Sacramento-California is the top target in the U.S. for international criminal enterprises that operate from safe havens in Eastern Europe, Africa and China, according to a report released Thursday.
Along with trafficking in drugs, guns, and people, criminals are also turning to cyber crime against wealthy, innovative businesses and financial institutions in the state, Calfornia Attorney General Kamala Harris said in the report.
“California is a global leader on a number of fronts and, unfortunately transnational criminal activity is one of them,” the report states.
Harris said the report is the first to outline the effects of international criminal organizations on California residents and businesses.
“These organizations have taken advantage of the technological revolution of the last two decades, as well as advancements in trade, transport and global money transfers, to substantially increase the scale and profitability of their criminal activities in California,” the 181 page report states.
It says California leads all states in the number of computer systems hacked or infected by malware; victims of Internet crimes and identity theft; and the amount of financial losses suffered as a result of online crimes.
The state also is particularly vulnerable to thefts of intellectual property because of its leading roles in developing new technology and mass-media entertainment.
“Many of these breaches have been tied to transnational criminal organizations operating from Russia, Ukraine, Romania, Isreal, Egypt, China, and Nigeria, among other places,” the report says.
California’s gross domestic product of $2 trillion, significant foreign trade activity and border with Mexico also make the state a target for international money laundering schemes. The report estimates that more than $30 billion is laundered through the state economy each year.
Some are filtered through legitimate businesses or by using virtual currencies such as bitcoin. But the report says backpacks and duffel bags suffered with cash have been seized more frequently since Mexico began toughening its money-laundering laws in 2010.
Seizures of bulk cash increase 40 percent by 2011 in California, which now leads the nation in the number of currency seizures.
California should alter state law to make it easier for prosecutors to crack down on money laundering, the report says. Unlike federal law, state law requires prosecutors to prove that a suspect deliberately carried out a financial transaction in a way designed to hide the fact that the money came from or was used for a criminal activity.
The report also recommends that the Legislature change state law to let prosecutors temporarily freeze the assets of transnational criminal organizations and associated gangs before seeking an indictment.
