The impact of financial crimes on democracy and security in a world of conflict – An interview with Nick Court
Journalist: Elisa Verdier
ILYMUN guest speaker Nick Court, Assistant Director of financial crime and corruption at INTERPOL
Elisa Verdier with Nick Court - Credits: ILYMUN Press
Nick Court's journey into financial crime investigation began in 2002 when he joined the UK police as a civilian intelligence analyst, initially focusing on local crimes before advancing to international drug trafficking and corruption cases. Realizing he wanted a more active role, he became a police officer with the City of London Police, known for its expertise in financial crime. Over the years, he specialized in economic crime, fraud, money laundering, and intellectual property crime. His work included tackling digital piracy and counterfeit goods, even leading a major COVID-related fraud investigation. In 2020, he joined INTERPOL, expanding his expertise on a global scale.
Elisa Verdier: To talk about this year’s topic which is democracy and security in a world of conflict, as someone who is involved in anti corruption could you give some examples of current threats to safety or democracy in general related to financial crimes?
Nick Court: There’s two things really, fraud is such a huge problem that it is being seen as a national security threat. Businesses are being defrauded, individuals are being defrauded and the amount of money that's moving from mostly richer countries to poorer countries through fraud is vast. In the UK 40% of all crime is fraud approximately, in the US there has been billions and billions lost in fraud. Therefore it's considered as a national security threat which affects the security of countries so the amount of fraud is massive. On the corruption side, we look at grand corruption which is the corruption of public officials, normally quite high level senior people; politicians or family members of politicians or heads of national agencies. That has a massive impact on the population because the amount of money that these people steal is money that should logically one way or another belong to the public. Often they will be taking money that was destined for big projects, like developing a new national strategy/ infrastructure/power stations and diverting money from those projects which are supposed to help everybody. In fact they just take the money themselves and put it in their own pockets. Obviously arresting these people is important but also trying to find the money is really important because they will almost always hide it outside of their country in multiple different jurisdictions. We’re doing some quite good stuff trying to help countries find those assets. That's the challenge, it's a huge threat especially to developing nations. The theft of millions of euros in France for instance would have a massive impact but it would have a much bigger impact if that amount was stolen from a much poorer country.
Elisa Verdier: More broadly, how are financial crimes a threat to democracy?
Nick Court: Corruption is essentially done for two reasons; power and money. We’ve talked about the money bit with the money going overseas but corruption for the purpose of power means that in reality election results will be different to what they should be. People may be paid to act in one way or another, the individuals involved in corruption all aiming for power ultimately to lead their country, ministry or territory. If they do that successfully, which obviously sometimes they do, that means the people don't get the democratic leaders they should have or that they voted for. Either that they would have elected or wanted to elect. So corruption is really done for power and money, it definitely has a big impact on democracy.
Elisa Verdier: Do you think that democracies are currently more threatened by corruption than ever?
Honestly I don't think I know the answer, I think one positive thing is that probably since more than 20 years ago, civil organizations like NGOs, and charities have probably been identifying corruption and telling people about it. The internet helps, websites, blogs, the ability to move data and intelligence around the world. So I guess we're seeing more information about corruption whereas if we go back before there was so much available information, that we wouldn't have known about it. The difficulty is what does that mean? Does that mean that there's more corruption because we're seeing more of it or does it mean there's less because people are less likely to be corrupt. It's the same debate as fraud, people are reporting more fraud but we don't know if it means it's happening more than it used to. We see it more, it’s the case for other crimes like domestic violence, sexual abuse in many parts of the world. It's not the same as saying it's going up, it's hopefully partly that people trust their ability to speak up about it. The answer is I don't know.
Elisa Verdier: You mentioned the development of the internet; does the development of technology like AI and the internet add more possibilities to fraud?
Nick Court: Yes absolutely, it's massive. It adds more possibilities to the criminals and for people who are trying to enforce the law. A case that I worked on in 2009 was romance fraud. The advice that we gave to the victims is if your new love interest is only willing to communicate with you by email and if they're not willing to voice call with you or video call with you, they're probably fake. That was the advice we gave, because that's what criminals would do. They would have an email conversation or a social media conversation saying “I need money for this reason” and the victims would give money. Now that is different of course because of deep fake technology, AI, large language learning models means that their language is perfect pretty much and it means that they can be on a video call and look and sound like anyone they want. So it's definitely making life easier for criminals, they are better at their job but also we have to remember it makes life easier for police officers and others as well. We can use AI, I was back in London this week investigating fraud and they are using AI to gather information. If you think about your phone that you have right now, if you printed out the amount of information in that it would be pages and pages long. AI helps us to access that, to help see what's relevant on your phone or not. It enables us to assess the vast amount of crime we get. Now in many countries reports of fraud in different parts of the world are connected together, the information is shared between police stations. So technology is a win on both sides, it's an arms race really.
Elisa Verdier: Now on the security side, how has corruption erupted in recent conflicts?
Nick Court: I don't have a perfect answer for this but what I would say is; instability whether it's through conflict or anything else automatically makes it harder for normal processes to work properly. Directorates or units might be shut down, people may be moved on to other things. They might have to go and fight of course, but they might be moved on to other things which means I guess the scrutiny is lower. We saw it in COVID, governments will naturally push resources very quickly towards the new threat. So in COVID, all countries pushed resources to medicine, towards PPE, towards training people and logically that rush meant that probably some of the checks on how you pay for that wouldn't have been undertaken. It's the same for corruption; there’ll be examples in current conflicts where the checks on who can buy, sell weapons and munitions might be a bit lower. Because they need to rush those to the front line, but that gives people the opportunity to find a gap and get involved in that transaction, steal the weapons or take the money that's designed for them. So I don't think I have any specific examples but it's absolutely the case that instability means that there are better opportunities for criminals to find that spot that would otherwise be filled by some government or agency doing more checks than they’re able.
Elisa Verdier: How is Interpol involved globally in different organizations and governments to be more efficient?
Nick Court: One thing we do is training and awareness raising. One of the things that's really important for Interpol is that, obviously we do international collaboration, but the step before that is domestic collaboration. So what you need is within, let's say France, ideally, you need as many agencies cooperating and sharing information, sharing knowledge together, because if they do that, they get a really good idea of what's happening, and then if they share that with us, then we've got a much better chance of success.
So the first step is to have good quality domestic cooperation. One of the things that we do is we try to persuade countries to, for instance, give other agencies access to our databases and to get you to work better together. So in a certain country, you might have the police, you might have an anti corruption investigation team, you'll almost always have a Financial Intelligence Unit, which is where the banks send information on suspicious activity, and you'll have specialist teams, like investigating drugs. And we would say that they need to work really well together, and they need to share information. And then if they do that, then we've got a better chance. That's one thing.
Then the second thing is training, capacity building, and awareness raising. So we go out to countries and we deliver training in how to conduct corruption investigations, financial investigations. We produce strategic reports, which basically tell people what the scale of the threat is. And the reason for that is we try to make sure that the government of each country has got all the information they need so they can understand what the biggest threats are at the moment, because, you know, I'm a cop, and if we're in our own world as a police officer, let's say I've been a drug investigator for my whole career, I will be much more likely If I ever got to the top of the police to divert loads of resources towards drugs, because I know how important it is, and because I've been doing it all the time.
One of the things that Interpol can do is that we can gather all the information that we can from all over the world, and we can tell people in drugs, for instance, what threats are going up and what are going down. So in the US, you would have heard a lot about fentanyl as a drug. So there will be people saying, is fentanyl becoming more of a problem? Does that mean that heroin is becoming less of a problem? Is cocaine staying the same? What about cannabis? And then they can direct their resources the right way, and it's exactly the same with corruption, because we would be saying to people, this is what we think the scale of the threat is. And then we hope that the government ministers, interior ministers, chiefs of police, that we hope that will help them to direct resources in the right way. We do that sort of thing.
And then in terms of engaging with other authorities on corruption. We've got some really good engagement with the UN. It's got the UN Convention against Corruption, and we've got the International Anti Corruption Coordination Center in London, which like lots of countries, come together to do investigations. So we work with those on strategic things. We work with them on investigations as well. So that's our ambition, really, just to try to help countries to understand the threat better and then deal with it when they see it. But corruption is a challenging one, because it's quite hard for people to talk about. You know, corruption, if you're a victim of fraud in France, it’s very likely that the fraudster will be in a different continent, very unlikely for that person to be in France, which means it's quite easy for you to tell the police and the police to tell INTERPOL you know, we've got a fraud here. And actually the criminals are somewhere in another country in corruption. It's different, because corruption is normally a domestic matter, although the assets get moved. So it's quite hard for a country to say we've got a corruption problem, because it's kind of opening the doors a bit. So we try to encourage that to happen more. It is difficult, it's not easy.
Elisa Verdier: You mentioned cooperation and well, awareness for governments within the government. How does that happen when the government itself is corrupt and is rejecting that awareness? How is there intervening?
Nick Court: We, Interpol, can't tell any country to do anything. We don't have the power to investigate anything, we don't have the power to arrest anybody. We don't have the power to order any countryto do anything. We work to support those member countries. So if that corruption that you're mentioning has an impact on another country that asks us to help them, then we can do it. The truth is that we do work with our member countries, and we rely on them to say to us, “we need your help with this thing”. So I guess the truth is that we can't always act, we can't always help. Let's say there's big corruption in a country, a government is corrupt and the outside world wants to do something about it. There's a few ways that you can do it. One is bilateral, which means one country to another. So you could have a bigger, richer country in some way, kind of point a finger and tell them to do things, and maybe that would come with strings attached. Maybe aid would be reduced if they don't, or maybe aid would be increased if they did do something, right? So that's one option, and sometimes that works and sometimes it doesn't work so well. The other option is international organizations like Interpol, like the UNODC, and we're not better or worse than from country to country, but we are different. And one of the reasons we're different is that these countries have chosen to be members of Interpol. They've chosen to be members of the UN, they pay money to be members. Sometimes we find that it may be easier for countries to listen to us than the bigger countries. We can advise and we can suggest and we can strongly recommend things, but we can't tell anyone.
Elisa Verdier: So just to finish up on a general question about what we can do as people, as individuals, in our everyday lives, to fight against corruption, to avoid it being a threat to our democracy and security?
Nick Court: Yeah, as an individual, I just think acting ethically is just really important, I think, if you've got ethics and morals as a human, and if you make sure everyone knows that you've got ethics and morals, then that will go a long way. And as you move through life and into a career, you will find yourself every now and again, in positions where you've got a choice about doing something that's right or something that's maybe a little bit wrong. And what I would say is doing the thing that's right has guided me, personally throughout my career, and it's something that I'm really proud of, because I find that, because I've worked with businesses a lot, doing intellectual property crime back in London, all of the crimes were reported to me by big businesses. So they were reported to me by the biggest sportswear manufacturers in the world, the biggest TV producers, the biggest film studios, the music and everything, and all the, you know, the car companies. So these are super, super wealthy companies, and they have to protect their bottom line. Yeah, that's why they're dealing with this stuff, which means that finance matters to them, and if they think that they can get me to do a better job for them by buying me an expensive dinner or taking me to a sporting event or what have you, and that's what they'll do. Sometimes having an expensive dinner bought for you is logical and fine because you've got something to talk about, but sometimes you realize that it's being done just to give them a better chance of impacting your decisions. Whereas as a cop, what I like is that I've got that ethical boundary that says I will meet you and, if needed, I’ll eat with you. But there's a line which I won't cross, which is that my decisions are the ones that are kind of sacrosanct, and they're always based on ethics. So I would say that that's the main thing, because if you've got that within you as an individual, then you're not going to go far wrong. So that would be my advice.