Wednesday, August 03, 2005
There is a report out of Germany that organized fraud gangs and terrorist organizations are joining forces to commit financial crimes (fraud). The Federal Audit Court of Germany issued a report stating that these groups have cost the taxpayers of Germany 17.6 billion euros, which equates to 23 billion dollars, or 12 billion british pounds at today's exchange rates.
It is alleged that the groups involved in this are extremely organized and employ accountants, auditors and even law firms.
The specific fraud cited was sophisticated value-added tax (VAT) fraud, where phantom purchases were used to obtain refunds on high end items. In one case cited, groups in China, Israel, the UK and Dubai were able to claim VAT refunds of 1.15 billion Euros.
The report stated that terrorist organizations are involved in this activity and that they are taking advantage of a lack of communication between tax, judicial and law enforcement agencies in Europe.
This article demonstrates the importance of communication and partnership between the free countries of the world. For many years, it has been known that terrorist organizations were funding themselves through the drug trade, particularly in Afghanistan. In theory this would bring them in partnership with criminal organizations. If the allegations in this report are true, it is entirely possible that they are branching out in their activities to fund their terrible causes.
Here is an earlier post on the recent McAfee study on the impact of organized crime on the internet.
For the article by Bertrand Benoit, please click on the title of this post.