12/08/2019

An interview with deputy prosecutor of the District Antimafia Directorate in Catanzaro (Italy), Domenico Guarascio

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Domenico Guarascio at just 38 years old has investigated over 1,000 individuals in Italy and across Europe, since joining the District Antimafia Directorate in Catanzaro (Italy) as deputy prosecutor in 2014. In the past month alone, his investigations have led to the arrest of 35 affiliates of the Calabrian mafia, the ‘Ndrangheta, and the seizure of over EUR 30 million worth of mafia-controlled assets. The Financial Crime Digest spoke to Domenico about the history, operations, and global footprint of the ‘Ndrangheta, which is considered to be the most powerful mafia organisation in Europe.


Ef Article
Domenico Guarascio

What is the ‘Ndrangheta?

The ‘Ndrangheta is a traditional criminal organisation, born in the southern Italian region of Calabria at the time of Italy’s unification in the 1860s. Initially a predatory group, it forged its operations around the practice of extortion, providing Calabrian locals with protection and employment. Their modus operandi is simple: if you pay us, nothing will happen to you. With time, the ‘Ndrangheta has permeated Italy’s economy and institutions. It became a leading criminal organisation from the 1950s until the 1970s, when it mastered cocaine trafficking.

Why is the ‘Ndrangheta a problem?

It is pervasive. Totally pervasive. In some areas of Italy its presence is such that its members and affiliates can influence electoral and economic processes. It is also a European, perhaps even a global, leader in the trafficking of cocaine, generating huge proceeds that are laundered, meticulously, through numerous activities. Moreover, the founding principle of the ‘Ndrangheta is omertà, which makes it difficult to defeat, penetrate and understand. Omertà is essentially a code of silence which all ‘Ndrangheta affiliates abide by, which means that all information about their organisation is kept secret. This is why the ‘Ndrangheta is an issue.

How did the ‘Ndrangheta become so powerful?

As opposed to other criminal organisations, the ‘Ndrangheta has been able to mutate over time. Other mobs, such as the Camorra, have retained their traditional predatory character, generating social alarm and embracing terror. The ‘Ndrangheta has instead silenced itself and penetrated, for instance, the institutions. This mob has a tendency to avoid confrontation with law enforcement. Instead, in the territories it controls, it guarantees buon ordine, providing protection and employment in return for people’s silence. This has allowed the ‘Ndrangheta to expand rapidly.

How did the ‘Ndrangheta develop, historically?

Extortion and robberies were common practice during the early years of the ‘Ndrangheta. Later, kidnapping also became a source of income for the mob. This coincided with a period of great economic expansion for the ‘Ndrangheta. For a time, kidnappings were a daily occurrence in Calabria, which allowed the ‘Ndrangheta to accumulate capital that was then reinvested in drug trafficking. 

With the proceeds of drug trafficking, the Calabrian mafia began investing in a number of sectors, including real estate, construction, agriculture and restaurants. Interestingly, it also began defrauding the European Union, as do all other mafia organisations based in the south of Italy. So much so that one of the international organisations with which we cooperate the most is OLAF, the European Anti-Fraud Office.

It is difficult to predict how the ‘Ndrangheta will evolve in the future. Currently, our fight against it is so intense that the ‘Ndrangheta is seeking new, illicit ways to prosper. For the moment, we are focused on depriving the mob of its material property and hampering its ability to traffic drugs.

How is the ‘Ndrangheta different from other mafia organisations?

There is no clear, immediate difference between the ‘Ndrangheta and other mafia organisations. The Calabrian mafia, like the Camorra and Cosa Nostra (Sicilian mafia), relies on affiliation criteria, omertà and secrecy. However, while other mafia organisations have always retained a vertical, hierarchical structure, the ‘Ndrangheta is a “horizontal” mafia, in that it recognises very few leaders and is based upon familiar, blood ties. Such a characteristic has allowed it to expand epidemically.

This is not to say that the ‘Ndrangheta has no hierarchy. In fact, a hierarchy exists, an example being Province and Mandamenti, which are committees that define the organisation’s grand strategies. However, the main strength of the ‘Ndrangheta is its ability to circumvent prosecution by functioning in a horizontal fashion, in the absence of a hierarchy. In this, it is similar to Anonymous. Operation Crimine has found proof of the existence of a top-down command structure. Yet, such hierarchy does not influence the operations of local ‘Ndrangheta outposts, including Locali and ‘Ndrine, which can operate in the absence of orders from above.  

What does the ‘Ndrangheta invest in?

The ‘Ndrangheta’s investments are varied. What makes this mob different is its capacity to understand the territories it controls, altering them, or proposing alternatives to their economic status quo. In the north of Italy, for instance, the ‘Ndrangheta provides appealing services in the construction sector. It guarantees low-cost labour by eliminating the social security costs associated with its workforce and forces desperate, unemployed people to relocate to the north, providing local industries and construction companies with affordable labour.

In the same area, the ‘Ndrangheta is active in the waste management sector, disposing of waste in illegal ways that, while cheap, do not comply with environmental rules. In a number of investigations, we even discovered that the ‘Ndrangheta had injected dirty capital into banks facing acute liquidity crises. 

How does the ‘Ndrangheta manage its investments?

On the one hand, it uses intermediaries, third-parties, or clean faces. These may be professionals, lawyers, or accountants. Equally, there now exists a second-generation of ‘Ndranghetisti, the university-educated sons and daughters of the ‘Ndrangheta families, capable of running restaurants, wine estates, cheese factories, and virtually any other business in compliance with local rules.

On the other hand, the ‘Ndrangheta uses its penetration and intimidatory abilities to find investment opportunities and manage its existing investments. Such abilities allow the mob to occupy a market and saturate it, so as to prevent competition from other investors. To do so, the ‘Ndrangheta also relies on its large cash reserves, with which it scares off potential competitors.


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The Public Prosecutor’s Office in Catanzaro

How does the ‘Ndrangheta launder its proceeds?

The ‘Ndrangheta is good at predicting which sectors have potential to be profitable and floods them with capital. For instance, when they were told that the government of Italy would be heavily subsidising a number of immigration-related initiatives, they infiltrated one of the largest reception centres for asylum seekers in Europe. The ‘Ndrangheta seeks to infiltrate sectors that can guarantee multiple, secure and diverse streams of income.

To obtain such privileged information, the Calabrian mafia relies on consultants, lawyers and accountants, whom we believe constitute and belong to a “grey” group of advisers, typical of any criminal organisation. In Italy, having infiltrated various public institutions, they are able to intercept and predict the origin of economic demand and can work to guarantee the corresponding supply.

Does the ‘Ndrangheta operate in jurisdictions outside of Italy?

Yes. In the Netherlands, it is handed the cocaine it purchases in South America, at times using Dutch flower wholesalers as cover. In France, it invests in the real estate in the Côte d’Azur. In Spain, it retrieves hashish and marijuana dispatched from north Africa. In Switzerland, where its presence is tied to the historic immigration of Calabrians, it controls numerous restaurants and real estate firms.

In the UK, its footprint changes. The ‘Ndrangheta registers companies in which it channels the illicit proceeds of its various businesses. London is a safe. One of the ‘Ndrangheta’s many safes. We believe its presence in the UK is not as localised as in other countries.

Italian mobsters based abroad, whether in France, the UK or Spain, are all but traditional mobsters. They prefer to hide. Their influence is such that, in Germany, they are able to influence the vote of Italian immigrants and locals.

Can you tell us about your last investigation?

Yes, of course. In May this year, with operation Malapianta, the Guardia di Finanza (judiciary police) in Crotone (Italy) arrested 35 ‘Ndrangheta affiliates and seized assets worth over EUR 30 million, which comprised of bars, restaurants, and petrol stations, as well as local manufacturers of agricultural machinery and building materials. Operation Malapianta was the culmination of 18 months of investigation, the cooperation of Swiss and Spanish judicial authorities, and over 250 servicemen on the day of the arrests. With Malapianta, we dismantled the ‘Ndrangheta clan in San Leonardo di Cutro, which specialised in drug trafficking and extortion, plaguing various holiday resorts in Calabria.

Will Brexit affect the operations of the ‘Ndrangheta in the UK?

Yes, it will. Brexit is likely to make the UK even more of a “foreign” country, in that it may affect existing judicial and law enforcement cooperation at the European level. Brexit may also distance the UK from the norms regulating finance in Europe, making it financially less transparent. This will not turn the UK into the Cayman Islands, but it may get close to it. For example, at present, executing an international letters rogatory in the UK is difficult. In the near future, post-Brexit, it may become impossible. We may not even bother trying. In the wake of Brexit, we may have to cooperate via semi-diplomatic, non-institutionalised channels, which will make it hard to probe the cross-jurisdictional operations of the ‘Ndrangheta in the UK.

Is there anything foreign banks and regulators should be wary of when dealing with Italian companies?

One should evaluate the geographic origin and footprint of the directors of the company, as well as their parental linkages, especially if these include individuals with a criminal record. One should also assess the company’s ownership structure and its financial statements, with an eye to sudden capital increases. It is crucial to understand who is behind these companies. One should have at their disposal reliable information in relation to the CEO, directors, and auditors of the company.

Can the ‘Ndrangheta be stopped?

The fight against the ‘Ndrangheta and other mafias has intensified over the past twenty years. Thirty years ago, we believed that these organisations were circumscribed phenomena and thought that the ‘Ndrangheta was limited to Calabria and predatory criminality. Today, Italy’s legislation is the most evolved in the world in this regard and our fight against the ‘Ndrangheta is constant. This has allowed us to develop a comprehensive understanding of the Calabrian mafia. We believe that, with time, the ‘Ndrangheta will decay, as does everything in history.

What will prove difficult to eradicate is not the ‘Ndrangheta as an organisation, but the ‘Ndrangheta’s character and methodology. The ‘Ndrangheta has established a collusive, discriminatory culture, the basis for an illicit, profitable modus operandi that is likely to perpetuate in time.

For this reason, Italian law enforcement agencies have shifted their target towards those who utilise mafia methods, rather than those who belong to mafia organisations. This is the direction in which our understanding of the ‘Ndrangheta has been evolving. Other countries are yet to understand this. Foreign authorities still seek to identify clear mafia structures, as did northern Italian prosecutors up until recently.

The Germans have a comprehensive, structural understanding of the operations of the ‘Ndrangheta across their federal states, but still reason in terms of names and relationships. We reason in terms of method. They seek to count ‘Ndrangheta affiliates, as is common practice with foreign fighters. We no longer do this. Rather, we seek to construct a dynamic, holistic picture of how companies and individuals behave, illicitly, in their sector.

Edoardo Fiora, Analyst, Aperio Intelligence

edoardo.fiora@aperio-intelligence.com

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Edoardo Fiora