Sicily, Italy is a great example of this phenomenon, where the Cosa Nostra collects protection money locally and resembles a de facto authority, or a parallel government. Hence, protection rackets are common in places or territories, where criminal organizations resemble de facto authorities, or parallel governments. Protection rackets tend to form in markets in which the law enforcement cannot be counted on to provide legal protection, because of incompetence (as in weak, corrupt, or failed states), illegality (when the targeted entity is involved in black markets), and/or because forms of government distrust exist among the entities involved. The racket often occurs in situations and places where criminal threats to certain businesses, entities, or individuals are not effectively prevented or addressed by the prevailing system of law and order or governance, or in cases of inadequate protection by the law for certain ethnic or socioeconomic groups. Through the credible threat of violence, the racketeers deter both third-party criminals and people in their own criminal organization from swindling, robbing, injuring, sabotaging, or otherwise harming their clients. The protection racket sells physical security. In some instances, the main potential threat to the target may be caused by the same group that offers to solve it in return for payment, but that fact may sometimes be concealed in order to ensure continual patronage and funding of the crime syndicate by the coerced party. Due to the frequent implication that the racketeers may contribute to harming the target upon failure to pay, the protection racket is generally considered a form of extortion. The perpetrators of a protection racket may protect vulnerable targets from other dangerous individuals and groups or may simply offer to refrain from themselves carrying out attacks on the targets, and usually both of these forms of protection are implied in the racket. Protections rackets can vary in terms of their levels of sophistication or organization it is not uncommon for their operations to emulate the structures or methods used by tax authorities within legitimate governments to collect taxes from taxpayers. ![]() An organized crime group determines an affordable or reasonable fee by negotiating with each of its payers, to ensure that each payer can pay the fee on a regular basis and on time. Each payment is called "protection money" or a "protection fee". ![]() A protection racket is a type of racket and a scheme of organized crime perpetrated by a potentially hazardous organized crime group that generally guarantees protection outside the sanction of the law to another entity or individual from violence, robbery, ransacking, arson, vandalism, and other such threats, in exchange for payments at regular intervals.
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