Protection racket
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A protection racket is an extortion scheme whereby a powerful entity or individual coerces other less powerful entities or individuals to pay protection money which allegedly serves to purchase protection services against various external threats.
Those who do not buy into the protection plan are often targeted by criminals. These crimes are typically thought to originate from the organization itself. When a person or group refuses to pay for protection, word is put out that they are outside of the local organization's protection (these organizations often exist in the absence of a trusted police force) and that the person or group in question is therefore free game for freelance criminals or the organization itself. In Russia during the 1990s and to a lesser extent today[citation needed] most businesses had to pay some form of protection money (known as krysha, the Russian word for "roof") to Russian mafia gangs.[citation needed]
The protection money is typically collected by a "bag man". Although the organization might be particularly coercive in obtaining protection money, it is usually careful to shelter its "mark" from attacks by competitor organizations that similarly attempt to solicit or threaten the targeted individuals or businesses. Disputes between organizations concerning territory consequently arise from two competing organizations attempting to extort from the same "clients".
According to economics professor William Stanley at Loyola University, national governments may well be the largest forms of the protection racket on the planet.[1]
