There's one recession-proof industry... organised crime

THEY are the Mob who like to say "Yes".

Scotland's criminal gangs have spotted a new business to help them through the economic downturn: banking.

Senior detectives are investigating suspicious loans made to companies that can no longer get finance from high street institutions.

Alan Cunningham, a detective chief inspector at the Scottish Crime and Drug Enforcement Agency (SCDEA), said gangland "bankers" had been quick off the mark to fill the gap left by traditional lenders. "We are already seeing this across a number of business sectors," he said.

The apparently recession-proof criminals will want a lot more than sky-high interest for their loans with control over businesses their real goal.

Organised crime groups, experts said yesterday, have always fared well when the economy slows down. They see financial gloom as a huge opportunity to expand as legitimate businesses suffer.

Cunningham said: "Economic difficulty fosters uncertainty and can lend itself to risks being taken to maintain profitability that may not otherwise be taken. Organised criminals will look for these risks and at ways of exploiting them for illegal purposes.

"If bona fide financial institutions are reducing the amount of credit they are willing to offer, it may be tempting, particularly for smaller businesses, to accept offers from illegitimate or quasi-legitimate sources. This may well be linked to organised crime and the ultimate price will be heavy for those tempted to go down this route."

Criminal gangs – which cost the UK economy an estimated 40bn a year – have traditionally targeted cash-in-hand businesses such as private hire companies, tanning salons and petrol stations to launder their profits. Scotland's biggest crime families alone have had their business interests conservatively valued at more than 1bn. But they remain desperate to infiltrate firms that have the skills they need, including accountants and lawyers. "Unfortunately," said Cunningham, "we know that there are a small number of unscrupulous professionals in various sectors of our economy who provide assistance to organised criminals in these areas."

No business, crimefighters reckon, should assume it is immune to the unwelcome attention of criminal "bankers".

Simon Mackenzie, of Glasgow University, specialises in the activities of Scotland's criminals and reckons the Mob will see ups and downs in the coming economic storm."Is it recession-proof?" he asked. "Well, I don't see organised crime groups going out of business due to the downturn."

Like Cunningham, Mackenzie highlights the threat to Scotland's small firms. "As legitimate businesses go to the wall, they make better targets for corruption by organised criminals," he said. "Owners may be more willing to accept bribes or submit to threats accompanied by cash payments during a recession than they would otherwise be. It's easier to be moral when your livelihood doesn't depend on it.

"There might also be increasing opportunities for organised crime groups to buy up bombed-out local businesses, helping them to infiltrate the legitimate economy or operate front companies to help launder their money."

But criminal gangs have other ways to thrive in a recession. Mackenzie said: "People may become more willing to buy counterfeit goods – CDs, DVDs, knock-off clothes, etc – because originals seem too expensive."

Then there are drugs, the core business for most of Scotland's organised crime groups. "An addict doesn't want less heroin because there's a recession," one drug insider said, yesterday. Economists have a word to explain demand for highly addictive substances: it's "inelastic"; demand doesn't go down in line with affordability. Opinion, however, is divided on whether a recession brings higher or lower demand for all narcotics.

Criminals also have another advantage during a recession: they find it easier to hire. Mackenzie yesterday warned that ex-convicts may find it harder to go straight in hard economic times. A stable job and family, after all, is a major factor in getting out of crime. Government programmes with offenders, moreover, may be cut back, the expert warned.

There is one downside for the gangs: people-trafficking may become far less lucrative. Mackenzie said: "UK-based organised criminals might find that the country has become a less attractive place for people to come to illegally to work, so they might find they have less business bringing people in."

Reported crime in Scotland is now at its lowest level for a quarter of a century, since the last major recession, and has been falling for the last decade and a half. But the ups and downs of crime haven't always matched the rises and falls of the economy, Mackenzie stressed. Crime – including organised crime – seems to thrive most when the gap between the rich and poor is greatest, he said.

"Relative deprivation and inequality tend to be better correlates of crime than poverty," he said, "so these would be the indicators to watch in a recession – whether the country becomes more polarised in income and wealth terms."