Mafias in Europe


It was 1962 when the American mathematician Edward Lorenz studied and elaborated the so-called “butterfly effect”, probably inspired by “A Sound of Thunder”, a story by Ray Bradbury. The writer of the famous novel “Fahrenheit 451” imagines that, in the future dystopian fixed in 2055, the protagonist, a hunter who, during a “safari in time”, tramples on and kills a butterfly, causing political, social, cultural changes in his present.

Lorenz elaborated mathematically and physically the hypothesis that “a beat of the wings of a seagull would be enough to alter the course of the climate forever”: the seagull, which later became a more romantic butterfly, would cause a shift of matter such as to trigger infinitesimal but decisive changes in reality that could also cause a hurricane to originate in another part of the world.

The more than suggestive Lorenz theory, endowed with a bursting imaginative force, has been the basis for successful scripts such as Donnie Darko and The Butterfly Effect; it has inspired singers and artists and, over time, has served to explain philosophical theories, related to human destiny and environmental theories, related to climate change.

Among the various applications of the concept, interesting is the instrumental use that is often made of the butterfly effect to explain globalization: the global market, wrongly defined as inevitable and part of human evolution, has triggered over time invisible links between places in the world apparently disconnected. A fire in a shoe factory in Thailand, for example, can cause considerable damage to an American-based multinational company, causing its stock market price to drop and affecting employment in the areas of the world where the multinational company operates. The most emblematic example is certainly that of the Great Crisis of 2008: the deregulation of the financial markets allowed incredible – and complicated – speculation by the largest financial players in the United States (Goldman Sachs and JP Morgan among them), especially in the real estate market. When the speculative bubble burst, a domino effect was triggered that led first to the bankruptcy of the world’s largest insurance company (AIG), then to the collapse of the world stock exchange, to the point of affecting the daily lives of billions of people, especially in the poorest and most underdeveloped countries, step by step.

Globalization has allowed us to find Asian or South American products on the shelves of our supermarkets; it has allowed us to know the political controversies of this or that Sub-Saharan country; it has allowed us to connect and create bridges between economic and social realities that are very distant from each other. But as the butterfly effect teaches, each clap of wings corresponds to a hurricane.

One of the many, too many negative and uncontrolled – but not uncontrollable – effects of globalization has been and still is the exponential growth of organized crime: the almost feudal Sicilian Mafia families, the barbaric “ndrine” of the ‘ndrangheta, the Camorra clans have decided to learn English, German, Spanish and have had the ability to cross the Italian and European borders.

For this reason, defining the characteristics of the Italian criminal organizations today is very difficult and complex. Like two-headed Janus, in fact, on the one hand, they are deeply tied to their territories of origin, where they continue to maintain a power deeply tied to the popular consensus; on the other, instead, they have acquired a strong propensity to emigrate and explore beyond the Italian borders in search of the most fertile lands to sow and then reap their criminal fruits.

At this point, it is necessary to open a parenthesis. For decades, the mafias have differentiated their sectors of investment, in search of a giant “washing machine” of their dirty money always in operation. It is fundamental for the mafias to invest as much as possible in legal activities which allow the use of their own dirty money deriving from activities such as the trade of drugs, prostitution, pizzo, and so on. For this reason, to speak of “mafia organization” today means to speak of a real “mafia enterprise”, whose primary purpose is profit, characterized by a renewed ability to blend with the legal market and with agents active in the European and global economic landscape. The mafias earn, invest and risk just like any other company and, given their immense economic capacity, they are comparable to a few multinationals in the world. According to a recent study by the Anti-Mafia Parliamentary Commission, Italian mafias have a turnover (i.e. a sum of revenues) of around EUR 150 billion, more than the first Italian multinational (Exor, which includes Juventus and Fiat, for example, which in 2018 had a turnover of EUR 143 billion).

Capital. Investments. Globalisation. The golden words that characterize the unbridled neo-liberalism, today, are the same words that can be used for the various forms of organized crime, Italian (the ‘ndrangheta above all) and foreign (such as the Mexican and Colombian Narcos and the Russian mafia). And also in this case, the butterfly effect takes its course. As when, in 2007, one of the typical internal feuds of the ‘ndrangheta – the one between the Nirta-Strangio and Pelle-Vottari clans – originated in the Calabrian hinterland, in San Luca, motherland of what is today recognized as the strongest criminal organization in the world and monopolist of the European cocaine market – had its devastating effects on very distant places, geographically and culturally. It is Germany, in fact, the scenario in which, on the day of August 15 of twelve years ago, the internal war between the Calabrian clans was definitively consummated: in Duisburg, a city famous for its steel and its immense river port, in front of the restaurant Da Bruno (one of the many “washing machines” of the ‘ndrangheta), the typical Teutonic silence was broken by the explosion of dozens and dozens of blows. 6 victims, all belonging to the Pelle-Vottari clan, aged between 16 and 39. The two main principals, Giovanni Strangio and Francesco Nirta, were arrested a few years later not in the arid San Luca, not in bunkers well hidden among the sewers of Calabria, not in houses protected by a frightened and silent neighbourhood, but in Holland. The first, in fact, was arrested in Amsterdam, in 2009; the second near Utrecht, in Nieuwegein, in 2013.

A feud in San Luca, a massacre in Duisburg, two arrests in Holland: this is globalisation. Here is the butterfly effect. Faraway stories that intersect, distant countries that become scenarios of the same tragedies, apparently parallel lines that intersect giving rise to twisted mazes. As well as the stories of the last two innocent victims of mafia, Jan Kuciak and Martina Kusnirova, twenty-seven years old Slovaks, engaged, and Antonino Vadalà, born in Bova Marina, in the province of Reggio Calabria, known for years by the Italian authorities. Jan was a brilliant journalist and was working on an investigation into the relationship between ‘ndrangheta and the Slovak Prime Minister Robert Fico, aimed at discovering an immense turnover based on the illegal interception of European funds. Vadalà, already known by Italian investigators for having hidden the drug dealer Domenico “Mico” Ventura, escaped from Bova Marina in Slovakia where he started fervent business activities and acquired more and more power as a referent of the criminal association, establishing relations with the Prime Minister of the country. Jan’s investigations were brutally silenced on February 21, 2018, the day in which he and Martina were killed in their home, but the butterfly effect, this time, led to a hurricane of collective anger and solidarity: Robert Fico, in fact, was forced to resign from the Slovak protests, squares filled as never before since the Velvet Revolution of 1989 to demand loudly new elections.

Immense economic availability (comparable to a few states or multinationals in the world), intercontinental ramifications and permeating capacity in many areas of society: perhaps Marlon Brando, the actor who played the famous Godfather, was right when he said that “the mafia is the best example of capitalism that we have”.

Combating Money Laundering at a local level: the example of Amsterdam


On September 6, 2019 we participated in the conference on money laundering organized by ”Die Linke” at the Bundestag. On this occasion, the speech of Bas ter Luun, Senior Advisor of the Department of Public Order and Safety at the City of Amsterdam, was very interesting.

The Dutch capital – explained ter Luun during his presentation – is a nerve center of illicit drug trafficking. The consumption is also very high in the city, it is estimated that in 2018 was consumed cocaine worth millions of dollars. Drug traffickers can rely on a network of corrupt brokers to help them locate secure apartments and places where they can carry out their trafficking undisturbed.

In addition, a main concern is money laundering, particularly in the real estate sector. In Amsterdam, the proceeds of illicit trafficking are invested in properties, for example in sectors as catering and restaurants, tourism and other attractions that the city offers. Luxury goods are also a popular target for organised crime in the Netherlands.

In this regard, the city administration takes initiatives and measures to combat money laundering. Firstly, it is essential to study the phenomenon in depth. For this purpose, the city of Amsterdam uses cross-referencing data on income and ownership. The combination of fiscal and housing data is then processed. This information allows us to obtain statistical data and analyse the results to see where the accounts do not add up. There may be cases and areas of interest where income data does not match linearly with ownership data. It is in these cases, therefore, that a wake-up call is triggered, and a more in-depth analysis is carried out.

The operational phase, then, involves the screening of subsidies, permits and local real estate transactions. The approach that is carried out is multi-agency, as more actors are involved (Police, tax and customs administration, legal bodies). It is necessary in this phase to establish a fruitful collaboration between the public and private sectors in the contrast of money laundering and housing fraud.

But what can other cities do to face similar problems, become resilient and follow the example of Amsterdam? First, explains ter Luun, it is necessary to raise awareness and create structures of contrast within the public administration. Then you must work together with stakeholders within society. Moreover, the sharing of information and intelligence between the different law enforcement agencies is fundamental. Finally, it is necessary to cooperate with the other European cities to contrast the money laundering.

Ter Luum’s speech was received with great curiosity and in the margins of the conference he granted us a brief interview.

For us was quite new to hear that a city engages someone responsible for money loundering. How did that happen in Amsterdam?

”It all started in the 90s. There was a parliamentary inquiry and part of it was an investigation in the city centre conducted by criminologists. The conclusions showed that many real estates but also other economic sectors like prostitution and coffee shops were owned by organized crime. In addition, the city itself somehow facilitated all that since permits and licences were granted quite easily. That led to the decision by the city administration in the mid ‘90s to invest in qualified personnel to combat money loundering.’’

Is that a common model for the Netherlands or it is limited only to Amsterdam?

‘’It started in Amsterdam, but soon other cities throughout the country followed the model. On a national level there’s a structure that facilitates the cooperation between different government agencies and that strengthen local authorities and mayors to combat organized crime.’’

Are you also working together and cooperating with police forces?

‘’Yes, we exchange information with them. It happens for a screening of applicants for permits, for example. But we also cooperate in the enforcement of the rules. For instance: in the hospitality industry, coffee shops, bars, there are certain rules enforced by the municipality. In these places there could be a commission of crimes. In some cases, the enforcement of the local government and the police work together to conduct the inspections.’’

The Netherlands have a quite liberal drug policy. Is that interfering somehow with money laundering? In a positive or negative way?

‘’Because of the coffee shop system – where you can sell marijuana – a large industry, which is not regulated, could grow. This industry has a lot of proceeds, makes a lot of money and this money must be invested somewhere.’’

Was it complicated to get an overview of money laundering activities in your town?

‘’I don’t think we have the overview yet. It’s really complicated.’’

Are you also lobbying on national policy makers or is this not part of your job?

It can be part of my job to lobby on national policy makers. For example, when we realize that a certain power or instrument doesn’t work well, we need the legislation to be changed. Hence, we show by cases what has to be done.

Do you have also civil society organizations like ours active in that field in Amsterdam?

‘’Not enough in the field of money loundering. From the outcomes of this conference I observed that is something we need also in our country. Anyhow, in the field of human trafficking and prostitution there is cooperation between the NGO’s and the local government.’’

Could you tell us more about the powers of the Dutch mayors and of the local administrations in the Netherlands? Are there in Germany comparable models of tackling money laundering on the municipal level?

‘’The Dutch mayors are responsible for public order and safety. They have the executive power to close houses or to fill restraining orders. That could be maybe comparable to what happens in Germany. What is peculiar of the Dutch mayors and does not apply to Germany or other countries are the screening instruments they have. A mayor can obtain information from the police, from the tax service and then use these instruments.’’

And of course, one question of interest: what are the prevalent organized crime groups in Amsterdam?

The motorcycle gangs are still there. They do not have a top house in the city anymore, since we managed to get rid of it, but they return occasionally on their vehicles. We see also Albanian networks, in relation to drug trafficking. There are also the old Dutch networks which were quite big at the beginning of this millennium. We see also the networks composed by second and third generation of immigrants who now took over all the positions in the drug trafficking. These are the groups, but the situation it’s more fluid.

And what about the Italian organized crime?

”It is present also in Amsterdam. There are some reports about the presence of ‘ndrangheta clans in the Netherlands.”

Record seizure – Europe flooded with cocaine


On 2nd August 2019, customs in Hamburg announced that 4,500 kilograms of cocaine had been confiscated in the port of Hamburg. This is the largest quantity of cocaine ever confiscated in Germany. The cocaine would have generated about 1.4 billion euros on the market. The drug, that came from South America, was very pure, and one gram of that would costs around 80 euros on the street.

The substance came in soy containers and was packed in sports bags. These containers often contain spare locks for the containers. Even before the containers “officially” arrive at the port, they are opened by special service providers on behalf of criminals, the sports bags are removed and the containers are secured again with the replacement locks, which are exact duplicates of the original locks, so that the removal of the bags is not traceable. This time, for some reason, the procedure didn’t work out and customs secured this immense amount of cocaine before criminals could get it. The substance is taken after confiscation and burnt under supervision.

This intercepted record delivery shows once again that Europe is experiencing a cocaine glut. Demand remains high, and the existing global anti-drug policy appears to be ineffective. Every day, the cocaine market ensures that billions of euros fall into the hands of criminal organisations. That is why it is important to combat money laundering effectively, because it is not only drugs that have a harmful effect, but also the financial gain that they generate. It is known that billions are being laundered in German real estate. It is good that the measures against this are being stepped up. It is extremely questionable why payment for real estate with cash is still permitted. This is an invitation to gangsters from all over the world to invest in Germany. However, a comprehensive fight against money laundering is needed. It must be ruled out that valuables such as used and new automobiles, watches, works of art and jewellery can be used for this purpose. Complicated mechanisms of money laundering such as trading in participations in companies and investments in protective financial instruments such as closed-end funds and trust constructions must also be brought to the fore.

Another aspect of cocaine glut that is often overlooked is the consumer side. Even top politicians consume the substance. However, social elites do not buy their drugs on the street market, but in structures such as luxury restaurants and other suitable outlets. These contacts between drug traffickers and such consumers do not favour the pursuit of the structures that supply these clients. For this reason, too, politically independent public prosecutors in Germany would be an important step in the fight against organised crime.

Why such an immense business as the one in Hamburg went wrong can only be speculated about now. New players are currently trying to gain a foothold in global trade. It remains to be seen whether this circumstance has anything to do with the recent record seizure. It will also be interesting to find out which backers are being investigated. Because a seizure alone is not very meaningful in the end.

German and the Italian legal frameworks to combat money laundering and the financing of terrorism


The International Monetary Fund has assessed the German and the Italian legal frameworks to combat money laundering and the financing of terrorism. Reports have been published respectively in June and in February of this year. The evaluation of Italy is overall positive. Despite the high risk of money laundering, the country has a well developed legal system, authorities are able to undertake complex financial investigations, and entities involved in the prevention of money laundering have a good understanding of the phenomenon. Nevertheless, the achieved results are not commensurate with the volume of proceeds of crime generated in and outside the country. The use of shell-companies and other corporate vehicles for the purpose of money laundering and tax evasion is well known by authorities (especially by the Guardia di Finanza), however, more transparency with regard to beneficial owners is advocated. Particularly banks are considered vulnerable to money laundering due to the range of products they offer, the transaction volumes they handle, and the interconnectedness of the banking sector with the international financial system. Yet, the IMF does not call for the hardening of sanctions for banks, nor for the introduction of corporate liability.

OLAF to close record numbers of investigations in 2015


In 2015 the European Anti-Fraud Office (OLAF) closed 304 investigations, issued 364 recommendations to the Member States and EU authorities and opened 219 new investigations. The growth of efficiency is due to the 2012 OLAF reorganization, which turned out beneficial – in 4 years the office has reduced the number of long-lasting investigations by half.  What is worth noticing is that not only Europe-based investigations were handled by OLAF (as examples: fraud investigation in an ecological project in Africa or evasion of anti-dumping duties in Japan and Malaysia).

VAT fraud – bait for organized crime groups to funnel money


In 1993 the Maastricht Treaty (the Treaty on European Union or TEU) came into force. One of its main goal was to create a single market where goods, people, services and capital move within the union as freely as they do within a single country. Undeniably, the opening of borders has brought lots of benefits (the ability to study, live, work and retire in any member state; unrestricted flow of capital, products within the European Union etc.), yet the „frontier-free” market is also a bait for organized crime groups that want to take advantage of custom duties’ and other tariffs’ abolition. One of the most common and profitable crime is the value added tax fraud (VAT fraud) where mobsters make use of intra-community laws in order not to pay the tax on products shipped to another European Union’s Member State. According to Europol’s estimate, every year EU Member States lose 40-60 milliard euros in non-paid Value Added Tax.

BitCrime project reveals the use of digital currency in organised crime


In May 2016, the European Central Bank (ECB) after months of discussions announced that in 2018 it would cease to issue the banknotes of a 500-euro value (yet the ones in circulation would remain valid). By this means the European Union wants to eradicate a comfortable „tool” for mobsters to smuggle tainted money. Yet nowadays tangible money is not the only method of performing illicit financial flows. With the introduction of virtual currencies (Bitcoin being the most famous in this category) the organized crime groups were given an alternative method of transferring illegally acquired assets. This issue was finally acknowledged by Germany and Austria – that is why they decided to launch a research focused on the use of digital currencies in the organized crime domain. The project’s name is „BITCRIME” and it will be founded by the German Federal Ministry of Education and Research (BMBF) and the Austrian Federal Ministry for Transport, Innovation and Technology with a total amount of €2.4 million.

500 euro bill – help for mobsters?


The idea of withdrawing 500 euro bill from circulation reappears in public debate every now and then. In 2010, the United Kingdom was the first to ban the sale of the note by exchange offices even though the country is not a member of the Eurozone. Now, the European Anti-Fraud Office (OLAF) calls on the European Central Bank (ECB) to reconsider withdrawing the banknote as it is a comfortable tool for mobsters to smuggle tainted money. On the other hand, there are countries like Germany or the Netherlands where the tradition of using tangible money instead of electronic one (like credit cards, cheques etc.) still prevails. So what are the main concerns that act in favor of  withdrawing the purple bill?

Deutsche Bank in dire straits


Recent years have been no sunshine and rainbows for Deutsche Bank – one of the most powerful worldwide-known institution. Next week, the bank will announce a record loss, the highest in its history: 6,7 bln euros. That downturn is surely correlated to many dubious deals executed by the bank in the past years for which it will be answerable now. But in this story, the most staggering is that, apparently, intricate criminal-like structures can grow only if equipped with the jurisdiction’s, tax advisors’ and – indeed – financial institutions’ support. Thanks to such a team, bank’s operations   are susceptible to oscillate in the grey area, jurisdictional void, simply toying with rules and regulations.