High-Tech Crime Networks Leave Police Agencies Far Behind : Britain: A conference paints a grim picture of global syndicates doing business worth $850 billion a year.

By WILLIAM TUOHY

May 31, 1995 12 AM PT

TIMES STAFF WRITER

BRAMSHILL, England — Organized crime has developed a sophisticated network of international contacts that is far outpacing efforts of law enforcement agencies to thwart its activities.

And international crime syndicates are running huge empires--often invading legitimate international companies--and doing business that approaches $850 billion a year.

Further, the international criminals using sophisticated computer technology and other state-of-the-art telecommunications methods are way ahead of the international police forces trying to keep up.

And the gap is growing.

This grim assessment of the growing power of international organized crime was presented at a conference last week organized at the British Police Staff College here by the National Criminal Intelligence Service (NCIS), established three years ago.

The meeting was held in conjunction with the Office of International Criminal Justice, a Chicago-based organization that attempts to coordinate anti-crime activities by law enforcement officers in various countries.

“The extensive and pervasive influence of organized criminals is well documented throughout the world,” said Albert Pacey, director general of the NCIS. “Their motivation is greed and avarice, their product is misery and death, their purpose is profit.”

In pursuit of profit, the international organizations have developed refined money-laundering operations to recycle their cash; in the case of international drug money, the annual estimate exceeds several hundred billion dollars, according to United Nations figures.

Last year, the NCIS received more than 15,000 tips about suspicious financial transactions, Pacey said, a fifth of which were found to have some connection with organized criminal activity.

Now British banks must report suspicious financial transactions to the NCIS.

David L. Carter, a faculty member at Michigan State University’s School of Criminal Justice and a former Kansas City police officer, said that South American criminal operators in drugs are buying banks in West Africa.

They then provide funding to upgrade the various banks’ telecommunications facilities so that the criminals can make huge deposits in the newly acquired banks and instantly relay massive cash transfers to legitimate banks in Europe and the United States.

Carter said that “the processing speeds of computers, the large amounts of available memory, data transfers, cellular phones, miniaturization, fiber-optic networks, satellite networking have all been adapted by criminals.”

Carter said that while many international criminals have the latest-model computers and telecommunications equipment, police are often given only bargain-basement computers that are long out of date.

“The problem,” he said, “is that some police forces look upon developing computer expertise as somehow not really traditional police work. So they lag far behind the criminals these days.”

Another laundering approach is through London’s auction houses, according to Detective Chief Inspector Charles Hill, a fine arts specialist and head of the art and antiques squad of London’s Metropolitan Police.

Hill cited the recent activities of gangs in northern Italy who bought works of art in Milan and Turin with drug profits and then resold them in London.

“Being greedy,” he said, “they couldn’t resist throwing in the odd stolen one.”

And British Detective Inspector Terry Burke, who is based with an FBI Caribbean task force in Miami, said that there are more than 135,000 offshore companies registered in the British Virgin Islands and 450 banks in the Cayman Islands alone, which indicates the difficulty of tracing illegal funds.

In another indication of the growth of organized crime, a recent U.N. study was cited at the conference to show that international crime syndicates are cooperating with one another to achieve economies of scale and improve profit margins.

Representatives of Russian and Italian crime networks, said one delegate, are reported to have met to discuss opportunities for collaboration, while the Sicilian Cosa Nostra deals directly with the Medellin and Cali cocaine cartels in Colombia, which in turn peddle narcotics throughout the Baltics and Eastern Europe with the aid of Russian gangsters.

The problem of organized international criminals is not just one of illegality, some delegates suggested, but could affect the economies of countries both big and small.

“Organized criminal activities have the potential to cause the greatest degree of financial disruption to the social infrastructure of the state,” warned Rowan Bosworth-Davies, a lawyer specializing in crime. He cited higher unemployment, pension fund losses and the failure of investment programs as results of organized criminal activity.

Bosworth-Davies also warned that drug cartels could eventually put their laundered funds into financial instruments such as U.S. Treasury bonds and securities of other U.S. institutions eager to attract money to manage America’s huge budget deficit.

“We may yet live to see the biggest budget deficit in the history of the world being financed by the recycled narco-dollars wrung from the drug habits of [the United States’] own socially deprived inner-city inhabitants,” he said.

Pacey of the NCIS said that in the fight against international organized crime, the traditional law enforcement tactic has been to “follow the money trail” to lead to the criminals behind the financial transactions.

But these transactions are getting to be too sophisticated and rapid to follow easily. Thus, Pacey said, international police forces should consider adopting the procedures of the United States’ RICO statutes against organized crime, fostered by the Racketeer Influenced and Corrupt Organizations Act: finding where the money trail surfaces and seizing assets of suspects.

“The onus should shift to the money launderer to establish that funds and proceeds have been legitimately obtained,” he said. “What we have in place in the United Kingdom is good, but we are still one step behind the money launderer.”