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From murder to money laundering – the changing face of organised crime

Changing face of organised crime

From murder to money laundering – the changing face of organised crime

A hundred years ago, one of history’s most notorious crime bosses ruled an empire of organised crime in Chicago. In the roaring ‘20s, Al Capone appeared untouchable. At the height of his reign, almost a quarter of all gang-related deaths in the city could be directly or indirectly attributed to him. This was one of reasons why he was able to operate illegal gambling, alcohol sales and prostitution enterprises with impunity – he was considered too dangerous and too politically connected to tackle.

Ironically, Capone’s eventual arrest and incarceration came from charges relating to tax evasion, not murder, extortion or any of his other crimes.

I say “ironically” because, almost a century later, it’s not murder but white-collar crimes like tax evasion and money laundering – among others – that form the playground for modern organised crime. The drive-by shootings, concrete boots and “sleeping with the fishes” modus operandi of the crime bosses of the early 20th century have given way to lower risk, lower-key activities.

A recent report from Reuters says that “Italy’s mafia rarely dirties its hands with blood these days. Extortion rackets have gone out of fashion and murders are largely frowned upon by the godfathers.”

Indeed, official data shows that “just” 17 people were killed by the Italian mob in 2022, versus over 700 in 1991.

The big question, of course, is why? When the mafia have literally been getting away with murder for decades, what’s prompted this paradigm shift?

As with so many things these days, the change is linked to the pandemic. In post-Covid Italy, billions of Euros in recovery funds were made available to restart the stalled economy. The unwanted side effect was that the sudden influx of huge amounts of cash provided a nirvana for fraudsters.

In February this year, the European Public Prosecutor’s Office (EPPO) – which investigates crimes against the financial interests of the European Union – issued a warning that the sheer scale of financial misconduct happening across the EU suggested the involvement of organised crime groups.

In 2023, EPPO had just shy of 2 000 active fraud cases centred on Italy – accounting for around 7.4 billion Euros of the total estimated 19.3 billion for the entire 27-nation bloc.

“It would have been foolish to think [organised crime] wouldn’t take advantage of a huge influx of cash,” said Barbara Sargenti, from the office of the National Anti-Mafia and Anti-Terrorism Prosecutor.

For organised criminals, the appeal of financial crime – apart from the obvious – lies in its relatively light punishment even if the perpetrators are caught.

“In Italy, there is no social stigma for those who issue false invoices or evade taxes,” says Alessandra Dolci, the head of Milan’s anti-mafia prosecution team. “Social views on economic crimes are very different to those regarding drug trafficking.”

In Italy, you face up to 20 years in prison if you’re convicted of selling as little as 50g of cocaine. But if you’re caught issuing fraudulent invoices to get out of paying half a billion Euros in tax, you’re looking at a maximum of 6 years behind bars. Some sentences are as short as 18 months.

Not surprising then, that tax evasion is an enduring and pervasive problem in Italy and in 2021, the Italian Treasury estimated the crime cost the government over 80 billion Euros in lost tax revenue.

“There is no comparison when it comes to assessing the risk/reward ratio,” says Dolci.

Three of the best-known mafia groups operating in Italy are Sicily’s Cosa Nostra, the Camorra from the city of Naples, and the ‘Ndrangheta based in the southern region of Calabria.

The latter is the country’s biggest and most successful, having almost seamlessly transitioned from extortion rackets to insolvencies and bankruptcies.

Milan magistrate Pasquale Addesso is perfectly placed to testify to this metamorphosis of the mafia.

“The ‘Ndrangheta is no longer involved in extortion,” he says. “”[It] has entered the world of sub-contracting, responding to a demand for tax evasion from entrepreneurs.”

The good news is that the Italian government is starting to make progress in its war against these traditionally Teflon criminals.

In November last year, in one of the country’s biggest mafia trials for decades, over 200 defendants were sentenced to a combined total of more than 2 200 years in jail for crimes ranging from extortion to drug trafficking.

Among the individuals allegedly linked to the ‘Ndrangheta included a former Italian senator and prominent local officials, businessmen and politicians.

It’s undoubtedly a huge step forward – and yet the historically intimidatory reputation of the mafia remains – all the judges presiding over the case were put under police protection over fears for their safety.

Unfortunately, although all this is happening on the other side of the world, there are concerning parallels with South Africa.

The problem is, financial criminals thrive in environments where societal vulnerabilities exist. Vulnerable people, especially those who’ve lost faith and trust in the government to a) help them and b) prosecute wrongdoers, are ideal targets for these corrupt individuals.

South Africa ticks both those boxes – and a whole lot more.

In 2023, the Global Organized Crime Index revealed that South Africa is now one of the worst countries in the world when it comes to organised crime.

Just two years previously, when the report was first issued, South Africa was ranked 19th worst, out of 193 countries. Last year, we’d climbed to 7th, finishing behind only Nigeria, the DRC, Paraguay, Mexico, Colombia, and Myanmar. We were 3rd out of 54 countries in Africa, and 1st among the 13 countries of southern Africa.

This means we officially experience worse organised criminality than Afghanistan, Lebanon, Iraq Syria, Iran, Haiti, Panama and Russia.

A report in Business Tech says, “South Africa’s criminal economy is fuelled largely by quasi-criminal style networks or syndicates with corrupt transnational connections.

“Organised criminal activities include drug trafficking and hits on armoured vehicles transporting cash. There are also widespread poaching syndicates, robbery, cell phone theft, metal dealers and cable theft. [These] Mafia-style groups are well-armed, and their operations are associated with a high level of violence.”

The obvious question is, with elections just a couple of days away, and the possibility of a new ruling party hanging in the air, are we going to see an Italian-style clampdown on these types of activities?

A report by Corruption Watch says, “Criminals, like magicians, benefit from diversion. With 2024 set to hold plenty of distractions for political leaders, the public and the media, there is a risk that organised crime will be treated as a low priority.

“Instead, we should campaign for the opposite, for the multilateral adoption of a global strategy to counter organised crime.”

This is something South Africa, and the world, does not currently have. There is only the UN Convention against Transnational Organized Crime, but at almost 25 years old, it is woefully out of touch with recent – and rapid – technological advancements.

The same Corruption Watch report goes on to say, “Increasing challenges of environmental crime, the creation of new psychoactive substances, changing attitudes towards drugs, and the emerging link between violent crime and threats to international peace and security have strained the convention beyond the types of challenges it was designed to address.”

In addition, as there is no prosecutory body, the responsibility for the implementation of any of its guidelines rests on the shoulders of the individual countries. For South Africa, with its worsening reputation for tackling organised crime, this kind of Convention is about as useless as a chocolate teapot.

We can only hope that, whatever the election outcome is, the winning party will increase efforts to tackle the scourge of organised crime with stricter penalties, improved investigative capabilities, and international cooperation.

We need vigilance and robust legal frameworks to find and prosecute the people responsible for our rampant financial fraud so we can finally start rebuilding our battered country.