Main Image Credit Venezia via Wikicommons
New autonomous criminal entities and mafia gangs, known as ‘Ndrine, have gained independence whilst still carrying their predecessors’ ruthless reputations. Information unearthed from successful Antimafia operations now demonstrates how these new mafia gangs are using the coercive, so-called ‘mafia method’ in new ventures – such as VAT Fraud – whilst staying almost completely hidden.
In July 2020, the Carabinieri Special Operational Group coordinated by the Antimafia District Prosecutor’s Office of Venice carried out the record-breaking ‘Operation Taurus’ against a criminal group of more than 130 suspected mafiosi. The group was believed to be connected to the powerful ‘Ndrangheta criminal groups known as Piromalli-Molè and Pesce who settled in the North of Italy in the 1970s due to the transfer of some mafia affiliates in coerced stay (“soggiorno obbligato”). Soggiorno obbligato, abolished by referendum in 1995, sought to remove suspected mafiosi from their areas of operation by forcefully relocating them to different regions. However, the policy simply expanded mafia networks and brought organised crime to the new regions. The investigation was conducted in the wake of another successful operation coordinated by the Antimafia District Prosecutor’s Office of Bologna in 2015 that led to the arrest of 117 affiliates of the powerful Calabrian ‘cosca’ of Grande Aracri operating in the Emilia Romagna region bordering Veneto. Critically, both Carabinieri-led investigations yielded insight into how the ‘Ndrangheta has innovated and adapted its modus operandi, opting, in most cases, for a low-profile approach.
Operating under the radar, the groups have leveraged their signature intimidation through indirect and direct intimidation – often without direct warnings – rather than the infamous and explicit threats and act of violence. In several cases the investigations revealed how these criminal groups have extorted hundreds of thousands of euros from some entrepreneurs and victims of predatory loans. In these cases, the extortion was conducted without resorting to explicit violence. Instead, criminal affiliates merely showed up to victims’ homes on behalf of the creditor – of course, carrying an implicit message.
Other entrepreneurs who have long been extorted by ‘Ndrangheta affiliates operating in Verona have turned to protection from other criminal groups in the same region. Notably, these entrepreneurs chose to simply to seek other organised criminal partners to quickly solve their problems rather than reporting to law enforcement. This reinforces the observed trend of clans operating and coexisting in the same area, choosing cooperation rather than violent conflict to minimise law enforcement interest and to maximise profit.
Another striking case was the state auction of a seized villa belonging to a mafia affiliate. The auction garnered little buyer interest, causing a significant decrease in price of over 75%. With the property massively devalued, one of the previous owner’s relatives lodged a bid to buy the property through an ad-hoc, fictitious company. A subsequent investigation revealed that during the auction, many prospective and interested buyers who wanted to visit the house had been threatened and had consequently renounced their interest in the property.
False Invoices: Few Risks, Big Gains
As evidenced by information gained through Operation Taurus and others, there were three main, interconnected methods used by the Mafia to quietly and illegally make and launder money: false invoices, Value Added Tax (VAT) fraud and extortion.
This happens, as I witnessed throughout my time in the Carabinieri, when an affiliate of a criminal group delivers an entrepreneur illicit proceeds (for example, 100.000,00 euro – cash) together with fictitious invoices – issued despite the services never having been rendered – of the value given, increased by an agreed percentage (about 10-12%, e.g., total 112.000,00 euro). The victim then returns to the affiliate (owner of a fake company also called “cartiera”) the amount of money specified in the invoices, issuing post-dated bank checks. The collection of the extorted sum is concretized in the difference between the cash the entrepreneur receives (i.e., 100.000,00 euro) from the affiliate and the amount paid with cheques by the entrepreneurs. Ultimately, the Mafia groups profit from the extortion, effectively laundering their illicit gains whilst also profiting from VAT fraud. The negative financial loss is borne by the State (Treasury) which returns the VAT (12.000,00 euro) when the entrepreneur files for a VAT refund. At times, the entrepreneur will be compensated by the criminal group although many victims are likely extorted into participation.
The Silence of the Victims
The operation and follow-up investigations revealed that not once did the victims report to the police any loansharking or blackmail nor did victims report involvement in VAT and invoice fraud. Only when investigators approached the victims directly did they finally admit to being forced to pay. Each had felt intimidated by men who had the ruthless reputation of a mafiosi; fortunately, no violence nor explicit threats were reported. This lack of civilian-law enforcement cooperation was cited in the verdict on the ‘Ndrangheta’s infiltration in Veneto: “There has not been a spontaneous collaboration of entrepreneurs with the police” – a phenomenon that is widespread in cases involving the mafia and other organised crime groups. There was, however, one exception – one entrepreneur had the courage to take civil action against the criminal groups.
“What prompted me not to accept that pact with the underworld? Simply the fact that they are things that absolutely should not be done”, explained the courageous victim to the press, “If we all turned to crime, we would do nothing but fuel this phenomenon that, to the contrary, we must fight and try to eliminate. Many resort to it because, taken from desperation, they are convinced that it is a method that can lead to immediate results. But we must say no, whatever the stakes are”.
Nowadays, the ‘Ndrangheta disguises its presence, and its affiliates have regular, close relationships with entrepreneurs, merchants and lawyers. These revelations demonstrate how well the ‘Ndrine are integrated into the social fabric of the geographical area in which they operate. This, of course, makes the police investigation more difficult. Whereas police could chase the ‘smoking gun’ of mafia gunmen, they must now chase more elusive lawyers, bankers and entrepreneurs. Therefore, now more than ever, it is necessary to conduct more complex criminal investigations with a comprehensive approach that includes the full access to a wide array of police, tax, and various administrative databases (land, vehicle and revenue agency’s registry, to mention but a few). Police must combine their traditional abilities and assets with those of, for instance, the Financial Intelligence Unit of Italy. Equipping and enabling law enforcement to carry out cross-checks using these databases will allow police to cut down on waiting times and operate in a more comprehensive and timely manner. Furthermore, fostering community-oriented policing is crucial to collecting large amounts of information and actionable intelligence. After all, as stated by the judge from Operation Taurus’ cases: “In the cases of crimes connected to [the] mafia, it is the entire local community [who is] to suffer the serious consequences”. With initiatives meant to engage the public, the Carabinieri can – through increased public support and interaction – put clandestine ‘Ndrine under significant pressure. Together, this combination of public, institutional and law enforcement cooperation can help shine light on an increasingly obscured and underground activities of the Mafia in Northern Italy and elsewhere.
Marco Codispoti is an Italian Carabinieri officer currently deployed at the NATO Stability Policing Centre of Excellence as lessons learned staff officer. During his 38 years of active duty among several position he joined also the Carabinieri Special Operational Group (Raggruppamento Operativo Speciale – ROS) tasked to fight organized crime and terrorism through the creation of central and interprovincial investigative units.
Main Image Credit: Venezia via Wikicommons; Diagram by Elijah Glantz.
The views expressed in this article are those of the authors and do not necessarily reflect the views of RUSI or any other institution nor is this paper is a product of the NATO Stability Policing Centre of Excellence and its content does not reflect NATO policies or positions, nor represent NATO in any way, but only the NATO SP Coe or author (s) depending on the circumstances.
Lessons Learned Staff Officer at the NATO Stability Policing Centre of Excellence in Vicenza; SHOC Network Member