Financial and Ownership Patterns of Organised Crime Infiltration in Legal Businesses

• In Event: IASOC Presents: When Organised Crime Meets Corruption. Risk Factors of Infiltration in Procurement and Legal Businesses

Abstract

This paper aims to identify financial and ownership patterns of firms infiltrated by mafia-type organised crime. To reach this goal, we use a unique dataset of approximately 3,500 companies confiscated from mafia groups in Italy, where law enables authorities to confiscate and manage assets financed by illicit activities. We contribute to the current literature by an innovative quantitative approach based on the analysis of companies’ financial reports. The selected financial variables are compared to the legal economy using matching techniques. Using this method, we identify corporate risk factors that can be used both in the public and private sectors to forecast the probability of crime infiltration and to increase risk prevention. Besides financial ones, various ownership and activity related variables are considered to enhance the set of risk indicators. The analysis is a result of Project MORE (www.transcrime.it/more), a project co-funded by the European Commission.

Authors

• Benjámin Villányi, Università Cattolica - Transcrime

• Michele Riccardi, Università Cattolica - Transcrime

• Daniela Andreatta, Università Cattolica - Transcrime