According to the United Nations between $800 billion and $2 trillion is being laundered each year. This is estimated to be between 2% and 5% of global GDP.
More creative forms of money laundering are everywhere.
There is a trend developing in which every day commodities are used as a form of payment in exchange for criminal goods. Some examples of these items are razor blades, infant formula, over-the-counter medication, perfume and cosmetics.
Bizarre money washing trends
There are some other peculiar items used as payment for contraband, which include:
There has been a widespread use of laundry detergent as a currency across the US. This is one method criminal syndicates have been cleaning their money by accepting “Tide” laundry detergent. Tide is a leading brand of a product in the US which everybody needs and can cost up to $20 a bottle. This was first discovered when US law enforcement agencies found large quantities of Tide when raiding suspected drug houses. Initially it was suspected that the detergent was being used as an ingredient to produce the drugs. Soon it was realised that the detergent is being used rather as a currency to buy the drugs themselves.
The UK Center for Retail Research has conducted a global survey that has uncovered that the world’s most stolen food is cheese. This does not just relate to shoplifting. It appears that criminal establishments are stealing or accepting cheese as payment in exchange for drugs. Reselling or even manufacturing “illegal” cheese is also a popular method of sanitising proceeds derived from illicit activity. As the cheese production process is capital intensive, it is a perfect vehicle for money laundering.
By way of example, in Italy, $6.9 million in Parmigiano-Reggiano cheese has gone missing over the last two years. The Camorra, an Italy-based Neapolitan mafia criminal syndicate, invested large sums of illegitimate money into a legally authorized cheese manufacturing business. Another case in 2015 occurred in Russia when police, acting against a criminal syndicate, confiscated $30 million worth of contraband Cheddar.
Reselling expensive ice cream brands such as Ben and Jerry’s, Blue Bell and Häagen-Dazs in bulk has become a popular currency. Like the items mentioned above, ice cream is relatively easy to steal, transport and resell. These are also inconspicuous amongst the general public and legal authorities.
These items have become an ultimate target of theft. Criminals have been weighing up the risk and reward of stealing items such as laundry detergent as opposed to dealing drugs. The penalty for theft or shoplifting is much less severe than illegal drug related activity. It is high reward for low risk.
Crypto- money Laundering
Crypto Currencies advantageous characteristics such as global availability, high speed transactions and the ability to hide identities has made it a great digital detergent to clean money for launderers. Europe’s police agency has estimated that 3-4% or $4.2bn to $5.6bn of criminal proceeds are crypto-laundered.
Dirty money can be washed by converting it into Crypto, splitting it into smaller amounts and across a variety of “altcoins” (alternative crypto currencies) on the Crypto sphere.
In March 2018 a British man was arrested in the Netherlands for taking $13.2m in dirty Bitcoin from criminals, converting these into Dollars through he’s bank account and withdrawing the cash and returning it to the lawbreaker(s), minus a cut for he’s services.
In the past law enforcement agencies would be on the lookout for suspicious transaction related to highly valued traditional assets such as property, luxury vehicles, yachts and jewellery which could be associated to money laundering. All being assets that attract far more attention than cheese.
It may be possible that the delicious melted Mozzarella or Parmesan on your pizza is the vehicle to shift money originating from illicit activity.
An alarming thought is the number of other foods that share the same characteristics as cheese. While one could usually abstain from activity associated with crime such as drugs, gambling and stolen or pirated goods, it has become increasingly more difficult for anyone to identify and avoid illicit food.
So be very careful next time when you are offered your favourite cheese on a “3 for the price of 1” deal from an unfamiliar supplier.
Derebusorgza. 2017. De Rebus.
Economistcom. 2018. The Economist.
Reuters editorial. 2018.
Disclaimer: The views thoughts and opinions expressed within this article are those of the author, and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security.