Financial crisis window for Mafia money laundering

Cash-rich mafia groups have been channelling funds into banks desperate to survive the global credit crisis, the UN anti-crime chief said on Monday.

Antonio Maria Costa of the UN Office on Drugs and Crime said he had collected ample evidence to make such accusations.

"Consultations I've had with prosecutors and law-enforcement officials around the world show there is ample evidence that the banking system's illiquidity is providing a unique opportunity for organized crime to launder their money," Costa said.

"Just about every financial centre can be characterized as part of the problem," Costa said, but declined to name countries or banks involved, saying that was for prosecutors and other law-enforcement bodies to do.

Costa said a Vienna conference next month marking the 10th anniversary of a UN General Assembly special session on drugs would mull ways to boost steps against money laundering and ease the impact of drug gang profits on the integrity of states.

He said the multilateral Financial Action Task Force (FATF) formed in 1991 did much to help drive mafia money out of banks over the ensuing decade but that achievement was being challenged by the global hemorrhaging of legitimate credit.

"You have the supply--an organized crime industry with enormous amounts of cash, estimated at$322 billion in 2005,not any more stored in banks--and the demand, a banking sector strapped for liquidity," said Costa.

"This is a supply and demand driven situation. Our intuition, based on logic, is now supported by ample evidence."

Asked where cases were occur-ring, he said:"Traditionally, Europe and North America are the places where, as financial centres, most money would be laundered.

Source: The Calgary Herald 2009