“Coke on Tick”: exploring the cocaine market in the UK through the lens of financial management

Author:Alexandra Hall, Georgios A. Antonopoulos
Position:Department of Social Sciences, Business and Law, Teesside University, Middlesbrough, UK
Pages:181-199
SUMMARY

Purpose This paper aims to offer detailed preliminary data and analysis that focuses specifically on the structures and financial aspects of the UK cocaine market. Design/methodology/approach This paper is based on in-depth interviews with - among others - four active criminal entrepreneurs involved in powder cocaine supply in the UK. Furthermore, along with a review of relevant... (see full summary)

 
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“Coke on Tick”: exploring the
cocaine market in the UK through
the lens of nancial management
Alexandra Hall
Department of Social Sciences, Business and Law, Teesside University,
Middlesbrough, UK, and
Georgios A. Antonopoulos
Teesside University, Middlesbrough, UK
Abstract
Purpose This paper aims to offer detailed preliminary data and analysis that focuses specically on the
structures and nancial aspects of the UK cocaine market.
Design/methodology/approach This paper is based on in-depth interviews with – among others –
four active criminal entrepreneurs involved in powder cocaine supply in the UK. Furthermore, along with a
review of relevant literature and open sources, in-depth interviews were undertaken with a range of experts
with knowledge of the cocaine market. These experts include law enforcement agents and independent
academics/researchers who have researched the cocaine market in the UK and internationally.
Findings The cocaine market is a fragmented business dependent on networks of individual
entrepreneurs and groups. At the core of collaborations often lie family, ethnic or kinship relationships and
relationships forged within legal businesses and in prison. Capital investment practices in this market are
exible, “messy” and mutating, and money comes from a range of different sources. Credit is an integral
feature of the cocaine business in the UK. The nancial management of the cocaine trade is a result of (and
reects) a number of factors, such as the fragmented and decentralised nature of the trade.
Originality/value Empirical research into nancial aspects of organised crime manifestations is
important for the assumptions that are part of public debate to be tested. In addition, understanding the
broader range of nancial aspects of organised crime is an important component of the process of crimes for
gain and can contribute to both better investigation and better prevention.
Keywords Financial management, Organised crime, Cocaine market, Crime money
Paper type Research paper
1. Introduction
In the 1990s, a number of household surveys found that all four countries in the UK had levels
of illicit drug use that were several times the size of any other European country (Parker,
2001). Increasing in popularity and decreasing in price in the late 1990s and early 2000s,
cocaine became a sought after and more readily available drug among this drug-experienced
population. By 2011, there were over four million users of cocaine in Western and Central
Europe, within which the UK – closely followed by Spain – had the highest prevalence rates
The authors acknowledge support in the form of Grant HOME/2011/1SEC/AG/4000002566 (“FINOCA”)
from the European Commission that has funded the research. The authors are indebted to Craig
Ancrum (Teesside University, UK) for his help in the data collection process and to Atanas Rusev
(Centre for the Study of Democracy, Bulgaria) for his valuable comments on an earlier draft. Parts of the
paper were written when the second author was a visiting fellow at the Centre for Criminological
Research, Faculty of Law, University of Shefeld (July 2015).
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1359-0790.htm
Coke on Tick
181
Journalof Financial Crime
Vol.24 No. 2, 2017
pp.181-199
©Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-07-2015-0037
(Kilmer and Pacula, 2009;EMCDDA, 2013;UNODC, 2013). Statistics from 2003/2004 valued
the UK’s illicit drugs market at £4-6.6bn. Powder cocaine accounted for an 18 per cent share
of expenditure in the market, whereas crack cocaine had a 28 per cent share (Matrix
Knowledge Group, 2007;McSweeney et al., 2008;EMCDDA, 2012; see also Home Ofce,
2007). Both powder and crack cocaine are classied as Class A drugs in the UK. Under the
Misuse of Drugs Act – which determines sentences by the class and weight of the drug –
maximum sentencing for supply is life imprisonment (Fleetwood, 2011,2014). Yet, despite
the risks involved, the sizeable demand results in large amounts of cocaine entering Britain,
with various networks, means of distribution and sources of nancial investment all playing
a part in the process.
Some research is available on the nancial management of drug markets in specic
contexts internationally (Reuter et al., 1990;Levitt and Venkatesh, 2000;Naylor, 2004;Brå,
2007;Skinnari, 2010;Kruisbergen et al., 2012), offering a relatively sound understanding of
nance-related issues, with an emphasis on prices, costs of doing business (Caulkins et al.,
1999;Moeller, 2012), investments and money laundering (van Duyne and Levi, 2005).
However, little research has been conducted on the nancial management of the cocaine
market, or indeed other illicit markets, in the UK (Antonopoulos and Hall, 2015). This is
despite the fact that “proceeds of crime” and “tackling criminal nances” have been a priority
for policymakers and law enforcement agencies both in the UK and internationally (FATF,
2012;NCA, 2015;HM Government, 2015). Exceptions to this include two broader studies
funded by the Home Ofce, one exploring middle-market drug distribution (Pearson and
Hobbs, 2001) and the other the illicit drugs trade more generally (Matrix Knowledge Group,
2007), which offer some information on nancial aspects of the cocaine market.
This paper aims to offer detailed preliminary data and analysis that focuses specically
on the structures, actors and, most importantly, nancial management of the UK cocaine
market. According to Kleemans (2015, p. 213):
[…] empirical research into nancial aspects of organised crime is very important to test the
assumptions that are part of public debate, but are often taken for granted, not explicated, and put
to the empirical test.
In addition, understanding the broader range of nancial aspects of organised crime is an
important component of the process of crimes for gain and can contribute to more effective
investigation and prevention (Antonopoulos et al., 2015;Levi, 2013). Although it is estimated
that the crack cocaine market in Britain accounts for a much larger proportion of cocaine
expenditures and up to “80 per cent of all primary crack episodes in Europe” (Kilmer and
Pacula, 2009, p. 30), the main focus of this paper is the powder cocaine (cocaine
hydrochloride) market. This is because over a ve-month period from November 2013 to
March 2014, we gained access and conducted in-depth interviews with four active criminal
entrepreneurs involved in powder cocaine supply in the UK[1]. The sample of criminal
entrepreneurs interviewed is relatively small. However, bearing in mind they were active in
the market at the time of interview and were accessed via the rst author’s personal network
without any connection to an institutional setting, the research provides valuable in-depth
accounts that shed light on some of the nancial aspects of the cocaine market in ways that
might have been more difcult to capture if the entrepreneurs had been accessed via the
criminal justice system (Matrix Knowledge Group, 2007) or drug treatment facilities (Moyle
and Coomber, 2015). Furthermore, alongside a review of relevant literature and open sources,
in-depth interviews were undertaken with a range of experts with knowledge of the cocaine
market to offer richer empirical evidence and analysis. These experts included law
enforcement agents from the Police, Her Majesty’s Revenue and Customs (HMRC), the UK
Border Force and the National Crime Agency and independent academics/researchers who
JFC
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