When Criminals Invest in Businesses: Are We Looking in the Right Direction? An Exploratory Analysis of Companies Controlled by Mafias

Riccardi, Michele

doi:10.1007/978-3-319-01839-3_23

Cited by 28 publications

(21 citation statements)

References 10 publications

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“…In this way, criminal organizations achieve high profits, power and social consensus by ensuring employment and income for the population in the areas where they exercise control of the territory (Fantò, 1999;Riccardi, 2014;Sciarrone, 2014). Fantò (1999) suggests that the main trait of LMFs is not the type of business run but the nature of the capital accumulation process that leads to their formation as well as the strength of intimidation on which they are hinged.…”

Section: Legally Registered Mafia Firms: Operating Context and Theorymentioning

confidence: 99%

“…Furthermore, LMFs consolidate their market power by expelling non-mafiosi entrepreneurs from infiltrated markets or taking control of their firms using direct violence and/or asphyxiation through usurious loans (Masciandaro, 1997;Champeyrache, 2004). Specifically, Mafia organizations are able to benefit from situations of economic crisis, by offering financial resources to entrepreneurs who have difficulty in accessing credit, or by taking over troubled businesses as fronts for money laundering (Riccardi, 2014;Sciarrone and Storti, 2014). The tendency of LMFs to establish a monopoly power is consistent with previous studies, finding that the sectors more vulnerable to Mafia infiltration are characterized by low technological level, high labor and cash intensity, predominance of small-medium enterprises that compete on the local market (e.g.…”

Section: Legally Registered Mafia Firms: Operating Context and Theorymentioning

confidence: 99%

“…construction), low international competition and strong public regulation (e.g. competitive bidding) which allows the Mafia to put pressure on policy-makers and gain advantageous positions in accessing public resources (Daniele and Marani, 2008;Lavezzi, 2008;Riccardi, 2014;Sciarrone and Storti, 2014). …”

Section: Legally Registered Mafia Firms: Operating Context and Theorymentioning

confidence: 99%

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Accrual management as an indication of money laundering through legally registered Mafia firms in Italy

Ravenda¹,

Valencia‐Silva

Argilés

et al. 2018

AAAJ

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Purpose -This paper investigates how accounting is used to disguise and realize money laundering activities in specific socio-economic and political contexts and whether discretionary accruals can provide evidence of such illicit practices realized through legally registered Mafia firms (LMFs).Design/methodology/approach -The study is based on a sample of 224 Italian firms identified as LMFs, due to having been confiscated by judicial authorities because of their owners being accused of Mafia-type association. Using a multivariate regression model, specifically developed discretionary accrual proxies for LMFs are compared with those of a population of lawful firms (LWFs). Originality/value -This study adopts discretionary revenue and expense accrual proxies that provide additional insight into the simultaneous manipulation of revenues and expenses, linked to money laundering, which may not be fully detected by traditional aggregate accrual models.Furthermore, it suggests that the incentive for unlisted LMFs to manage accruals may be fostered by the irrelevance of their financial statements to trades with stakeholders. More importantly, this paper may aid regulators in identifying accounting signals that can be used in risk assessment models or in the detection of criminal practices.

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Section: Legally Registered Mafia Firms: Operating Context and Theorymentioning

confidence: 99%

Section: Legally Registered Mafia Firms: Operating Context and Theorymentioning

confidence: 99%

Section: Legally Registered Mafia Firms: Operating Context and Theorymentioning

confidence: 99%

See 1 more Smart Citation

Accrual management as an indication of money laundering through legally registered Mafia firms in Italy

Ravenda¹,

Valencia‐Silva

Argilés

et al. 2018

AAAJ

View full text Add to dashboard Cite

show abstract

“…A measure of international connections was created by giving each police area a risk rating based upon the presence of international transit hubs, such as international airports, international railway stations, passenger ferry terminals and cargo ports. There is also a (debated) hypothesis that business profitability can be an attractor of inward investments for crime groups, though the empirical evidence for this is weak (see Riccardi 2014). Nevertheless, business profitability was also used as a proxy measure.…”

Section: Identification Operationalisation and Normalisation Of Riskmentioning

confidence: 99%

Identifying Money Laundering Risk in the United Kingdom: Observations from National Risk Assessments and a Proposed Alternative Methodology

Hopkins

Shelton

2018

Eur J Crim Policy Res

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Two National Risk Assessments (NRA) of money laundering (ML) have now been published in the United Kingdom (see HM Treasury 2015 and 2017). While both represent an attempt to identify the risks of ML, there are limitations in relation to the conceptual framework and the methodology used. This paper reviews the UK NRAs and considers whether revision of the methodology employed could help to both remedy these limitations and generate more robust findings. Drawing upon the findings of the UK strand of project Identifying and Assessing the Risk of Money Laundering in Europe (IARM), it outlines how a composite ML risk indicator was developed through analysis of threats and vulnerabilities across 43 police areas. The findings demonstrate that risks are highest in the City of London and the Metropolitan Police area, which is largely explained by the presence of organised crime groups, connections to risky jurisdictions and the cash intensity of businesses. Although the findings should be treated with caution, it is posited that this methodology could be used to help future NRAs develop a more robust framework to understand ML risk and ultimately develop more effective preventative strategies.

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“…This is because they adapt to punitive law enforcement strategies by becoming more flexible and violent, with larger, more static players replacing smaller, more flexible ones (Dorn and South 1990). Moreover, a loss of jobs can also result from confiscated companies going bankrupt or being liquidateda typical situation in Italy for example (see Riccardi 2014;Savona and Riccardi 2015). The 'criminal lifestyle' assumptions and the low burden of proof in civil recovery cases are considered to be particularly problematic by some commentators due to the punitiveness of these measures, their impact on the rights of defendants and the hardship that this may cause to them and their families (Lea 2004;Bullock and Lister 2014).…”

Section: Introductionmentioning

confidence: 99%

The Back-Door Governance of Crime: Confiscating Criminal Assets in the UK

Chistyakova

Wall

Bonino

2019

Eur J Crim Policy Res

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The policy and practice of confiscating criminal assets to control crime and recover illicit wealth has come to occupy a central position in national and international policing and security agendas. However, this practice has raised many questions about agencies' abilities to measure success and also the social impacts of asset confiscation. This article contributes to the crime control debates by exploring contemporary literature and drawing upon a subset of data from the Joint Asset Recovery Database (JARD). The first part of the article briefly outlines the key legislative provisions of asset recovery in the UK. The second part explores what the JARD data tells us about the performance of the confiscation of proceeds of crime approach and it will argue that seizing illicit wealth has not been the main priority for government. It will argue instead that the proceeds of crime approach, originally designed to target the most serious and organised crime, has effectively become a disciplining and symbolic tool against relatively lower level acquisitive crimes. It concludes that while technical measures of impact remain inconclusive, it is more important to subject the ideological underpinnings of the proceeds of crime law to critical scrutiny.

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When Criminals Invest in Businesses: Are We Looking in the Right Direction? An Exploratory Analysis of Companies Controlled by Mafias

Cited by 28 publications

References 10 publications

Accrual management as an indication of money laundering through legally registered Mafia firms in Italy

Accrual management as an indication of money laundering through legally registered Mafia firms in Italy

Identifying Money Laundering Risk in the United Kingdom: Observations from National Risk Assessments and a Proposed Alternative Methodology

The Back-Door Governance of Crime: Confiscating Criminal Assets in the UK

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