Prosecuting the Money Launderers Who Act for Organised Crime
| DOI | https://doi.org/10.1108/eb027218 |
| Date | 01 April 1999 |
| Pages | 104-112 |
| Published date | 01 April 1999 |
| Author | R.E. Bell |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control — Vol. 3 No. 2
ANALYSIS
Prosecuting the Money Launderers Who Act for
Organised Crime
R. E. Bell
GLOBALISATION AND ORGANISED
CRIME
The forces of globalisation1 have had a profound
effect on the world's economies and it should come
as no surprise that they have given new opportunities
for organised crime and new challenges for legal
systems and law enforcement. While the phenom-
enon of organised crime2 is not new, it has been
growing in recent years and is now generating and
laundering huge illegal profits, subsequently invest-
ing them in legal business. Strategies against orga-
nised crime will be shaped by the mental models3
used to understand it, and anyone whose mental
model of organised crime is derived from the Chi-
cago gangsters of the 1920s or the Mafia godfather
of cinematic fiction is using the mental model of a
bygone era. Organised crime today must be under-
stood using a business model and hence viewed as
businesses, producing illicit goods and services,
which vary in size and scale on a continuum from
small, local businesses to multinational corporations.
The business model assists in analysing the structures
of organised crime and, by applying it, one can pos-
tulate for example that, at the latter end of the conti-
nuum, organised crime groups will, like all
multinational corporations, have their own mana-
ging directors, finance directors and other corporate
officers.4 The unprecedented challenge now facing
law enforcement authorities is to develop effective
strategies to combat these multinational corporations
of organised crime.
Organised crime is entrepreneurial and adapts to
new circumstances and opportunities5 as they present
themselves. For example, organised crime undoubt-
edly takes advantage of the free movement of
goods, capital, services and persons within the Eur-
opean Union. Similarly, just as multinational cor-
porations direct cash flows from business in one
country into another where an opportunity exists
because of low tariffs, so too organised crime directs
cash flows to where the money-laundering defences
are low. The influence of the business model of orga-
nised crime can be seen by the business language in
the CIA assessment of transnational threats to
NATO in 2010:
'Latin American cocaine traffickers, the Italian
Mafia, Russian organised crime and Nigerian
criminal syndicates will have established greater
co-operation in drug trafficking, arms smuggling,
counterfeiting and money laundering into and
across Europe. They will gain efficiencies by spe-
cialising in their most experienced and profitable
areas of operation and by exploiting the more vul-
nerable borders and less-regulated systems in the
region.'6
region.
Just as businesses form alliances, so also does organised
crime. In 1995 it was estimated that organised crime
gangs had established working relationships with
their counterparts in 50 other countries.7 Such alli-
ances can provide an organised crime group from a
particular country with access to new markets, new
products, innovative technologies, specialist know-
how and other resources.
With growth in financial power, organised crime
may also obtain an increase in social influence, a
matter which has begun to give rise to concern:
'The multi-billion dollar scope of worldwide
money laundering poses a significant threat to
countries on both a micro- and macro-economic
level. The tremendous wealth being legitimised
by laundering allows criminal organisations to
gain a large amount of economic power fairly
quickly. Front companies — legitimate businesses
through which illicit profits are funnelled — are
the predominant means of laundering funds used
by almost all criminal groups. As drug trafficking
and other criminal organisations invest more in
these businesses, their toehold in the legitimate
economy of a country grows, as does the economic,
Journal of Money Laundering Control
Vol. 3, No. 2, 1999. pp. 104-112
© Henry Stewart Publications
ISSN 1368-5201
Page 104
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