Organized crime
Recently, there was a particularly interesting article in the Taipan Daily (http://www.taipanpublishinggroup.com/taipan-daily-062309.html) on the economic opportunity provided to organized crime as a result of the world’s current economic plight.
Organized crime has a lot of cash. To put this into perspective, the article notes that Exxon Mobil booked a profit last year of about $10 billion per quarter. The top three organized crime syndicates in Italy alone – and that is just the top three (and just in Italy) – off-booked estimated profits of $20 billion per quarter. Tax free!
Since banks have been reluctant to lend money, this gives organized crime, which has lots of cash to be laundered, has a once-in-a-lifetime opportunity to legitimize a tremendous amount of cash. From our perspective, the issue is not that organized crime has lots of cash. We already knew that.
Rather, the issue is whether present AML programs are properly equipped to recognize, block, and capture this money. In theory, the answer is yes. In practice, however, the primary concern in many AML programs is compliance – not becoming the subject of a cease-and-desist order – and nothing more.
How resistant will these programs be to some combination of cleverness and bribery? We would be willing to bet cash money that organized crime managers expect to lose only a small amount to AML programs as they move to take advantage of this great opportunity. From their perspective, this is merely a cost of doing business.
