Organized Crime is a threat to our National Security

In 2010 the United States National Security Council advised that organized crime is becoming a threat to their National Security. In 2013, Europol concluded that the Italian Mafia has the capability of manipulating elections and exploiting loopholes in legislation. They further stated that the Mafia is a clear and present threat to the European Union. In 2012, the RCMP’s top Mafia-hunter in Canada advised that the Mafia organization called the ‘Ndrangheta had been raised to a “Tier 1” National Threat.

It has also been reported that organized crime (Mafia) have become aligned with terrorist groups – working together for a common benefit. And finally, organized crime is known to be supported by Nation States that would like to see our nations crippled and weakened – and worse yet it is known that they have worked to penetrate our every level of government and to have connections with our military.

There has been a significant increase in the amount of organized crime infiltration into legit business. In 2016 just one single mafia group, the ‘Ndrangheta, was reported as having a portfolio involving billions of euro’s, thousands of companies, and tens of thousands of properties. Policing this is almost impossible, as there is limited insight into the workings of each company at the Government level. As well, the number of people, and the time it would take to detect and catch every single instance of illegitimate penetration into legal businesses, would be astronomical.

Tactics to infiltrate a small to medium business

  • offering support to the companies when they become in financial need
  • bribing or otherwise influencing high ranking people into ‘joining’
  • using businesses already influenced by organized crime to absorb competitors
  • choking legit businesses ill-favored by organized crime (eliminate the competition)
  • weaken the competition so that they can be merged or acquired

Financial Support / Loans

When cash strapped, both publicly traded and privately run companies run risk of becoming infiltrated or controlled by organized crime. Companies can become cash strapped when other companies already controlled by organized crime ‘chokes’ them, or by their taking advantage of an economic downturn. Financial support can also be shown through the actions of a companies purchasing department – by their favoring other organized crime controlled companies. Or by ensuring that those having controlling shares of a company are influenced by organized crime.

Infiltration

Individuals are hired in, or individuals are bribed, or coerced into joining. Once a business has been infiltrated by a person sympathetic to organized crime, that person will then use political means inside that company to ‘out’ individuals in key departments to ensure loyalty, with their intention of steering the company. This will continue until the business has either: become weakened and is requiring financial assistance, or has grown stronger providing more political power to those new ‘members’. Of course, organized crime will favour organized crime; therefore company contracts and suppliers will be changed accordingly but not made obvious.

Of course, companies hope those being hired bring a capacity to increase profits and applaud their efforts when this happens – they would have no knowledge that the newly hired person has illegal motives, connections, or loyalties.

Companies that grow tend to expand their business and will grow their geographical footprint as opportunities arise. This includes absorbing already established competitors. Of course, once a company is absorbed, key players are usually replaced or are absorbed into the new ‘culture’, with politics taking care of the remaining – and those remaining often not having any idea as to what is going on.

Choking ill-favored legitimate businesses

By far the easiest tactic to hide from watchful radar, as companies are free to change suppliers as they deem fit. But the economy changes quite negatively when companies sympathetic to organized crime favour other companies with those same sympathy’s, as it starts to eliminate competition by reducing the number of legit companies. Volumes will increase at those companies, prices will be reduced, making everything look well run – but all at the expense of legit business who would be viewed as incapable of competing in that market.

Detection

Is there any way of monitoring business transactions, or the way that they are reported, to detect suspect illegal transactions? Or perhaps things such as sudden or significant changes in profitability? Financial institutions use software that monitors transactions to check for fraudulent transactions – could elements be transposed to other business models? If so, then is a possibility of policing this via the introduction of a data monitoring system (AI) built right into the business software used by companies – or by monitoring the transactions as they are committed to the database. If this data was gathered and analyzed across all of the companies operating inside our borders, then we could obtain a good footprint of criminal activities.

Perhaps this software could produce some sort of a report advising of the likeliness of suspect transactions – along with some pertinent details – for review. It would also be of benefit to know whom in the company performed the transactions. Criminal records and current suspects could also be drawn into this analysis – allowing a better footprint to be generated.

It is known that a significant number of communications are recorded, and transcribed into text for review by artificial intelligence or simple text searches. Perhaps this technology could be tied into this analysis? Privacy would not be a factor, as the software would only report suspicious data occurrences.

I believe the use of a software solution would reduce on the number of false positives generated using standard tactics employed today. This would reduce the cost of investigations and reduce manpower requirements.

Brazilian Anti-corruption Law – Should we also enact one?

It takes more than our simply talking about the threat that organized crime offers us and throwing a small task force at it – it takes significant action. We are competing with organized crime groups that have annual turnovers higher than some small nation states. On January 29, 2014, Brazil implemented the Anti-corruption Law, which mandates that legal entities will be held liable for illegal acts committed by any of its employees or by third parties, without the need to evidence intent or that the company’s management had actual knowledge or approved the specific improper acts. The authorities only need to evidence that the illegal acts were committed in the benefit or interest of the company. This could be considered one of the Brazilian Government’s biggest steps in its efforts to combat corruption and bribery. Companies are required to have a compliance officer, who is charged with the monitoring of the decisions of officers and directors, from an anti-corruption perspective, to ensure that decisions are in line with the company’s Code of Conduct and other policies.

Here, in Canada and the United States, I am curious as to just how far we would be willing to go to stop Organized Crime’s penetration into our legitimate businesses? Will we take a strong stand to protect our economy like Brazil has, or will we become another Italy where it was reported back in 2000 that the Mafia controlled approximately 20% of all businesses and had an annual turnover of about 15% of the GNP. Or Rome, where it is estimated 70% of all restaurants and bars are controlled or owned by organized crime.

As we pass the torch over to the next generation, how much of it will we actually own? How bright of a future will they have?

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