Gangsters from one of the world’s most feared mobs have set up business around the site in Stratford, East London.
Ruthless Russians, who have links to several vice dens in London, plan to cash in when hundreds of thousands of tourists hit the capital.
Hookers will whore themselves to punters, cocaine will flood the streets and extortion rackets will hit small businesses, police fear.
Gamblers could also be targeted in illegal betting rings. Sources at Scotland Yard’s organised crime unit say Russian families are working in bars close to the Olympic site.
The Daily Star Sunday has been told the names of the bars suspected of laundering millions in illegal cash but cannot reveal them for legal reasons.
One Yard insider said: “Several of these people are active members of the Russian Mafia. “They are suspected major players in drug trafficking, prostitution and protection.
“The Russians are highly skilled in averting the attentions of the police so it is very difficult to detect their criminal activities. They are also adept at integrating into communities and putting on a legitimate front for their business.
“But we are certainly keeping an eye on them.” The source said Russian mobs would most likely use low-level dealers from Eastern Europe to lure foreigners into buying drugs on the back streets of London’s vice blackspots like Soho.
He also revealed that young women would be paid pennies as sex slaves working in seedy strip joints, brothels and casinos.
And some would even pose as “birthday girls” inviting ogling fellas to splash their cash on drinks – only to hit them with whopping credit card bills in extortion scams.
He added: “Drugs and prostitution bring in most of the money.
“Obviously there’s going to be a hell of a lot of people flooding into London from all over the world so it’s prime time for sophisticated criminal gangs – and the Russians are certainly that.
“They pose a different kind of threat than terrorist fanatics and suicide bombers but they will still target innocent people.
“There’ll be a lot of tourists and even Brits visiting clubs and lap- dancing bars – and, while they may not know it, it’s likely in some places they’ll be funding Mafia activity with every shot of vodka they buy.”
The mob menace comes as Olympics bosses worldwide warn of a 2012 Mafia betting scandal.
International Olympic Committee president Jacques Rogge said: “We should not be naive. Sooner or later this might occur in the Olympic Games.”
At the 2002 Winter Olympics in Salt Lake City, suspected Russian Mafia kingpin Alimzhan Tokhtakhounov was nicked for allegedly bribing ice skating judges but later cleared.
He is now one of the world’s most wanted men.