Interagency Coordination in Economic Crime Investigations in Latvia

5. Overcoming the inherent challenges of economic crime in Latvia

Abstract

Chapter five draws further on the previous chapters highlighting a selection of key areas requiring attention that may benefit from improvements, using a selection of international cases to contextualise examples of good practice. The selection of good practice case studies was based on the assessment of the existing challenges pertaining to the proper investigation of economic crime cases in Latvia. The characteristics of the problems identified were used to assess the merits of the approaches exemplified. This was conducted to ensure the mechanism behind the success of the recommended actions addressed the problems highlighted during the study.

Introduction

Chapter Five, in drawing from the previous chapters and analysis and supported by available literature, highlights four areas that may benefit from prioritised attention. Two areas (training and allocations of resources) are highlighted, as they specifically relate to the Latvian context and to draw from the experience and knowhow more generally in relation to the proper investigation and prosecution of economic crime cases. The first area specific to Latvia concerns the need for training. This was highlighted in all the reports identified and throughout the majority of interviews. The second relates to allocation of resources commensurate with the magnitude and scope of the problem, looking at ways to minimise workloads through the prioritisation of serious crimes1. The two areas requiring attention because of the ongoing challenges they present, but not unique to Latvia include, the challenge of dealing with complex, labour-intensive cases, involving a multiplicity of stakeholders, and second, challenges associated with cross border and extra-territorial dimensions of economic crime. A combined approach such as this is appropriate, as many of the challenges, although often discussed as a single issue (for example, delay in cases), are more complex and require multiple responses to alleviate different factors influencing them. In taking this approach, this study also adds greater insights into why many of the recommendations of the other reports, despite active implementation in many areas, have not been as impactful as desired. This lack of immediate or significant observable impact of these changes is not unique to Latvia, rather as identified in the literature, may be indicative that the right levers of change have yet to be moved.

It is worth noting that these observations, although influenced by the findings, also reflect the conclusions of relevant literature in this area, which predominately suggests four areas of improvement in relation to police investigations: (1) model procedures; (2) additional resources (personnel, forensics, information management); (3) improved relationships (internal and external); and (4) better training (Braga and Dusseault, 2016[1]). In examining the recommendations made in previous reports, they can largely be put into one of these four categories. What they fail to adequately do, however, is to specifically identify the root causes of the problem at hand in respect to the investigation and prosecution of economic crime. This is a fair criticism of this report too, which is also limited in its specificity2. That said, the findings of the aforementioned reports and this analysis are similar to the available literature at a high level. For example, in studying the causes of criminal investigative failures, Rossmo and Pollock found three problem areas (a) personal issues; (b) organisational problems; and (c) situational features (Rossmo and Pollock, 2019[2]). These resonate with the main issues impacting economic crime investigation and prosecution as noted by in an interview with a representative of the Ministry of the Interior (MOI) (i) capacity of investigative structures, (ii) qualifications and knowledge of investigators, (iii) political prioritisation of changes. These, too, are similar to the findings contained here, with numerous interviews recognising personal, or organisation and situational factors influencing criminal investigative failures (as highlighted in the last chapter), albeit it is noted that the approach taken does largely focus on the organisational and situational factors, for the most part. The next section provides further insight into the key challenges identified.

Training

The majority of reports reviewed for the purpose of this research made reference to perceived inadequacies in the skill set and knowledge of those involved in the investigation and prosecution of economic crime cases. This was reiterated throughout the interviews, but in a more nuanced way. Opportunity for professional development was deemed to be very good at present across the majority of organisations and individuals interviewed, with internal, inter-agency and international training opportunities accessible and of good quality. Moreover, it was evident that many of those involved in economic crime investigations and prosecution proactively seek opportunity for self-learning and knowledge gathering. Despite these positive observations, however, the findings of the interviews indicate that entry level training for police and prosecutors does not equip new members and members moving into specialised roles with the skills that are required for the investigation and prosecution of complex economic crime cases and there is a lack of formal specialist operational training for police officers to access, develop and mature their knowledge and skills in this area3, which has resulted in many gaining their experience and knowledge through on the job learning. While there are efforts being made to address this4, as noted in the previous chapter, similar issues are routinely reported in the extant literature on crime investigations noting that training in the area of serious crime investigations is “inadequate, inconsistent and incomplete” (Horvath, Meesig and Hyeock Lee, 2001[3]). While learning can be achieved on the job, investigators need to be equipped with the necessary training and skills to inform them of organisational approach to such investigations, which seem to be absent at present. Serious crime investigations require a lot of investigators, such as capacity and capabilities with respect to deductive, inductive, and abductive reasoning, not just experience and knowledge in the operations of police processes, therefore, formal training is required (Fahsing and Ask, 2017[4]).

The issue of inadequate training has been raised in previous reports, and improvements made, at least with respect to opportunities for professional development, however, significant attention is required at least in relation to the level and type of training available to new investigators, thus representing one area for recommendation. Training new officers better, however, is not the panacea that it might appear to be, because exactly what makes a good investigator is actually yet to be fully understood. Academically, available literature focuses largely on uniformed officers, omitting attention to how effective investigators or detectives work is. This may be due to the lack of agreement as to what success looks like, as discussed in the interviews. This was reiterated in the findings of some of the reports reviewed and throughout the interviews. There were different opinions on how effective police investigators really are in understanding what is expected of them, with an over emphasis on closing cases, often prioritised over quality. This echoes Eck and Rossmo’s opinion that a focus on crime clearance rates, may in fact undermine the promotion of justice and solving crime may not have a direct impact on the level of crime, which are likely to negatively impact society at large (Eck and Rossmo, 2019[5]). They assert that “criminal investigations should (a) focus on the quality of investigations by aiming to reduce errors and (b) orient investigative units toward prevention as well as toward the solution of crime” (602). This demonstrates that training needs to be closely designed around the activities required in investigations, but also in a manner that is cognisant of the environment in which it will be conducted. This is currently not been adequately done at present in Latvia.

Good practice training courses are available across the world, but direct transfer and implementation into the Latvian context is unlikely to be effective, as noted by many of the interviews (See Box 5.1 for an example from the United Kingdom). Direct transplantation of good practices (training or in other areas) is rarely successful, without a thorough understanding of the context in which it works, and symmetry between that and the conditions in which it is to be transposed. Nonetheless, learning from one or more examples of good practice can be impactful if the conditions of change are understood.

Box 5.1. Selection of Economic Crime Investigation Training Courses

Here is a selection of economic crime investigation training courses run by the National Crime Agency in the United Kingdom (UK), which are designed and tailored around specific investigation needs. While each country has different specificities that make their training needs unique, they share a number of key and important factors in training design. For example, they have a clear training objective, they aim to ensure that trainees will acquire the specific knowledge and skills (competencies) they need to do their jobs; and they can be evaluated against the following three components;

• the content or information to be transmitted

• the organisation of the curriculum, which includes structure, format, and sequencing

• the training methods used.

Thus, these courses are likely to help those in Latvia design their own new curriculum based on their needs.

• Financial Intelligence Officer

• Financial Investigator

• Confiscation course

Notes: Financial Intelligence Officer : Financial investigation training courses - National Crime Agency; Financial Investigator :Financial investigation training courses - National Crime Agency; Confiscation course : Financial investigation training courses - National Crime Agency.

Source: National Crime Agency, 2021.

Insufficient investment

A number of areas were highlighted in the reports reviewed and the interviews which call for greater investment in economic crime investigations, for example, into training, technology, equipment, forensic service, etc. It might be easy to deduce that greater investment would significantly impact, in a positive way, the proper and effective investigation and prosecution of economic crime. For example, this appears from the interviews to have benefited the work of the Financial Intelligence Unit (FIU) considerably. Thus, it might appear logical that greater investment and increasing the sophistication around serious crime investigation, through the introduction of modern investigative equipment and related technology, such as forensic analysis, CCTV, linked data bases, etc., coupled with extra manpower would result in improved investigation and prosecution, but will it really? In fact, this is not born out in statistics (Eck and Rossmo, 2019[5]). A key reason why this approach is not as impactful as one may think is that normally such innovations are introduced without any or few changes in the criminal investigation model overall. A model which has not hugely changed for years (Horvath, Meesig and Hyeock Lee, 2001[3]). This may also help explain why only marginal improvements in prosecutions have been made, despite enhancement in many of the areas covered. That said, the lack of resources is a consistent problem identified in this review, and to overcome many of them greater investment will be required. To ensure access to these funds, Latvia might explore the use of confiscated proceeds of crime to supplement law enforcement resources and examine the possibility of removing the cap on the confiscation fund, which is currently set at €2million (see Box 5.2 for more details).

Following this logic, to ensure a meaningful impact might best be achieved, one needs to review the investigative strategy and model used, before responding to the other issues, such as IT, equipment, training, etc. The problem at hand should inform the response, not the desired outcome, a subtle but different approach.

Box 5.2. Confiscation of the Proceeds of Crime – ASSETS FORFEITURE FUND (USA)

In 1984, the United States of America (USA) introduced the Comprehensive Crime Control Act, which established the Department of Justice Assets Forfeiture Fund. This fund was established to “receive the proceeds of forfeiture and to pay the costs associated with such forfeitures, including the costs of managing and disposing of property, satisfying valid liens, mortgages, and other innocent owner claims, and costs associated with accomplishing the legal forfeiture of the property” (np). The fund sees billions of dollars deposited annually and is managed and maintained with appropriate accounting and oversight. The fund is also allowed to be used to finance certain general investigative expenses. Such forfeitures, therefore, while critical in reducing the rewards of crime, can also have a positive impact on investigative responses, through the allocation of additional resources.

Source: Department of Justice, 2022

Problems outside the control of Latvia

Two key findings of note observed within this research relate to factors which are largely outside the control of the State Police, or the Latvia Government, for that matter. These relate to the very characteristics of economic crime investigations that make them complex and time consuming, and also the increasing extra-dimension of economic crime, which collectively put a significant burden on those involved in the investigation and prosecution of such cases. As noted, this is not unique to Latvia, it is a point routinely acknowledged and highlighted by Interpol and Europol. The investigation of economic crime and serious crime, for that matter, should therefore be seen and accepted for what they are, complex, time consuming and labour intensive because such crimes require greater time and effort than, for example, cases where officers arrest someone at the scene of a crime. Key activities that are not involved in the latter crime type, but are present in the investigation of serious crime, involve increased administrative functions, such as reviewing reports, finding and interviewing witnesses, file creation and documentation (Eck and Rossmo, 2019[5]). This will make, and is making, investigations more difficult with the complexity negatively impacting the likelihood of successful prosecution.

Similar to responding to challenges associated with insufficient resources and investment with more resources, it may appear logical to simply recommend increasing personnel allocated to such investigations, and extra support services, which would in fact address challenges raised in the interviews–the need for greater investment to match response capacity with demand. Positive impact, however, is not likely at the level required to achieve significant change, because complexity is not something that can be solved solely by increased numbers, rather often needs a new and improved response. This requires a different approach. An example of a different approach can be seen in Ireland, in the form of the Criminal Assets Bureau (CAB) which was established in 1996 to in the wake of the murder of a serving police officer, a high-profile journalist, and prominent actions of Irish criminals. The establishment of CAB marked a new and innovative approach to policing in Ireland. Unlike traditional criminal investigations which target individuals, CAB was introduced to focus on assets, resulting in CAB’s core function being to deny and deprive criminals of assets that they've acquired through their criminality (See 3 for more detail on CAB).

Box 5.3. Multidisciplinary Units for Serious Crime Investigation – Ireland’s Criminal Assets Bureau (CAB)

The Criminal Assets Bureau (CAB) was established in Ireland in 1996 and is a separate legal entity from An Garda Síochána, the Irish Police Force. CAB’s objectives are:

A. the identification of the assets, wherever situated of persons which derive or are suspected to derive, directly or indirectly, from criminal conduct,

B. the taking of appropriate action under the law to deprive or to deny those persons of the assets or the benefit of such assets, in whole or in part, as may be appropriate, and

C. the pursuit of any investigation or the doing of any other preparatory work in relation to any proceedings arising from the objectives mentioned in paragraphs (a) and (b).

CAB is structured differently than traditional policing bodies too. It recruits personnel from four departments or organisations; An Garda Síochána, the Department of Justice and Equality, the Revenue Commissioners (which consists of both Customs and Taxes), and the Department of Social Protection. This enables a multi-disciplinary response, maximising complimentary skills, capacities, and powers, of the respective organisations and departments that make up CAB. This approach also helps overcome siloed thinking. This combination of skills and competencies is further enhanced by the co-location of members of CAB, working together with each other in the same offices, in the same teams, on the same cases; co-location has also been a key component of CAB’s success. It has allowed for trust and respect to develop within the teams, who have shared aims, goals and can enjoy shared successes. At an EU level, the European Cybercrime centre is another case in point, which although is mainly made up of a combination of different police forces, they also work in close partnership with industry and academia.

Source: CAB, 2021.

This is not to dismiss the issues identified in the previous reports and interviews. After all, they are important, are evidence led, and largely resonate with the extant literature in this area. These are, however, not the problem per se, rather are symptoms of the problem. Therefore, to simply move straight to recommendations to deal with these individual issues would omit recognition that despite all this and coupled with positive changes, little impact has been achieved to date. The next section, therefore, offers reasons why improvement has not been achieved, and illustrates why despite identifying some of the key issues, a more nuanced understanding is necessary.

Changing the investigative approach in Latvia to tackle remaining challenges

Despite clear identifications of some of the problems pertaining to the proper investigation and prosecution of economic crime in Latvia, and notwithstanding the progress made, few of the recommendations made in previous similar reviews that have been implemented have had a significant positive impact to the overall goal of improving cooperation and coordination mechanisms in Latvia among the State Police departments, and other actors in this area. It would be remiss, however, just to reiterate similar recommendations made, or to make recommendations that address the observable problem but do little to address the underlying factors. Before making recommendations, therefore, it is pertinent to examine options that both acknowledge these well documented challenges, while at the same time examine how the recommendations made herein can lead to sustainable change.

Taking a problem solution focused approach is one possible option. Viewing economic crime and not understanding the environmental factors and complex interactive systems that are driving it will ensure police are always reactive. Real progress on crime prevention is largely based on recognising opportunity and altering them (Goldstein, 1990[6]). Little has changed in this regard since the 1990s. The same logic could be applied to economic crime, an approach often called ‘problem solving’.

Economic crime offers offenders high profit with low risk, making it an attractive form of criminality. To avoid detection, they often undertake counter-investigation measures to make it difficult, if at all possible, to identify them. The very nature of these crimes and such actions make investigation and prosecution difficult. If one sees the problem as the number of such crimes–which is logical, as this is directly influencing the workload of both the police and prosecutors. One might consider actions that increase the risk of the perpetrator getting caught, thus changing the low-risk high profit scenario to high-risk high profit. In contrast, one could go down the route of increasing financial controls, reducing the ease of cross border money flows. etc. one might shift the balance to low risk, low profit. Or, better yet, a combination of both. This approach seeks to rebalance the motivations for and opportunity of economic crime. In turn, reducing the level of crime should result in a lesser workload for police, prosecutors and support services, so they can focus on priority economic crimes, both nationally and internationally, further providing a deterrent effect for those who are still motivated to offend.

This approach also recognises the need for investigators to have the capacity and capabilities to apply deductive, inductive, and abductive reasoning (Fahsing and Ask, 2017[4]). Heuer (1991) highlights that these skills help raise awareness of cognitive biases, but also recognises that they need to be supported by organisational policies and procedures to avoid errors (Heuer, 1999[7]). In the context of Latvia, and in recognition of the need for a new curriculum for investigators, these aspects are of significant importance to consider. Moreover, it can be beneficial to have periodic reviews of unsolved cases by an independent investigation at certain periods of time. In complex cases, this may even benefit from the investigator from a different police agency. Like cold case reviews, if the investigators are not involved in the original investigations, they may be in a better position to identify mistakes and oversights.

The report has largely looked at actors within the wider criminal justice system (CJS), but a problem-solving approach requires more than just a criminal justice response, because research has shown that increased crime rates can influence private efforts at prevention and avoidance, which can result in many different actors taking different, often not complimentary responses (CentrePiece, 2013). Any response, therefore, needs to be cognisant of all actors in this process, and maximise their involvement, inside and outside the CJS. This specific focus is often what limits impact, as it can often oversimplify the problem. Recent research on implementing problem-oriented approaches, have found that this is often a common failing of such approaches too, and researchers now call for a recognition that problem approaches need to be designed in response to complex problems, by taking a multi-criteria approach.

Using such an approach allows for a deeper analysis of the problem, before selecting a solution, which this report is aiming to do (Read and Tilley, 2000[8]). Moreover, this approach can help identify conflicts between different goals (e.g., justice, national security, economic resilience, national reputations, etc.) between stakeholders. This calls for a different method, viewing the police and prosecutors and other traditional actors in this space within a broader multidisciplinary frame, structured similar to frameworks from other disciplines, including design, engineering and risk management (Borrion et al., 2020[9]).

Positively, there appears to be a growing awareness of the benefits of this broader approach to economic crime in Latvia, for example, greater cooperation between police and prosecutors, with international law enforcement, and increasingly in terms of public private partners, which were all reported during the interviews. It also conforms to existing, albeit old research, which found that improving relationship between detectives (investigators) and patrol officers, as well as the wider community helped in de-isolating investigators, thus, improves their work (Sherman, Milton and Kelly, 1973[10]). If one takes for example, the case involving the Economic Crime Enforcement Department (ECED) and Federal Bureau of Investigation (FBI) highlighted above, one can clearly see how inclusion, engagement and relationships was beneficial in this case, indicating this research might hold through today, and may further indicate that widening the network investigators have to engage with may help as well.

Changing the way investigators think

There is also merit to exploring how the existing investigative model fits into this new approach, which Eck and Rossmo (2019) note has suffered from neglect, conservative traditions, and organisational dogma (Eck and Rossmo, 2019[5]). This is also especially pertinent given the need for reconfiguring the response to economic crime. One must also reconfigure the actors involved. Eck and Rossmo (2019) offer an alternative model from which to do this, which is framed around ‘investigative thinking’ (Eck and Rossmo, 2019[5]). While this does not change the main purpose of investigators, it changes their way of doing things. Added investment or change in the proposed model investigative procedures, additional resources, improved relationships, and better training while likely to have some positive impact, as is being seen in Latvia, is unlikely to have a significant observable impact because the impacts achieved largely focus on gathering more evidence, without change in how it is evaluated and/or analysed (Eck and Rossmo, 2019[5]). Thus, there is a need to change the latter, therefore, by improving investigative thinking and the investigative model used. An example of an innovative approach to investigative thinking is evident in Norway, by privatising investigations into white collar crime, for example (Amundsen, 2021[11]) (See 4 for more details).

Box 5.4. Alternative Approach to White Collar Crime Investigation – Norway

The change of approach was in part influenced by the fact that the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime had experienced challenges in securing convictions for economic crime cases. Issues included not enough staff, challenges in court, too many cases, etc. Similar to many of the problems identified in Latvia. In Norway, the growing recognition that despite further investment into the investigation and prosecution of cases by police and state bodies, they could not meet the demand (Amundsen, 2021). Therefore, the government incentivises private companies to investigate themselves, rewarding them with lower penalties and entering into negotiated settlements, if they present their own evidence and cooperate with authorities. While this system is not without its own problems, for example, can someone be held criminally liable, but it presents another way of doing things, and reduces the demands on the police and related authorities to work on other cases.

Source: Author.

Conclusion

This chapter examined some of the core issues raised in the documents reviewed and the interviews viewing them within the investigative approach, rather than as standalone issues. The logic of this approach is that many of these issues raised are symptoms of deeper problems, often outside the control of the State Police, and sometimes even beyond that of the Latvian authorities, and the chapter sought in so far as is possible to identify the underlying causes for continued problems in this area. The core lesson of this chapter, and the document as a whole, is that the challenges encountered in Latvia are the result of a number of different factors stemming from organisational problems and situational features. As noted before, examining personal issues was beyond the scope of this study. These operational and situation problems are such that any improvements in these areas are unlikely to be effective if dealt with in isolation, notwithstanding that, considerable efforts will be required in areas, such as personnel, workloads, initial and ongoing training, mentorship and supervision, support personnel, and forensic and information technology. To be effective, however, their impact on the overall approach needs to be better understood, as it is the overall response to economic crime investigations and prosecution in Latvia that needs to be re-structured. It is on this basis that the recommendations from this study were designed, which draw their rationale from the information gleaned from the other reports, extant literature and the interviews. Merging this information together ensures a deeper more nuanced probe into the problems at hand, and helped generate recommendations to support sustainable improvements in both the investigation and prosecution of economic crime in Latvia.

References

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Notes

← 1.  Interview No. 12.

← 2.  The terms of reference of this report are such that it was not designed to measure the problems in cases at the individual level; nonetheless, recognising the merits of doing so, as highlighted in the recommendations.

← 3.  One reason for this offered was the closure of the Police Academy in 2010.

← 4.  Interview No. 21.