New Delhi: In London, a drug dealer delivers cannabis using the government postal service that is functioning during the lockdown. In the German party town of Berlin, drug dealers are reporting a massive increase in revenues as customers forced to spend time at home are stocking up. In Sicily, the mafia is showering “gifts” that are said to be favours they would want repaid later.
Closer home, Lucknow saw an illicit alcohol delivery system at the height of the lockdown, which brought top-notch scotches and wines to the very doorstep. In the neighboring city of Kanpur, a unique barter system has allowed the rich to trade cartons of cigarettes in exchange for bottles of alcohol.
As the global economy takes an unprecedented hit due to the Covid-19 pandemic, the underground trade across the world has found ways to thrive in the midst of government-mandated lockdowns and social restrictions.
And it isn’t restricted to drugs and alcohol.
Manufacturers of sanitisers, disinfectants, and hydroxychloroquine across North India claim that after the government stepped in to cap the prices of their inputs, they have had to rely on suppliers who charge them five to six times the usual price and demand payments strictly in cash.
Here is a look at various facets of the global underground economy that have demonstrated unique plasticity in some of the toughest of times.
Sophisticated bootlegging and new barter system emerge in India
Much like during non-pandemic times, India has continued to make innovative contributions to the underground economy.
In the initial phase of the lockdown, with alcohol stores shut, bootlegging made a comeback on expected lines. But what made the matter tricky was the government-imposed restrictions on movement, which made procuring alcohol difficult.
“For the wealthy, there were essentially two ways to procure alcohol during lockdown,” a businessman who owns several liquor stores in Lucknow told ThePrint. “So, people who had alcohol sitting at home, especially the business owners, were using it to pay off customers or sometimes oblige a client.”
He added, “Then you had shop managers selling at a premium. You place the order with the manager, and they usually encourage you to order in bulk. During morning hours, when lockdown restrictions were relatively loosened, and people were allowed by the police to step out to buy groceries, these store managers would ask their workers to deliver the said order to the customer.”
Asked how the police failed to curb these activities, a superintendent of police in Lucknow told the ThePrint that all their resources are currently being directed to enforce the lockdown. “It makes it very hard to control the movement of a few alcohol bottles here and there.”
A little away from Lucknow, the industrial city of Kanpur saw the emergence of another unique practice. Since most of the cigarette stores had also closed down, along with alcohol shops, people restored to a barter system to meet their demands. Thus, a bottle of “Teachers” whiskey could be exchanged for a carton of “India Kings” cigarettes.
Speaking to ThePrint, an advertising agency executive said a similar barter system is also at play in Delhi. “You could exchange a brand of whiskey for another one or exchange rum for cigarettes. We ran this barter system using WhatsApp groups.”
Drug dealers devise new delivery methods
While many drug cartels across Latin America — the hub of the global narcotics production — are struggling to supply cocaine, meth, and opioids such as fentanyl to their key markets in the US and Europe, local drug dealers who can source their supplies domestically are seeing a major boom.
The drug dealers are devising new methods to get around government-mandated lockdowns to supply weed and methamphetamine.
ThePrint managed to speak to a few such dealers in the UK.
One of them, who didn’t want to be identified, said he uses the veneer of charity to supply the substances — he dabbles in multiple strains of cannabis, acid, and methamphetamine.
The Leeds resident said he drives around in his van carrying many bottles of water and toilet paper, along with his stash of cannabis. When the police stop him at various check-points, he tells them he is out to donate the items of need to the poor.
And due to the fear of transmission, he extends a plastic tray that has “99 per cent isopropyl alcohol in it for customers to sanitise their hands”. While some people pay cash, the dealer prefers online transactions or bitcoins.
Once he has received the payment, he throws the pack of weed as far as possible — to prevent direct contact.
The dealer told ThePrint that he has seen his income grow by nearly 75 per cent since the lockdown started, with his clients mostly in the Yorkshire and Greater Manchester counties.
There has also been a spike in prices. According to The Sun, in some parts of the UK, the rate of an ounce of cannabis has gone up from 100 pounds to 250 pounds.
Another dealer who works out of London, and didn’t want to be named, told ThePrint that he mostly delivers cannabis using the Royal Mail, the government owned postal and courier service that has not shut its operations during the lockdown.
Similar stories of increasing sales are being reported from other parts of Europe.
“In Berlin, a city famed for its hedonistic nightlife and techno clubs like Berghain, dealers such as Dave are adapting to serve the large number of clubbers who find themselves stuck at home with little to do but get high,” noted a Financial Times report.
Some cannabis dealers in the UK who deliver to India told ThePrint that they are currently unable to do so, given most international courier services have been shut.
But while the supply of cannabis and other substances has remained tight in India during the lockdown, some domestic dealers who operate on the “dark web” — deep hidden internet platform used for sale of narcotics — continue to supply “shrooms, acid, and MDMA”, but at a much steeper price, some users told ThePrint.
Meanwhile, they added, the much cheaper street cannabis also continues to be sold, though the dealers now put a “minimum order” condition.
According to a report in The Hindu, India’s Narcotics Control Bureau (NCB) was part of an international operation launched in December 2019 for joint intelligence gathering on international postal, express mail and courier shipments containing drugs. The agency made an arrest in Lucknow in February this year, said the report, which quoted the NCB as saying that investigating criminal activities rendered over dark web is tough due to end-to-end encryption.
While no official details are available at this moment on the dark web activities going on during the lockdown, the users ThePrint spoke to said scammers are now also selling fake products. A customer said he recently paid a dealer Rs 30,000 for an ounce of cannabis, but was delivered five pills of paracetamol.
In the narcotics production hubs in Mexico, Venezuela, and Columbia, operations have ceased due to the closure of most shipping routes and travel. While most of these major producers would have to suffer substantial revenue losses due to the pandemic, gangs and cartels here are now doubling down on diversification. Drug traffickers in Venezuela and Columbia are indulging in more illegal mining, Mexican gangs are resorting to more fuel heft and human trafficking, according to Alejandro Hope, a former Mexican intelligence officer.
Mafia does welfare, but there’s always a price
On the southern Italian island of Sicily, the brother of a Mafiosi was seen distributing food among the poor in early May. A little to the north in Naples, the Camorra, one of the country’s oldest and largest organised crime syndicates, has been distributing sugar, coffee, and pasta.
In Mexico, cartel members were seen distributing food parcels even while flashing their guns. The daughter of El Chapo Guzman — the former boss of the Mexican Sinaloa cartel — was seen distributing toilet paper.
In Asia, members of Inagawa-kai — Japan’s third largest crime syndicate — collected over 30,000 masks and sent them to charities in China.
With governments struggling to reach all sections of society, crime organisations have halted turf wars and stepped in to fill the void, Federico Varese, Professor of Criminology at Oxford University, told ThePrint, but added that these acts are not exactly altruistic in nature.
“Mafiosi act with the interest of the organisation at heart,” Varese said. “Their gifts are favours to be paid back at a later time, rather than an act of charity or the right of a law-abiding citizen.”
The mafia always comes back and extracts a price for its assistance, Gaspare Mutolo, a former Sicilian mafioso who became a key witness in multiple mafia cases, told the BBC.
“When your children are crying because there’s no food on the table or if your business is about to go bankrupt you don’t think about the consequences of getting help from the wrong people. You just think about surviving,” he said.
But as elections approached, Mutolo said, he would go to people he had helped and say, “Ciao bella, remember me?”
But Varese said the mob stepping in during an economic crisis is nothing new. Lucky Luciano, the father of organised crime in the US, had famously suspended the collection of “mob tax” in New York City during the Great Depression.
“Such episodes are a reminder that some organised crime groups seek a precious, intangible currency during a crisis, namely legitimacy and popular support. Democratic institutions need to come to the rescue of ordinary people quickly and effectively, otherwise unsavoury actors might step in,” Varese said.
Illicit economy of sanitisers, masks, and medicines
Once the coronavirus pandemic struck India, it led to a major hike in demand for sanitisers, disinfectants, hydroxychloroquine, and face masks. As a result, not only their prices but also the prices of their inputs started to go up.
Eventually, the government stepped in, and imposed the Essentially Commodities Act to cap the prices of these products and their inputs. But several manufacturers ThePrint talked to claim that these price caps were hardly being imposed in practice.
“Isopropyl alcohol, required for surgical spirit and sanitisers, used to cost us Rs 70 to Rs 80 a litre. Now we are buying it for around Rs 400. And even then, procuring it is very hard,” a generic drug manufacturer told ThePrint. “They bill us for the government-mandated price, and then we have to pay them the rest of the amount in cash.”
Meanwhile, in other developing countries such as Africa, there has been a surge in fake medicines related to coronavirus, according to the World Health Organization. “With the world’s two largest producers of medical supplies — China and India — in lockdown, demand now outstrips the supply and the circulation of dangerous counterfeit drugs is soaring,” noted a report in the BBC.
With the people stuck at home increasingly stockpiling medicines, developing markets have been flushed with fake medicines. “From Malaysia to Mozambique, police officers confiscated tens of thousands of counterfeit face masks and fake medicines, many of which claimed to be able to cure coronavirus,” noted the BBC report.
The problem is especially acute across African countries. The Democratic Republic of Congo and Cameroon have reported large quantities of fake chloroquine to be circulating in their markets.
Beyond mafia, drugs, and fake medicines, if there is one thing that depicts the true global nature and scale of the underground economy, it is cybercrime.
The lockdowns have forced people to stay at home and moved interactions online. This has led to skyrocketing cybercrimes, with the perpetrators adopting newer and innovative techniques.
Cybercrime organisations come in various shapes and sizes, and they range from large organised groups to independent actors, according to Ana Gomez Blanco, a cybercrime expert at BBVA, a Spanish multinational financial services provider. And these cybercriminals provide a variety of services such as the use of botnets — “providing networks comprising hosts of ‘zombie’ computers and IT equipment infected by malware” — and selling ready to use malwares and viruses.
“In recent weeks, the number of attacks has skyrocketed, fuelled by fear of Covid-19 and exacerbated by a reduced level of security at some companies (resulting from the unexpected and rapid rise in tele-working),” writes Blanco.
Even in India, cybercrime has been on the rise. In just first four weeks of lockdown during March-April, the number of cyberattacks went up by 86 per cent, according to home ministry figures. “We have received over 8,300 complaints from individuals across India and NRIs who have donated thousands of dollars into fake account,” a ministry official told Reuters.
In India and across the world, full spectrum of cybercrime techniques, such as the use of social engineering, trojan, spyware, ransomware, and phishing, are being put to use by cybercriminals.
Moreover, coronavirus-themed cybercrime is also taking place. “Cybercriminals are taking advantage of the fear and uncertainty surrounding the coronavirus pandemic as well as the increased time spent online during social-distancing to trick people into releasing sensitive information,” noted a report in Research and Markets.
And such phishing attacks have been “increasing at almost the same frequency as the pandemic”, writes Blanco.
Surge in illegal global financial flows
As countries struggle with economic downturns, governments are pushing a lot of money into the system. Often this money needs to pushed through quickly, which leads to suspension of transparent mechanisms, creating an environment for “bribes, kickbacks, and contract malfeasance”, according to Jodi Vittori, an expert on the linkages of corruption, state fragility, illicit finance at Carnegie Endowment for International Peace.
Moreover, foreign assistance meant for responding to the pandemic is highly prone to misappropriation in developing countries.
“Much of the misallocated funds will be laundered and moved through the international financial system,” writes Vittori. And what makes matters worse is that the pandemic is making oversight by regulators and local police much harder, as these agencies are suspending some of their essential services at this time, he adds.
While the exact figures are hard to predict, several global agencies are pointing to the increasing risk of illicit financial flows. “The response to the Covid-19 pandemic is likely to increase corruption risks and practices that contribute to illicit financial flows, and may also introduce new risks,” notes a policy brief by the World Bank’s governance initiative.
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