west, people have one thing in common - they speak or understand Russian and this facilitates cooperation between criminals."

Vietnam, a country with thousands of Russian speakers and where the Russians themselves have been present since the Vietnam War, also fits into this pattern of Russian gangsterism abroad. It is hardly surprising that small gangs like Valerian's have managed to establish good contacts in the shady world of gangsters, police and civil authorities who in a seemingly paradoxical symbiosis often control criminal activities in East Asia.

In Thailand, the Russians have also, despite differences in language and culture, managed to carve out a niche for themselves where they can earn money mainly because they have proved that they can satisfy some of the demands of their host country. But elsewhere in Asia, the rough, badly organised Russian mafia has not managed to challenge the power of the region's traditionally well-established gangs: the Chinese Triads, the Japanese yakuza and its Korean equivalents.

"Shanghai, Bangkok and Hong Kong are not London, Paris or New York. In the West, the Russians feel at home, they're familiar with local conditions and know how to operate. In Asia, it's an entirely different ball game," says a Western law enforcement official in Bangkok who is observing the arrival of the Russians in the Far East.

This subordinate role the Russians are playing in Asia is evident in their role as prostitutes and, in the case of the men, the cheapest and most willing drug couriers - and the fact that in both cases they often work for Asian gangs. Nowhere is this illustrated more clearly than in the Portugese enclave of Macau on the South China coast, where Russian gangs until only a few years ago were running prostitution rings, but had to give them up to local Chinese Triads (see separate story).

Now that China is rediscovering its capitalist past, Russian prostitutes are also back in large numbers in Shanghai. Valerian tells me with bitterness that his ex-wife now dances in a Shanghai night club. He doesn't know which one, since they lost contact more than a year ago. "But she works for some bloody chinks, that's all I know," he says, with the racism of the New Russia evident in his remarks.

But I have no reason to doubt him. In a dimly lit night club in the old "Paris of the East," young, blonde girls sing love songs from the Russian tundra while the overwhelmingly Chinese audience clap their hands in rhythm with the hip movements of the dancers. A Russian jazz band plays in the background - and, by the entrance, two Chinese punters, each with a conspicuous bulge under the left armpit, are keeping an eye on the customers.

After nearly half a century of puritan communism, the old Shanghai has been reborn with even more jazz, glitter and razzmatazz than in the 1930s. This particular night club, I am told, is a joint venture between a Taiwanese gang and officers of the Chinese Public Security Bureau, China's own version of the KGB, the CIA, the FBI and the traffic police, all rolled in one.

The involvement of the Russian mafia in the marketing of stolen ex-Soviet Army weapons, which later turned up in the ethnic conflicts on Russia's southern borders in Central Asia, is well-documented, as is the role of areas such as the rebellious Chechen republic in the Caucasus in the new drug trade from Afghanistan, Pakistan and Tajikistan to Russia and Europe.

But the role of Russians as couriers in the Southeast Asian drug trade only became known when in November 1992 the Moscow police made its first seizure of Golden Triangle heroin. The incident involved a Russian prostitute who had been working in the Far East, and it was soon to be followed by many more, similar cases in different parts of the world. In early 1993, the first Russians selling drugs from the Golden Triangle were arrested in New York.

The number of Russians working for Chinese syndicates either as prostitutes, drug couriers or as minor business partners is likely to increase as the situation in Russia continues to deteriorate. The only two Russia-based gangs which may be able to play a more important role in the overall context of organised crime in East Asia may, not surprisingly perhaps, be gangs involving the large Asian population of the former Soviet Union. The first consists of Vietnamese who have stayed behind in Russia and run a large portion of the black market, prostitution, drug smuggling rings and foreign exchange scams there. The other is made up of ethnic Koreans from eastern Siberia.

Valerian describes Vladivostok as a city "without limits", beyond control of the authorities and already in the hands of the gangs: "But there are too many gangs there. All of them ask shopkeepers and others for protection money; there's complete chaos. If you pay one gang but not another, you may still get shot."

However, the best-organised - as well as the most vicious - gangs in Vladivostok are the Korean. During the Stalin era, Koreans were resettled in Siberia and others were even transferred to the steppes of Uzbekistan and Kazakhstan in Central Asia. "They kill anybody to protect Korean interests," says Valerian. More importantly, they have regional links of a kind which other Russian-based gangs often lack. Many recent cases point at connections with North Korea, where many of the Siberian Koreans have relatives and other contacts dating back to the communist era in the former Soviet Union. There is also a significant Korean minority in northeastern China, which used to be known as Manchuria.

Local officials in China's Yanbian Autonomous Region claim that the North Koreans - or gangs with North Korean connections - are using northern China as a transhipment point for heroin bound for Japan and the USA. In early 1994, an ethnic Korean from China was arrested as he attempted to smuggle through China 300 kg of heroin from North Korea. Chinese border officials reportedly are very concerned about this cross-border traffic, but feel powerless to stem it as most of it occurs across the Yalu and Tumen rivers at night. The origin of the drugs that are being smuggled in this way is unknown, but the raw opium from which the heroin was made is most probably from the Golden Triangle.

Drugs of Southeast Asian origin smuggled through North Korea have also been found in Russia. On 9 June 1994, the Russian authorities across the border from North Korea arrested two North Korean citizens carrying 8 kg of heroin. A Moscow newspaper, Segodnya, reported on 16 June 1994: "To smuggle such a large amount of narcotics from North Korea without the deliberate connivance of the authorities appears most improbable." The value of the heroin seized from the North Korean citizens was US$ 1 million at the going rate on the world drugs market, which is all the more impressive against the backdrop of the economic plight of Kim Il-Sung's regime.

The two North Koreans were later identified as Kim In-Chol and Choe Chong-Su. Both are alleged to be North Korean intelligence officers based in Vladivostok. On 3 January 1995, two North Koreans, one of them in possession of a Democratic People's Republic of Korea passport, were arrested in Shanghai attempting to sell 6 kg of opium. A Macau-based North Korean company that operates as a liaison office for the Korean People's Army has been implicated in the case.

Any evidence of official North Korean involvement in the East Asian drug trade - and links with the ethnic Korean underworld in the Russian Far East - remains circumstantial, although suspicions are strong. With the economic situation in North Korea worsening, Pyongyang's dependence on illicit sources of foreign exchange, such as gun running and most probably also drug trafficking, is likely to increase.

The Russian gangs may play a secondary role in this intricate network of gangsters, governments and security agencies in the Far East. But they are here to stay, and although they may be disorganised compared to other indigenous crime organisations, they are certainly no less brutal. When Valerian and his comrades have finished their drinks and left, I turn to one of the Vietnamese waiters in the bar: "Do you know those guys?"

That they were regulars had been evident from the moment they walked in to order their vodka. But the waiter now cast nervous glances over his shoulders to his colleagues behind the bar. "No. I have never seen them before." As Valerian pointed out, they are well connected and have "good friends" in high places in Ho Chi Minh City.

RUSSIAN ROULETTE IN MACAU

Conservatively dressed in a pin-striped pant suit, with earphones connected to a portable CD-player in her handbag, Yekaterina looks every bit what she would have been if Russia had not collapsed economically and socially: a young female computer specialist. But she earns much more money now than she would have, had she remained in her native Khabarovsk by the Amur river in eastern Siberia. Yekaterina charges 1,000 Hong Kong dollars per short-time session in a room in one of the poshest hotels in the Portugese enclave Macau. Her customers are almost exclusively wealthy Chinese, Japanese and Korean businessmen whom she picks up in the hotel's coffee shop.

"I can serve up to eight customers a day", she says, almost defiantly, when I ask her about her business. It is if she were trying to say: that's 8,000 Hong Kong dollars. Is that bad? Can you make that much money? After all, she comes from an old and proud civilisation, a country which until only a few years ago was a superpower. The tragedy of today's Russia is evident in the entire scene in the coffee shop in Macau: it is full of tired and weary, long-legged blonde girls - and few look as proper as Yekaterina. Nearly all have thick layers of make-up on their faces. One is dressed in a daring miniskirt and leather boots which reach almost to her knees. Many smoke incessantly.

But regardless of their appearance, most of them come from backgrounds similar to Yekaterina's. When the Soviet Union collapsed in 1991, she was only 19 and still struggling with her computer course at a university in Khabarovsk. But she became pregnant and her boyfriend left her. With a new-born son to support - and with parents whose old state pension still stood at 20,000 roubles a month, or approximately US$ 5, despite rampant inflation - she had to take whatever offers came her way. One day she saw a poster on a telephone pole in Khabarovsk: well-paid jobs for women available in the Far East.

Yekaterina rang the number which was listed on the poster. A Russian syndicate escorted her and a number of other girls through China to Macau. That was her first trip, which lasted two months, until her visa for Macau ran out. "You can work in Russia, too," she says. "But for crumbs. Nothing." She is deeply disillusioned with the new politicians in Russia, who she says "promise everything and give nothing."

The communist leaders were the same, she states, but somewhat surprisingly, she expresses admiration for Stalin. "He was strong, that's what my mother told me." I ask her if her mother knows what she does, and the mix of sadness and defiance comes back in her voice: "How can a mother ask her daughter such a question when she understands what's going on? I send my parents money, they would not survive otherwise."

She smiles awkwardly after a while: "No, money, no honey, you know. It's as simple as that. And we Russian girls offer good services. We may be expensive, but our customers get value for their money." Unlike other prostitutes in the territory, no one can bargain with the Russian girls. The price is fixed: 1,000 Hong Kong dollar, take it or leave it. "I don't come down a single kopek," Yekaterina says, again defiant.

Girls like Yekaterina can be found all over Macau today. The local authorities here are much less rigid when it comes to law enforcement than their Hong Kong counterparts. Apart from gambling - which is Macau's main source of income - there is also widespread prostitution and all sorts of vice, much of which is controlled by local Chinese Triads. In the beginning, they cooperated with the Russian syndicates which brought the girls to Macau. But by a curious twist of events, the Russian mafia has recently been squeezed out of the Portuguese territory.

On July 24th, 1994, a couple was found dead in a dingy flat in a working-class suburb of Vladivostok in the Russian Far East. The man had been shot once through the eye and the girl had been tortured and then shot in the head. Such murders are everyday occurrences in today's Russia and mostly pass unnoticed in the world of drive-by shootings, kidnappings, smuggling and gambling which characterise the port city of Vladivostok even more than other places in the Russian Wild East.

But this case received the attention of even the world media when the identity of the murdered couple became known. The man turned out to be Gary Alderdice, a 48-year old New Zealander, a top Queen's Counsel and one of Hong Kong's leading criminal lawyers, as well as a well-known socialite in the British colony. The girl, who was found tied to a chair in a dingy flat in Vladivostok, was identified as Natalia Samofalova, a 20-year old Russian prostitute whom Alderdice had first met at the Skylight nightclub in the Hotel Presidente on Avenida Da Amizade in Macau.

The police investigation into the case revealed that Alderdice had had US$ 150,000 in cash on him just hours before he and his Russian girlfriend were shot. This led to speculations that he had gone to Vladivostok to buy Natalia free from the syndicate which many suspected had controlled her when she worked as a nightclub dancer in Macau only weeks before her escape with Alderdice. According to the police investigation, Natalia had entered Macau in August 1993 and first met Alderdice in March 1994. In May, she left her work at the Skylight to live with the New Zealand lawyer.

The front for the syndicate which had sent Natalia, Yekaterina and other Russian girls to Macau was the "tourism department" of a local "firm" in Siberia called Dialog Naradov ("Dialogue of Nations"). A "chief executive" of that company, Sergei Guramovitch Sukhanov, was seen in the area on the night of the murders, which seemed to strengthen that suspicion.

However, Hong Kong lawyer Michael Lunn, a colleague of Alderdice, went to Vladivostok shortly after the murder to identify the corpse - and to find out more about the case. He returned to Hong Kong in July 1994 with the conclusion that the sole motive for the murder was robbery. He also questioned press reports that Alderdice was carrying as much as US$ 150,000 with him, saying he entered Russia with less than US$ 3,000.

This assumption is supported by Yekaterina - who reveals that she she knew Natalia very well. In fact, they lived together in Edificio Jardim, a luxury apartment block in Praceta De Miramar near the Hong Kong-Macau Ferry Terminal before Natalia met Alderdice. "It was just robbery, that happens all the time in Russia," Yekaterina says. "That foreigner just made the mistake of revealing that he was carrying lots of money. Life is cheap in Russia today." Many girls are killed as soon as they return to Russia with money which they have saved up in Macau and elsewhere in the Far East - for their money and with a "fee" to the gunman which may be as little as US$ 200.

But the publicity which the case of Alderdice and Natalia attracted led to a crackdown on Russian prostitution in Macau - in true Macau style. The Russians males from the "Dialogue of Nations" were forced to leave along with over 100 girls who were rounded up and expelled from the territory. Then, local Chinese gangs took over the entire operation. The Russian males have not been allowed to return, but the girls are once again to be found everywhere in Macau, from the Lisboa Hotel coffee shop, a popular meeting place for people who have just won some money in the establishment's casino downstairs, to the glitzy China City night club, a massive entertainment complex in the same street as Hotel Presidente, where Natalia once worked.

The famous Tonnochy Nightclub in Rua Da Praia Grande in central Macau is another popular place and its supply of girls actually reads like a real "dialogue of nations". Apart from Russians, there are also Chinese girls from every province on the mainland, Brazilians, Colombians, Koreans, Thais and Filipinas. The decor seems to be out of a Chinese Kung Fu movie: chrome, glass and red silk - and private rooms where the customers can meet the "hostesses" of their choice to discuss the price for further activities.

Yekaterina says that the girls at the China City and Tonnochy sign four to six month contracts with the owners, with whom they share their income 50-50. "But it's safer to work in a club than to be freelance," she adds. "There are lots of regular customers." The Japanese are the best and the most generous, she says. The Chinese and the Koreans are acceptable too, but the Europeans are the worst: "They're too stingy," scorns Yekaterina.

With the Russian males gone from Macau, I ask her who brings the girls to Macau now and who protects them once they are here. She answers the first question without hesitating: "We know our way by now. It's not difficult." A new flight from Khabarovsk to Seoul, South Korea, has opened an alternative route to the longer and more awkward one through China. After spending a few days in Seoul, the girls fly on to Hong Kong where they catch the hydrofoil across the Pearl River estuary to Macau. "But we're treated like dirt," she says. "A Russian passport? You're in for trouble at every immigration checkpoint in the world. It's even easier for the Thais and the Filipinas."

I try to steer the conversation back to the question of protection. "We are well protected," she replies diplomatically. "We have good relations here." She reveals that her boyfriend is a local policeman in Macau, a territory where the line between what is legal and illegal has always been somewhat blurred.

But more importantly, the new prostitution scene in Macau demonstrates both the weaknesses of the chaotic, ill-organised Russian mafia - as well as the strength and power of the Chinese Triads. Says a Western law enforcement official in Southeast Asia: "The Russians are no match for well-organised local gangs. They have to be content with playing second fiddle if they want to get any share of the cake in this part of the world."

NOTE. Valerian and Yekaterina are not the real names of the Russians interviewed in these articles. However, all other persons and places are mentioned by their real names.

(Bertil Lintner researched these stories over a six-month period in Ho Chi Minh City, Bangkok, Shanghai and Macau. The story appeared in the May 1996 issue of the Tokyo Journal, and in Manager magazine [Thailand], April 1996)

This one from 3 years ago.

ORGANIZED CRIME

Spreading Tentacles

An influx of illegal Chinese immigrants into the Russian Far East is helping Chinese organized-crime gangs to gain a lucrative new foothold in this lawless territory.

By Bertil Lintner/VLADIVOSTOK, RUSSIA

Not much is known about gangster boss Lao Da--"Elder Brother." What is known is that he goes by at least two other names, Li Dechuan and Liang Chuannan, and that he comes from northeast China. He has three gangs--The Wolves, The Snakes and The Mad Dogs--that smuggle everything from fish to illegal migrants. He has invested in local gambling and tourism operations, including some legitimate businesses, and he regularly extorts protection money from business people. Those who resist risk losing their ears or fingers--or their lives.

Lao Da keeps a low profile, yet he is well connected with local administrators and law-enforcement officials. But late last year, he and about a dozen of his cronies were arrested. None of them, however, ever went to court. When it comes to Lao Da, the police will say nothing. The Russian police, that is.

Lao Da may be Chinese, but in just a few years he's turned himself into one of Russia's crime lords, centring his activities around the port city of Vladivostok. He's not alone. "Over the past few years, we have seen a dramatic increase in Chinese organized crime here. They are investing heavily in local enterprises," says Vitaly Nomokonov, director of its Centre for the Study of Organized Crime at Vladivostok's Far Eastern State University.

The rise of Chinese criminals in Russia's Far East has come in parallel with an influx of illegal Chinese migrants. Vladivostok was once a largely Chinese city, but thanks to the purges of Soviet dictator Josef Stalin it was until recently the only major port city in the Pacific Rim without a Chinese community. Since the collapse of the Soviet Union, Chinese from the heavily populated northeast have been tempted to cross the border into the Russian Far East, where land is plentiful and business opportunities abound, especially in the booming underground economy. Most live in the suburbs, or in other Far Eastern towns such as Ussuriysk and Blagoveshchensk, and in the smaller township of Pogranichnyy, where they outnumber the European population.

By its very nature, the migration is largely undocumented, so it's all but impossible to come up with hard figures on its scale. Local media like to cite a figure of 200,000 Chinese migrants, equivalent to less than 3% of the local population. But for the 7 million residents of the Russian Far Eastern Federal District--an area two-thirds the size of the United States and which is next door to a part of China that's home to 100 million people--perceptions count for as much as realities.

"The Chinese are everywhere now," says one 31-year-old local businesswoman in Vladivostok. "They control most of the casinos, all the Chinese restaurants and even some Russian hotels and eateries. Actually, Russian businessmen, both legit and shady, have only two areas left for them: the import of second-hand cars from Japan and fishing."

Facing racial prejudice and the threat of deportation, many migrants choose--or are forced--to work for ethnic-Chinese gangs, which are linked to mainland Chinese triads. Those who don't work directly for the gangs, such as stall owners in the city's Chinese market, often have to pay protection money instead. In return, the gangs arrange for bribes to be paid to local officials to make sure the vendors are not sent home. Some have business visas, many have no papers at all.

The problems of cross-border crime--and illegal migration--were deemed important enough to be highlighted in a joint declaration signed by Russia's President Vladimir Putin and his Chinese counterpart, Hu Jintao, on May 27 this year. Russia and China agreed to create a joint working group to curb the uncontrolled movement of people across the common border.

Gangsterism is not a new phenomenon in the Russian Far East. In a speech in April, Russian Internal Affairs Minister Boris Gryzlov stated that the Far Eastern region has Russia's worst per-capita crime rate. Paradoxically, crime these days is less visible than it was when the local Russian godfathers ran smuggling rackets, gambling dens and prostitution rings, and carried out kidnappings, drive-by shootings and Italian Mafia-style car bombings. Flamboyant and badly organized, the first wave of Russian crime bosses wasted much of their energy on pointless turf wars. Their triad successors are much more discreet.

Somewhat ironically, says crime expert Nomokonov, it was one of the last of the old, fabled Russian crime bosses, Evgeny Petrovich Vasin--nicknamed Dzhem or "Jam"--who first brought the triads to Vladivostok. He wanted to counter competitors from European Russia and Central Asia, who had flocked to the area after the collapse of the Soviet Union in 1991. In the mid-1990s, he paid several visits to Shenyang in China's northeastern Liaoning province to contact the triads. Shortly afterwards, Lao Da arrived in Vladivostok and a partnership was established. Dzhem died in October 2001 and, not surprisingly, the elusive Lao Da showed up at the funeral to which he donated $100,000, according to Nomokonov. Since then, Lao Da has been running the show essentially alone but with the backing of some Russian partners.

About the only criminal activity that Lao Da and his gangs haven't monopolized is the local trade in hard drugs, which is still in the hands of Tajik, Kazakh, Chechen and other Central Asian mobsters, who bring in heroin from Afghanistan. On two occasions--in 1994 and 1999--North Korean intelligence agents and government officials were caught trying to smuggle Southeast Asian heroin and opium into the Vladivostok area. According to the local police, only ephedrine and smaller quantities of Southeast Asian heroin are smuggled in from China.

The rise in Chinese organized crime and illegal migration has fuelled racist attitudes towards all Chinese, even ordinary businessmen who are actually victimized by the triads through their protection rackets. "We Russians are now working for the Chinese, and most people hate it," says a young businesswoman in Khabarovsk, some 700 kilometres north of Vladivostok.

In reality, though, Russia's Far East may be just too poor to attract huge numbers of migrant workers, who are better off at home in China. Yet, though it's more of trickle than a flood, Nomokonov calls the movement of people across the border "unstoppable" and says that the authorities must make sure is doesn't "damage Russia's national interests."

Especially worrying is the spread of a parallel economy that the authorities just can't control. Last year alone, an estimated $200 million was transferred from China to the Russian Far East, mostly through the Chinese underground banking system, which Nomokonov says is becoming well-established in the region. Most of the money goes to finance illegal logging and fishing deals with Russian interests, while vast amounts have also been invested in hotels, casinos and related enterprises.

Most of the timber and the fish is smuggled to China, Japan and South Korea, and, says Internal Affairs Minister Gryzlov, the government is losing millions of roubles' worth of revenue every year. Enforcing the law in this corner of Russia has never been easy, and Gryzlov noted in his speech that of 151 bribery cases filed in 2001 and 2002, only 20 made it to court and only one of the suspects received a prison term. Keeping the region under central control may prove even harder now that godfathers like Lao Da are putting down ever-deeper roots.

This article first appeared in the Far Eastern Economic Review, October 02, 2003