Germany’s criminal underworld is coming out of the shadows
In late September 2024, German police dismantled dozens of crypto exchanges suspected of laundering billions of dollars and a host of other crimes ranging from ransomware to darknet trading. As part of Operational Final Exchange, German police and prosecutors targeted 47 separate exchanges that had failed to perform background checks, verify proof of identity, or register new customers. What alarmed investigators most, however, was the involvement of individuals with ties to Russian intelligence. The incident revealed a darker truth: organized crime in Germany is increasingly entrenched, tech-savvy, and globally connected.
Over the past five years, Europe has witnessed surging organized crime, and Germany is no exception. Criminal networks—Italian mafias, Eastern European gangs, and clan-based groups from the Middle East to the Balkans – have exploited gaps in governance and law enforcement. Germany’s Federal Criminal Police Office (BKA) estimates that Italian mafia networks alone, particularly the ‘Ndrangheta, have over 1,000 operatives in Germany, generating around $50 billion annually. According to Helena Raspe from Mafia Nein Dan Danke e.V., the true figures are likely several times higher, as many white-collar crimes—estimated to contribute $300 billion each year—are excluded from official organized crime statistics.
Acceleration and diversification
The sheer scale of criminal activity is taking Germans by surprise. Indeed, the country recently registered the largest drug busts in European history. German police and intelligence, together with Europol and law enforcement agencies from across Europe and South America, dismantled a drug smuggling network that spanned Colombia, Ecuador, Guyana, Panama and Suriname and reached the ports in Germany, the Netherlands and Belgium. Between April and September 2023, prosecutors in Duesseldorf confiscated over 35 metric tons of cocaine, worth an estimated $2.7 billion. A businessman from North Rhine Westphalia reportedly set up 100 letterbox companies to make the shipments appear legal.
Drug markets are not only expanding and diversifying, they are becoming more violent. Daniel Brombacher, the director of the Observatory of Organized Crime in Europe, believes that cocaine, heroin, and synthetic opioids are more readily available, driving new patterns of addiction and health crises. Synthetic drug production within Germany and neighboring countries has likewise increased, lowering the costs of transportation and creating lucrative new markets. And all this has fueled violent competition among criminal groups, with rising levels of violence reflecting disequilibrium in drug markets. Meanwhile, the steady diversification in drug availability has made it harder for law enforcement to map and disrupt supply chains.
Clan-based organized crime has also undergone significant transformations. Traditionally dominated by Arab clans from Turkey, criminal clan activity now includes actors from Albania, Bulgaria, Chechnya, Romania, Serbia, and Syria. Mahmoud Jaraba, a researcher associated with Friedrich-Alexander-Universität Erlangen-Nürnberg, believes these groups are increasingly decentralized, with younger generations operating independently of traditional hierarchies. The use of digital platforms and cryptocurrencies has helped clan-based networks to coordinate across borders and evade detection. Younger thugs are notably more violent and unpredictable, contributing to increased instability within Germany’s criminal landscape.
Clan-based crime is no longer confined to urban centers or specific ethnic enclaves; it now operates across Germany, with links to European and global markets. The police response has been reactive and outdated intelligence and uneven strategic planning has undermined their efforts to dismantle clan structures. Federal and state law enforcement and criminal justice agencies are under-resourced and overburdened. The German Judges’ Association documented over 933,000 unresolved criminal cases pending in Germany’s judicial system as of March 2025, highlighting the strain on investigative capacity.
The state-sponsored dimension
Even more troubling than the evolution and growth of domestic criminal networks is their increasing alignment with foreign state actors. Russia has long integrated organized crime into its geopolitical strategy—including its shadow war against the West. Europol has documented the ways Russian criminal networks operate as extensions of the state’s intelligence apparatus, engaging in hybrid warfare: sabotage, political interference, and financial disruption. Mark Galeotti, from Mayak Intelligence, claims that the Kremlin’s use of criminal proxies has intensified since the 2022 invasion of Ukraine and the expulsion of suspected Russian spies from Western nations the same year.
One of Russia’s comparative advantages in Germany is its (criminal) diaspora. Indeed, the BKA believes that crime groups from Russia and the Caucuses—including the “Thieves in Law”—are driving a significant crime wave in Germany. Many of the recruits are enlisted directly from the prison system where roughly 10 percent of inmates reportedly speak Russian. German authorities allege that local Russian gang membership ranges between 20,000 and 40,000 individuals. These groups are involved in everything from drug and human trafficking to tax fraud, prostitution, counterfeit documents and, whether they know it or not, contract work for Russian spies.
In the process, Russian criminal groups have become “one-stop shops” for drugs, weapons, cyberattacks, and counterfeit goods. Galeotti has observed how they provide both operational cover and financial support for state-sponsored activities, blurring the line between organized crime and state espionage. Germany has seen an uptick in Russian-linked cyberattacks targeting critical infrastructure, alongside incidents of physical sabotage, including the severing of undersea communication cables in the Baltic Sea. In December 2024, former Chancellor Olaf Scholz claimed that digital and critical infrastructure in Germany were “under severe threat” from foreign adversaries led by Russia.
In February 2023, for example, police exposed a Bulgarian spy ring operating out of London with connections to Russian intelligence. The group, allegedly directed by Jan Marsalek, a fugitive Austrian financier, conducted “industrial scale“ espionage activities across the continent. This included spying on a US military base in Grafenwoher, Bavaria, and planning operations targeting Russian dissidents and journalists. The trial uncovered the group’s use of advanced surveillance equipment and their involvement in various illicit activities, highlighting the extent of Russian influence in organized crime networks across Europe. Separate incidents in January 2025 near Manching are suspected to have involved Russian-linked saboteurs.
There are also disconcerting connections between organized crime groups involved in drug trafficking and domestic far-right movements and terrorist groups. In 2024, for example, police busted drug traffickers with alleged links to the so-called
Reichsburger movement, a right-wing conspiracy group that does not recognize Germany statehood. Raids on 16 properties in Hanover, Osnabruck and other towns in North Rhine Westphalia and Lower Saxony recovered drugs, ammunition, luxury goods, and cash. And in 2025, German police carried out nationwide raids targeting 19 properties in 6 states against an Eritrean group called “Brigade N’hamedu” which is also classified as a domestic terrorist entity.
By way of contrast, China’s role in organized crime appears to be more economically focused. Chinese networks have been implicated in large-scale money laundering schemes and intellectual property theft, including in Germany. In April 2024, for example, German authorities conducted a raid against an international human smuggling gang with links to China that exploited visa permits. More than 1,000 police officers searched dozens of homes, stores, and offices across western and southern Germany, detaining 10 suspects, including two lawyers. The suspects were accused of illegally obtaining residency permits for around 350 mostly Chinese nationals who did not meet the necessary criteria, in exchange for significant sums of money.
Iran and North Korea have also established footholds in Germany’s criminal ecosystem. Iranian-linked networks have targeted dissident groups and engaged in financial crime to fund the regime’s overseas operations. In September 2024, French and German investigators revealed Iranian agents who used European drug traffickers to carry out surveillance of Jews and Jewish businesses in Berlin, Munich and Paris. One intelligence official said that “the Iranian [intelligence] services have adopted their modus operandi and now more systematically prefer to use people from criminal circles” to carry out their attacks. Meanwhile, North Korea’s Lazarus Group, notorious for the 2017 WannaCry ransomware attack, has expanded its operations to target German financial institutions and defense industries. The combination of cyberattacks and financial crime has created a complex threat environment where state actors and criminal networks operate symbiotically.
The soft financial underbelly
One of the reasons why Germany is so vulnerable to exploitation by organized crime is that its financial system suffers from regulatory gaps and legacy of secrecy. Germany also has a famously strong cash-based economy, with high levels of cash transactions compared to other European countries. Notwithstanding recent progress, anti-money laundering laws are poorly enforced, which explains why the Financial Action Task Force detected “significant deficiencies” in Germany’s ability to track suspicious transactions in 2022. According to Eurpol, just 2% of criminal assets are frozen each year (and 1% confiscated), allowing criminal networks to recycle profits through real estate markets, financial services, and cryptocurrency platforms.
One of the channels used by criminal groups to launder money is real estate. In major cities like Berlin and Frankfurt, luxury property markets have been infiltrated by criminal networks seeking to launder funds. This is because there is no obligation to verify the origin of funds used in property transactions. The Organized Crime and Corruption Reporting project describes Germany as a ‘money laundering haven” in which Italian mafia, Russian oligarchs and Albanian crime syndicates are able to launder billions through high-end property purchases and a constellation of shell companies. With the introduction of EU anti-money laundering directives in May 2024, this could force greater due diligence on real estate agents. That said, EU member states have until 2027 to comply.
In February 2024, German authorities uncovered a major Russo-Eurasian money laundering network. The investigation found that a group operating primarily out of Berlin and Riga laundered several tens of millions of euros through a network of companies linked to Maltese institutions. As part of the investigation, law enforcement officers searched 58 residential and commercial premises in Berlin, Brandenburg, Baden-Wurttemberg and Saxony, as well as locations in Latvia and Malta, seizing business documents, electronic storage devices, and mobile phones.
And it is not just conventional crime, but also cybercrime that is expanding rapidly. In 2024, German companies reported losses of over 300 billion euros from cybercrime, up almost 30% compared to the previous year. Criminal networks use encrypted messaging platforms and cryptocurrency to coordinate activities and evade detection. In November 2024, for example, a Bavarian pharmaceutical company employing over 200 people and supplying 6,000 pharmacies across the country was targeted. Ransomware attacks targeting German businesses and public infrastructure are increasingly frequent and sophisticated. The BKA reported how state-sponsored actors from Russia, China, and North Korea are exploiting digital platforms to conduct espionage and financial crimes, creating a hybrid threat that combines organized crime with state aggression.
Data privacy and protection laws, among the toughest in the world, have further weakened Germany’s ability to respond. This is because they restrict the ability of law enforcement to conduct surveillance, track financial transactions and share critical data. While the BKA can conduct wiretaps, they must clear very high legal hurdles (including proving imminent threats). Germany’s strong banking privacy laws also restrict access to financial data. The country also has strict data retention laws, which means that telecom providers and technology firms cannot store user data for more than four weeks. Moreover, Germany’s decentralized law enforcement structure creates bureaucratic hurdles to data-sharing and the General Data Protection Regulation (GDPR), while crucial for preserving privacy, complicates cross-border cooperation.
Fragmented responses
Germany’s fragmented approach to fighting organized crime has fostered complacency and energized criminal networks. Political leaders have largely focused on terrorism and extremism while downplaying the manifold security threats posed by organized crime. Organized crime is seldom a winning campaign issue; neither the newly elected Chancellor Friedrich Merz nor his party, the Christian Democratic Union (CDU), have articulated a coherent strategy to confront it. The historical aversion to expanding state surveillance is one factor. So too is the temptation to focus on other legitimate priorities, be they immigration, economic stability, or even international security.
Germany’s ability to respond is also hampered by operational weaknesses. The BKA and regional police forces lack the resources and technical capacity to respond to increasingly sophisticated criminal networks. According to Cambridge University’s Zora Hauser, Germany’s decentralized federal structure means that responsibility for organized crime enforcement is split between federal and state agencies, complicating coordination and intelligence-sharing. Law enforcement agencies often rely on outdated technology and face legal constraints on surveillance and data retention. Germany’s strong privacy laws, designed to protect civil liberties, have unintentionally created blind spots in criminal investigations.
Moreover, Germany’s judicial system is under immense strain. Judges and prosecutors face growing caseloads and lack the specialized knowledge needed to prosecute complex financial crimes. Financial penalties for organized crime are relatively low compared with other European jurisdictions, reducing the deterrent effect. Asset seizures are rare, and when they do occur, the proceeds are not systematically reinvested in enforcement or prevention efforts.
The legal framework for combating organized crime is also outdated. Germany’s criminal code lacks provisions for targeting organized crime as a strategic threat rather than a collection of individual criminal acts. Prosecutors face high evidentiary burdens when linking criminal activity to broader networks, which makes it difficult to dismantle organized groups. Proposed reforms to asset seizure laws and anti-money laundering regulations have been met with political resistance, reflecting broader institutional inertia.
The intelligence gap is equally concerning. Germany’s domestic intelligence agency (BfV) and the BKA have struggled to keep pace with the technological sophistication of criminal networks. Encrypted messaging platforms, anonymous financial transactions, and cross-border supply chains have created significant challenges for investigators. Nevertheless, Germany’s intelligence services have warned that domestic criminal networks are increasingly connected to Russian, Chinese, and Middle Eastern state actors, especially since 2022.
Searching for a strategic response
Confronting organized crime in Germany requires a change in mindset. Experts such as Hauser argue that Germany needs to treat organized crime as a national security threat, on par with terrorism and state-sponsored cyberattacks. Tackling criminal networks also requires a whole-of-government approach, including integrating law enforcement, criminal justice, and counter-intelligence with experts on financial regulation, counter-terrorism, and foreign policy. There are some encouraging nudges in this direction in Germany’s latest strategy to fight serious organized crime, though more can be done.
For one, Germany’s financial oversight infrastructure needs urgent upgrading. Anti-money laundering laws must be enforced more aggressively, and penalties for financial crimes should be increased. Financial regulators need greater authority to investigate suspicious transactions and seize assets linked to organized crime. Real estate markets should be subject to stricter ownership disclosure requirements, making it harder for criminal networks to launder money through property investments.
Next, Germany’s judicial and investigative capacity should be reinforced. albeit with due considerations for civil liberties. The BKA and regional police forces need additional resources and technical expertise to track and dismantle complex criminal networks. More specialized financial crime prosecutors and judges are needed to handle cases involving money laundering, cybercrime, and cross-border criminal activity. Legal reforms could lower the evidentiary burden for asset seizures, aligning Germany’s framework with EU standards.
Also, German operational coordination and intelligence-sharing must quickly improve to meet evolving challenges. The country’s federal structure creates obstacles to effective coordination between agencies, but joint task forces and centralized intelligence units could help bridge these gaps. Closer cooperation with European and international partners, including Europol and Interpol, would strengthen Germany’s ability to disrupt transnational criminal networks.
Germany should also invest in prevention and community-based interventions to strengthen local resilience to criminality. Criminal networks often recruit from marginalized communities where poverty rates are high and economic and social opportunities are limited. Early intervention programs, including targeted education and job training and placement, could reduce the pool of potential recruits. Programs aimed at dissuading young people from joining criminal organizations have been successful in other European countries and could be adapted for Germany’s urban centers.
Germany’s approach to organized crime has been reactive for too long. The changing DNA of organized crime—including the growing intersection with cybercrime and state-sponsored espionage—presents a strategic challenge that requires a systemic response. Treating organized crime as a strategic threat rather than purely a law enforcement issue would allow Germany to develop more sophisticated and effective responses. Without urgent reforms, Germany risks becoming a safe haven for transnational criminal networks and a target for hostile state actors.
The take-down of crypto exchanges in Frankfurt last year, and the disruption of another massive exchange suspected of money laundering in 2025, are rare success stories. But unless Germany strengthens its institutions, enhances its intelligence capacity, and reforms its financial oversight, such victories will remain exceptions rather than the rule. Organized crime is not just a criminal problem—it is a strategic threat to Germany’s political and economic stability. Addressing it will require political will, institutional reform, and a shift in national security priorities.
