A recent report has revealed that the child welfare services in Buskerud, Vestfold and Telemark have been infiltrated by criminal networks. The police believe this is only the tip of the iceberg. The Minister of Justice is calling for a full mapping of the situation in all police districts.
“An enterprise was established by a criminal actor who has been convicted several times of serious drug offences. Several of the employees are linked to criminal activity. One of them is linked to several serious criminal networks and enterprises used for financial crime and serious drug crime. Information indicates that the enterprise is being used for the systematic exploitation of public welfare schemes through incorrect timesheets, fictitious deductions, failure to pay taxes and deliberate tax planning.”
This description is taken from the recent report on Risk in Private Child Welfare Services, which was prepared by the A-crime Centre (A-krimsenteret) in Tønsberg, in the South-Eastern Police District, and published on Wednesday, 26 August.
This enterprise is one of 16 unnamed private child welfare enterprises and providers of child welfare services that have come under scrutiny as a result of the A-crime collaboration in the South-Eastern Police District. This is a collaboration between the Police, the Norwegian Labour Inspection Authority, Nav and the Norwegian Tax Administration. These enterprises have in common that they have one or more criminals in key positions, with ties to criminal networks.
Private child welfare institutions constitute a large and tempting stream of public money. Expenditure on these increased from NOK 2.73 billion to NOK 3.87 billion from 2019 to 2024, while the number of days spent in such institutions has remained stable. The average daily cost increased from around NOK 13,930 to NOK 20,600 during the period.
Legitimate disguise
Økokrim chief Pål Lønseth stated at the press conference that 80 per cent of criminal networks in Europe use legitimate companies to infiltrate public agencies. The motive is financial gain.
Serious conditions have already been uncovered in Sweden. Minister of Children and Families Lene Vågslid expressed the view that it is important to put a stop to this before we get Swedish conditions in Norway. But the report suggests that the Swedish conditions have already become Norwegian.
The fraud takes place through structures that make it difficult for the authorities to see the full picture.
“… a business model in which public funds circulate internally: the operating company invoices the public sector, the staffing company invoices the operating company, and both are controlled by the same owner or network. The actual value of the service may then be far lower than what the public sector pays”
Non-profit organisations
The report describes an example of how a non-profit youth and support association offering low-threshold services developed into an extensive enterprise run by an individual who has been convicted several times of serious offences and who is linked to a criminal network.
“The enterprise appears to be tightly controlled by a small circle of people with roles as owners, managers, board members and employees. The enterprise also uses internal companies to provide services for its own operations.”
This enterprise alone has benefited from various grant schemes from Bufdir, Nav, county authorities and various foundations. Over the past six years, this enterprise alone has received NOK 50 million. In one case, it received more than NOK 800,000 for supporting one pupil for four months.
Great temptations
“For actors with criminal intentions, grant funding is particularly attractive: it is relatively easy to apply for, oversight is mainly retrospective, and the amounts can be large. A systematic strategy may involve applying to many schemes in parallel, using a professional appearance and correct application texts to obtain funds, and then failing to carry out the activity as described. The establishment of organisations with limited actual activity that subsequently apply for grants is a recurring pattern in the material,” the report states.
A pattern emerges in which the criminal enterprises outcompete legitimate operators. It is pointed out that if criminal actors and networks continue to outcompete lawful operators, there is a risk that the state and municipalities will become dependent on the criminals.
Poor oversight
In one case, a criminal actor is described as owning enterprises both in the staffing sector and in the care sector. Staffing, invoicing and property are used as a platform for financial crime, including through invoices between his own businesses and the use of accounting figures as a basis for bank loans and property purchases.
The criminals have exploited privacy protections that impede the flow of information between public agencies. In this way, the legislation has been exploited in a manner that facilitates crime.
There are also major gaps in the vetting of personnel. Police certificates disclose only convictions, while the report points out that an increasing proportion of criminal cases in recent years have been dropped. Moreover, it is difficult to obtain police certificates when recruitment takes place across national borders and the enterprises are staffed through staffing agencies.
Recruitment for violent assignments
In addition to the financial motive, the criminal networks see an opportunity to recruit the clientele in the care of the child welfare services.
“In the most serious cases, influence can develop into more permanent exploitation, and some young people may be drawn further into crime,” the report states.
It has for some time been known that the Foxtrot criminal network, which is based in Sweden and has connections to the regime in Iran, has infiltrated Norwegian child welfare institutions. This summer, two serious convictions took place.
Johannes Kongsnes Natland (19), who was recently found guilty of unlawful possession of firearms and conspiracy to murder at the Old Bailey in England, was in a child welfare institution when he was recruited by Foxtrot.
Document wrote about the case on 21 May …
… and followed up on 4 August.
Johannes Natland (19) convicted of conspiracy to murder. Mother: “He could never have harmed anyone”
His 17-year-old handler was sentenced in June to 14 years of preventive detention (forvaring) for complicity in murder and the recruitment of Natland.
The judgment has been appealed and the case will return to court in September. His co-defendant will also stand trial then.
