Michael Marinetto on crime organized economy

Nothing short of a miracle has taken place during the past twenty years. Crime is at a historic low. The US is at the forefront of this miracle fall in crime. But same dramatic trends can be seen outside the US – in the UK, France, Portugal. And also, let’s not forget, Russia. Last year the interior minister, Vladimir Kolokoltsev reported that the murder rate had dropped by 27%. And the crime rate had fallen by 5% across Russia in 2017, with crime rates in the capital Moscow reaching a ten-year low.

This near miraculous fall in crime has perplexed many so-called experts – not only criminologists and sociologist but also economists and even medical scientists.

One possible explanation which is often overlooked by academic specialists is that crime is changing. Take the example of Italy. This Mediterranean country in effect invented and imported modern organized crime. Since 1992, according to figures produced by the Italian interior ministry, homicides linked to organized crime have fallen sharply. Italy has one of the lowest murder rates in Europe. Now violence against women is the most serious violent crime.

The fall in gangster violence in Italy doesn’t mean there is less criminality – if criminal profits are anything to go by. Here crime really does pay. UNICRI’s 2016 report revealed an annual turnover of all the four main crime syndicates in the Italian South (the Mafia in Sicily, the Camorra in Napes and so on) is close to €150 bln – the equivalent of 4-7% of Italy’s GDP. These groups have the opposite problem of many legitimate businesses: too much liquidity. According to a 2014 study by the employers association Confesercenti these syndicates have estimated cash reserves of €65bln. In theory, the Mafiosi PLC is now Italy’s largest bank. This cash liquidity has been shrewdly used as leverage to infiltrate the mainstream market economy. The ‘Ndrangheta mafia group, with a greater annual turnover than Deutsche Bank and McDonald’s put together, has cleverly used its liquid cash to achieve a quasi-monopoly foothold in certain sectors, such as construction, real estate and transport.

The Italian example reveals something important about the decline of crime. The fall in violent crime is equated both with the commercial expansion of illegal markets and their extension into legal markets.

The dramatic fall in crime statistics we must conclude is not so much a miracle after all. Rather it tells the story of how organized criminals have adapted to the chaos and opportunities afforded by the fast-moving dynamism of contemporary capitalism. In this dynamic economic environment, there is now for criminals a new frontier that promises the holy grail of guaranteeing low risk high profits. What is this new leading edge? According to a 2013 EUROPOL report: ‘Cybercrime in the wider sense is the new frontier, and the mafias have a pioneering attitude to new markets.’

Cybercrime also puts this presumed disappearance of crime in context. One of the UK’s most senior police officers, Assistant Chief Constable Jon Boutcher claimed the good news about falling crime statistics is a mirage: ‘Everyone tells me crime is down and we are very good in the police at the moment. I am convinced that crime isn’t down – it is just being done in a completely different way.’ Crime is not falling – it’s moving, like many features of life, to online platforms. The anonymity of the websphere and the scale of information, makes cybercriminals nearly impossible to detect and prosecute. The future of crime is cybercrime.

You could say the future has arrived. As different areas of our lives become dependent of cyberspace, it becomes inevitable that our devices get hacked with criminal intent: that to defraud and steal. A survey by the Office of National Statistics in the UK found that 4.5 million cybercrimes were committed in 2018. Over 70% of these crimes were fraud offences and the remaining crimes were a matter of computer misuse – namely, the distribution of child pornography and hacking.

What often goes unreported by the mainstream media is that people in the UK are more likely to be victims of cybercrime than any other crime – whether violent crime or theft. There were 17 million victims of cybercrime in 2017, with close to £130 bln being stolen from them.

There were various ways these 17 million UK victims became ensnared by anonymous cybercriminals. One method is phishing – a sophisticated digital heist. Phising is designed to scam victims into giving up vital personal details through spoof emails and fake websites. Once the personal details are supplied, the fraud ensues. There is also identity theft which occurs when someone uses personal information, such as a name, or credit card number, without permission, to commit fraud or other crimes. Research by the Javelin Strategy & Research in 2017, showed that 16.7 million Americans were victims of identity theft, with losses from such theft totalling a remarkable $16.8 bln.

It might seem reasonable to classify cybercrime as a white-collar crime; one where there is no violent intent or physical harm. But this is far from true, for the authorities also include online harassment and cyberstalking as well as the online grooming of minors under the cybercrime umbrella. These crimes come with direct or actual physical threats.

Another emerging cybercrime that poses a real danger to victims is known as ‘sextortion’. This form of extortion works as an email scam: the victim receives an email from an anonymous source, claiming he possesses sexually sensitive images or videos of the victim. A ransom is demanded in exchange for the images not being sent to family and friends. Whether these images actually exist is another matter.

This email scam is tame compared to webcam sextortion – far more sinister and harmful. Victims are initially groomed online by a member of the opposite sex using a fake identity. Communicating via a webcam, the male victim is enticed by his alluring companion to perform sexual acts. This video webcam link, unbeknown to the victim, is being recorded and is used instantaneously to extort money. Having obtained the victim’s social network details, the criminals threaten to distribute these actual recorded images to family, friends and colleagues, unless cash is turned over.

This is no idle or empty threat. Since 2016, five British men committed suicide having been victims of this cybersex sting. Young men between 20-30 years of age are the natural targets of this crime but victims of webcam sextortion also include females, pensioners and even children. The UK National Crime agency, claims there were 1,304 reported sextortion cases in 2017, an increase from 428 in 2015. The probable reluctance of many victims to come forward means the official figures may underestimate the true extent of webcam sextortion.

Sextortion and other cybercrimes are new frontiers of criminality in the twenty-first century. But this new frontier is part of an even bigger story: the age of post-organized crime where crime becomes more integrated into the mainstream economy. You could say we no longer have organized crime, but a crime organized economy.

By Dr Michael Marinetto, Senior Lecturer in Public Management, Cardiff Business School

Previous ArticleNext Article