Criminal Contagion

How Mafias, Gangsters and Scammers Profit from a Pandemic

Tuesday Reitano, Mark Shaw

• Publisher: Hurst Publishers
• Year: 2021
• Print ISBN: 9781787384460
• eBook ISBN: 9781787386167
• Topic: Social Sciences
• Subtopic: Criminology
• Index: Social Sciences

Covid-19 is reshaping and challenging governments, societies and economies in previously unimaginable ways—but gangsters and profiteers have adapted. They have found new routes for illegal commodities, from narcotics to people. Shortages, lockdowns and public attitudes have brought the underworld and upperworld closer together, as criminals strive to meet needs, maximise opportunities and fill governance vacuums. Unscrupulous fraudsters are touting fake remedies to desperate people: counterfeit drugs, and trafficked wildlife used in traditional medicine. Social distancing and restrictions have seen online transactions and cyber-ops replacing or supplementing physical shipments, opening opportunities for scammers and hackers. Heavy-handed state responses have created new illicit markets by prohibiting the sale of particular goods and services, while some elites have capitalised on the pandemic for personal or political gain. Covid has cast a long shadow over the rule of law. Criminal Contagion uncovers its extraordinary impacts on the global illicit economy, and their long-term implications.

1

INTRODUCTION

Sometime in December 2019, an unknown virus crossed over from an animal—mostly likely a bat—to humans. Several people in Wuhan, a city in China where transmission of the virus seems to have first occurred, were hospitalised with severe pneumonia, but medical staff quickly realised that something else was at play. Further research identified a novel coronavirus—formally labelled SARS-CoV-2—which caused a disease in humans called Covid-19.

The virus was highly infectious and lethal. Uniquely, many people who contracted the disease showed no symptoms, while others did not display them immediately, making it difficult to ascertain infection rates. On 1 January 2020, the Chinese authorities closed the wholesale food market where the virus was first identified, and on 20 January they confirmed human-to-human transmission—and warned that the virus was spreading fast.¹ In order to contain the virus, all movement and business were halted, and people had to stay inside. Wuhan had entered lockdown.

This was a term that was rapidly to become common parlance as the virus surged around the world. By April 2020, it was estimated that around two billion people globally were in some form of lockdown aimed at containing the spread of the virus. Commercial airlines reduced or suspended services, while border closures and social distancing measures were put in place by the vast majority of countries to reduce the rate of infection and prevent public health systems from being overwhelmed.

But this suspension of economic and social activity came at a heavy cost. Whole sectors collapsed in a matter of days, triggering the loss of millions of jobs across the tourism, entertainment, hospitality, travel and services industries. Everyone was affected, from giant multinationals to those working in the gig economy, although some felt the impact far more than others. The relentless march of the coronavirus—which was declared a pandemic by the World Health Organization (WHO) on 11 March²—had brought our busy world to a screeching halt.

Billions of words have already been written about the impact of the virus on the legal economy, and rightly so. The pandemic is a defining moment in history, a major disruption to the overall trajectory of globalisation, and a significant accelerator of some trends already under way, especially in the virtual sphere. It is likely to shape lives and livelihoods for years to come. Leading economies have been driven into recession, and developing economies are seeing ever greater numbers of people fall further into poverty. In June 2020, the International Monetary Fund (IMF) anticipated a 4.3% drop in global GDP for the year.³ That may not sound significant until you compare it with the 2008–9 recession, which triggered only a 0.1% contraction in the global economy, with devastating results.⁴

Far fewer words have been written about the impact of the pandemic on the illegal economy of organised crime. As the pandemic hit, these criminals were faced with the same set of challenges as everyone else: disrupted businesses, risks of infection, life under lockdown. But, unlike ordinary people, many found ways to carry on working, and even thrived.

Understanding how the coronavirus impacted on this world of organised crime, and how organised crime in turn affected the social and economic fallout of Covid-19, is the aim of this book.

Covid and crime

We work in an organisation, the Global Initiative Against Transnational Organized Crime, established to understand illicit markets and their effects. When the virus began to spread in early 2020, we mobilised our field network and analysts and began to collect as much information as we could about the changes that seemed to be under way in criminal markets.

Like those of many analysts, our views changed over time. At first we thought there was more disruption in some markets, notably illicit narcotics, than turned out to be the case. Meanwhile, some areas, particularly the cyber sphere, exceeded expectations as to the speed and breadth of criminal growth. In some cases, the relationship between the pandemic and crime was relatively straightforward: with fewer commercial flights in operation, drug couriers were unable to travel and deliver their products. In other cases, the impact was more indirect: fears of contracting Covid-19, for example, changed consumer demand for illegal wildlife products in Asia.

But a common theme emerged: criminal tactics were evolving and crime was continuing—even flourishing—while law enforcement struggled to keep up, hamstrung by the necessity of responding to the pandemic and weakened by droves of personnel falling sick. Although we have spent years studying organised crime issues, nothing lessens our surprise at the ability of criminals to adapt or the resilience of criminal markets and actors. What we have observed with the coronavirus is extraordinary and has renewed our belief in the importance of understanding the changing dynamics of organised crime and developing new responses to it.

We begin this book with an overview of the disruption caused by the pandemic, then step back to examine the rise of organised crime since the early 1990s and the advent of globalisation. Interestingly, many of the same causes that have facilitated the spread of the coronavirus—greater interconnectedness and trade, rising urbanisation, and a booming global population—also contributed to the growth of organised crime across the globe in the pre-pandemic period. Indeed, this dispersion of criminal groups and networks—as well as the violence they engendered—was often described in terms of disease. In 2007, for example, Antonio Maria Costa, head of the United Nations Office on Drugs and Crime (UNODC), referred to the ‘drug epidemic’ which must be contained, and claimed that organised crime had metastasised, or spread uncontrollably.⁵ Taking the metaphor literally, some analysts have even explored how the principles of epidemiology could be applied to the response to organised crime.⁶ At the same time, the threat posed by organised crime was largely discounted in this period. Global responses were weak and fragmented, and the nature and extent of the growth of illicit markets were poorly understood.

As a result, by the time the pandemic hit, organised crime and illicit markets were well established across the globe, dealing in a range of illicit commodities from narcotics and people to wildlife and gold. We explore the impact of the pandemic on the various individual criminal markets before turning to the broader implications of the coronavirus for forms of criminal governance and the challenges that state actors faced during the pandemic. We conclude with some ideas for the prevention, treatment and cure of illicit markets and organised crime in a post-pandemic world.

Our book makes three conclusions regarding the impact of Covid-19 on crime. Firstly, the consequences of the pandemic differed from market to market, although several criminal markets are now tightly intertwined, resulting in knock-on effects. Secondly, the pandemic has in many cases accelerated changes that were already under way in the criminal economy, especially online. Thirdly, we need in the case of each market to distinguish between the immediate disruption caused, on the one hand, by lockdowns and the same general uncertainties that have plagued the legal economy and, on the other hand, by the longer-term economic crisis or depression that the pandemic is likely to cause and the future prospects of the criminal economy as global economic and trade dynamics change.

A note on terms

In assessing the impact of the coronavirus on crime, it is important to be clear about the terms we use. When we talk of organised crime, we mean those organised groups or networks that are active in controlling or benefiting from illicit markets. In this study, we cover a range of criminal-style organisations, from drug cartels, historical mafias, newer gangs and loose networks of dynamic criminal actors, including those within the state who offer protection to criminals and criminal markets. In different ways, all these organisations and outfits engage in corruption and violence to achieve their objectives. We recognise that there are differences between these organisational phenomena, but we see them as a spectrum of linked actors deeply embedded in the business of making criminal markets operate. Almost without exception, they also have a foot in the legal economy, and legal and illegal commercial activities are frequently interwoven.

When we refer to criminal or illicit markets, we mean those that states have generally determined to be outside the law, such as the trafficking of drugs, human beings or wildlife products, or those in which licit products are obtained by illegal means, such as gold. But it is worth emphasising at the outset that states have different legal frameworks and what is illegal in one place may not be so in another, or may be enforced differently, or with different emphases, depending on political decisions, political will or questions of state capacity and legitimacy.

Criminal markets can be hard to understand because the information that guides legitimate economies—the basis for determining prices, for example—is hidden or uncollected in the case of illicit economies. Analysts work around this dearth of data by piecing together information from multiple sources to ascertain what might be going on. Some of this is conjecture, but the study of illicit markets has improved greatly, even if it is far from perfect. Our objective here is to assemble as much information as we can to take a first stab at understanding what happened to illicit markets during the pandemic. We think that is important because the defining nature of the pandemic may itself shape the nature of illicit market activity, and by implication organised crime, for decades to come. It is a subject likely to occupy researchers for at least as long.

A better response

The coronavirus presents extraordinary challenges to global governance, the economy and social order. Where we go from here is an open question: there is no agreed plan, no guiding ideology to steer us through the chaos and disruption that the pandemic has brought. Yet there will be change. As Ivan Krastev, one of Europe’s leading political and social thinkers, says: ‘The world will be transformed, not because our societies want change or because there’s consensus for the direction of change—but because we cannot go back.’⁷

Political economies are being visibly reshaped across the globe at all levels. The volume, nature and direction of global trade will shift. The policy space, as so often in periods of crisis, is more open than ever: fixed ideas are up for debate.

Our view is that the pandemic may provide a long-overdue opportunity to rethink how several illicit markets are regulated; to build more effective institutions to fight organised crime; and to improve the life and livelihood of people often caught in a web of criminal governance.

But the window of opportunity is likely to be brief and chances have already been lost. Instead of investments in legitimate state institutions, civil society action or local communities, the responses of many leaders around the world have tended towards heavy-handed lockdowns, coupled with failures to effectively counter disinformation and provide social safety nets to the most vulnerable. Some political and economic elites have even exploited the disruption to profit or to enhance discreet agendas, including the state protection of illicit markets. In other cases, state action has actually created new illicit markets through prohibiting the sale of goods and services, such as alcohol.

If action is not forthcoming, criminal actors will continue to operate. Illicit markets and networks are always adapting to find new routes for established illicit commodities so as to meet existing as well as new demand. While of a different order, the challenges posed by the pandemic are, for criminals, also arguably nothing out of the ordinary: just another barrier to overcome in the relentless pursuit of profit. Demand and supply of illicit products may have fluctuated through the pandemic, but neither is going away anytime soon.

And the global turmoil may actually play into the criminals’ hands. The economic devastation of the pandemic has caused many people’s livelihoods to shrink or disappear, and this is offering new opportunities for illicit money to enter new geographies and speculate on new sectors as businesses collapse. The swelling ranks of vulnerable and excluded people are also an enormous potential resource for criminal groups. Such people are susceptible to recruitment as the tools and commodities of criminal markets, including those for violence and exploitation (for sex or labour); as a potential market for illegal products; and as the labour force for many illegal markets (in drug production or illegal mining, for example). Criminals have proved extraordinarily resilient during the pandemic—in part because illegal markets often weed out lesser actors—and many will emerge even stronger than before.

Barbara Tuchman concluded her classic study of the Black Death—the 14th-century plague, which was estimated to have killed from one-third to two-thirds of Europe’s population—with an assessment of what had changed as a result: ‘Consciousness of wickedness made behaviour worse. Violence threw off restraints. It was a time of default. Rules crumbled. Institutions failed in their functions … The times were not static. Loss of confidence in the guarantors of order opened the way to demands for change, and miseria gave force to the impulse.’ ‘Mankind,’ she ends, ‘was not improved by the message.’⁸

Tuchman’s medieval pandemonium may appear far removed from our twenty-first-century lives, but the stirrings of similar forces are now at play. The shifts and adaptations that took place in the underworld and upperworld during the pandemic pose real challenges to the rule of law, institutions and social cohesion. Violence is endemic in many areas of the world where criminal organisations hold sway.

As we argue in the following pages, our world is suffering not just from one pandemic, but two: coronavirus and crime. And while the coronavirus pandemic has done incalculable damage, it is crime that may shape our longer-term trajectory. The globalised, connected nature of the illicit now touches on all aspects of human existence, from human rights and health, the economy, poverty, inequality and social exclusion, the environment, climate change and the future of species, urbanisation and peace, to the very nature of politics and governance itself. It is as important a challenge as any faced by the global community, and one where we are not clearly succeeding. Rather than accelerating this downward trajectory, could the pandemic offer us an opportunity to reshape our response?

2

DISRUPTION

It is a story now well known to the world, but, in retrospect, it is still astonishing to see how quickly the corona-virus spread in those early months of the year, and how quickly things changed. For those living in the Western hemisphere, the news articles that appeared on New Year’s Day about an unknown, pneumonia-like disease in central China were barely blips on the radar of an already congested news picture. Our attention was dominated, we thought, by more pressing issues, like climate change, migration, the fate of the so-called liberal international order, Donald Trump. Whatever this disease was, it was happening far away.

And then it wasn’t. In a matter of weeks, the corona-virus spread rapidly through China and beyond, with the first overseas case reported in Thailand in mid-January. The epicentre soon shifted, moving from China to Iran, then to northern Italy and Spain, and thereafter more broadly across continental Western Europe. Italy declared a state of emergency on 31 January and suspended all flights to and from China, but the ...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Contents
• List of Acronyms
• 1. Introduction
• 2. Disruption
• 3. Between Cold War and Covid
• 4. No Escape, No Way Home
• 5. Business as Usual
• 6. Criminal Commodities
• 7. Wildlife’s Revenge?
• 8. It’s Virtual
• 9. The Fish Rots from the Head
• 10. Covid and Punishment
• 11. Gangland Rules
• 12. Who’s Going to Pay?
• 13. Prevention, Treatment and Cure
• Notes
• Acknowledgements
• Index