Posts Tagged ‘organized crime’

h1

Dubai: a Mecca for sex trafficking

April 3, 2015

Watch this video to understand some of the basics about prostitution and human trafficking in the United Arab Emirates:

Money Jihad has previously noted that there are connections between jihadist groups and human trafficking syndicates. A study by West Point’s Combating Terrorism Center found that Individuals [within the global illicit marketplace] involved in other illicit activities link to terrorists 35 percent of the time.” Although the video excerpt tends to focus on the women and their experiences, there are powerful networks operating behind them to coerce them into the sex business and skim millions of dollars off the top. Rest assured that the profits from the sex business aren’t being used to build schools and hospitals.

Advertisements
h1

Money for terror: recommended news reading

March 26, 2015
  • Hamas was on the verge of bankruptcy until a Swiss offer to cover Hamas’s payroll… more>>
  • Bank compliance officers:  Do you know who your customers are in Latin America?  How about the customers of correspondent banks there?  It could include Hezbollahmore>>
  • The Obama administration appears to have violated long-standing U.S. policy in 2010 by having the CIA contribute $1 million toward a ransom payment to Al Qaeda for the release of a captive… more>>
  • Why effective organized crime groups inevitably seek international business relationships… more>>
h1

Business experts weigh in on ISIS’s organ sales

February 27, 2015

Black market organ sales and the financing of ISIS was the subject of a segment on last Saturday’s edition of the business news show “Bulls & Bears” on Fox News.  Among the more interesting points made during the discussion came from hedge fund manager Gary B. Smith, who suggested that ISIS’s financial swamp can be drained by following the model for prosecuting organized crime rings to include developing informants and flipping them to rat out the big bosses.  That would have been easier if Pres. Obama had tried to keep a residual force in Iraq to include human intelligence forces, but it’s still a valid prescription for tackling ISIS sleeper cells in the West.  Roll tape:

h1

Terror-weary, IRA shifts to financial crime

August 29, 2014

Coming to terms with their faded, washed out political cause, ex-terrorists of the disbanded Irish Republican Army and their newer generation of recruits have turned to money laundering schemes, organized crime, drug trafficking, and other forms of financial crime.

Like the movie, “The Third Generation,” illustrated, after the wind goes out of the sails of a formerly principled revolutionary group, the newer followers turn to ruthless and petty trifles.

This is something of a cautionary tale for the way the world deals with terrorist organizations and rebel groups who have failed to carry out their main objectives. Is it better to finish them off once and for all, or to let them limp along through banditry? The problem with this case is that the bandits appear to have evolved into a permanent mafia class.

This commentary from the National Post in May sheds more light on the development:

…The more controversial British economic policy post-Thatcher was to effectively allow Sinn Fein’s military wing, the Provisional Irish Republican Army (IRA), to launder the huge amounts of money it had acquired through high-profile bank robberies. This bounty was widely labelled by republicans as a pension fund — or pay settlement — for IRA members.

Instead of trying to recover the funds, the British government turned a blind eye and gave the IRA 10 years in which to legitimize the cash. This the IRA did, with property in parts of Dublin exchanging hands well above the market value. The laundering reached such heights that pubs on the outskirts of the city exchanged hands for millions of euros. While all this initially worked well for the IRA, the spectacular economic collapse of the Republic of Ireland, and in particular the property crash, meant that the ex-IRA members’ funds plunged in value.

British Intelligence agencies kept a close watch on the whole process, and became increasingly alarmed as members of the disbanded IRA turned to more traditional forms of organized crime — such as drug dealing and brothel management in order to make up for shortfalls caused by the financial crash. The absence of foreign organized crime syndicates in Northern Ireland (one of the few positive effects of the conflict) meant that opportunistic ex-IRA members were able to quickly fill this crime vacuum with relative ease.

Ex-loyalist paramilitaries had long since been involved in organized crime in loyalist areas of Northern Ireland. Indeed, much of the violence that has taken place in the so-called post-conflict era has been the result of “turf wars” between rival gangs of loyalists fighting over control of the lucrative illegal drugs markets…

h1

Mafia makes killing on crash-for-cash schemes

June 24, 2014

A mob-linked auto shop owner has been indicted for insurance fraud. The case of Ronald Galati illustrates the methods employed in this increasingly common form of financial crime and its links to organized crime rackets.

In the blog post below, the executive director of the Coalition Against Insurance Fraud comments that organized crime and insurance fraud are often perceived as involving immigrant groups, which is unfortunately true, and mentions Somalis in Houston as an example. The prevalence of auto insurance fraud by Somali-Americans in Texas is news to Money Jihad. Historically such schemes are associated with Palestinian Arabs in New York and the Russian mafia around the world.

We must admit that the deer blood ploy used in this case is pretty clever. If only Galati had used his cleverness for good rather than for crime…

From Insurance FraudBlog:

Mobster’s reputed auto cons show America can create its own defrauders

May 29, 2014 by Dennis Jay

“I live my life to cheat insurance companies — my high every day is to cheat insurance companies.”

That’s the motto of reputed Philly mobster Ronald Galati, say accomplices arrested in a widespread sweep yesterday. A grand jury in the city of Brotherly Love indicted 41 yesterday for allegedly staging auto crashes and faking damage to previously banged-up cars. Galati and his body shop collected millions from insurers in the scam, prosecutors say.

Investigators say Galati even had shop employees gather and store deer blood, hair and carcasses as props in photos later submitted with claims to insurers.

Participants in the long-running scam include body-shop employees, tow- truck operators, a city cop and two insurer adjusters — plus Galati’s wife, son and daughter.

Galati, an auto mechanic at American Collision, Inc., had strong mob ties and was out on bail for allegedly masterminding a triple murder-for-hire plot against men he believed had testified against him involving the insurance plot?

Much of organized crime involving insurance in America focuses on immigrant groups — Russians in New York City, Armenians in Los Angeles,  Dominicans and Cubans in Miami, and Nigerians and Somalians in Houston.

This case reminds us that we still have home-grown gangsters likely defrauding insurers and their policyholders in every major city…

h1

Canada: Hezbollah immersed in organized crime

June 23, 2014

Indeed. Most terrorists either personally know or know somebody who knows an organized crime figure, and vice versa.

According to Hezbollah’s Iranian masters, criminal mischief is religiously justifiable so long as it is done to harm the enemies of Islam.

From Sun News on June 3:

Hezbollah tied to organized crime in Canada, says spy agency

MONTREAL – Hezbollah members in Canada are involved in organized crime, according to Canadian Security Intelligence Service reports and documents.

Members of the outlawed group – banned as a terrorist entity in Canada since 2002 – also are secretly engaging in fundraising, procurement of materials and intelligence gathering, according to a “threat assessment” report by the Integrated Terrorism Assessment Centre.

Hezbollah’s activities here were among the subjects the spy agency expressed concern about in a “top secret” 10-page letter he wrote and delivered last July to Public Safety Minister Steven Blaney, soon after he was sworn in…

h1

Seven habits of highly effective kingpins

May 27, 2014

Criminal and terrorist groups are highly interconnected according to new analysis of data by West Point’s Combating Terrorism Center. The conventional wisdom was that criminals worry that working with terrorists may draw unwanted scrutiny from their governments, and they are only inclined to cooperate only in resource-poor environments where it is necessary to survive. But the CTC finds that transnational traffickers and criminals appear to be more than willing to partner with terrorists, and that they benefit from these relationships in a wide variety of environments.

The full report can be read here. It is very thorough (89 pages) and includes academic language and models. Here are a just a few of the salient points from the study about members of the global underworld that may be of interest to practitioners and analysts outside of academia:

  1. Interconnected: 98 percent of the individuals in the global illicit marketplace are within two degrees of separation of each other.
  2. International: One in three individuals in the network have international relationships.
  3. Distributed power: Unlike typical hub-and-spoke networks where 80 percent of the connections rely on 20 percent of the actors involved, the global illicit network is somewhat less dependent on a small number of powerful actors/kingpins. Twenty percent of participants are responsible for only 65 percent of underworld connections. This diffuse hub-and-spoke model makes the network tougher for law enforcement to disrupt.
  4. Willingness to work with terrorists: “Individuals involved in other illicit activities link to terrorists 35 percent of the time” (p. 43). Terrorists often serve as “boundary spanners,” that link and form introductions between disparate groups such as drug traffickers, arms dealers, and organized crime.
  5. Frequent bilateral links with the United Arab Emirates: The top two bilateral connections in the criminal underworld–the U.S. and Colombia and the U.S. and Mexico–are probably unsurprising to Americans. The third most prevalent bilateral connections are between India and the U.A.E., and the sixth most common are between Pakistan and the U.A.E.
  6. Organized crime, not just terrorism, benefits from state sponsorship. We know that state sponsorship of terrorism exists, but for some reason we erroneously assume that state sponsorship of crime does not. The evidence from North Korea, Russia, the Balkans, and Pakistan indicates that criminals can carry out national interests—a phenomenon deserving further study.
  7. Convergence is not driven by poverty. Terrorists and criminals are drawn together in a variety of environments, not just in countries where there are little money or resources. The evidence indicates that the opposite is often true—that criminal masterminds prefer climates where there is some level of predictability and economic development, such as Monzer al-Kassar operating in Spain and Dawood Ibrahim in Dubai. Focusing only on failed states could be a red herring.

Acknowledgment: Thanks to Twitter user @El_Grillo1 for sending in a link to the CTC study.

This piece has also been published at Terror Finance Blog.