UK authorities arrested nine people last week suspected of running a $63 million fraud that involved the trading of carbon credits, reported Reuters. Seven were arrested in raids early Wednesday, while two others were arrested late that night, according to a statement from the UK tax office .
"Those arrested are believed to be part of an organized crime group operating a network of companies trading large volumes of high-value carbon credits," it said."It is thought that the proceeds of this crime have then been used to finance lavish lifestyles and the purchase of prestige vehicles."
There was no word on the nationality of the suspects, but Europol officials, who were involved in the investigation, said they expected more arrests.
OC Targets Carbon Credits
Published: 25 August 2009
By Beth
The fraud was apparently a by-the-books rendering of carousel fraud, which happens when criminals import goods into a country, value-added tax (VAT) free. They then sell goods to domestic buyers, charging them the VAT, and disappear without paying the tax to the government. The carousel comes when the goods go around and around in a circle through various countries, defrauding governments out of their cut and enriching the criminals. Fraudsters have typically bilked governments by dealing in electronics. (Other tariff trickery was done in Serbia a few years ago with sugar .) But carbon credit trading markets are becoming very attractive to criminals , according to the FT.
Anand Doobay, a partner at Peters & Peters, a City-based law firm specialising in financial crime, said the ethereal nature of the fast-expanding multi-billion dollar international market in carbon credits had made them an attractive target for graft: “There is an increasing amount of fraud connected with them as a commodity. It’s trading with something that’s intangible, and that isn’t regulated in the way some other commodities are.”
Britain last month followed the French and Dutch lead in abolishing VAT on carbon credits so that criminals can no longer use them for import scams. The European Commission also proposed last week that EU member countries share their VAT databases with all other member countries, among other things, to detect cross-border fraud schemes.
Truck Cargo Targeted
In other news involving crime groups you don’t usually hear about, a trucking trade magazine warned last week that organized trucking cargo theft is on the rise in the US . Even in secured cargo holds or stops, thefts in the second quarter of this year were up 300 percent from the first quarter. And a computer-security industry expert told a tech magazine last week that organized crime cyberattacks are the key scourge of businesses’ networks.
UBS-IRS Deal Details
More details came out last week of the deal between Switzerland’s largest bank, UBS, and the tax collecting arm of the US government, the IRS: The bank agreed to turn over the names of about 4,500 American accountholders whom the IRS believes were evading their US taxes. At the same time, the US indicted a Swiss banking executive and a Swiss lawyer for conspiring to defraud the US, by allegedly helping wealthy American clients set up sham companies with which they could dodge the taxman. Good news: Anyone who uses their financial expertise to aid and abet tax evaders, organized crime figures, money launderers or corrupt leaders should be in deep, deep trouble.
Confusion Reigns in Arctic Sea Case
Russia arrested eight suspects over the suspected hijacking of the Russian-crewed Arctic Sea last week, but questions still remain as to what happened in the Baltic Sea late last month.
Biggest of all, the motive: The ship was carrying less than $1.5 million worth of lumber. Russian maritime journal editor Mikhail Voitenko said it didn’t add up :
"The operation cost more than the cargo and ship combined," he said. The 18-year-old freighter officially had a cargo of timber worth only $1.8 million. Voitenko said he suspected the freighter was carrying an undeclared cargo and that state interests were involved. He refused to elaborate.
Other media this past month speculated that organized crime has something to do with the ship’s hijacking. Most of the ship’s Russian crew and the eight suspects – four Estonians, two Latvians and two Russians – are in Moscow being questioned by investigators . How and why the alleged hijackers took over the ship at the end of July in Swedish waters and piloted it some 2,000 miles off the coast of West Africa may come out after the investigation.
Kosovo/Serbia: Seven arrested
Police in Kosovo last week arrested seven people suspected of involvement with drug trafficking and organized crime and will keep them in custody for 30 days, reported Pristina media. Two of the suspects are from Belgrade, one is from Novi Pazar and the rest are from Kosovo.
"This is a multiethnic group of organized crime wanted by a number of countries of the European Union, where some of them had been active," Koha Ditore daily quoted its sources as saying.
Turks Nab Japanese Drug Smugglers
Turkish police in Istanbul last week arrested one dozen alleged drug traffickers with ties to Japanese organized crime, reported the Turkish press. The drug of choice was methamphetamine, which is apparently popular in Japan.
The report said that the police launched five operations last month against criminal organizations attempting to establish drug trade among Iran, Turkey and Japan. Eight Iranian and four Japanese drug smugglers were arrested, according to the report.
Anti-smuggling and Organized Crime Bureau officials got information that the Japanese gangs were trying to smuggle methamphetamine they had bought from Iran to Japan. The police were able to trace the route of the drug smugglers. The Iranian and Japanese drug smugglers were closely monitored, and the police launched their operation when the drugs were brought to Istanbul from Iran.
Italy: More Mob Arrests
A Calabrian boss who enjoyed a prominent place on Italy’s top-30-dangerous-fugitives list was arrested at a rented vacation home in Sicily last week. Paulo Rosario De Stefano, 33, had been on the run for four years since being convicted of mafia association. Police in the Netherlands also arrested a Calabrian fugitive last week ; Gianluca Rocco, 29, was convicted of murder, attempted murder and mafia association in Italy in 2004.
Even with the Italian police pledge to crack down on the mob – and their making good on the threat by arresting dozens and seizing millions of euros in assets – the groups are still making out like, well, bandits. Italian mob groups are expected to generate €200 billion in revenue this year , up from €170 billion last year, according to anti-mafia prosecutor Piero Grasso.
A big part of the income originates from the international arms and drug trade, which shows no signs of slackening, Grasso said. Rising unemployment and financial worries seem to prompt people to use more drugs than before, the figures show, providing a stable income for those who deliver the drugs.
And, the AP reports, even if the godfathers go down, there are always godmothers to step in and take over the family business, at least in the Neapolitan Camorra, were the number of them is on the rise.
