Investment of Criminal Proceeds into the Legitimate Economy: An Analysis of Italian and Russian Organised Crime in the UK Real Estate Market

Abstract

UK remains a ‘hot spot’ for investment by Italian and Russian organised crime groups in the real estate sector, highly concentrated in the London metropolitan region. Despite a focus in the literature on the relationship between infiltration, money laundering and Italian and Russian organised crime groups in the UK real estate market over the years, there is a paucity of qualitative studies on this topic. Therefore, this research hinges on a business model approach (Passas, 2000), adopting a systemic perspective on organised crime, as enterprises and their mutual collaboration with legitimate businesses have interwoven economic interests, enabling exploitation of legislative and contextual gaps across countries (Haller, 1990; Passas and Nelken, 1993). This theoretical lens has allowed for an in-depth analysis of the relationship between the push/pull factors of organised crime expansion and contextual factors which act in the formation of criminal opportunities and affect organised crime phenomenon abroad, particularly in the real estate market. The interdisciplinary approach adopted addresses the infiltration of organised crime in the legitimate sector, thereby contributing to knowledge of organised crime mobility abroad and the degree of vulnerability of the real estate sector to organised crime.
Using qualitative methods and an interpretivist lens has allowed for the capturing and in-depth analysis of the attitudes and behaviours of Italian and Russian organised crime groups’ modus operandi in new territories (i.e. UK real estate market). The thematic analysis of semi-structured interviews conducted with 22 participants, including practitioners and academics in the UK and Italy, has generated interesting findings in terms of systemic factors contributing to Italian and Russian organised crime’s migration abroad, their flexible business modus operandi and criminogenic opportunities generated through contextual legislative and socio-economic discrepancies in new territories. Notably, the findings indicate the importance of territorial control for Italian and Russian organised crime groups to access the socio-economic fabric in new territories, which appears out of step with the business modus operandi adopted in their infiltration of the UK real estate market.
This study also broadens our understanding of the presence of legal asymmetries, the role of private actors and legal service providers which have enabled Italian and Russian organised crime groups’ money laundering schemes in the UK real estate market. Lastly, the findings indicate that such investments can have far-reaching implications for the economy at large and law enforcement strategy/operations.
This academic study, albeit with limitations, offers new theoretical and empirical insights into Italian and Russian organised crime groups’ changing landscape of operations in new territories and in the UK real estate sector in recent years.

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Identifiers

ORCID for Emanuele Sclafani: orcid.org/0000-0002-8670-7511

ORCID for Jenny Fleming: orcid.org/0000-0002-7913-3345

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