A Study on Undercover Policing and the Follow-The-Money Strategy
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Combating organized crime A study on undercover policing and the follow-the-money strategy Edwin W. Kruisbergen Combating organized crime A study on undercover policing and the follow- the-money strategy Edwin W. Kruisbergen ISBN: 978 90 5383 228 8 Thesis layout and cover design: proefschrift-aio.nl Copyright: © 2017, Edwin W. Kruisbergen VRIJE UNIVERSITEIT COMBATING ORGANIZED CRIME A STUDY ON UNDERCOVER POLICING AND THE FOLLOW-THE-MONEY STRATEGY ACADEMISCH PROEFSCHRIFT ter verkrijging van de graad Doctor aan de Vrije Universiteit Amsterdam, op gezag van de rector magnificus prof.dr. V. Subramaniam, in het openbaar te verdedigen ten overstaan van de promotiecommissie van de Faculteit der Rechtsgeleerdheid op maandag 9 januari 2017 om 15.45 uur in de aula van de universiteit, De Boelelaan 1105 door Edwin William Kruisbergen geboren te ‘s-Gravenhage promotoren: prof.dr. E.R. Kleemans prof.mr.dr. M.J. Borgers Thesis committee: prof. N. Fyfe prof.dr. W. Huisman prof.mr. T. Kooijmans prof. M. Levi prof.dr. P. Ponsaers Contents 1 General introduction 11 1.1 The rise of organized crime on the political agenda 11 1.1.1 Organized crime in the Netherlands 12 1.2 Combating organized crime 13 1.2.1 The criminal justice approach 14 1.2.2 The financial approach 18 1.3 Research on counterstrategies to organized crime 23 1.4 Purpose and research questions of this thesis 25 1.5 Empirical data 27 1.6 Outline of this thesis 32 2 Undercover policing: assumptions and empirical evidence 33 2.1 Introduction 33 2.2 Undercover operations: a brief history 34 2.3 Academic and legislative debate: theory and assumptions 36 2.3.1 Academic debate 36 2.3.2 Legislative debate 37 2.3.3 Assumptions in academic and legislative debate 39 2.4 Current Study 40 2.5 Undercover operations in the Netherlands: numbers, types, course and results 41 2.5.1 Numbers 41 2.5.2 Types 41 2.5.3 Measuring success and failure 42 2.5.4 The unpredictable criminal environment 45 2.6 Undercover operations and the court 47 2.7 Discussion 48 3 Infiltrating organized crime groups: theory, regulation and results of a last resort method of investigation 53 3.1 Introduction 53 3.2 Undercover policing 55 3.2.1 Policing organized crime 56 3.2.2 Undercover policing in historical perspective: from Judas to ‘Mr. Big’ 58 3.3 Regulation of undercover policing 60 3.3.1 Affairs and legislative debate 61 3.3.2 Regulation in the Netherlands 62 3.4 Current study 64 3.5 Infiltration operations in the Netherlands 66 3.5.1 The assessment of proposed infiltration operations by the Central Assessment Committee (CTC) and the Board of Procurators General 66 3.5.2 In which cases and on what grounds does a public prosecutor opt for an infiltration operation? 67 3.5.3 Course and results of infiltration operations 68 3.6 Analysis: unpredictability and regulation of undercover operations 71 3.6.1 Unpredictability, the consequence of participating in illegal markets 71 3.6.2 Implementation of regulatory procedures in the investigative practice 73 3.7 Discussion 77 4 Profitability, power, or proximity? Organized crime offenders investing their money in legal economy 79 4.1 Introduction 80 4.2 Theoretical perspectives and empirical research 81 4.2.1 Theoretical perspectives 81 4.2.2 Empirical research 82 4.3 Methodology 84 4.3.1 Definition 84 4.3.2 Data and methods 84 4.4 Results: investments of organized crime 85 4.4.1 Investments: property and companies 86 4.4.2 Scope of investments 92 4.5 Conclusion and discussion 97 4.5.1 Empirical results 97 4.5.2 Profitability, power, or proximity? 97 4.5.3 Implications 99 5 Explaining attrition: investigating and confiscating the profits of organized crime 101 5.1 Introduction 101 5.1.1 Present study: purpose and research questions 102 5.2 Prior research 103 5.3 Methodology 104 5.4 Follow the money in the Netherlands:institutional framework 105 5.5 Financial investigation: finding clues, or not 107 5.6 Court procedures: from public prosecutor’s claim to Supreme Court 110 5.6.1 Court procedures: determining the amount of criminal profit 111 5.6.2 Court procedures: lengthy procedures 113 5.6.3 Court procedures: taking into account the convict’s financial capacity 114 5.7 The collection of confiscation orders: What do they actually pay? 114 5.7.1 Legal reasons to stop collection without (full) payment 115 5.7.2 Convict is unwilling to pay and succeeds in hiding his assets 116 5.7.3 The convict is unable to pay 116 5.8 Conclusion and discussion 117 5.8.1 Empirical results 117 5.8.2 Explaining attrition 118 5.8.3 Implications 118 6 Conclusion and discussion 121 6.1 This thesis: research questions, data and summary of the empirical results 121 6.1.1 The criminal justice approach 121 6.1.2 The Financial approach 126 6.2 Scope of this research and methodological considerations 130 6.2.1 Scope and limitations 130 6.2.2 Value of this study 134 6.3 Implications 137 6.3.1 Controlling the use of special methods of criminal investigation 137 6.3.2 Crime money and the legal economy 141 6.3.3 Investigating and confiscating the proceeds of organized crime 142 6.4 Research on counterstrategies to organized crime 145 6.4.1 Why should we do research on organized crime policies? 145 6.4.2 Suggestions for further research 146 6.4.3 Concluding remarks 148 References 149 Samenvatting (Dutch summary) 177 Curriculum vitae 199 Publications 201 1 General introduction This thesis presents empirical evidence on two counterstrategies to organized crime in the Netherlands: the criminal justice approach and the financial approach. For the criminal justice approach, it focuses on a specific method of criminal investigation: undercover policing. For the financial approach, it looks into what organized crime offenders actually do with their money as well as the efforts of law enforcement agencies to confiscate criminal earnings. 1.1 The rise of organized crime on the political agenda According to Paoli and Fijnaut, the term ‘organized crime’ was coined in the United States at the close of the nineteenth century (2006: 308-309). Although organized crime flourished in the early decades of the twentieth century - when criminal groups were active in the liquor trade and had control over unions and legitimate businesses - it was not until the 1950s that the phrase became really popular in the United States. Since that date, several U.S. congressional bodies have put the issue on the political agenda. These bodies viewed organized crime mainly as the work of a nationwide, centralized, Italian mafia organization. The Kefauver senate investigating committee stated in its final report: ‘The public now knows that the tentacles of organized crime reach into virtually every community throughout the country’ (U.S. Senate, 1951). Mafia leaders were believed to be in control of the most lucrative criminal activities. In 1963, former Mafioso Joe Valachi testified before the Senate Permanent Subcommittee on Investigations. Because his testimony was broadcasted on television, this awareness of - or view on - organized crime became popularized among the American public (Paoli and Fijnaut, 2006: 308-309; Fijnaut, 2014: 72-74). From the 1960s onwards, illegal drugs gave an impulse to organized crime. The popularity of cannabis, heroin, cocaine and synthetic drugs have fostered a trade in drugs and stimulated the rise of distribution networks on a national as well as an international level. It brought lucrative chances for those who are capable of bridging the distance between regions where these drugs are produced and regions where consumer markets are located (Paoli and Fijnaut, 2006: 315; Van Duyne and Levi, 2005).1 1 For a historical overview of ‘organized crime’, such as banditry in seventeenth- and eighteenth-century North- western Europe, see Fijnaut, 2014. For a history of the concept of organized crime, see Paoli and Fijnaut, 2004a. 11 Chapter 1 1.1.1 Organized crime in the Netherlands Until the 1970s, the term ‘organized crime’ was almost exclusively used in the United States. For a long time, Dutch criminologists and policymakers considered organized crime to be a predominantly foreign problem, similar to what their colleagues in most other European countries thought. It was not until the early 1990s that organized crime2 reached the political agenda in the Netherlands.3 Authorities had become more aware of the huge profits made by offenders who engaged in trafficking cannabis, cocaine and heroin. The fact that, on several occasions, these criminals used deadly violence to deal with threats or to solve other problems with ‘colleagues’, also helped to raise the sense of urgency. On an international level, two bomb attacks in Italy in 1992, killing the prominent judges Giovanni Falcone and Paolo Borsellino, produced huge shock waves and played a significant role in putting organized crime on the European crime control agenda. In the Netherlands, in particular the killing of alleged Mafia don Klaas Bruinsma in 1991 served as a ‘wake-up call’ (Kleemans, 2007: 163-164; Paoli and Fijnaut, 2006: 308-309; Paoli, 2014: 1; Van Duyne and Vander Beken, 2009: 265-266). The organized crime problem became a hot topic on the Dutch political agenda. In the early 1990s, the dominating view on organized crime was that of the Mafia-type organizations that existed in Italy and the United States. The problems with the mafia in Italy and the United States, where mafia organizations controlled certain economic sectors or regions, functioned as a powerful symbol of what could happen to the Netherlands as well.4 Empirical research showed, however, that this picture actually contradicted the phenomenon of organized crime in the Netherlands.