Abstract
The investment of criminals in companies has been receiving a lot of attention from policy makers and regulators worldwide. However this topic has often been neglected by researchers and relegated as a subspecies of money laundering: businesses are in most cases seen only as layers or shell companies used for concealing illicit proceeds. Is this only part of the story? This paper, after a critical review of the literature on criminals investments’ in businesses, performs an analysis of the geographical and sectorial distribution of about 2,000 companies confiscated from Mafia groups in Italy, highlighting how criminals’ investments may be explained not only by money laundering purposes, but also by other drivers such as profit maximization, control of the territory, social consensus and cultural/personal reasons.
“The truth is rarely pure and never simple”
—Oscar Wilde, The Importance of Being Earnest
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Notes
- 1.
The full-length analysis can be found in Transcrime, 2013a, pp. 149–211.
- 2.
Including 1,533 possessions of shares higher than the 50 % of the issued share capital and 209 possessions of shares lower than 50 %.
- 3.
First of all, it may be possible to find a greater concentration of confiscated assets in areas characterized by a stronger activity of the police or the judicial authorities; secondly, statistics on seized and confiscated assets may lead to overestimation of goods more easily traceable and hence seizable as tangible goods, real estate or companies operating in more closely controlled sectors (e.g. construction, restaurants, etc); finally, confiscations could provide a “vintage” picture of criminal investments, since years can pass since the initial criminal investment to the final confiscation.
- 4.
While information about NACE code 1 digit was available for 1,530 companies, information on the NACE code 4 digits is available for 503 companies.
- 5.
For 1,545 companies it was possible to obtain, through a review of open sources (Transcrime 2013: 165–169), an indication of the criminal organization (e.g. Camorra , ‘Ndrangheta, Cosa Nostra, etc). For 301 companies, of the single group (e.g. clan Casalesi, Morabito group, Cesarano group, etc).
- 6.
For example, the technological level of a province j has been proxied with the number of R&D patents issued in province j, controlled by the number of companies registered in the same province j. To test the hypothesis, above discussed, that mafia businesses concentrate in low-tech markets, it is calculated the partial correlation between the number of companies confiscated and the number of R&D patents issued in the 107 Italian provinces.
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Riccardi, M. (2014). When Criminals Invest in Businesses: Are We Looking in the Right Direction? An Exploratory Analysis of Companies Controlled by Mafias. In: Caneppele, S., Calderoni, F. (eds) Organized Crime, Corruption and Crime Prevention. Springer, Cham. https://doi.org/10.1007/978-3-319-01839-3_23
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