A Deadly Game: How Outlaw Motorcycle Gangs Are Infiltrating And Manipulating The Security Industry

By John Pettit and Graeme Cunynghame.

In the post-war era of the late 1940s members of the working class were drawn to the freedom and risk offered by the motorcycle lifestyle. Having just returned from the war many young men found themselves alienated from society. Forever changed by the horrors of war these men soon became society’s misfits and outcasts. Searching for somewhere to belong many gravitated to the motorcycle culture to replace the camaraderie, excitement and danger that they had become accustomed to during the war, something that mainstream society no longer offered.

Members of the biker culture soon became known for their beloved Harley-Davidsons, social non-conformity, and loyalty to the biker group above all else. Thus a new social institution was born. This social phenomenon was repeated to some degree after the end of the Vietnam War 30 years on. More recently a motorcycle sub-culture has emerged that attracts members of society alienated by criminality and lawlessness rather than the ravages of war. These days, groups associated with this motorcycle sub-culture are colloquially known as Outlaw Motorcycle Gangs or OMG’s for short.

Typically these biker sub-cultures are headed by a small core group of individuals who ultimately derive all the financial prosperity from the organisation’s criminal enterprises at little personal risk. In contrast, the rank and file members receive little in the way of financial benefits while accepting all the related risks from being associated with an unlawful sub-culture. The rank and file appear happy to be linked to the ‘brotherhood’ and the associated tribalism that membership of this exclusive club brings. Their rewards are the good times, excitement, danger, risk taking and the sense of belonging that comes from the outlaw lifestyle.

The OMG lifestyle not only attracts blue-collar workers, but white-collar professionals as well. Membership for professionals who yearn to dabble on the wild side comes at a price. They are expected to provide their professional services in lieu of direct criminal involvements to advance the clubs’ criminal enterprises. For example, doctors are called upon to administer medical treatment to seriously injured members whose injuries would attract unwanted attention of the authorities had mainstream treatment been sought. Accountants provide advice on such matters as company structures and tax avoidance schemes. Chemists supply glassware to assist in the manufacture of illicit drugs and knowledge of the processes involved in its manufacture. Solicitors assist OMG’s with legal representation for club members and money laundering using their trust accounts as a clearing house for proceeds of crime. There are also known incidents of members of the law enforcement community providing information relating to ongoing investigations into the activities of OMG’s. OMG’s are apt at cultivating relationships with these professions using friends and family connections. Whether providing their services directly or indirectly, these professionals act as enablers of organised crime.

More than 35 different OMG’s are known to operate within Australia, most having multiple state chapters. It is estimated that there are over 3,500 fully patched club members together with another 20,000 associates and nominees. The Gypsy Jokers, Rebels, Coffin Cheaters, Bandidos, Black Uhlans, Hells Angels and the Finks are known to have the most nefarious reputations. Many of these OMG’s now have international affiliations. The lure of quick and easy money has cemented the link between OMG’s and organised crime. Traditionally these OMG’s have sought to exploit drug trafficking, firearms importation, counterfeiting, tax evasion, extortion, money laundering, trafficking in stolen goods, prostitution and wildlife smuggling to generate income. Their commercial endeavours have not been limited to criminal enterprises, but have also extended into legitimate businesses. Often these businesses are used as fronts for illegal activities.

In many respects the business structure and operations of OMG’s are not dissimilar to those of legitimate businesses. As a business entity OMG’s actively search for criminal opportunities that they can exploit to make money. OMG’s are not indisposed to seeking criminal opportunities under the umbrella of legitimate businesses. Some years ago OMG’s infiltrated the pharmaceutical industry to facilitate the legitimate importation of pseudoephedrine for the illicit manufacture of amphetamines. Police sources estimate that OMG’s now control 75% of the Australian methamphetamine trade.

Recently reports have emerged of OMG’s attempting to infiltrate the security industry, in particular the crowd control sector. While newspaper reports suggest that this situation dates back to at least 2004 it is highly probable that this situation predates the crowd control industry being subjected to regulation and licencing. Revelations from the Australian Crime Commission suggests that there is now a significant organised crime presence in the private security industry that controls entertainment venues in Melbourne, Sydney, Perth and on the Gold Coast.

Crowd control is now one of the largest sectors within the security industry. The last decade has seen the Australian security industry grow by over 41%. There are now over 2,400 security businesses operating in Australia and the industry employs around 90,000 full-time and part-time staff. Today, security personnel outnumber police 2:1. Revenue from the security industry is estimated at $3 billion dollars annually, while profits are estimated at around $90 million dollars per annum. New South Wales represents 43% of the security market, followed by Victoria with 21%, and Queensland with 16%. Crowd control represents 38% of the marketplace, followed by guards & patrols at 23%, and 13% for cash-in-transit operations. As the largest security market in Australia, it is reasonable to assume that New South Wales security market is the most vulnerable to criminal infiltration by OMG’s, followed by Victorian.

The nightclub scene has always been associated with illicit party drugs such as ecstasy and amphetamines. According to the Australian Crime Commission, the hospitality industry is a crucial market for the national drug distribution network. As a distribution system, it is not surprising that the OMG’s would want to exploit nightclubs as a point of sale for their illicit drugs, thus completing a synergy between drug manufacture and distribution. The question for the OMG’s has been how to take control of this potential distribution network. In the past it was not uncommon for several drug dealers to compete for business at the same nightclub. Not being ones to share, for the OMG’s this situation was an untenable business arrangement. It soon became apparent to the OMG’s that in order to exploit and monopolise the nightclub industry as a drug distribution network they had to exclude all other drug dealers from the venues. To do this they had to control the doors. In order to control the doors they had to infiltrate the security industry. So began the infiltration of the crowd control industry by the OMG’s.

The introduction of licensing for the crowd control sector of the security industry has done little to prevent OMG’s from infiltrating the industry. OMG’s have been quick to identify vulnerabilities in the system and have been only too willing and able to exploit these vulnerabilities in order to circumvent the new licensing regimes. OMG’s realised that by simply having what appeared to be an arms-length transaction between security and drug dealing they could operate their drug distribution network with immunity under the guise of a legitimate business. In order to avoid attracting the undue attention of the police and liquor licensing the OMG’s have financed a number of start-up security companies, enlisted the services of associates without criminal records to obtain the appropriate licenses to act as front men, while controlling the companies from behind the scenes. Today these security companies controlled behind the scene by the OMG’s act as arms-length facilitators of illicit drug distribution rather than being directly involved in the drug distribution network.

The profit margin for the distribution and sale of illicit drugs is very high. Add to this the fact that these businesses do not pay tax and you have the makings of a very profitable business model. OMG’s have exploited the overly competitive nature of the security industry to gain a foothold in the trade by offering crowd controllers at rates that legitimate security businesses cannot compete against in order to win contracts. Any losses are later offset by the distribution and sale of drugs by the OMG’s at the venues. Even after offsetting any losses associated with the under bidding of security the OMG’s are still able to turn a healthy profit from their drug business.

To a certain extent, nightclub management has also been complicit in the infiltrations of the security industry by OMG’s, as they have been only too willing to accept these seemingly uncommercial rates without hesitation. This calls into question how much knowledge nightclub management have of this infiltration. Given the nexus between drugs and nightclubs, one must also acknowledge that the availability of drugs at certain nightclubs could be seen as a drawcard for the venue as it could conceivably increase patronage. This in itself could be considered as an inducement for nightclub management to turn a blind eye to the infiltration of OMG’s and drugs into their venues, especially given that recreational drug use is widely considered to be a matter of personal choice rather than a crime.

The dangers of illicit drug use to personal health and to the community cannot be overstated. Illicit drug manufacture is not known for its quality control. The drug is often cut with toxic chemicals to make it go further, and there is no guarantee that the dosage of active ingredients is safe for ingestion. Other risks for the user include reduced inhibitions leading to unprotected sex and its consequences, the risks associated with sharing needles and the long-term mental health risks associated with drug use. The impact on society is the high cost of maintaining healthcare, corrections and criminal justice systems to manage those involved in the illicit drugs culture.

One of the unintended consequences of the infiltration of OMGs for the legitimate security industry, apart from the damage to its reputation, is the artificial downward pressure on prices. Unlike OMG’s who operate on healthy profit margins and who can afford to subsidise their security operations, the legitimate security industry cannot sustain another attack of price-cutting without being driven to the wall. If this is allowed to happen it will create a further power vacuum that the OMG’s will be able to exploit to gain an even greater hold within the industry. In order to prevent this from occurring, the government needs to act decisively and swiftly to protect this legitimate segment of the security industry from collapse. It is unlikely that the present practice of regular and random inspections of licensed venues by police and liquor licensing authorities will make any great impact on the infiltration of the security industry due to the arm-length relationship OMG’s have established between their security businesses and their drug dealing operations.

There are a number of factors that inhibit investigation of security industry infiltration by OMG’s. First, there is the ‘code of silence’ that OMG’s operate under. Insiders are unlikely to disclose the extent of the OMG’s involvement in drugs or the infiltration of the security industry. Secondly, illicit drug users are unlikely to disclose the extent of drug distribution in nightclubs due to their complicit involvement. Thirdly, legitimate security companies adversely affected by the infiltration of OMG’s are fearful to speak out for fear of retribution by the OMG’s. Finally, the clubs don’t wish to acknowledge their involvement with the distribution of drugs as it may jeopardise their liquor licence. Until those who would be affected start speaking out, the infiltration will continue.

Recently there have been moves by various state police forces to introduce laws restricting the activities of OMG’s in an attempt to create a much more difficult working environment for them. In the past, OMG’s have exploited jurisdictional inconsistences in state laws to advance their criminal activities. One such example has been the different state laws governing precursor chemicals. Precursor chemicals are the base chemicals that are required to make illicit drugs. Thankfully this anomaly has now been corrected with the harmonisation of the respective state laws governing such chemicals. Unfortunately, recent legislative efforts to curtail the illicit activities of OMG’s have been overturned by the High Court, which ruled the anti-bikie laws unconstitutional.

The Australian Crime Commission admits that it is difficult to estimate the current level of infiltration of the security industry by OMG’s. It is, however, a significant and ever present threat. In 2009, the Australian Government launched the Organised Crime Strategic Framework to combat the OMG’s infiltration of the security industry. Over the coming years their tactics will be to strengthen multi-jurisdictional approaches, improve information sharing, and undertake joint initiatives to combat organised crime. Time will tell if these new government initiatives are too little, too late, to protect the legitimate security industry.

 

John Pettit has been a security practitioner for over a quarter of a century. As a mature aged student, John attended Edith Cowan and Bond Universities where he read Security Science, OHS and Criminology. He is also a Board Certified CPP and PSP. John welcomes referrals and requests for advice. Contact him on 0418 720 187 or send an email to jpettit@security-advisor.com.au.
Visit John’s website at www.security-advisor.com.au

 

In his policing career Graeme Cunynghame served in a number of areas including the Fraud Squad, Corporate Affairs Commission, DEA, NCA, and NSW Crime Commission.
As a mature aged student, Graeme attends Edith Cowan where he reads Security Science. Graeme is a member of ASIS and ACFE. Graeme welcomes referrals and requests for advice on fraud and security risk management matters. Contact Graeme on 0408787978, or send an email to pripol@pripol.com.au. Visit Graeme’s website at http://www.pripol.com.au

 

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