Tuesday Reitano and Mark Shaw are the deputy director and director of the Global Initiative Against Transnational Organized Crime. Their forthcoming book, “A Criminal Contagion: How Mafias, Gangsters and Scammers Profit from a Pandemic,” will be published by Hurst in April 2021.
The coronavirus had barely cemented itself into public consciousness when the avalanche of organized criminality began. COVID-19 was not declared a pandemic until March 11, but by then, criminals of all ilk were already repurposing their activities into pandemic-tailored alternatives.
Counterfeiters, who are always alert to the hottest trends, quickly began to produce facemasks, coronavirus test kits and personal protective equipment. In a one-week operation spanning 90 countries as early as March, Interpol made 121 arrests worldwide and seized COVID-related fake pharmaceuticals worth over $14 million. The operation also closed down more than 2,500 websites, social media pages and online marketplace sites selling fraudulent medicines and medical products.
Doorstep scammers and organized thieving rings found new cover stories: examining offices for health hazards while scouting targets for theft; peddling fake products and cures; or, as in one notorious example in South Africa, going household to household masquerading as state officials recalling cash supposedly contaminated with the virus. Drug dealers posed as delivery drivers, emergency health workers and people out exercising as a cover for being out on the street.
Real Crime In Virtual Space
Of course, much of the action happened online because that is where all the people are. Industry data from all over the world showed meteoric rises in internet usage — in some countries, 50-60% higher than the previous year. E-commerce boomed at a greater rate than that: In April, U.S. and Canadian retailers reported that online orders were 146% higher than the previous year. Even in Africa and Asia, which have the lowest levels of online e-commerce in the world, an UNCTAD survey saw the use of online marketplaces grow dramatically.
Even before the waves of national lockdowns started, an army of cyber-fraudsters were already hard at work. Internet service providers and online security firms recorded eye-watering increases in COVID-19-themed attacks from January to March, including phishing, malicious websites and malware targeting remote users. Most of these attempts were capitalizing on the fear, anxiety and desperate desire for information that people were feeling as the pandemic spread. That national leaders in some countries chose to deny or downplay the danger of the virus and to promote miracle cures and false evidence — including Donald Trump, Jair Bolsonaro and Boris Johnson (all of whom, unsurprisingly, soon contracted the disease) — only exacerbated the confusion and provided more entry points for peddlers of misinformation and fraud.
As the legitimate economy came to an abrupt halt and honest people’s lives were sharply curtailed in all manner of damaging ways, criminal actors proved adept at continuing and expanding their illicit enterprises. Drug dealers kept dealing, human traffickers kept exploiting the vulnerable, street gangs and mafias kept terrorizing their communities. From the safety of their expansive desks, white-collar criminals kept manipulating markets so that they could live out the lockdowns in their gated communitiesluxury yachts and afford private tutors and education pods for their offspring.
Faced with this tsunami of criminality, states have not only struggled to prevent it but have, in many ways, made matters worse. Any disaster — man-made or natural — always creates new opportunities for the nefarious. Governments and state officials are distracted, there is chaos and confusion, people are perturbed, and, perhaps inevitably, governments take hasty, short-term decisions to pour oil over troubled waters.
Urgent procurement to meet extraordinary needs meant that many countries suspended their usual accountability and public procurement rules — in many cases, with terrible results. In Honduras, the government awarded a $47-million contract for mobile hospitals and to a company they found on the internet. The U.K.’s billion-pound contracts for their contact tracing systems have been riddled with errors, inefficiencies and abuses, and millions of respirators went missing after a £45 million contract was signed with a supplier known as the Win Billion Investment Group (Win BIG), which took its first 35% payment and then promptly began reeling off a string of excuses that meant the products could never be delivered.
Organized crime groups targeted stimulus payment systems that were rapidly established and thus highly vulnerable. In May, the U.S. Secret Service announced that hundreds of millions of dollars had been scammed from the government’s emergency unemployment stimulus payments by a Nigerian organized crime ring. Several municipal German authorities reported cases of fraud targeting their state aid websites, with scammers cloningcloning the websites and diverting people’s stimulus applications onto their sites, stealing their identities and benefits. In Brazil, a public sector watchdog identified some 620,000 cases of emergency aid being defrauded, amounting to around $200 million.
In some cases, it seemed less a matter of ineptitude than avaricious self-dealing and corruption. Political classes have been quick to capitalize on the urgency that the pandemic posed to suddenly liberate and allocate billions, or even trillions, in new funding. In India, for example, Prime Minister Narendra Modi called for contributions to a social fund for citizen assistance, receiving more than $1 billion in contributions from the private sector and wealthy individuals — but has refused any oversight over the money. A spokesman for the ruling party defended this approach by asking: “What is this urgent need for public accountability at a time when everyone is busy battling a pandemic?”
Criminal justice systems themselves revealed their vulnerability. As lockdowns were announced and regulations for ensuring social distancing came into effect, the job of implementation fell to the police. That reduced personnel and resources available for specialist law enforcement functions, including tackling organized crime. It also put police in a viral firing line — like their counterparts in the health sector, many police officers around the world became infected with the coronavirus. The New York Police Department indicated that during the first wave of the pandemic in New York City, around 18% of the force’s workforce was sick and unable to serve.
In Belgium, just short of 10% of the police force tested positive for COVID-19 in October alone, and in the province surrounding the city of Liège, the police union reported that around 50% of officers were not at work. In some places, COVID-19 became a new shakedown scheme — police officers in Zimbabwe were reportedly demanding hazard pay from the public and placing roadblocks in front of hospitals and demanding a bribe to pass. In multiple countries, excessively violent responses to policing of social distancing exacerbated mistrust and created new forms of disorder.
A Crisis With Long Foundations
The systemic weaknesses to organized crime revealed during the pandemic is not, however, merely the result of the pressures and understandable missteps taken during urgent emergency responses. The underlying problem is that over the past twenty years, the global framework required for an effective response to curtailing organized crime has been systematically undermined, as the moribund state of the U.N. Convention Against Transnational Organized Crime suggests, allowing organized crime to become stronger and more embedded.
In fact, there is considerable evidence to suggest that the underworld of organized crime has been building and intensifying over the last twenty years and, prior to the pandemic, was at its most profitable, powerful and integrated into the upper world than ever before in history. And the pandemic just supercharged that process.
By all indications, just prior to the pandemic, global narcotics production and trafficking was at an all-time high. June 2019 saw the largest cocaine seizure in the U.S. and the largest methamphetamine seizure in Australian history. European seizures were also at record levels, with a steady drumbeat of multi-ton seizures of cocaine and heroin at different E.U. ports. Opioid abuse — both organic and synthetic versions — have caused massive loss of life. It is equally troubling that it appears that many voters seem not to care much if political candidates are associated with drug trafficking and criminal networks. In 2019 alone, in Guatemala, Suriname and Guinea-Bissau, figures associated with drug trafficking ran for and secured high offices.
Metastasizing urbanization in some of the world’s most populous cities, especially in the Global South, has led to a massive undersupply of governance by the state, driving the marginalized urban poor to seek (often rough) protection, justice and service delivery from criminal groups and gangs. Accordingly, they pay their taxes in the form of extortion to those groups and seek their assistance in time of need. These communities feature some of the world’s highest homicide rates, and the rise of “gangland governance” has prompted brutal crackdowns by national armies as well as extrajudicial killings by police and paramilitaries. These punitive measures have not only abrogated the human rights of ordinary inhabitants but also exacerbated the vicious cycle of deepening mistrust in state institutions.
Human smuggling has boomed amid the multi-continental migrant crises. The number of global refugees and internally displaced persons has, year-on-year, exceeded global highs. The drivers of this movement are conflicts, urban violence, climate change and chronic structural poverty, forcing people to seek new livelihoods elsewhere at unprecedented scales. COVID-19 fears have made countries even less receptive to receiving refugees. As border controls have ratcheted up and become increasingly militarized and inhumane, so too have the smugglers facilitating illicit crossings, with abuse, exploitation and trafficking becoming more frequent and more brutal, even as their profits swell.
The rate of deforestation, over-fishing, illegal mining and wildlife trafficking has escalated, degrading environments and ecosystems and bringing a cascade of species closer to extinction. Moreover, environmental activists and land defenders seeking to prevent rapacious pillaging by illicit actors have been killed in record numbers. This has gotten worse in a number of places during the pandemic, as COVID-19 gave illegal groups space to strengthen their operations. In Colombia, for example, there has been an 85% increase in the rate of violence against social activists during in the first half of 2020.
Free trade and manufacturing zones have proliferated. The Chinese Belt and Road Initiative — a global infrastructure project funded by huge Beijing-backed loans — has introduced multiple different forms of free-trade agreements that are a clear soft spot for the entry and storage of illicit commodities. An OECD study found that each additional free-trade zone within an economy results in an associated 5.9% increase in the value of illicit trade, counterfeits and substandard goods.
The number of tax havens and wealth secrecy jurisdictions have similarly proliferated — there are around twice as many now as there were ten years previously, and they conceal an estimated $36 trillion of corporate profits, private wealth and dirty money. Society’s richest have gotten progressively richer during the pandemic, often while laying off or putting their own workers at risk. While a handful of countries prevented bailout money from going to companies or individuals registered in tax havens, the majority did not.
Cyberspace remains fundamentally ungoverned, unregulated and increasingly predatory, while key parts of the tech ecosystem remain absent — the domain name registration system most notably, but also the financial centers that regulate the use of cryptocurrencies and serve as the interface between digital and real money. A handful of tech companies whose leaders are billionaires and whose wealth accumulation is counted in seconds, decide the boundaries of the internet, while the multilateral system and law enforcement are limited in their capacity to respond to the highly technical, rapidly evolving, multi-headed hydra that is online crime.
This has created a wide-open playing field for cybercriminals, as we have seen. By April, every country in the world had seen at least one major coronavirus-themed cyber-attack, and over the course of 2020, there have been attacks that targeted health infrastructure, medical research and vaccine supply chains.
The last two decades of globalization have grown the global economy, inspired rapid innovations of technology and increased interconnections between both physical and virtual infrastructure. All of this has happened more rapidly than legislators and regulators can account for. Global governance has been stretched and stressed by this growth, and fissures have emerged. And true to form, like weeds pushing through cracks in the sidewalk, organized crime has taken advantage of these vulnerabilities to grow, eroding foundations as it does so.
Post-Pandemic Organized Crime
The global road to recovery from coronavirus is going to be long and hard. The economic contraction has been brutal, and its impact will have a long tail. The IMF estimated in October that cumulative global output will fall short of pre-pandemic expectations by $11 trillion between 2020–21 and by $28 trillion by 2025. Unemployment rates across the world have risen between 2.4% and 12.7%, with further rises expected when government support comes to an end.
According to estimates made by the World Bank in June, national lockdowns and the ensuing economic shutdown will push between 88 million and 115 million people into extreme poverty, reversing almost a decade of gains made in pursuit of the U.N. Sustainable Development Goals. Social safety nets are strained in many places and in tatters in others, growing the number of potential victims and recruits for organized crime.
Much of the greatest economic harm has fallen on the most vulnerable in the global economy — those working in informal sectors who will never see a stimulus payment and will have no recourse to loans or safety nets. Law enforcement and non-governmental organizations alike have sent up warning flares about the growing predation of human traffickers, including criminals grooming children online, as well as families forcing their daughters into marriage or their children into online sexual exploitation. Europol reported a 200% increase in traffic in the online communities sharing child pornography.
Also worrying is the rise of desperate souls who turn to organized crime for help in their darkest hours, to find money for medical bills, to keep their house, to save their business or to find a new livelihood. In cities in Africa, Central America and Europe, police and community workers have documented active gang efforts to recruit and groom new members among the kids who, because of the pandemic, are out of school and the young adults who are out of work. Cybercrime is an industry with a low barrier to entry, thanks to the “cybercrime as a service” ecosystem that has developed, whereby cybercriminals provide tutorials and helplines to induct new hackers and fraudsters into the illicit industry.
As businesses fail, even those firmly in the legitimate economy may turn to criminal groups as their lender of last resort. In the U.K., some two-thirds of businesses could be at risk of going bankrupt, and many have already closed. Organized crime is always willing to recruit another criminal into its ranks, and dirty money is always available to buy up failing businesses as legal fronts or to offer a lifeline at usurious rates and often with the threat of violence held up as penalty for default. As one Italian anti-mafia prosecutor explained: “[Mafia] lenders don’t need to take collateral … [They] know that their collateral is the borrower’s life.” In the next few years, as more and more people feel the impact of the economic drawdown, cash-rich organized crime will use it as an opportunity to buy into new sectors of the economy and to buy the loyalty of new followers.
The post-pandemic future of organized crime is likely to be stronger and more embedded than before. So, to really cure the virus and repair all the harm it has done, individual countries and the global community as a whole are going to need to address organized crime and corruption. This crisis should not just generate new thinking among the criminal fraternity, but also those arrayed against it.
What a sound diagnostic will highlight is the lack of skills and resourcing to respond to organized crime and the requirement to build more comprehensive strategies outside of ratcheting up law enforcement’s firepower. It will require a significant investment in meaningfully implementing the different provisions of the U.N. Convention against Transnational Organized Crime, including international cooperation and prevention activities. UNTOC is one of the most highly ratified international treaties, with 190 signatories, but needs momentum to translate its provisions into action.
It also means shoring up and protecting those who are most exposed and vulnerable and using a diverse range of tools to reduce violence. It means attacking the architecture of the global financial, corporate and trade systems that overwhelmingly favor wealth accumulation of elites at the expense of the majority. It means finding ways to protect those who defend land and investigate and speak truth to power, even while those that are powerful are increasingly corrupt and self-serving.
Right now, while we are consumed with lockdowns, partisan politics and sheer exhaustion, it may not seem like organized crime is a priority concern. But there is a lot on the line, and we do not want to find ourselves at the end of the pandemic on palliative care.