This paper investigates the effect of diffusion of organized crime on local economies by examining a legal institution that operated in Italy between 1956 and 1988. The law allowed Public Authorities to force mafiosos to resettle to another town. Using variation in the number of resettled mafia members across destination provinces in a differences-in-differences setting, I find no conclusive evidence on the effect of the policy on crime or homicides, while there is a very robust positive impact on employment in the construction sector. The results are consistent with mafia exploiting these new locations mainly for money laundering and corruption.