A new report from the Financial Times highlights a surprising link between the world of finance and organized crime. According to the story, financial institutions such as pension funds, hedge funds, at least one Italian bank and others have bought over $ 1 billion in private bonds backed by the organization of organized crime known as’ Ndrangheta.
“ Ndrangheta, considered to be the most powerful criminal organization in Italy, allegedly supported the obligations through front companies intended to hide the true origin of the organization’s income, which comes from usual mafia practices, in particular the trafficking of drugs, money laundering, extortion and other criminal activities. . These companies’ ties to Ndrangheta now lead to criminal charges and exposure to some of the group’s financial problems.
Certain obligations were formed from unpaid public health debt from companies to medical establishments in Italy, which was then purchased in large quantities by the financial institutions in question. Other obligations were backed by the financial resources of a refugee camp in Calabria which was later discovered to be run by individuals convicted of stealing millions of dollars from the coffers of the European Union.
One billion euros, or approximately 1.1 billion U.S. dollars, of these private bonds were purchased by these institutions between 2015 and 2019, including Banca Generali and Banca Generali Fund Management Luxembourg.
The full fallout behind the news remains to be seen, but Banca Generali says in a press release that by the time she invested in mafia-backed bonds, she was unaware of their connection to organized crime.
“ Ndrangheta is not as famous outside Italy as the Sicilian mafia most often represented in popular police fiction, but Europol and other organizations have classified it as one of the richest criminal organizations from around the world, with an estimated annual turnover of around $ 49. billion.