Criminal Facilitators and Financial Intermediaries  

This is part three in a series on business practices of transnational organized crime and drug trafficking organizations.

An analysis of criminal cases (involving crimes such as fraud, terror finance, money laundering) indicates that facilitators and financial intermediaries were instrumental to the operation and sustainability of the transnational criminal organizationCriminal facilitators played a role in the sustainability of the supply chain and the financial intermediaries created legal structures that encouraged and enabled illicit activity.

Both the facilitators and financial intermediaries contributed to illicit business activities in a way that is akin to professional networking; they were relied upon to bridge knowledge gaps and make connections.

In almost all of the cases studied the most successful financial intermediaries operated separate from the criminal activity, in a manner akin to the way a corporate parent organization interacts with a subsidiary.  The criminal facilitator remained ambiguous and appeared to be quite adept at blending in where and when needed.   Both the facilitators and intermediaries gave instructions and set up policies and procedures in a way that is consistent with one who has had long term involvement in criminal activity.  The contributions of the criminal facilitator and financial intermediary were similar to what one might expect from a subject matter expert or consultant- one who has spent time studying and honing their expertise over a long period of time.

These findings, supported by prior work of Scott Decker and Michael Kenney, are disturbing because they continue to show a consistent level of commitment on the part of the criminal to refine and advance their criminal profession in order to sustain the criminal business enterprise.

In light of these realizations, what then can law enforcement and the private sector do?

I will explore innovative ideas and answers to this question in upcoming posts.

Please feel free to share your comments and suggestions below!


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The Criminal Supply Chain


This is part two in a series on business practices of transnational organized crime and drug trafficking organizations.

A critical component of the criminal business model is the supply chain and the swift and certain movement of goods from one point to another.  Analysts tasked with understanding crime perpetrated by illicit business networks like drug trafficking, bulk cash and weapons smuggling should use the Supply Chain Analysis (SCA) framework to gain insight into the operations.

The SCA framework asks analysts to set aside the illegality aspect of the transnational criminal organization in order to focus on business sustainability issues.  For example, how can the bulk cash smuggler shift transport routes to evade detection by competitors and law enforcement? Or how might a manufacturer amend a production schedule due to unforeseen circumstances?

Analysts should apply the following framework to these types of scenarios in order to better understand the individual components of the business supply chain and the supply chain in its entirety.  Once an analyst is fully immersed in the business side of the operations they will be better equipped to provide high level anticipatory and estimative analytic products rather than those that are simply descriptive.

The Supply Chain Framework:

Source: Identify the factual circumstances involved in the extraction and handling of the product or natural resource.

  • Is the point of extraction of production located in a high risk area?
  • If so, who retains control of the area in which production and/or extraction occurs?
  • Are contractors involved?

Logistics: Identify the factual circumstances involved in the transport, handling, trading, processing, refining and manufacturing of the natural resource or product.

  • How is the product or resource transported from point of origin to the next stage in the supply chain?
  • Are the products or resources packaged and shipped?
  • If so, by whom?

Operations: Identify the individuals, contractors and entities with a vested interest in the production of the product/natural resources.

  • Are the production and manufacturing practices transparent?

Distribution Logistics: Identify the individuals, contractors and entities with a vested interest in the successful distribution of the product.

  • How are the finished products transported from the manufacturer to consumers?
  • Who is responsible for transport?
  • Where are the critical distribution hubs?

Part three will provide an overview of the role of criminal facilitators and financial intermediaries within the illicit supply chain. Research indicates that both facilitators and financial intermediaries are instrumental to the operation and sustainability of the transnational criminal organization.


The Economics of Drug Trafficking by the Organization of American States

OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected or High-Risk Areas

Simulating the Afghanistan-Pakistan Opium Supply Chain


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IAFIE NYC Chapter Meeting

The NYC chapter of the International Association for Intelligence Education is having its fall meeting on November 19, 2014 at St. John’s University in Queens.  Details are available on the IAFIE website.

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