Witnesses will be asked to respond to claims the ’Ndrangheta has laundered billions of euros in City of London
Last modified on Tue 27 Apr 2021 01.02 EDT
In a high-security, 1,000-capacity courtroom converted from a call centre, Italy’s largest mafia trial in three decades is under way in Lamezia Terme, Calabria. About 900 witnesses are set to testify against more than 350 defendants, including politicians and officials charged with being members of the ’Ndrangheta, Italy’s most powerful criminal group.
Several of the defendants will be asked to respond to charges of money laundering over establishing companies in the UK with the alleged purpose of simulating legitimate economic activity.
“’Ndrangheta interests in the UK have figured prominently as clans have used the country as an investment and money-laundering base,” says Nicola Gratteri, the prosecutor whose investigation has culminated in the maxi-trial.
The ’Ndrangheta – based in the southern region of Calabria, the toe of the Italian boot – is reputed to be one of the richest and most feared criminal organisations in the world. A study by the Demoskopita Research Institute in 2013 estimated its financial strength as more than that of Deutsche Bank and McDonald’s combined, with an annual turnover of €53bn (£44bn).
Investigators say the secret of its success lies in its ability to connect the underworld with the upper world, where often the “upper world” stands for London. In the last decade, hundreds of investigations have asserted how the ’Ndrangheta has laundered billions of euros in the City.
A 2019 report from Italy’s Antimafia Investigative Directorate claimed that criminal organisations laundered billions of pounds each year through UK banks. Investigations between 2018 and 2020 in Reggio Calabria asserted how bosses of the Nirta clan had entrusted the management of their profits to a man who officially sold tiles, but who was described by investigators as a sort of “alchemist” capable of creating shield companies in Croatia, Slovenia, Austria and Romania (he has denied that he acted in this way). After a few years, all of these companies were systematically transferred to the UK and then closed.
Col Claudio Petrozziello of Italy’s Guardia di Finanza, which monitors illicit flows of capital, said ’Ndrangheta clans in the UK had no interest in controlling the local territory, just the exploitation of the financial system.
“It’s not that there are no rules in London,” he said. “The problem is that the risk of mafia infiltration is underestimated.”
The ’Ndrangheta is often considered archaic and almost hermit-like, with wanted clan members living in hideouts deep in the Calabrian mountains, and as such it may seem an unlikely candidate to exploit the modern City of London. But it has an interest in perpetuating such myths: in reality, its origins are as a middle-class phenomenon, which took advantage of the system of social capital found in Masonic lodges to manage the profits generated by international drugs trafficking.
The grand master of the Grande Oriente d’Italia (GOI) lodge, Giuliano di Bernardo, claimed in trials in 2014 and 2019 that linked the ’Ndrangheta with terrorism that he had a discussion with the Duke of Kent, the grand master of the United Grand Lodge of England (UGLE), in the early 1990s over infiltration of the Italian lodges in the south of the country by criminal clans.
“It was the Duke of Kent who suggested that I leave the GOI and create a new order,” he claimed. “I would like to point out that the Calabrian context was very concerning because Freemasonry there was much more extensive and powerful than in Sicily.”
A spokesman for the Duke said he “would never comment on vague sensationalist claims based on alleged conversations from over 30 years ago, suddenly made in a court case which until now was unheard of”. UGLE said it had no comment to make about alleged criminal elements in a foreign constitution with no connection to it but added: “It sounds as though some Italians might, certainly at that time, have significantly lost their way.”
In the minds of Italian investigators who have followed the ’Ndrangheta’s illicit activities, a new problem now looms large: Brexit. Magistrates and police officials in the country have shared concerns that ’Ndrangheta clans may try to take advantage of the UK’s exit from the European Union, if, as they fear, police and judicial cooperation between the EU and UK proves less effective than when both countries were in the bloc.
“With Brexit, things could spin out of control,” Gratteri said.
According to investigators and experts, the UK could equally be left to fight the ’Ndrangheta clans without international judicial support and the assistance of Italian investigators.
“When the UK was part of the European Union, it benefited from the effective sharing of data in the fight against organised crime,” Italy’s national anti-mafia prosecutor, Federico Cafiero De Raho, told the Guardian.
“Now that it has left the EU, problems will start to emerge. London will not be absent, but things will change and even the best post-Brexit cooperation will be less effective than within the EU. Today’s mafias are moving among countries and continents, and where they find weakness in international cooperation, they exploit that opportunity.”
Among the consequences of Brexit are the UK leaving the European Arrest Warrant (EAW), a provision that allowed for fast extradition, as well as the European Investigation Order (EIO), which empowered countries to call upon a member state to lead an investigation, place wiretaps, or track a suspect.
“Italy and the UK will sign agreements to continue such efforts,” Cafiero said. “However, in practice, the collaboration will be different.”
“Imagine two investigators from two different EU member states who are looking, at the same time, into a wiretap from two different screens and while in two different countries,” added Cafiero. “Non-EU countries will have more difficulty participating in a team of this sort.”
It is a view the UK disputes, saying its deal with the EU allows for extradition as effective as the EAW, bilateral information sharing, arrangements to simplify asset confiscation and full participation in investigatory teams with EU member states.
“The agreement the UK reached with the EU delivers a comprehensive package of capabilities which ensures we can work with partners in Europe, including Italy, to tackle serious crime and terrorism – protecting the public and bringing criminals to justice,” said Kevin Foster, the UK minister for future borders and immigration, in a statement.
“It includes streamlined extradition arrangements, continued exchange of data for law enforcement purposes and arrangements enabling close and effective cooperation with Europol and Eurojust. We are committed to working together with European partners, including Italy, to counter the threats we all face, within Europe and beyond. The UK will continue to be a global leader on security and one of the safest countries in the world.”
Of the Italian fears, Tim O’Sullivan, a former crown prosecutor and chair of the Law Society’s EU committee, said: “These concerns are certainly shared because at the moment there is still uncertainty on how the new arrangements will work.
“The EU mechanisms give law enforcement a legal basis on which to operate. [But] This doesn’t mean that in the new cooperation agreement there aren’t the means to address these concerns.”
In the meantime, to make things worse, Covid-19 and the financial crisis generated by the pandemic have amplified the risk that the ’Ndrangheta could deepen its involvement in international markets.
Giuseppe Lombardo, the deputy prosecutor of Reggio Calabria, warned that “in a phase of very scarce global liquidity, the goal of the ’Ndrangheta will be to create a banking system parallel to the legal one”, as all the eyes are on the City.
Federico Varese, a professor of criminology at the University of Oxford, believes Brexit is forcing the UK government to rethink the fight against transnational organised crime.
“Criminals consider borders an opportunity and will make the most of it,” said Varese. “It is just another price of Brexit.”
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