But paying up is a big mistake, he said.
The conference, held at the Radisson-Slavjanskaya Hotel and sponsored by the American Chamber of Commerce in Moscow, also discussed bank fraud, counterfeiting, prostitution and car theft.
But the event's top priority was warning intrepid businesspeople about Russia's notorious organized crime gangs.
"Sooner or later a 2-meter fellow is going to come to your door," said the Russian official, who cannot be named according to conference rules. "It's an unfortunate part of doing business here."
Contacts with Russia's underworld often end in violence, the Russian official said. Nine businessmen, both foreign and Russian, have been killed and 293 kidnapped so far this year, a 10 percent increase from 1993.
The vast majority of the incidents involving foreigners took place in St. Petersburg, he said.
Extortion was the most popular crime against foreign businesspeople, the official said.
"It starts with security demands," the first official said. "Next they ask you to put one of their employees on staff, as an accountant or maybe a clerk. Soon you find you aren't really necessary to your business."
When thugs come calling, the best strategy for a foreigner is to stall for time and seek out an embassy and the militia's organized crime group, nicknamed the "unit to protect the rich," the official said. The police will arrest the blackmailers and provide protection for the businessman, the official said.
Several Western businesspeople, however, were skeptical about the police's effectiveness. Familiar with Chicago and New York-style gangland retribution, the businesspeople said they were wary of becoming informants.
"I'm from Brooklyn," one Westerner said. "When the mob comes to you, you don't go to the cops. It's tantamount to cutting your own neck."
The first Russian official countered that there has been a "100 percent" effectiveness against the mafia when a foreigner comes forward quickly.
"Gangsters here haven't developed the ties that they have in America," the official said.
A U.S. government official agreed, adding that the more noise a person makes, the safer they'll be.
"The mafia will move on to easier targets," he said. "If you coordinate with your embassy and the police, it becomes too much of a hassle for the mafia to bother with you. There are plenty of easy targets here."
He also cited a recent American Chamber of Commerce survey, which showed that of 119 businesses operating in Russia, only 19 have been approached for protection. Only four of those decided to pay. The rest had no repercussions, he said.
While the mafia was designated as the greatest threat to life and limb, officials said there are plenty of other illegal activities in Russia that are a threat to the pocketbook, including auto theft, prostitution and counterfeiting.
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