CLEANING MONEY LIKE A (CRIME) BOSS: UNUSUAL FORMS OF MONEY-LAUNDERING - PART 2

Dr Jason de Mink

Ice cream

Another more recent, and just as bizarre,  example, is the theft of expensive Ben & Jerry’s and Häagen-Dazs ice cream, which the thieves will almost immediately sell to a middle-man or direct to a store-owner in order to turn a quick profit.[1]  Some investigations have revealed syndicates who steal ice-cream, store it and then re-sell it in bulk once a sufficient quantity has been obtained.

 

As with the laundry detergent, thieves have determined that ice cream is an easy item to steal and re-sell, with many unscrupulous retailers willing eager to acquire the stolen merchandise for onward sale in their shops.

 

Lego

As an example of an untraceable commodity that retains its value, Lego can be viewed as almost as good as uncut diamonds.[2]  One enterprising drug-dealer in Belgium was discovered accepting Lego sets as payment for drugs and then re-selling the sets at a profit.[3]  Unopened Lego sets can be sold online for as much or even more than the retail price.  If a Lego set is kept for a while it may rapidly appreciate in value —at a rate much faster than inflation.

 

 

Online vendors say the persistent demand for Lego sets, their tendency to appreciate in value over time and their difficulty to trace over the Internet make these plastic toys irresistible to thieves.[4].  The next time you buy Lego online, be aware that if the price is too good to be true, they could very well be stolen goods.

 

Cheese

Finally, perhaps strangest of all, after conducting a global survey by the UK Centre for Retail Research determined that cheese is the most stolen food in the world.[5]

The reasons for individual criminals targeting this particular commodity seem clear, including high demand, easy disposal by thieves and small, mobile formats that make it easy to conceal and transport.

 

Cheese is an item that one criminologist describes as ‘C-R-A-V-E-D’ – concealable, removable, available, valuable, enjoyable and disposable.[6]  Unlike many items that would also fall under the ‘craved’ description like razor blades or electronics, cheese is not usually fitted with any type of security tag. It is small and easy to conceal in clothing, a handbag or a baby buggy and with the price of quality cheese rising, much of the theft is for resale to retailers or to restaurants. The reasons for individual criminals targeting this particular commodity seem clear, including: high demand, easy disposal by thieves and small, mobile formats that make it easy to conceal and transport.  Unlike many items that would also fall under the ‘craved’ description, like razor blades or electronics, cheese is not usually fitted with any type of security tag. With the price of quality cheese rising, much of the theft is for resale to retailers or to restaurants.

However, it is not just individual shoplifters who are involved. It appears as if crime syndicates have expanded their operations into stealing and then reselling large volumes of cheese or even manufacturing ‘illegal’ cheese. 

 

In Italy for example, robbers have made off with an estimated

 

 € 6 million worth of Italy’s prized Parmigiano-Reggiano cheese over a period of the past two years.[7]

 

Like laundry detergent and ice cream there is also thriving black-market trade in this product in countries like Russia where in 2015 police, acting against a criminal syndicate, seized US$ 30 million of contraband Cheddar.

 

Producing fake or adulterated products is also a method to generate illegal profits or to promote illicit activity.  A 2013 US Food and Drug Administration report[KK1]  found that items labeled as ‘100 percent real Parmesan and Romano cheese’ distributed through two national companies contained a combination of Swiss, Mozzarella and white Cheddar cheeses, as well as large amounts of wood pulp.[8]  These high-end products generated massive profits at far below normal cost, a perfect cover to launder illicit funds.

 

In countries struggling to combat drug cartels, such as El Salvador, cheese exports have been strong year on year, despite there being virtually no cheese manufacturing companies within the country.

 

Basing a money laundering operation around cheese is not as farfetched as one may initially assume.  For example, in countries struggling to combat drug cartels, such as El Salvador, cheese exports have been strong year on year, despite there being virtually no cheese manufacturing companies within the country.  This points to such businesses being fronts for illicit operations.

 

The legal infrastructure (manufacture, transport, export etcetera.) allows the criminal gangs to openly integrate their funds into the mainstream and to take advantage of legitimate business ventures as a cover to co-opt and suborn the police, judicial, and immigration systems. The result is a vast, multinational, and multidimensional criminal network, disguised as a legitimate business that includes drug-trafficking and human-smuggling.  In countries struggling to combat drug cartels, such as El Salvador, cheese exports have been strong year on year, despite there being virtually no cheese manufacturing companies within the country.

 

 

Criminal syndicates in Italy such as the Camorra (the Neapolitan Mafia) invest large amounts of illegitimate money into legitimate cheese manufacturing businesses. As obtaining maximum profit is of less concern than laundering dirty money, these criminal cheese enterprises can sell their products below market prices, competing unfairly with honest competitors while simultaneously generating seemingly legitimate profits.

 

What makes cheese production such an attractive proposition for the money launderer?  First, cheese sells for relatively high prices compared to other popular foods and it is, therefore, much more efficient to sell a block of cheese compared to high volume products like wheat or rice.

 

Second, cheese is a staple around the world and has no clear substitute. The relative stability of cheese demand allows crime syndicates the ability to forecast revenues.  While a downturn in the economy may cause the demand for certain other types of ‘luxury’ foods to fall drastically as consumers switch to cheaper alternatives or abandon these foods altogether, for many cultures in the world, substituting or removing cheese is simply not possible.

 

Third, the manufacturing process, from raising cows to investing in the means of production, can be extremely costly.  A cheese company is, therefore, a prime opportunity for a money laundering operation to process large sums of money without raising suspicions.  Having acquired the product and its means of production by using ‘dirty’ money, the launderer can then generate massive amounts of  ‘clean’ money when the cheese is sold.

 

Criminal syndicates in Italy such as the Camorra (the Neapolitan Mafia) are known to invest large amounts of illegitimate money into legitimate cheese manufacturing businesses.  As obtaining maximum profit is of less concern than laundering dirty money, these criminal cheese enterprises can sell their products well below market prices, competing unfairly with honest competitors while simultaneously generating seemingly legitimate profits.

 

Cheese sells for relatively high prices compared to other popular foods and it is, therefore, much more efficient to sell a block of cheese compared to high volume products like wheat or rice.

Cheese is a staple around the world and has no clear substitute. The relative stability of cheese demand allows crime syndicates the ability to forecast revenues. While a downturn in the economy may cause the demand for certain other types of ‘luxury’ foods to fall drastically as consumers switch to cheaper alternatives or abandon these foods altogether, for many cultures in the world, substituting or removing cheese is simply not possible.

 

Although luxury cheese products and famous brands do exist, most cheese exists as a commodity. Consumers are less concerned about the producer of the cheese they are buying compared to the price of the cheese. This characteristic makes it easier for organised crime to start a cheese business and compete in the market immediately.

 

Conclusion

While law enforcement agencies today are generally on high alert for suspicious transactions involving the traditional assets associated with money launderers, such as property, luxury vehicles, boats and jewellery, one asset that gets far less attention is cheese.  It would appear as if ongoing demand for a product that is hard to substitute has created largely unknown links to black markets, criminal activities and money-laundering.

 

Far more concerning than the simple issue of ‘criminal’ cheese is the number of other foods products that share the same characteristics as cheese mentioned above.  While one can easily abstain from activities traditionally associated with crime such as drugs, gambling, and stolen or pirated goods, it is far more difficult to avoid or identify illicit food or laundry detergents.

 

It may be possible that the Mozzarella on your pizza, that delicious Phish Food[9] ice-cream or that cut-price box of Harry Potter Lego a delicious piece of Camembert may be the vehicle whereby criminals disguise and shift money originating from illicit activity. In the world of the money-launderer it appears as if nothing is sacred!

 

 

[1] N Craine ‘Stolen, Sold and Savored: Ice Cream Is a Hot Commodity in Manhattan’ The New York Times (4 September 2016) <https://www.nytimes.com/2016/09/05/nyregion/stolen-sold-and-savored-ice-cream-is-a-hot-commodity-in-manhattan.html> accessed 20 November 2019; J Schram ‘City’s bodegas are stocked with stolen, refrozen ice cream’ New York Post  (11 May 2016)  <https://nypost.com/2016/05/11/citys-bodegas-are-stocked-with-stolen-refrozen-ice-cream > accessed 20 November 2019

[2] S Kavanaugh ‘For Master Thieves, Legos Are the New Uncut Diamonds’ Vocativ (20 August 2014) <https://www.vocativ.com/underworld/crime/lego-heists/index.html> accessed 20 November 2019

[3] -- ‘Groningse drugsdealer laat zich betalen in Lego-dozen’ AD (19 February 2016) <https://www.ad.nl/binnenland/groningse-drugsdealer-laat-zich-betalen-in-lego-dozen~af997e92/https://www.ad.nl/binnenland/groningse-drugsdealer-laat-zich-betalen-in-lego-dozen~af997e92/> accessed 20 November 2019

[4] -- ‘Watford Gap £57,000 Lego theft pair jailed’ BBC (17 April 2013)

<https://www.bbc .co.uk/news/uk-england-22182516>  accessed 20 November 2019

[5] This survey was conducted in 2011.  Recent trends indicate that pre-packed meat products are now top of the shoplifter’s list.  https://www.retailresearch.org/shoplifters.html

[6] R Clarke ‘Hot products: understanding, anticipating, and reducing demand for stolen goods’ (1999) Police Research Series, Paper 112, Policing and Reducing Crime Unit, Research Development and Statistics Directorate, Home Office.

 

[7] -- ‘Italy’s parmesan thieves nab €6million of cheese in two years’ The Local (1 April 2016) <https://www.thelocal.it/20160401/italys-parmesan-thieves-nab-6-million-of-cheese-in-two-years> accessed 20 November 2019; E Sylvers ‘Someone Is Stealing Italy’s Most Precious Cheese’ Wall Street Journal (22 June 2018) < https://www.wsj.com/articles/who-stole-my-cheese-parmesan-thefts-grate-on-italian-cheesemakers-1529682856> > accessed 21 November 2019

[8]L Mulvany ‘The Parmesan Cheese You Sprinkle on Your Penne Could Be Wood’ Bloomberg (16‎ ‎February‎ ‎2016) https://www.bloomberg.com/news/articles/2016-02-16/the-parmesan-cheese-you-sprinkle-on-your-penne-could-be-wood > accessed 20 November 2019

[9] A flavor of Ben & Jerry’s ice-cream containing chocolate ice cream with gooey marshmallow swirls, caramel swirls and fudge fish <https://www.benjerry.com/flavors/phish-food-ice-cream>

 [KK1]Request report from author for checks.

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