Loan-Sharking: The Untouched Domain of Organized Crime
![handle is hein.journals/collsp5 and id is 97 raw text is: Loan-Sharking: The Untouched Domain of
Organized Crime
If you repay me not on such a day,
In such a place, such sum or sums as are
Expressed in the condition, let the forfeit
Be nominated for an equal pound
Of your fair flesh, to be cut off and taken
In what part of your body pleaseth me.
Shylock, in The Merchant of Venice,
Act I, Scene 3.
I. NATURE AND EFFECT OF LOAN-SHARKING
The profession of usury (shylocking or loan-sharking) has
existed for many years.' The relatively recent involvement of or-
ganized crime 2 in this very lucrative area has given the problem an
entirely new dimension in this country. No longer is it a matter of
concern simply because of its financial effects on the hapless bor-
rower; it is now a vital matter of concern because of its economic
and social effects on the entire nation.
Loan-sharking 3 has been a source of income for the underworld
in New York City at least since the Depression in the 1930's,4 and
there are indications that it began to develop in other areas through-
out the 1950's.5 Nevertheless, it has only been in the past five or six
years that organized crime has become so deeply involved as to war-
1. Usury has long been the subject of regulation and comment. See, e.g.,
Bernstein, Background of a Gray Area in Law: The Checkered Career of Usury,
51 A.B.A.J. 846 (1965); Meth, A Contemporary Crisis: The Problem of Usury
in the United States, 44 A.B.A.J. 637 (1958).
2. The broad definition of organized crime used here will be that given
by Henry E. Peterson, Chief of the Organized Crime and Racketeering Section
of the Justice Department:
criminal syndicates which have national and international ties and
which conduct their illegal activities on a daily basis over an extended
period of time, in an atmosphere of relative safety.
Hearings on Impact of Crime on Small Business-1968-Before the Senate Se-
lect Comm. on Small Business, 90th Cong., 2d Sess. 31 (1968) [hereinafter cited
as 1968 Hearings]. The largest and most well known of these syndicates is
La Cosa Nostra, also known as the Mafia.
3. Loan-sharking has not been used as a term of art. However, in this
article the term will refer to transactions characterized by exorbitant rates of
interest or fear of the application of physical force to guarantee payment, or
both.
4. Interview with Alfred J. Scotti, Chief Assistant District Attorney,
Rackets Bureau, New York County District Attorney's Office, in New York City,
Nov. 4, 1968. Even in the 1930's, annual loan-sharking income to the underworld
was estimated at close to $1 million. Id.
5. See, e.g., Hearings Before the Senate Select Comm. on Improper Ac-
tivities in the Labor or Management Field, 85th Cong., 2d Sess. & 86th Cong.,
1st Sess., pt. 46, at 16,899-902 (1959); SPECIAL SENATE COMM. TO INVESTIGATE
ORGANIZED CRIME IN INTERSTATE COMMERCE [hereinafter cited as KEPAUVER
COMM.], THIRD INTERIM REPORT, S. REP. No. 307, 82d Cong., 1st Sess. 178
(1951).
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Loan-Sharking: The Untouched Domain of Organized Crime
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