The State, Trends and Forecast of Russian Crime in the Context of the Coronavirus Pandemic

This report was prepared for discussion at Towards a More Safe and Secure World Master Seminar: A Multi-Regional Project (October 27 – December 9, 2020), sponsored by the US Department of State’s Bureau of Educational and Cultural Affairs.

The Covid-19 pandemic is disrupting globalisation and temporarily disorienting the criminal underworld. Following the imposition of curfews and quarantines affecting more than two-thirds of the global population, many countries experienced a temporary lull in violent crime. Yet there are signs that criminal organisations are adjusting to the new normal and making an opportunity out of this crisis. Meanwhile, criminals are migrating online like the rest of us to where the action is. If left to their own devices, they could make the world a more dangerous place.

Contrary to the pessimistic forecasts of futurologists in the wake of Covid-19, a landslide increase in crime in Russia, including organised crime, is yet to materialise. This is understandable. Four months of self-isolation, coupled with access control and administrative fines have played a key role in limiting the volume of domestic crime. According to the Russian Ministry of Internal Affairs, through the first nine months of 2020 there have been minor, almost insignificant changes to the volume of crime – up 1.2 percent (to 1.5 million registered incidents). It is true that the increase in crime occurred across 56 of the 85 regions of the country. In this respect, the regions of Central, Volga and Siberian federal districts of Russia were at the “forefront” of this increase. Most of the recorded crimes were committed in cities and were associated with theft of other people’s property. Material damage in the investigated criminal cases amounted to 392.2 billion rubles (USD 5.2 billion), which is 20.2 percent less than last year.

However this criminal “lull” has its negative sides. Despite the decline in material damage, the number of citizens who died at the hands of hardened criminals remains significant: over 17.5 and 27.1 thousand people, respectively. While the total number of serious and especially serious crimes increased by 13.8 percent (up to 421.6 thousand). In this regard, terrorist and extremist acts, fraud, extortion, kidnappings, rape, banditry, organised crime and the production and transfer of drugs have increased.

The general detection of crimes, which dipped as much as 3.5 percent (or 632 thousand), and for serious crimes, by almost a third, is also alarming. Among these crimes were 101 murders and attempted murders, 407 attempted acts of causing grievous bodily harm, 319.1 thousand thefts, 6.4 thousand robberies and 463 armed robberies. The worst situations in relation to disclosure of criminal activity are in the North Caucasian, Volga, Siberian and Far Eastern federal districts.

The increase in organised crime is, so far, minimal – about 2.4 percent, or 15 thousand incidents. However, most of this increase relates to serious and especially serious crimes, for the commission of which only 7.8 thousand persons have been arrested, including 51 minors. Within the studied time frame, members of organised crime groups (OCGs) committed 75 violent crimes (including 18 murders and 39 kidnappings), 7.6 thousand property crimes  (mainly thefts and frauds), 54 acts of banditry and 284 “organisations” of criminal associations. Given the difficulties in identifying and solving such crimes, unwillingness of victims (and witnesses) to cooperate with law enforcement officers due to distrust, as well as extensive corrupt ties held by many OCGs, the number of groups and the volume of their activity can be much higher than stated in reports.

As for “white-collar” criminals and corrupt officials, for them, it seems little has changed. Over the past 9 months, the crime curve in the sphere of economic activity (Chapter 22 of the Criminal Code) increased by almost 3 percent (to 31.4 thousand), while the number of corruption crimes (Chapter 30 of the Criminal Code) went up by 6 percent (to 12.4 thousand). Notwithstanding this the number of bribery cases increased by 8.5 percent and exceeded 3.5 thousand, of which over 2 thousand were large-scale. Petty bribery (less 10,000 rubles or USD 130) and commercial bribery increased marginally, which is not surprising in the conditions of economic recession.

As practice shows, it is not just state and municipal officials who take bribes for their illegal services (mainly in the procurement field), but also law enforcement officers (from the policemen to prosecutors). Moreover, the amount of bribes extorted by officials totals tens of millions of rubles. The corruption situation is aggravated by the fact that today, government purchases aimed at preventing and eliminating the consequences of Covid-19 can be carried out from a single supplier. In addition, the pandemic as a force majeure event is taken into account by antimonopoly authorities when considering complaints against state customers, administrative cases, and conducting desk audits.

Migrants (mainly from Central Asian countries), whose difficult fate is frequently highlighted by human rights activists, committed 26.7 thousand different crimes (mostly property and violent crimes), while they themselves were victimised almost 12 thousand times. With persisting conditions of economic stagnation and growing unemployment, combined with the number of cases of fictitious registration of foreigners at places of residence exceeding 34.1 thousand, the experiences and acts of migrants require further monitoring.

While common (street) crime appears to have paused, virtual criminal activity continues to flourish due to lengthy, active Internet use. Since the beginning of the year, the number of cybercrimes has exceeded 363 thousand (half of these are classified as serious or especially serious), reaching 23.6 percent of the all registered crimes. Four out of five of these crimes are committed in the form of theft or fraud, and one in 12 for the purpose of selling drugs. More than half of cybercrimes are committed using the Internet (209.7 thousand), with cell phones accounting for 155.2 thousand cybercrime incidents. Among the regions most affected by cybercriminals along with Moscow and Saint Petersburg, were Ingushetia, Novosibirsk, Sevastopol, Kaluga and Omsk .

According to the Kaspersky Lab, the volume of scam and fraudulent mailings continues to grow in the Russian-speaking segment of the Internet. In the first half of 2020, the company’s experts found over 23 thousand scam websites, which is almost three times more than in the same period last year. At the same time, the number of visits to such sites more than doubled and reached 27 million. A sharp jump in this activity is connected both with the simplicity and high “return” of these schemes which are profiting on greater internet usage due to the spread of Covid-19. Fraudsters are actively exploiting the theme of the pandemic, from fake promises to pay benefits or refunds for a small cash contribution to the sale of personal protective equipment (PPE). If every visit to the scam website, which was finally blocked, entailed deception of at least one user, then the potential amount of damage could exceed 8 billion rubles.

In the first half of this year, the Central Bank of Russia blocked over 9.7 thousand phone numbers from which fraudsters were operating (almost four times more than the same period last year), in addition to 4,700 websites created to steal money from individuals (540 of which were fake websites mimicking real banks). However, the scammers were still able to carry out more than 360 thousand unauthorized transactions and steal almost 4 billion (for same time in 2019 – 2.8 billion) rubles from bank clients. Of this amount, banks were only able to return about 485 million (or 12.1%) rubles to customers. We are talking about transfers of individuals and companies made without their consent using payment cards and other electronic means of payment. Fraudsters stole money when paying for goods and services on the Internet through ATMs and from personal accounts of companies and individuals held in mobile applications or on bank websites. Social engineering for gaining access to user bank accounts has become one of the trends of 2020. Typically, users receive a call supposedly from the bank’s security service which intends to “save” its client from a suspicious payment. To confirm their identity, victims of the scam are asked to say or dial in a code received via SMS from the bank, after which the user’s funds are withdrawn to accounts controlled by the attackers and cashed out. Using restrictions related to self-isolation, cyber fraudsters steal money and bank card details of users using fake websites of popular courier services. Group-IB experts have already sent more than 250 such sites to block by Roskomnadzor. In the course of the study of the “courier scheme”, dozens of criminal groups specialising in this type of cyber fraud were identified.

The InfoWatch Group has published a study of cases of confidential information leaks related to Covid-19. In the first half of 2020, 72 cases of intentional or accidental leakage were recorded in the world with 25 of those falling in Russia. As a result of these leaks, personal data of 3.43 million people in the world and 35.5 thousand in Russia were compromised. Nearly half of all Covid-19-related leak cases in the world have come from healthcare facilities. From state and municipal institutions, as a rule, the data of persons in quarantine, contact persons and violators of the self-isolation regime were leaked. From the high-tech sector, research data on Covid-19 and information from surveillance programs for the population during quarantine were lost, and the transport industry leaked data of passengers who were suspected as carrying the coronavirus. The dominant type of data leaked in all cases was personal data, in Russia, this data accounted for 100% of cases.

Forecasting the further development of the criminal situation amongst the current uncertainty is problematic. If we rely on foreign studies, we can predict an increase in corruption in terms of public procurement of medical equipment, medicines and supplies, as well as the distribution of budget subsidies to support entrepreneurs from various business areas. This is unsurprising, as officials and those affiliated with medicinal products from the regions of the country most affected by the pandemic, which are already allocated billions of rubles from the budget, are especially “rich”. In accordance with the effectiveness of state support measures for bankrupt businesses and poorer populations, economic crime will also change. Based on the experience of previous crises, one can predict an increase in fraud (in the trade and financial spheres), fictitious bankruptcies, illegal business including the production of counterfeit goods, tax and customs evasion, cashing out and money laundering.

Leaders of criminal groups parasitizing on drug trafficking, prostitution and gambling will also adapt to the changed realities. Demand for drugs is as high as before quarantine and the number of drug addicts in the country has not decreased. Only the logistics, prices and range of drugs offered have changed. The greatest demand is for synthetic drugs and marijuana (the prices for them remain the same), distributed through anonymous Internet channels on Telegram and “caches” made by children on the streets (they attract the least attention of the police). Cocaine and heroin, due to the rise in market prices, are purchased less often.

In conditions where there is a shortage of working capital, the demand for shadow loan sharking, which is actively engaged in by large criminal associations through controlled banks, pawnshops, and other financial organisations, will probably increase. Armed clashes between criminal groups over spheres of influence, especially in ethnic enclaves, are also possible. On the trading and transport business sectors, the demand for hunting rifles and traumatic weapons is not surprising.

The full impact of the pandemic – not only on crime but also more widely on society and the economy – is not yet apparent. However, law enforcement should be prepared to be able to respond to the warning signals as the world deals with the fallout of the Covid-19 pandemic. Now more than ever, international policing needs to work with the increased connectivity both in the physical and virtual world. This crisis again proves that exchanging criminal information is essential to fighting crime within the law enforcement community.

Europol has broken down the ways in which Covid-19 is affecting and could affect criminal groups into three phases:

Phase 1 – the current situation: Covid-19-related criminality, especially cybercrime, fraud and counterfeiting have followed the spread of the pandemic throughout Europe, similar to other jurisdictions that have reported a rise in phishing, scam and spam attacks tied to the pandemic, protective equipment or, more recently, stimulus checks. More on the current situation can be read in Europol’s previous reports published in March and April 2020.

Phase 2 – mid-term outlook: An easing of lockdown measures will see criminal activity return to previous levels featuring the same type of activities as before the pandemic. However, the pandemic is likely to have created new opportunities for criminal activities that will be exploited beyond the end of the current crisis. It is expected that the economic impact of the pandemic and the activities of those seeking to exploit it will only start to become apparent in the mid-term phase and will likely not fully manifest until the longer term. Some of the relevant crime areas are human trafficking and alien smuggling, shell-companies in off-shore jurisdictions with weak AML policies and money laundering.

Phase 3 – the long-term impact: Communities, especially vulnerable groups, tend to become more accessible to organised crime during times of crisis. Economic hardship makes communities more receptive to certain offers, such as cheaper counterfeit goods or recruitment to engage in criminal activity. Mafia-type organised crime groups are likely to take advantage of a crisis and persistent economic hardship by recruiting vulnerable young people, engaging in loansharking, extortion and racketeering. Organised crime does not occur in isolation and the state of the wider economy plays a key role. A crisis often results in changes in consumer demand for types of goods and services. This will lead likely to shifts in criminal markets.

Several factors have had a significant impact on serious and organised crime during the Covid-19 pandemic. These factors shape criminal behavior and create vulnerabilities. Based on experience gained during prior crises, it is essential to monitor these factors to anticipate developments and pick up on warning signals.

• Online activities: a greater number of people are spending more time online throughout the day for work and leisure during the pandemic, which has increased the attack vectors and surface to launch various types of cyber-attacks, fraud schemes and other activities targeting regular users.
• Demand for and scarcity of certain goods, especially of healthcare products and equipment, is driving a significant portion of criminals’ activities in counterfeit and substandard goods and fraud.
• Payment methods: the pandemic is likely to have an impact on payment preferences beyond the duration of current measures. With a shift of economic activity to online platforms, cashless transactions are increasing in number, volume and frequency.
• Economic downturn: A potential economic downturn will fundamentally shape the serious and organised crime landscape. Economic disparity across Europe is making organised crime more socially acceptable as these groups will increasingly infiltrate economically weakened communities to portray themselves as providers of work and services.
• Rising unemployment and reductions in legitimate investment may present greater opportunities for criminal groups, as individuals and organisations in the private and public sectors are rendered more vulnerable to compromise. Increased social tolerance for counterfeit goods and labor exploitation has the potential to result in unfair competition, higher levels of organized crime infiltration and, ultimately, illicit activity accounting for a larger share of GDP.

Through its investments in legal economy, organised crime becomes an alternative provider of capital and employment, especially in those countries with a stagnating economy and where institutional intervention is either lagging or insufficient. These ‘red-flags’ constitute a fertile soil for organised crime to establish or reinforce its infiltration. In other words, a crisis represents an opportunity for organised crime: with economies going through hardships, organised crime serves the market with its financial and non-financial resources, helping to satisfy the demand for goods and services among the population. The spread of the Covid-19 pandemic is no exception to this rule and will constitute an opportunity for criminal organisations to further cement and expand their business operations. As recently pointed out by the Italian media, in April 2020 there was already evidence of organised crime’s investments in the production and distribution of ‘epidemic kits’ to face the Covid-19 health emergency. Moreover, organised crime has recently been deemed responsible for the distortion of funds intended for the management of the very same crisis. “With criminal networks looking to profit from the Covid-19 pandemic, it is critical for governments to work together in line with a landmark UN treaty to combat human trafficking, firearms smuggling and other cross-border crimes”, UN Secretary-General António Guterres said recently. Some 190 countries are party to the UN Convention against Transnational Organized Crime, the only legally binding global instrument against this threat. The Convention was adopted by the UN General Assembly in November 2000 and entered into force three years later. It is supplemented by three Protocols against Trafficking in Persons, Smuggling of Migrants, and Illicit Manufacturing of and Trafficking in Firearms.

Any forecasting or foresight exercises are speculative to a degree, but relying on expertise and caution it is possible and necessary to draw up potential developments to formulate responses and reinforce resilience to upcoming security threats, including those from organised crime. Using foresight, we can combat security threats proactively and engage in prevention.

Annex

Identified crimes in Federal Districts of Russia for the first 9 months of 2020

Source: General Prosecutor’s Office of Russia

Alexander Sukharenko is a criminologist and an independent anti-corruption expert from the Far East of Russia. He is the Director of New Challenges & Threats Study Center, based in Vladivostok, Russia. Before that, he worked as a criminal investigator, lawyer and researcher. Alexander is also a columnist in Moscow’s “Nezavisimaya gazeta”  and the Vladivostok business weekly “Konkurent”. He has published over 250 articles, policy memos and book chapters on organized and economic crime, illicit fishing, corruption, and terrorism.

Main Image Credit: Annailarionova, via Pixabay. 

The views expressed in this article are those of the author and do not necessarily reflect the views of RUSI or any other institution.