Editing Organized crime (section)

===Financial crime===
{{More citations needed|date=June 2011}}
{{main|Money laundering}}
Organized crime groups generate large amounts of money by activities such as drug trafficking, arms smuggling, extortion, theft, and financial crime.<ref>[http://www.fsa.gov.uk/about/what/financial_crime Fighting financial crime] {{Webarchive|url=https://web.archive.org/web/20190323113610/http://www.fsa.gov.uk/about/what/financial_crime |date=2019-03-23 }}, FSA.gov.uk, Retrieved November 7, 2013</ref> These illegally sourced assets are of little use to them unless they can disguise it and convert it into funds that are available for investment into legitimate enterprise. The methods they use for converting its 'dirty' money into 'clean' assets encourages corruption. Organized crime groups need to hide the money's illegal origin. This allows for the expansion of OC groups, as the 'laundry' or 'wash cycle' operates to cover the money trail and convert proceeds of crime into usable assets. Money laundering is bad for international and domestic trade, banking reputations and for effective governments and rule of law. This is due to the methods used to hide the proceeds of crime. These methods include, but are not limited to: buying easily transported values, transfer pricing, and using "underground banks,"<ref>{{cite web|url=http://faculty.publicpolicy.umd.edu/sites/default/files/reuter/files/levi_and_reuter.pdf|title=Money Laundering|url-status=dead|archive-url=https://web.archive.org/web/20181123160656/http://faculty.publicpolicy.umd.edu/sites/default/files/reuter/files/levi_and_reuter.pdf|archive-date=2018-11-23}}</ref> as well as infiltrating firms in the legal economy.<ref>{{Cite journal |last1=Mirenda |first1=Litterio |last2=Mocetti |first2=Sauro |last3=Rizzica |first3=Lucia |date=2022 |title=The Economic Effects of Mafia: Firm Level Evidence |url=https://www.aeaweb.org/articles?id=10.1257/aer.20201015 |journal=American Economic Review |language=en |volume=112 |issue=8 |pages=2748–2773 |doi=10.1257/aer.20201015 |s2cid=251141537 |issn=0002-8282}}</ref>

Launderers will also co-mingle illegal money with revenue made from businesses in order to further mask their illicit funds.  Accurate figures for the amounts of criminal proceeds laundered are almost impossible to calculate, rough estimates have been made, but only give a sense of the scale of the problem and not quite how great the problem truly is.  The United Nations Office on Drugs and Crime conducted a study, they estimated that in 2009, money laundering equated to about 2.7% of global GDP; this is equal to about 1.6 trillion US dollars.<ref>{{Cite web |date=2018-05-12 |title=Illicit money: how much is out there? |url=http://www.unodc.org/unodc/en/frontpage/2011/October/illicit-money_-how-much-is-out-there.html |access-date=2025-05-13 |website=web.archive.org |archive-date=2018-05-12 |archive-url=https://web.archive.org/web/20180512095414/http://www.unodc.org/unodc/en/frontpage/2011/October/illicit-money_-how-much-is-out-there.html |url-status=bot: unknown }}</ref>  The [[Financial Action Task Force on Money Laundering]] (FATF), an intergovernmental body set up to combat money laundering, has stated that "A sustained effort between 1996 and 2000 by the Financial Action Task Force (FATF) to produce such estimates failed."<ref name="Reuter2005">{{cite book | date = 2005 | title = Chasing Dirty Money: The Fight Against Money Laundering |chapter=How much Money is Laundered? | publisher = Peterson Institute | pages = 9–24 | isbn = 978-0-88132-529-4 | url =https://www.piie.com/publications/chapters_preview/381/2iie3705.pdf }}</ref> However, anti-money laundering efforts that seize money laundered assets in 2001 amounted to $386 million.<ref name="Reuter2005"/>  The rapid growth of money laundering is due to:
* the scale of organized crime precluding it from being a cash business - groups have little option but to convert its proceeds into legitimate funds and do so by investment, by developing legitimate businesses and purchasing property;
* globalization of communications and commerce - technology has made rapid transfer of funds across international borders much easier, with groups continuously changing techniques to avoid investigation; and,
* a lack of effective financial regulation in parts of the global economy.

Money laundering is a three-stage process:
* Placement: (also called immersion) groups 'smurf' small amounts at a time to avoid suspicion; physical disposal of money by moving crime funds into the legitimate financial system; may involve bank complicity, mixing licit and illicit funds, cash purchases and smuggling currency to safe havens.
* Layering: disguises the trail to foil pursuit. Also called 'heavy soaping'. It involves creating false paper trails, converting cash into assets by cash purchases.
* Integration: (also called 'spin dry): Making it into clean taxable income by real-estate transactions, sham loans, foreign bank complicity and false import and export transactions.<ref>{{Cite web |title=Three Stages of Money Laundering: An In-depth Guide & Prevention |url=https://www.lexisnexis.com/en-gb/glossary/money-laundering-stages |access-date=2025-05-13 |website=www.lexisnexis.com}}</ref>

Means of money laundering:
* [[Money transmitter]]s, black money markets purchasing goods, gambling, increasing the complexity of the money trail.
* Underground banking (flying money), involves clandestine 'bankers' around the world.
* It often involves otherwise legitimate banks and professionals.

The policy aim in this area is to make the financial markets transparent, and minimize the circulation of criminal money and its cost upon legitimate markets.<ref>{{cite journal |last=Savona|first=E|title=Globalization of crime: The organizational variable.|journal=15th International Symposium on Economic Crime|date=1997}}</ref><ref>{{cite journal  | last1 = Savona | first1 = Ernesto U. | last2 = Vettori | first2 = Barbara |title=Evaluating the Cost of Organized Crime from a Comparative Perspective|journal=European Journal on Criminal Policy and Research|date=2009|volume=15|issue=4|pages=379–393|doi=10.1007/s10610-009-9111-1|s2cid=143912632 | issn = 0928-1371  }}</ref>

====Counterfeiting====
{{main|Counterfeiting}}
Counterfeiting money is another financial crime.  The counterfeiting of money includes illegally producing money that is then used to pay for anything desired.  In addition to being a financial crime, counterfeiting also involves manufacturing or distributing goods under assumed names.  Counterfeiters benefit because consumers believe they are buying goods from companies that they trust, when in reality they are buying low quality counterfeit goods.<ref>{{Cite web|url=https://www.iacc.org/resources/about/what-is-counterfeiting|title=What is Counterfeiting|website=International AntiCounterfeiting Coalition}}</ref> In 2007, the OECD reported the scope of counterfeit products to include food, pharmaceuticals, pesticides, electrical components, tobacco and even household cleaning products in addition to the usual films, music, literature, games and other electrical appliances, software and fashion.<ref>{{cite journal |title=The Economic Impact of Counterfeiting and Piracy|journal=OECD|date=2007|volume=12|url=http://www.oecd.org/dataoecd/13/12/38707619.pdf}}</ref>  A number of qualitative changes in the trade of counterfeit products:
* a large increase in fake goods which are dangerous to health and safety;
* most products repossessed by authorities are now household items rather than luxury goods;
* a growing number of technological products; and,
* production is now operated on an industrial scale.<ref>{{cite journal|title=Customs response to latest trends in Counterfeiting and piracy|journal=Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee|date=2005|url=http://ec.europa.eu/taxation_customs/resources/documents/comm_native_com_2005_0479_3_en_acte.pdf|url-status=dead|archive-url=https://web.archive.org/web/20121103214515/http://ec.europa.eu/taxation_customs/resources/documents/comm_native_com_2005_0479_3_en_acte.pdf|archive-date=2012-11-03}}</ref>

====Tax evasion====
{{main|Tax evasion}}
The economic effects of organized crime have been approached from a number of both theoretical and empirical positions, however the nature of such activity allows for misrepresentation.<ref>{{cite journal| last1 = Anderson | first1 = David A. |title=The Aggregate Burden of Crime|journal=Journal of Law and Economics|date=1999|volume=42|issue=2|pages=611–642|doi=10.1086/467436 |pmid= |jstor=10.1086/467436 |doi-access=free | issn = 1040-2446 }}</ref><ref name="Feige & Cebula 2011">{{cite journal  |last1=Feige |first1=Edgar L. |last2=Cebula |first2=Richard | title=Americaʼs Underground Economy: Measuring the Size, Growth and Determinants of Income Tax Evasion in the U.S. Growth  |journal=MPRA Paper |date=January 2011 |issue=29672  |url=http://mpra.ub.uni-muenchen.de/29672/1/MPRA_paper_29672.pdf  |language=en | issn =  }}</ref><ref>{{cite journal |last1=Feige |first1=Edgar L. |last2=Urban |first2=Ivica |title=Measuring Underground (Unobserved, Non-Observed, Unrecorded) Economies in Transition Countries: Can We Trust GDP? |journal=William Davidson Institute Working Papers |date=1 March 2008 |issue=913  |url=http://deepblue.lib.umich.edu/bitstream/2027.42/64384/1/wp913.pdf  |access-date=|publisher=University of Michigan|hdl=2027.42/64384  |language=en |issn=  }}</ref><ref>{{cite journal |last=Feltenstein & Dabla-Norris|title=An Analysis of the Underground Economy and Its Macroeconomic Consequences|url=https://ideas.repec.org/p/imf/imfwpa/03-23.html|publisher=IMF|date=January 2003|journal=Ideas.repec}}</ref><ref>{{cite journal | last1 = Fugazza | first1 = Marco | last2 = Jacques | first2 = Jean-François |title=Labor market institutions, taxation and the underground economy. |journal=Journal of Public Economics |date=2004 |volume=88 |issue=1–2 |pages=395–418 |doi=10.1016/S0047-2727(02)00079-8  | issn = 0047-2727  }}</ref><ref>{{cite book |last=Giovannini|first=E|title=Measuring the Non-Observed Economy: A Handbook.|date=2002|series=OECD Publishing|doi=10.1787/9789264175358-en|url=http://www.oecd.org/dataoecd/9/20/1963116.pdf|isbn=9789264197459}}</ref> The level of taxation taken by a nation-state, rates of unemployment, mean household incomes and level of satisfaction with government and other economic factors all contribute to the likelihood of criminals to participate in tax evasion.<ref name="Feige & Cebula 2011"/> As most organized crime is perpetrated in the liminal state between legitimate and illegitimate markets, these economic factors must adjusted to ensure the optimal amount of taxation without promoting the practice of tax evasion.<ref>{{cite journal | last1 = Alexeev | first1 = Michael | last2 = Janeba | first2 = Eckhard | last3 = Osborne | first3 = Stefan  |title=Taxation and evasion in the presence of extortion by organized crime |journal=Journal of Comparative Economics|date=2004|volume=32|issue=3 |url=https://deepblue.lib.umich.edu/bitstream/2027.42/39641/3/wp256.pdf |doi=10.1016/j.jce.2004.04.002 |pages=375–387 |hdl=2027.42/39641 |hdl-access=free | issn = 0147-5967 }}</ref> As with any other crime, technological advancements have made the commission of tax evasion easier, faster and more globalized. The ability for organized criminals to operate fraudulent financial accounts, utilize illicit [[offshore bank]] accounts, access [[tax haven]]s or [[tax shelter]]s,<ref>{{cite journal|last1=Masciandaro|first1=Donato|title=The Illegal Sector, Money Laundering and the Legal Economy: A Macroeconomic Analysis|journal=Journal of Financial Crime|date=2000|volume=8|issue=2|pages=103–112|url=http://www.emeraldinsight.com/journals.htm?articleid=1650586&show=abstract|doi=10.1108/eb025972|access-date=2011-06-11|archive-date=2012-09-26|archive-url=https://web.archive.org/web/20120926181629/http://www.emeraldinsight.com/journals.htm?articleid=1650586&show=abstract|url-status=dead|issn=1359-0790}}</ref> and operating goods smuggling syndicates to evade importation taxes help ensure financial sustainability, security from law enforcement, general anonymity and the continuation of their operations. Al Capone became a notorious example of tax evasion. In 1931, he was sentenced to 11 years in federal prison and ordered to pay $215,000 in back taxes, along with accrued interest<ref>{{Cite web |title=Al Capone |url=https://www.fbi.gov/history/famous-cases/al-capone |access-date=2025-04-29 |website=Federal Bureau of Investigation |language=en-us}}</ref>