Trending: Growth of the Drug Trade Down Under

 In Anti-Money Laundering, Bitcoin, Political Corruption, Trending

Earlier this month, the world got a small glimpse into just how severe and pervasive the illegal drug trade has become in Australia in recent years. Four Australian citizens were arrested on suspicion of working with drug cartels from the notoriously drug and crime-rich countries of Mexico and Colombia to smuggle more than 100 kilograms of methamphetamine and 500 kilograms of cocaine, respectively, into the country. The arrests mark the emergence of Australia as an illustrious new member of a transnational drug ring, with the country becoming a major player in the progression of organized crime both domestically and at the international level via the influx of large quantities of illicit funds primarily through the drug trade. Over the course of 2017, countless raids led by state and federal police from Australia’s joint organized crime group have been conducted throughout New South Wales (NSW), most notably in the capital of Sydney, aimed at infiltrating the various criminal syndicates that continue to plague the country, while also obtaining information on the sources of the drugs being smuggled in. Australia as a whole continues its seemingly endless fight against the drug trade today, with occasional triumphs in the form of billion-dollar drug seizures often being met with multiple drug shipments slipping through the cracks of the country’s national borders, a back-and-forth trend that has been ongoing since 2014. However, a new twist in said trend coincides with the newfound cooperation seen between Australian syndicates and their international counterparts in recent years: Australian crime figures basing themselves offshore.
The Sydney Morning Herald article “How Sydney’s drug lords went global”, cited in BSA News Now on November 20th, 2017, discusses several of the new developments that have helped to facilitate the growth of drug-related activity in Australia, and potential ramifications of these developments on the global drug trade. Australian law enforcement has discovered that the number of Australian crime figures found operating overseas continues to increase at an unprecedented, exponential rate, likely in an effort to avoid detection while continuing their exploits unbothered and uninterrupted. The figures backing this trend are staggering, as authorities estimate that “70 per cent of Australia’s high-end criminal targets and their associates are now based overseas” (Ralston, 2017). It is also believed that these individuals are the country’s largest organized crime threat, and are the driving force behind both the domestic drug market and dozens of gang-related murders in Sydney over the past several years. Writer Nick Ralston, an expert in Australian crime, writes that the “root of the problem is the unrelenting tide of drug importations, the overseas criminals driving the tonne-heavy consignments and the technology aiding their exports” (Ralston, 2017).
Ironically, one of the key ingredients leading to Australia’s increased presence in the drug trade is a piece of technology that became antiquated and obsolete in the late-2000’s: the Blackberry cellphone. However, these aren’t your ordinary phones, as criminals have begun augmenting these phones with military-grade encryption and private messaging software offered by the overseas tech firms and other outlets, making them nearly impossible to crack. These phones, which cannot be hacked even by the Australian Signals Directorate (Australia’s electronic spy agency), have made Australian law enforcement agencies increasingly unable to monitor the communications of many of the country’s most powerful criminals, leading to the facilitation of serious crime. With nothing to hinder their networking capabilities, criminal enterprises have run rampant, and have been granted the luxury of being able to cut their losses if any of their scheduled drug shipments are seized, due to the fact that other consignments of equal or greater size are likely being smuggled in undetected. In many cases, the drugs that are successfully smuggled in net the criminal organizations hundreds of millions of dollars in profits, even when shared amongst other groups in joint ventures. Adding to dilemma is the fact that even as the number of seizures continues to increase across Australia, the price being paid by Australian syndicates to overseas suppliers for the drugs has significantly decreased over the past 3 years alone, demonstrating that significant quantities of drugs are still entering the country. NSW authorities have stated that “the large amounts of cash generated from the large commercial drug deals provides ‘the many and varied groups with the resources to purchase expertise that in many cases outstrips the expertise that law enforcement agencies can afford’” (Ralston, 2017). This ability to raise large sums of cash in a relatively short period of time also grants crime groups the ability to purchase weapons, and hire skilled individuals to add to their groups, which statistics have shown leads to a correlational increase in unsolved violent crime both in Australia and abroad.
The trend of major criminals re-locating offshores is likely to continue as Australian law enforcement continues to target drugs and crime within its borders. The next step will be to come up with a solution to the various issues that these individuals and crime groups can cause to the greater well-being of Australia and its citizens altogether. That however will be easier said than done, but Mal Lanyon, the new head of NSW’s Police State Crime Command is up to the task, stating that in the months and years to come there will be a continued focus on offshore-driven crime.

 

Weekly Roundup

 

Corruption in China Could Lead to Collapse

 

Chinese President Xi Jinping’s campaign on the political corruption that has historically plagued his country has been well-documented of late. Xi has taken serious measures to rein in corruption and impose more stringent discipline to those in his party that have been involved in unethical activities since 2012, and has been rather successful in doing so. However, the opinion of many with close ties to China, including the country’s own deputy secretary of the Central Commission for Discipline Inspection (CCDI), remains that unless the battle against corruption persists and is enforced at a higher level, the republic could face a potential “Soviet-style” collapse in the near future. Yang Xiaodu has blamed the issues seen today directly on previous administrations, which allowed corruption to “fester to such an extent that the party’s leadership had weakened, with supervision soft, and ideology apathetic” (Reuters, 2017). Yang believes that Xi, who is by far the nation’s most powerful and well-respected leader in decades, has undoubtedly begun to rectify many of the pitfalls of past regimes, but believes that a firm control over an increasingly wealthy society is vital for Communist rule to remain intact.
Xi has already “tightened his control over possible competing centers of power, including those billionaires and their businesses, the internet, the military and other arms of state power, as well as over the 89 million members of the party itself” (Buckley, 2017). However, many were shocked when one of Xi’s most trusted confidants and one of China’s most powerful politician’s, Wang Qishan, was removed from his role as anti-corruption chief last month as part of the president’s continued movement to combat cancers to the political ecosystem. The alteration has yet to produce any negative repercussions, however these may emerge in time. Regardless, Reuters reports “China has plans for a national supervision law and a new commission next year to oversee the expansion of Xi’s graft fight” (Reuters, 2017).

 

Tether Hack Leads to Losses Across Industry

 

Tether, an up-and-coming blockchain technology that converts cash into digital currency to anchor the value to the price of national currencies, recently announced news of a significant hack that has already caused a ripple effect across the crypto-industry. On November 21st, company representatives declared that a malicious hacker was able to bypass security protocols to swipe a reported $30,950,010 worth of Tether tokens (USDT) from the company’s treasury account. The theft was discovered following a transfer to an unauthorized Bitcoin address, one that Tether officials have urged users to not deal with. This specific Bitcoin address has since been released to the public in order to prevent further disruption. In the meantime, Tether is attempting to provide a software update to users in an attempt to freeze the stolen tokens in the suspected account, thus not allowing them to enter the ecosystem. Tether has flagged the stolen tokens, making any tokens from the attacker’s address, regardless of transfers to other accounts, irredeemable.
In their announcement, Tether officials reassured their clientele that this incident would only increase security in the future, proclaiming “after the protocol upgrades to the Omni Layer are in place, Tether will reclaim the stolen tokens and return them to treasury” (Nation, 2017). The company also stated that issuances of the tokens have not been affected by the attack. The effects of the hack are being felt throughout the cybercurrency industry however, as Bitcoin dropped 5.4% following Tether’s announcement. Many believe the fall was due in large part to the loss of confidence in the safety of cryptocurrencies following repeated hacks of this nature occurring recently. Tether has become a major part of the Bitcoin ecosystem due to the aid it provides in facilitating exchanges, thus many are wary of Tether’s viability and the potential for future attacks.

 

Document Leak Leads to Probe at Greek Central Bank

 

The governor of the Central Bank of Greece is in hot water following the leak of classified documents produced by the bank’s audit team on a prominent Greek lender. Anti-corruption prosecutors are in the initial stages of their investigation into Yannis Stournaras’ suspected role in the release of the documents. While charges have yet to be filed, federal investigators are attempting to accrue further details on the leak itself, including whether or not it was performed intentionally, The information causing the stir emerged from on auditor’s report on irregular practices occurring amongst executives at Piraeus Bank, an institution that was recently “accused of violating capital controls imposed at the height of the country’s financial crisis” (Hope, 2017). Asserting that the report only hit the local media following its circulation amongst cabinet ministers and parliament, Stournaras denied any wrongdoing in the case, and vouched for the credibility of each of his fellow staff members at the Bank of Greece.
Piraeus Bank has been the subject of international headlines of late due to the bank’s aforementioned ethical concerns. According to reports, “10 senior executives at Piraeus resigned last month amid alleged involvement in the sale of loans worth €1.2bn to Libra Group, a New York-based family-owned conglomerate. Some loans were allegedly transferred to offshore companies in Cyprus in violation of capital controls, raising concerns about possible fraud and money-laundering” (Hope, 2017). Stournaras is also facing criticism that is somewhat unrelated to the leak, stemming from gaps in the declaration of his personal assets, which bankers and political officials are required to submit to Greek parliament for inspection annually. Throughout his tenure, Stournaras has been no stranger to controversy, and this leak – if found to have not been accidental – will likely lead to his professional and reputational demise.

 

Citations

 

Buckley, Chris. “Xi Jinping Opens China’s Party Congress, His Hold Tighter Than Ever.” The New York Times, The New York Times, 17 Oct. 2017.

Hope, Kerin. “Subscribe to the FT to Read: Financial Times Greece Probes Central Bank Head over Alleged Leak.” Financial Times, 19 Nov. 2017.

Mayers, Lily, and Sue Daniel. “Four Charged over Australian Conspiracy to ‘Tap into World Drug Supply’.” ABC News, 2 Nov. 2017.

Nation, Jeremy. “Hack Alert: Details On The Tether Treasury Wallet.” ETHNews.com, 21 Nov. 2017.

Ralston, Nick. “How We Became a Soft Target for the World’s Drug Lords.” Sydney Morning Herald, 20 Nov. 2017.
Wen;, Philip. “China Corruption Could Lead to Soviet-Style Collapse, Graft Buster Says.” Reuters, Thomson Reuters, 15 Nov. 2017.

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