Money Laundering and Drugs in Romania and Spain

[Danny Jarman]

Found this while digging around. From 1998...

EMBARGO BUSTING:
SERB ECONOMY STAYS AFLOAT WITH THE HELP OF CRIMINAL NETWORK:
GANGS OF SMUGGLERS, THIEVES ROAM EUROPE, KEEPING SHOPS IN BELGRADE FULL:
A SOURCE OF HARD CURRENCYby Roger Thurow
/Staff Reporter of The Wall Street Journal/
BELGRADE, Yugoslavia -- The Serbs, it would seem, have pulled off the
economic miracle of the ages.
Inflation, which at the beginning of the year was doubling every
several hours, is now down next to nothing. The dinar, as worthless
as old gum wrappers a few months ago, is now pegged by the government
to equal the German mark. And stores, once barren, now offer a
dazzling array of imports, from Pampers to Air Jordans. All this
in a country supposedly ravaged by three years of war in neighboring
Croatia and Bosnia-Herzegovina and an international trade embargo.
"How do we do it?" asks the Yugoslav central bank director, Dragoslav
Avramovic. "It's 90 percent luck, 10 percent wits."
And a whole lot of help from an international criminal underworld.
ARMY OF PICKPOCKETSAlthough the government has restrained spending and
stopped
round-the-clock printing of money, its newfound fiscal discipline
is being propped up by a veritable army of pickpockets, drug dealers,
smugglers, extortionists and gangsters at work throughout Europe.
In essence, the gangs generate the cash and commodities needed
to keep this Serb-dominated country and its war effort in Bosniaafloat.
The thievery and scams provide a constant flow of foreign
currency into the country that is vital to the government's effort
to support the dinar. And the smuggling of everything from
oil and weapons to cigarettes and pork chops has relieved the
government of having to finance sanctions-busting imports, an
activity that originally helped pusah inflation to dizzyingheights.
All of this has, up to now, blunted the sting of United Nations
sanctions and created an illusion of plenty in an otherwise
impoverished land, allowing President Slobodan Milosevic to
stave off social unrest and remain all-powerful despite
deafening international condemnation.
Government ministers indignantly reject the suspicions of
Western police and diplomats that the government is in cahoots
with the criminals, who the ministers say are controlled by
paramilitary leaders or mobsters. Mirko Marjanovic, the new
prime minister. says he is a crusader against what he calls
"war profiteers." Yet as he speaks, he proudly offers a visitor
smuggled Kent cigarettes and his secretary pours a glass of
scotch. "Twelve-year-old Chivas Regal," Mr Marjanovic says.
"You can buy it here in the stores."SUBVERSIVE LEGACY
The emergence of a criminal underworld, allegedly operating
at least tacitly in tandem with the government, is one of
the more subversive legacies of the war over the breakup of
Yugoslavia, which now consists only of Serbia and its smaller
ally, Montenegro. (Several other republics, including Croatia
and Bosnia have declared independence.)
European law-enforcement officers worry that Yugoslavia
may remain a haven for the underworld long after the war is
over. They say that the country, starved for foreign currency,
has become a handy laundromat for "dirty" money from criminals
throughout Europe. And, they add, rampant smuggling also has
become an attractive cover for drug traffic moving from Turkey
and the Middle East into Europe.
In Vienna, for instance, Austrian police and Interpol agents
recently announced the arrests of 35 Yugoslavs who, they claim,
are part of a Europe-wide "currency creation scheme" that
employs pickpockets and petty thieves to steal cash, traveler's
checks and credit cards and to rob banks and houses. In Austria
alone, they reckon, the ring has accumulated more than $10 million
in cash. And with Austria being the smallest country stung by the
scam, investigators say the total -- including loot from Italy,
France and Germany -- is much higher.
The police are still following the money trail, but they believe
the cash is either taken directly to Belgrade or used to buy goods
that are smuggled into Yugoslavia. The arrested Yugoslavs, who
would from time to time retreat to Belgrade when the police trail
in Western Europe got too hot, "couldn't eat or drink all the money
themselves," says Walter Pretzner, director of the organized-crime
division of the Austrian police. "It's a huge money siphon and
there's no money there. So you ask yourself, what happened to it?
Where did it all go?"
If not Belgrade, then, most likely to Timisoara, Romania. This
ancient and decrepit city near the Serbian border is now a center
of sanctions-busting. It is teeming with Serbs, smugglers and
shadowy businesses run by, among other characters, former officers
of Romania's Securitate, the dreaded security force of executed
dictator Nicolae Ceausescu.
Piles of money, rarely seen in Romania, are now appearing as if
by magic. One day last August, a Syrian businessman whose company
reportedly trades with Serbia walked into a Timisoara bank carrying
two leather briefcases stuffed with 800,000 marks in cash (about
$500,000 under current exchange rates). The next day he returned
with two bodyguards and $1 million in U.S. dollars.
The 30-mile stretch between Timisoara (pronouced Ti-mee-SCHWAR-a)
and the Serbian border is a porous crossing where, smugglers say,
Romanian and Serbian customs agents are easily bribed and
sanctions-monitors appear only sporadically. It is there that
everything from guns to glass makes its way to and from Yugoslavia
in violation of the two-year old U.N. embargo, which bans all trade
except for medicine, food and humanitarian aid. Highway E70 has
also become an oil and gasoline pipeline.