Detecting organised crime

illegalAre blue collar criminals changing their shirts to white? In Scandinavia they already have, according to Fredrik Hammarström

 

Over the last five years Sweden has seen the number of fraud and white collar crimes escalate to new dimensions. The rate of fraud cases has increased from 59,000 to 130,000 – an increase of some 120%. Not only has this type of crime increased but the majority cases of are carried out by organised criminals.

In Sweden approximately 10% of fraudulent crimes are solved – the same rate as for armed robberies, yet only 900 armed robberies were reported. Therefore if the criminal carries out a risk assessment they know that they are likely to be apprehended due to a lack of comparative police activity for this type of crime and the unlikely outcome of being prosecuted and sentenced. Even if they are sentenced, their sentences are likely to be far less than that for armed robbery or murders.

A Swedish criminal recently said to me, that he had swapped his hood for a suit. Scandinavian criminals are today acquiring or starting their own companies. By utilising individuals with no criminal record, a legal entity can be formed enabling access to credit from banking and financial institutions which create the opportunity for organised criminals to gain easy access to money.

The companies are then used for money laundering and through the company, criminals can gain access to vehicles, property, computer equipment and other valuable goods. Initial repayments of credit facilities are made from money earned from drugs, weapons and other illegal activities. Essentially the banks and financial institutions have now become the main launderette for criminals’ money.

“Arresting hardened criminals and detecting organised crime is, for most police, one of the main reasons for becoming an officer in the first place…”

In a recent case, that I was involved in, it was established that two people through two companies had over a period of three months, received credit of €1.5m. When this was discovered there were no assets to be repossessed and the banks and lending institutions never made an official complaint to the police. One of my most complex investigations involved over 178 people and many companies.

Over the last three years there have been huge changes and developments in the financial and banking institutions when it comes to suspected fraud. As a result two clear changes have occurred.

The organised criminals’ methods of carrying out fraud have become even more sophisticated and comprehensive.

Individual bankers and lenders are now being directly pressurised and threatened by the criminals.

Just as in Ireland, criminals globally make their money though crime in any way possible. However societal changes in Sweden (and Ireland) over the last decade have meant criminals have gone from bank and post-office robberies to tiger kidnapping and robberies of cash transit vehicles. As societies continue to reduce the amount of accessible cash (in addition to cash transports being provided with higher security) criminals have no choice but to reinvent themselves and their activities. Realistically, why would criminals play with the inherent risks of violent attacks on cash transits involving 10 people or more, weapons, explosives and robbed vehicles for €100,000 when they can with little risk gain access to €1.5m with only two people in suits ever involved?

Initially, criminals started in Sweden by gaining control over a company and because of this subsequently gained access to credit. They would then use this credit to purchase or lease fleet and/or acquire capital merchandise such as computers, tools etc. By making the initial two or three repayments they have made it hard for the police and prosecutors to prove intent of any crime being committed. Only civil proceedings therefore remain, leaving financial institutions with legal bills often greater than the assets gained by the criminals. This figure is then simply written off as bad debt and the criminal avoids any sanction.

“We therefore need to be ready to move with societal change and look ahead to new criminal moves and adapt our methods accordingly….”

One of the repercussions of this is that lending institutions then become more restrictive in their lending and the types of loans which they grant. This in turn leaves law abiding citizens with less of a chance of acquiring credit.

An ex gang leader told me that he had very detailed and clear rules for his gang members. “No one is interested in robbing someone in town for €50 and a designer jacket which will only lead to police attention. Instead, €1000 will pay a hacker to gain important and invaluable information about a target by gaining access to their computers and phone systems.” 

If further information was found relating to the target person having an affair, an addiction, or some other vulnerable personal matter was discovered, this would then be manipulated to the criminals’ advantage.

In investigations criminals where often found to be either owners of small companies, car sales representatives or in some instances, they were actually working for a lending, asset or leasing institution. By applying threats to the target the criminal could be guaranteed credit approval. The 2013 statistics in Sweden clearly demonstrate that there was a huge increase in the utilisation, recruitment and placement of insiders, often in the banking and finance sectors. 

Criminals are now controlling the entire supply chain, i.e. the buyer, the lender and the seller. Fighting white collar crime cannot be done by sending an email from your PC but will require physical and manual checks, investigations and surveillance of the actual materials, or goods being traded. Such investigation can lead to the prevention of criminal movement and restricted access to credit. 

As with all police work, prevention through solid operative work on the ground, is the best medicine and indeed cure. Even though police officers may love the ‘car chase’ it is of utmost importance for all police to consider all information in the round. Key areas are: The criminals’ registered vehicles; the companies they regularly visit and company names mentioned on paper work found in any raid or search.

Arresting hardened criminals and detecting organised crime is, for most police, one of the main reasons for becoming an officer in the first place. We therefore need to be ready to move with societal change and look ahead to new criminal moves and adapt our methods accordingly. 

It can now be assumed that many criminals will make their money from 2014 and beyond when wearing a white, not a blue collar. It is therefore only a matter of time before this criminal shift among Irish criminals becomes the gardaí’s next big headache. The truth is the transition has almost certainly already begun.  

Fredrik Hammarström is a former Swedish police officer and now works as a private security consultant to Irish companies. 

For full and in-depth coverage, see the current printed edition of Garda Review.

subscribe button