Principal-Agency Theory in Illegal Markets: Cooperation and Conflict Among Chinese Loansharks

There are management and organizational problems common to both legal and illegal businesses, such as moving one party to act in the interest of another rather than his own. In principal-agency theory, the party that wants someone else to do a job on his behalf is called the “principal” and the other party is called the “agent”. Principal-agency theory tries to find solutions to real and potential conflicts that arise from such transactional arrangements. We believe principal-agency theory has great potentials for understanding the operation and interpersonal relationships of criminal enterprises, in addition to the structural arrangements (e.g., a disorganized crime market) and the social network perspectives. Using a case study of Chinese loan sharking and cannabis cultivation in the Netherlands, we seek to make a theoretical contribution to existing literature on organized crime by focusing on how different individuals within a criminal enterprise negotiate the most efficient transactional arrangement in a principal-agent relationship amidst the uncertainties of an illicit market environment. We specifically look at four phases of the criminal enterprise studied: the selection of agents by the principal, attempts to bind these agents to the principal, potential conflicts and finally the solution of any problems. Incidentally, our study also gives insight in the less well-researched topic of loansharking.     

人质劫持:研究偷渡犯罪时易被忽略的一面

本文从研究偷渡犯罪出发,对偷渡过程中“偷渡客”被劫持的情景,以及“偷渡客”家属被勒索钱财的情况进行了研究。特别从中外比较的视角,以及中荷刑罚的一些个具体规定,将偷渡犯罪同人质劫持犯罪及勒索钱财犯罪联系在一起,以期解决司法中的矛盾与困难和立法中的缺陷与不足。同时提醒相关国家和部门,由于“偷渡客”无合法的地位以及担心受到犯罪人的报复等多种因素,“偷渡客”及其家属虽然受害,但却很少报案。于是在一些国家和部门这类犯罪似乎成为死角,尤其在高利润和不易被发现等因素的驱动下,该种犯罪甚至呈上升趋势,这不能不引起我们的高度重视。     

Taking loan sharking into account: a case study of Chinese vest-pocket lenders in Holland

Chinese organized crime has long been accused of playing an active role in the illicit usury world, except that there are no known empirical studies depicting how it is actually done. A rare opportunity arose when a Dutch police agency seized one set of financial records documenting detailed transactions of a loan shark working incognito inside a Dutch casino. A detailed analysis of these accounting records suggests that the Chinese loan sharks work with a wide range of clients, primarily Chinese but also non-Chinese. Exorbitant interests were levied on the loans and large volumes of cash were loaned out, with the vast majority accounts in good standing. The bookkeeping records revealed a rather smooth business transaction environment, where some customers were acquaintances from connected social networks, while others were not. Although the seized records left some questions unanswered, the case provided a rarepeek into a secretive financial world that has remained largely unknown to the research community.     

Online Public Response to Dutch News About Money Laundering

In this paper we analyze how Dutch Public Prosecution’s press releases about money laundering and underground banking are received by producers and consumers of online news reports. First we take a closer look at how journalists (re)framed six official press releases in 75 news reports. It turns out that journalists do not regularly adopt the success frame that the Public Prosecution uses in its press releases. Furthermore, the role of the Public Prosecution Service or the police is downplayed. The moral message that “crime should not pay” receives no coverage in news reports. Second, we analyze how the news reports generated 276 online comments. We distinguish three ways in which online commenters respond to news reports; they (1) appreciate, (2) downplay or (3) condemn the authorities’ success. Commenters are particularly likely to downplay or condemn the police’s success. When a news report focuses on ‘underground bankers’, commenters often express a negative opinion about the effort to curb money laundering. It also appears that readers did not always understand the use of a term like underground banking.     

Chinese organized crime and situational context: comparing human smuggling and synthetic drugs trafficking

This article criticizes the ‘ethnic’ conception of organized crime and puts forward an alternative view that does not put ethnicity first, but rather social networks and situational context. It focuses upon Chinese organized crime, a phenomenon where the preoccupation with ethnicity is paramount, and compares findings from extensive research into two different transnational criminal activities that are carried out by Chinese offenders in the Netherlands. The first topic, human smuggling, is well researched, whereas research into the second topic, trafficking in precursors (the basic ingredients for the production of synthetic drugs), is largely lacking. The article highlights the major theoretical and empirical similarities and differences between these two criminal activities and discusses the relevance of the main findings for theory and research.     

Correction to: Intergenerational continuity of crime among children of organized crime offenders in the Netherlands

Crime, Law and Social Change -     

Removing excuses in money laundering

Criminals can use financial facilitators to invest their ill-gotten gains without drawing attention to themselves. These facilitators are experts at getting round anti-money laundering procedures. Because of their expertise and unique capabilities they play an important role in criminal networks. It therefore stands to reason that law enforcement focuses on them. That focus often translates in prosecution when laws are broken. However, what can we do to prevent financial experts in breaking the law? In this article the focus lies on the method of removing excuses. This technique is employed in every day crimes but has not been put to the test in the context of organized crime. Interviews with police officers show that the technique of removing excuses could work under certain conditions. However, it turns out that an important differentiation lies in the sort of activities financial facilitators undertake. Not all financial activities take place in the legal financial-economic system. Instead of distinguishing between the three classical phases of money laundering (placement, layering, integration), a two-pronged focus on those who are involved in cash based transactions and those who construct smokescreens on paper is proposed.     

Intergenerational continuity of crime among children of organized crime offenders in the Netherlands

Crime, Law and Social Change - As existing literature on intergenerational continuity of criminal behavior is mainly based on data on ‘general’ offenders and their children, the current...