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Coronavirus Pandemic Creates Lucrative Opportunities For Organized Crime In Italy

STEVE INSKEEP, HOST:

Among its many other effects, the pandemic created opportunities for organized crime. Police in Rome say today that they have dismantled a loan sharking operation. It targeted small and medium-sized businesses during the lockdown. NPR's Sylvia Poggioli reports.

SYLVIA POGGIOLI, BYLINE: One of the very first to warn that criminals were exploiting the COVID-19 crisis was Pope Francis.

(SOUNDBITE OF ARCHIVED RECORDING)

POPE FRANCIS: (Speaking Italian).

POGGIOLI: He denounced those people who take advantage of the needs of others and, he added, sell them out to the Mafiosi and loan sharks.

Overall, crime plunged during the lockdown, according to the Italian Ministry of the Interior, but there was one notable exception - loan sharking, which grew by almost 10% in the first quarter. Lack of liquidity has led many businesses to the edge of bankruptcy. One worried businessman is Tonino Ciardullo.

TONINO CIARDULLO: (Speaking Italian).

POGGIOLI: "I'm afraid," he says, "I could fall back into the loan sharks' net." Ciardullo's shop in Rome's Monte neighborhood sells wines and gastronomic specialties from the southern Calabria region. For several years, he was a loan shark victim.

CIARDULLO: (Speaking Italian).

POGGIOLI: When you need cash but banks slam the door in your face, he says, you start asking your neighbors and friends if they know someone willing to make a loan. The problem is you have to pay it back with 10% monthly interest, and you can't. Then, says Ciardullo, things really get ugly.

Ciardullo finally reported his extortionist to the police in 2016. His business then did well again, but the lockdown has hit hard. He's unable to pay his 2,000-euro monthly rent and fears losing his business. Loan sharking is a deeply entrenched crime, hard to prove and hard to report. Victims can get help from an antiusury watchdog organization in Rome. Its president, Luigi Ciatti, says that between March and April this year, his group has seen a 30% increase in requests for assistance from victims. For a long time, says Ciatti, extortion was the name of the game - not so anymore.

LUIGI CIOTTI: (Speaking Italian).

POGGIOLI: Today, the real goal of loan sharking is to buy up businesses on the verge of bankruptcy, says Ciatti, so organized crime groups can use them to launder massive profits from drug trafficking and other illicit activities.

Mafia expert Roberto Saviano has been struck by the speed with which crime bosses have been buying up businesses, even before they declare bankruptcy.

ROBERTO SAVIANO: (Speaking Italian).

POGGIOLI: "Because these bosses know that sooner or later," says Saviano, "there's going to be a windfall of coronavirus recovery funds from the Italian government and from the European Union. It's a double win. You get to take over a failing business and pocket state aid." Several economists are urging the government to pump cash into the ailing economy fast. They say time-consuming paperwork that ensures everything is above board should be suspended.

ANNA SERGI: The risk now is that we do things in a rush and that these new funds, they don't come with enough guarantees of transparency and accountability control.

POGGIOLI: Anna Sergi is an organized crime expert at the University of Essex. She says, ideally, all business sales and applications for recovery funds should be put under even more intense scrutiny to meet stringent anti-money laundering standards.

SERGI: No state is able to do this. It's too costly. It's too expensive.

POGGIOLI: The danger, says Sergi, is that either the emergency funds get stuck in red tape or the crime bosses will reap much of the recovery benefits.

Sylvia Poggioli, NPR News, Rome.

(SOUNDBITE OF BERRY WEIGHT'S "YETI'S LAMENT") Transcript provided by NPR, Copyright NPR.