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German Gambling and The Mafia

Monday January 28,2013 : GERMAN GAMBLING AND THE MAFIA
 
Legal confusion exacerbates money laundering complications in Germany
 
University of Hamburg economist Ingo Fiedler, who has done extensive research into online gambling, claims that organised crime relies heavily on German online gambling sites to launder criminal profits...and the authorities are hampered in acting against them due to confusing laws.
 
Speaking to the publication Deutsche Welle, the economist noted that the German Federal High Court has referred questions on the country’s confusing gambling laws to the European Court of Justice, seeking clarification on compliance with EU law.
 
Fiedler says that a current UN study has estimated that organised crime makes profits of $2.1 billion a year, and is constantly seeking ways in which 'dirty' money can be laundered back into society as legitimate earnings.
 
One of the effective methods chosen has been to 'bet dirty and win clean' says Fiedler, and that is now being extended into ownership of online gambling operations, although he gives no examples.
 
Fiedler says that mafia bosses prefer the simplest and cheapest means of putting money earned illegally back into normal circulation, and Internet gambling platforms are the way to do it, with huge sums of money changing hands. Many gambling operators are based in jurisdictions outside Germany, complicating the issue.
 
"There is no exchange of information between the countries," Fiedler told DW, adding, "No one can find out where the money is coming from. But it can be paid out to the casino's owners in a perfectly legal way."
 
Fiedler points to comments made at a public parliamentary committee hearing in Berlin in November last year by Italian senior public prosecutor Roberto Scarpinato, respected for his courage in unmasking Mafia operations.
 
Scarpinato said that "unbelievable" sums of money were flowing between Italy and Germany. He added that 45 mafia whistleblowers had confessed to him that Germany is one of the most sought-after countries for money laundering, with its gambling halls and online gaming venues being favourite targets.
 
Swiss money laundering expert Andreas Frank attended the Berlin hearing, and confirmed Scarpinato's striking description of the situation, lamenting the apparent lack of resonance this had with the politicians or any subsequent follow up.
 
Frank is adamant that the confused gambling laws in Germany make detection and enforcement more difficult, and that the nation's anti-money laundering laws are inadequate for the task.
 
Sebastian Fiedler of the Federal Union of German Detectives says that it is not simply a matter of controlling legal online gambling whilst stamping out illegal operators.
 
"We do not have any criminal procedure against illegal Internet games. There are no penalties," he told DW.
 
Due to the lack of both political will and enforcement personnel, Fiedler says the illegal gambling market is booming in Germany.
 
"Last week, Germany's Federal Court of Justice sent an official petition to the European court. If German laws don't stand up to European judges' scrutiny, then Germany as a whole may have to permit online gambling platforms to operate," DW speculates.



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