Italy’s ‘Ndrangheta Mafia Shifts Focus from Extortion to Tax Evasion

A landmark trial in Italy has shed light on the evolving tactics of the powerful ‘Ndrangheta mafia syndicate, which has abandoned traditional extortion rackets for a more lucrative game: tax evasion and bankruptcy fraud.

From Extortion to Tax Evasion

According to prosecutors, the ‘Ndrangheta, one of the world’s most extensive and wealthy drug-trafficking groups, has adapted to changing economic conditions by exploiting loopholes in Italy’s tax system. The syndicate creates seemingly legitimate cooperatives that offer cut-price services to companies, only to declare bankruptcy after two years and walk away from debts and social welfare obligations.

• The ‘Ndrangheta operates throughout the temporary work supply sector, from transport to cleaning.
• By not paying taxes and contributions, it can offer services at slashed prices.

Trial Reveals International Companies’ Involvement

The trial, which concluded last year, revealed that international companies such as UPS Italia, DB Schenker, and Lidl outsourced logistics to cooperatives created by the ‘Ndrangheta. The companies have been sentenced to pay fines.

• Internal revenue service documents showed that bankrupt companies owed a total of 156 billion euros in unpaid taxes and pension payments, roughly three times Italy’s annual corporate tax revenues.

Prosecutors Call for Tougher Laws

Prosecutors, including Addesso, who led the investigation, are calling for tougher laws to combat white-collar crime. However, successive governments have failed to implement reforms, opting instead for fiscal decrees that decriminalize some tax offenses.

• Italian Premier Giorgia Meloni has defended the law, saying it “puts honest people in a position to pay.”
• Critics argue that the reform legitimizes illegal behavior and fails to address the root causes of corruption.

Need for Skilled Financial Investigators and Longer Statutes of Limitations

The trial highlighted the need for more skilled financial investigators and longer statutes of limitations to prosecute complex fraud cases. Current laws limit the time available to pursue white-collar crimes, allowing many offenders to escape justice.

• The Council of Europe has criticized Italy’s lack of progress in tackling economic crime, noting that only 0.9% of prisoners are serving time for economic offenses, compared to 7.1% in France and 9.8% in Germany.

Conclusion

As the ‘Ndrangheta continues to evolve its criminal activities, Italian authorities must prioritize combating tax evasion and bankruptcy fraud to prevent further financial losses and erosion of public trust.