The $1 Trillion Global Crime Wave

This is an amazing article detailing some of the organized criminal activity that's estimated to top $1 trillion a year.

It's not just drugs, of course. There is an epidemic of counterfeit goods that cost legitimate businesses hundreds of billions of dollars.

Foreign Policy:

Organized crime lurks behind many of the stories in the headlines today, though the connection rarely becomes explicit. Alexey Navalny, the Russian opposition leader who was just convicted on probably spurious charges of embezzlement, made a name for himself by targeting the corruption that is so deep-seated in today’s Russia that it’s often hard to see where the government leaves off and the mob begins. European Union law enforcement officials warned recently that mobsters are capitalizing on the European financial crisis by taking advantage of black markets in goods and services. Meanwhile, the increasing prominence of the Internet in the global economy is fueling worries about the rising power of organized cybercriminals.

Gangsters are cropping up in all sorts of odd places. Criminal syndicates are implicated in everything from the poaching of rare wildlife to the counterfeiting of drugs and manufactured goods. That growing range of activities attests to the criminals’ skill at exploiting the possibilities offered by deepening global interconnectedness. Consider the opening of this story about a recent global raid by Interpol: “More than 6,000 people around the world were arrested in a two-month anti-counterfeiting sweep that netted tens of millions of dollars worth of fake shampoo in China, phony cigarettes in Turkey and bogus booze in Chile.” The investigators discovered everything from a subterranean factory in Ukraine manufacturing counterfeit cigarettes to a workshop in Peru that puts false labels on motors from China.

Mobsters thrive on instability. In the Syrian civil war, the same criminal groups that once played on their close ties to the government of Bashar al-Assad have now mutated into the shabiha, the feared paramilitaries that do the regime’s dirtiest work on the battlefield. But they’re not the only ones. “The link between insurgent groups and organized crime has long been a feature of intra-state conflict,” notes Asher Berman, an expert at the Institute for the Study of War. “Rebels often turn to criminal activity to obtain the weapons and funding they need to maintain the fight.” The rebels in Syria, desperate for cash, are increasingly resorting to mafia-like tactics of their own, ranging from car thefts to the looting of antiquities. Reports of systematic extortion -- the familiar phenomenon of the “revolutionary tax” we’ve heard about so many times before -- and economically motivated kidnapping are also on the rise.

The resources devoted to fighting organized crime -- especially these transnational outfits -- are pitiful when compared to the problem. Some of that is related to jurisdictional disputes. Cooperation among countries is lacking and this accrues to the benefit of organized criminals.

Even the scope of the problem is unclear:

What we’re seeing, though, is just the proverbial tip of the iceberg. Criminals, by definition, prefer to avoid the light of day, so the dimensions of the real mafia problem remain obscure. Was that Vatican official who was arrested in June on money-laundering charges merely trying to make himself and some well-connected friends a bit richer, or is he part of a much broader pattern of institutionalized corruption within the bank of the Holy See? Was that recent police raid in New Delhi that netted a huge haul of black-market weapons a victory over mobsters or terrorists? Did that witness who met an untimely end just before he was to testify in the Whitey Bulger case here in the United States really die of natural causes? Why did the Chinese harbor one of Taiwan’s most prominent triad leaders for 17 years before handing him over to Taipei earlier this month? In most cases, we’ll probably never know the whole story.

Drugs, human trafficking, counterfeit goods -- these are the staples of the new Mafia as they have developed worldwide, sophisticated networks to move product and people. But what about cybercrime? Some international law enforcement officials believe that many of the recent hackings of government and private business networks was the result of "hackers for hire" who have the knowledge and resources to actually bring down the financial system.

Before anything meaningful can be done to address this growing threat, an acknowledgment that the problem exists and the scale it has reached must be forthcoming from the international community. In so doing, the massive resources needed to fight this global crime wave might become a reality.

Otherwise, the criminals will only be empowered and emboldened to make further inroads into legitimate society.