The Kremlin’s newest hybrid warfare asset: gangsters

Mark Galeotti writes: as they look to prosecute their “political war” against the West, the Russians are emerging as the most enthusiastic users of gangsters’ services. Given that their intelligence services are now up to Cold War levels, it seems ironic that they would even need such amateur auxiliaries. However, so ambitious and numerous are their operations that even they sometimes need some extra capacity or deniability.

Some of the instances when Russia has used criminals as proxies are well known. Russia’s seizure of Crimea, for example, and the subsequent undeclared war in Ukraine’s Donbass region were carried out not just by Russian special forces, but by local gangsters serving as so-called self-defense volunteers. Similarly, many Russian cyberattacks, especially large-scale ones, involve mobilizing criminal hackers. (Indeed, the cyberespionage division of the Federal Security Service has actually recruited hackers by giving them the choice of prison or service.)

But most of this state-sponsored organized crime is more low-profile. We are seeing more and more cases, especially in Europe, where local counterintelligence services believe gangsters are acting as occasional Russian assets. Some work on behalf of the Russia state willingly. In other cases, these criminals have been turned into assets without their knowledge, thinking they are simply doing a service for a Russian gang. And yet for others, they are made an offer they can’t refuse. In a recent report for the European Council on Foreign Relations, I call these “Russian-based organized crime” — whether ethnically Russian or not (because many are Georgians or the like), they are criminals with business or personal interests back in Russia, a fact the Kremlin can use as leverage.

To be sure, most of the time direct links between criminals and the Russian state are hard to establish. What good would it be to hire them if they weren’t? But in some cases, the politically convenient patterns are plain to see. In Istanbul, Russian gangsters have killed Chechen rebel supporters, according to Turkish intelligence. In Ukraine, only a few days ago, a Chechen gangster tried to kill an anti-Russian militia commander.

In the Czech Republic, the authorities warn of the links between Russian intelligence and questionable businesses involved in corruption and money laundering. In Finland, the security police suspect Russian criminals are buying up strategically placed properties from which military facilities can be monitored or even attacked.

Criminal hackers — those not recruited straight into the intelligence services — are being used for both targeted information heists and crude cyberattacks. Putin has even hinted, with a nod and a wink, that such “patriotically minded” cybercriminals may have been behind the Democratic National Committee hack. [Continue reading…]

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Trump’s casino was a money laundering concern shortly after it opened

CNN reports: The Trump Taj Mahal casino broke anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s, according to the IRS in a 1998 settlement agreement.

It’s a bit of forgotten history that’s buried in federal records held by an investigative unit of the Treasury Department, records that congressional committees investigating Trump’s ties to Russia have obtained access to, CNN has learned.

The casino repeatedly failed to properly report gamblers who cashed out $10,000 or more in a single day, the government said.

Trump’s casino ended up paying the Treasury Department a $477,000 fine in 1998 without admitting any liability under the Bank Secrecy Act.

CNN obtained 417 pages of Treasury Department documents under the Freedom of Information Act. The records included the 1998 settlement, draft and final copies of a similar settlement in 2015, and exchanges between the Trump casino lawyers and federal regulators.

The 1998 settlement was publicly reported at the time, and the Associated Press noted it was the largest fine the federal government ever slapped on a casino for violating the Bank Secrecy Act.

But key details of the casino’s cash reporting violations are missing from the publicly released documents, including the identities of the gamblers and casino employees involved in the transactions. [Continue reading…]

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Trump committed an impeachable offense

Noah Feldman writes: Using the presidential office to try to shut down the investigation of a senior executive official who was also a major player in the president’s campaign is an obvious and egregious abuse of power. It’s also a gross example of undermining the rule of law.

This act is exactly the kind that the Founding Fathers would have considered a “high crime.”

And it’s a high crime the president could perform only by virtue of holding his office.

Practically, it still seems unlikely that a Republican House would impeach the president, much less that two-thirds of the Senate would vote to convict and remove him from office.

But a Democratic House would have more than enough material now to start the impeachment process — including the revelation of the request to Comey. And the House could choose to impeach even if it calculated that the Senate probably wouldn’t convict.

The act of impeachment would have tremendous symbolic ramifications. And it would include the detailed investigative oversight that so far has been lacking in Washington. [Continue reading…]

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Obstruction of justice: Comey memo says Trump asked him to end Flynn investigation

The New York Times reports: President Trump asked the F.B.I. director, James B. Comey, to shut down the federal investigation into Mr. Trump’s former national security adviser, Michael T. Flynn, in an Oval Office meeting in February, according to a memo Mr. Comey wrote shortly after the meeting.

“I hope you can let this go,” the president told Mr. Comey, according to the memo.

The existence of Mr. Trump’s request is the clearest evidence that the president has tried to directly influence the Justice Department and F.B.I. investigation into links between Mr. Trump’s associates and Russia.

Mr. Comey wrote the memo detailing his conversation with the president immediately after the meeting, which took place the day after Mr. Flynn resigned, according to two people who read the memo. The memo was part of a paper trail Mr. Comey created documenting what he perceived as the president’s improper efforts to influence a continuing investigation. An F.B.I. agent’s contemporaneous notes are widely held up in court as credible evidence of conversations.

Mr. Comey shared the existence of the memo with senior F.B.I. officials and close associates. The New York Times has not viewed a copy of the memo, which is unclassified, but one of Mr. Comey’s associates read parts of the memo to a Times reporter.

“I hope you can see your way clear to letting this go, to letting Flynn go,” Mr. Trump told Mr. Comey, according to the memo. “He is a good guy. I hope you can let this go.” [Continue reading…]

Politico adds: “[Comey’ memo is] very rich in detail and hopefully it will come out soon,” the friend of Comey, who spoke on condition of anonymity, told POLITICO. “There are other memos about his meetings too. He wrote down every word Trump said to him as soon as he could.” [Continue reading…]

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Manafort’s real-estate deals said to be probed by N.Y.’s top cop

Bloomberg reports: New York State has opened an investigation into the real-estate dealings of President Donald Trump’s former campaign manager, Paul Manafort, deepening the already intense legal scrutiny of the young administration.

The probe by New York Attorney General Eric Schneiderman, one of the most outspoken critics of the president, is in a preliminary stage, according to a person familiar with the matter who asked not to be named because the investigation isn’t public. Manafort, who ran Trump’s campaign from April to August last year, has owned property in the Hamptons and Trump Tower in Manhattan.

Manhattan District Attorney Cyrus Vance Jr. is also in the early stages of an investigation into Manafort’s transactions, a person familiar with that probe said. Representatives for Schneiderman and Vance declined to comment.

The inquiries by the two Democrats could pose added legal peril for Manafort if investigators find evidence of a crime. Unlike a probe by the U.S. Justice Department and FBI, the president and Attorney General Jeff Sessions have no authority over New York state investigators scrutinizing whether Manafort broke state laws. Schneiderman is responsible for enforcing New York’s securities laws under the Martin Act, which gives him broad powers to pursue white-collar crime. [Continue reading…]

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A special prosecutor is not the answer

David Frum writes: Careful what you wish for.

In the wake of the firing of FBI Director James Comey, many are demanding a special prosecutor into the Trump-Russia connection. It’s not appreciated enough that such an appointment could well turn into a shield for wrongdoing. A special prosecutor could wrap the investigation of the Trump-Russia matter in secrecy for months and years—and ultimately fail to answer any of the important questions demanding answers.

Of all the types of independent investigation that have been suggested, a special prosecutor is the most likely to disappear down rabbit holes—the least likely answer the questions that needed to be answered. A select committee of Congress or an independent commission of nonpartisan experts established by Congress can ask the broad question: What happened? A select committee or an independent commission can organize its inquiry according to priority, leaving the secondary and tertiary issues to the historians. A select committee or an independent commission is not barred from looking at events in earlier years statutes of limitations. A select committee or an independent commission seeks truth.

A special prosecutor, by contrast, seeks crimes. The criminal law is a heavy tool, and for that reason it is thickly encased in protections for accused persons. The most important protection from the point of view of the Trump-Russia matter is the rule of silence. A prosecutor investigating a crime can often discover non-criminal bad actions by the people he is investigating. If those bad actions do not amount to crimes, the prosecutor is supposed to look away. [Continue reading…]

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Major U.S. investigation of Russian money laundering through NYC real estate gets shut down abruptly

CNN reports: A major US investigation into Russian money laundering has come to an abrupt end.

The case aimed to expose how Russian mobsters allegedly stole $230 million and hid some of the cash in New York City real estate. Also sure to come up was the suspicious death of the Russian lawyer who exposed the alleged fraud, though US prosecutors weren’t alleging that the defendants were behind it.

The trial was set to start on Monday, but late Friday night, federal prosecutors in New York announced they settled the case with Prevezon, the company accused of buying up “high-end commercial space and luxury apartments” with laundered money.

The abrupt conclusion has some involved in the trial wondering why this Russian investigation had been cut short.

“What most concerns me is: Has there been any political pressure applied in this?” asked Louise Shelley, an illicit finance expert who was set to testify in support of the US government on Tuesday. [Continue reading…]

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Trump thinks Susan Rice committed a crime but doesn’t think Bill O’Reilly did anything wrong

The New York Times reports: President Trump said on Wednesday that he thought that the former national security adviser Susan E. Rice may have committed a crime by seeking the identities of Trump associates who were swept up in the surveillance of foreign officials by American spy agencies and that other Obama administration officials may also have been involved.

The president provided no evidence to back his claim. Current and former intelligence officials from both Republican and Democratic administrations have said that nothing they have seen led them to believe that Ms. Rice’s actions were unusual or unlawful. When Americans are swept up in surveillance of foreign officials by intelligence agencies, their identities are supposed to be obscured, but they can be revealed for national security reasons, and intelligence officials say it is a regular occurrence.

“I think it’s going to be the biggest story,” Mr. Trump said in an interview in the Oval Office. “It’s such an important story for our country and the world. It is one of the big stories of our time.” [Continue reading…]

The New York Times reports: The embattled Fox News host Bill O’Reilly got powerful backing on Wednesday from none other than the president of the United States, who called him “a good person.”

Mr. Trump praised Fox News and Mr. O’Reilly, just days after The New York Times reported that the host had been involved in five settlements with women who said he had harassed them. The deals resulted in payouts totaling about $13 million, The Times reported.

“Personally, I think he shouldn’t have settled,” Mr. Trump said in an interview in the Oval Office with Times reporters. “Because you should have taken it all the way; I don’t think Bill did anything wrong.” [Continue reading…]

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The WhatsApp chat that nails Putin’s mafia state

Michael Weiss writes: It was a digital conversation never intended for public consumption. Yet what it discloses is nothing short of damning evidence about a decade-old conspiracy between the Russian mob and officials in Vladimir Putin’s government to steal $230 million from the Russian people, then frame and kill the whistleblowing tax attorney who uncovered the crime.

But here it is: Evidence that leaves little room for doubt that Sergei Magnitsky, the murdered lawyer, was right all along. There was collusion between members of organized crime and the Russian government to perpetrate the original theft and then cover it up. In fact, the cover-up continued years after Magnitsky’s violent end in pretrial detention, where he was beaten to death.

To understand the evidence and its import—the extent to which it exposes the rot at the core of the Russian system run by Vladimir Putin—it’s necessary to revisit the admittedly complicated details of the conspiracy, at least as they have been corroborated by the U.S. Congress, the U.S. Department of Justice (PDF), and the European Parliament, all of which have upheld Magnitsky’s findings—even if his own government has not. [Continue reading…]

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Judge to Trump: No protection for speech inciting violence

The Associated Press reports: A federal judge has rejected President Donald Trump’s free speech defense against a lawsuit accusing him of inciting violence against protesters at a campaign rally.

Trump’s lawyers sought to dismiss the lawsuit by three protesters who say they were roughed up by his supporters at a March 1, 2016 rally in Louisville, Kentucky. They argued that Trump didn’t intend for his supporters to use force.

Two women and a man say they were shoved and punched by audience members at Trump’s command. Much of it was captured on video and widely broadcast during the campaign, showing Trump pointing at the protesters and repeating “get them out.”

Judge David J. Hale in Louisville ruled Friday that the suit against Trump, his campaign and three of his supporters can proceed. Hale found ample facts supporting allegations that the protesters’ injuries were a “direct and proximate result” of Trump’s actions, and noted that the Supreme Court has ruled out constitutional protections for speech that incites violence.

“It is plausible that Trump’s direction to ‘get ‘em out of here’ advocated the use of force,” the judge wrote. “It was an order, an instruction, a command.” [Continue reading…]

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Why the FBI can’t tell all on Trump, Russia

WhoWhatWhy reports: It will take an agency independent of the Federal Bureau of Investigation (FBI) to expose Donald Trump’s true relationship with Moscow and the role Russia may have played in getting him elected.

Director James Comey recently revealed in a congressional hearing for the first time that the FBI “is investigating … the nature of any links between individuals associated with the Trump campaign and the Russian government and whether there was any coordination between the campaign and Russia’s efforts.”

However, a two-month WhoWhatWhy investigation has revealed an important reason the Bureau may be facing undisclosed obstacles to revealing what it knows to the public or to lawmakers.

Our investigation also may explain why the FBI, which was very public about its probe of Hillary Clinton’s emails, never disclosed its investigation of the Trump campaign prior to the election, even though we now know that it commenced last July.

Such publicity could have exposed a high-value, long-running FBI operation against an organized crime network headquartered in the former Soviet Union. That operation depended on a convicted criminal who for years was closely connected with Trump, working with him in Trump Tower — while constantly informing for the FBI and the Department of Justice (DOJ), and being legally protected by them.

Some federal officials were so involved in protecting this source — despite his massive fraud and deep connections to organized crime — that they became his defense counsel after they left the government.

In secret court proceedings that were later unsealed, both current and former government attorneys argued for extreme leniency toward the man when he was finally sentenced. An FBI agent who expressed his support for the informant later joined Trump’s private security force.

In this way, the FBI’s dilemma about revealing valuable sources, assets and equities in its ongoing investigation of links between the Trump administration and Russian criminal elements harkens back to the embarrassing, now infamous Whitey Bulger episode. In that case, the Feds protected Bulger, a dangerous Boston-based mobster serving as their highly valued informant, even as the serial criminal continued to participate in heinous crimes. The FBI now apparently finds itself confronted with similar issues: Is its investigation of the mob so crucial to national security that it outweighs the public’s right to know about their president? [Continue reading…]

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Trump’s business network reached alleged Russian mobsters

USA Today reports: To expand his real estate developments over the years, Donald Trump, his company and partners repeatedly turned to wealthy Russians and oligarchs from former Soviet republics — several allegedly connected to organized crime, according to a USA TODAY review of court cases, government and legal documents and an interview with a former federal prosecutor.

The president and his companies have been linked to at least 10 wealthy former Soviet businessmen with alleged ties to criminal organizations or money laundering.

Among them:

• A partner in the firm that developed the Trump SoHo Hotel in New York is a twice-convicted felon who spent a year in prison for stabbing a man and later scouted for Trump investments in Russia.

• An investor in the SoHo project was accused by Belgian authorities in 2011 in a $55 million money-laundering scheme.

• Three owners of Trump condos in Florida and Manhattan were accused in federal indictments of belonging to a Russian-American organized crime group and working for a major international crime boss based in Russia.

• A former mayor from Kazakhstan was accused in a federal lawsuit filed in Los Angeles in 2014 of hiding millions of dollars looted from his city, some of which was spent on three Trump SoHo units.

• A Ukrainian owner of two Trump condos in Florida was indicted in a money-laundering scheme involving a former prime minister of Ukraine.

Trump’s Russian connections are of heightened interest because of an FBI investigation into possible collusion between Trump’s presidential campaign and Russian operatives to interfere in last fall’s election. What’s more, Trump and his companies have had business dealings with Russians that go back decades, raising questions about whether his policies would be influenced by business considerations. [Continue reading…]

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Bank that lent $300m to Trump linked to Russian money laundering scam

The Guardian reports: The German bank that loaned $300m (£260m) to Donald Trump played a prominent role in a money laundering scandal run by Russian criminals with ties to the Kremlin, the Guardian can reveal.

Deutsche Bank is one of dozens of western financial institutions that processed at least $20bn – and possibly more – in money of “criminal origin” from Russia.

The scheme, dubbed “the Global Laundromat”, ran from 2010 to 2014.

Law enforcement agencies are investigating how a group of politically well-connected Russians were able to use UK-registered companies to launder billions of dollars in cash. The companies made fictitious loans to each other, underwritten by Russian businesses. [Continue reading…]

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No, Sweden isn’t hiding an immigrant crime problem. This is the real story

Kristine Eck and Christopher J. Fariss write: Last weekend at a Florida campaign rally, the president of the United States made vague claims intimating that Sweden has an immigrant violence problem. Research we have conducted shows that this is not true. In fact, criticism of Sweden is based on common misconceptions and mishandled information.

The president’s comments were originally inspired by a Fox News report on a video propaganda piece released by Ami Horowitz, which alleges that Sweden faces a spate of Muslim immigrant violence and that Swedish authorities are covering this up. The video misuses quotes from Swedish police to suggest that official crime statistics in Sweden are being purposely withheld. After President Trump’s comments, several right-wing media outlets doubled down on these claims. This is a feedback loop based on what are now called “alternative facts.”

Official crime statistics from Sweden actually show that the crime rate has remained steady since 2005. What’s more, the Swedish police do not collect information on the ethnicity, religion, or race of perpetrators or victims of crime, which means there’s no evidence for claims that Muslim immigrants are committing crimes in record numbers. Nor is there any evidence to support the claim that Swedish authorities are manipulating the statistics, as the producer of the video alleges.

Actually, compared to the U.S., the government of Sweden is a model in making data accessible and actions transparent. Its official statistics are some of the most complete and readily accessible in the world. Since 1766, Swedish law on freedom of the press has included a principle of public access (Offentlighetsprincipen), which grants public access to all government documents upon request unless they fall under secrecy restrictions. This law is the oldest piece of freedom of information legislation in the world. [Continue reading…]

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Trump’s ties to organized crime — past and present

The Daily Beast reports: In 2013, Sater’s connection to Trump, who was still two years shy of running for national office, caused the mogul one of his many moments of pique with a member of the international press. Trump stormed out of a BBC Panorama interview when asked by John Sweeney, “Shouldn’t you have said, Felix Sater, you’re connected with the Mafia and you’re fired.” Trump replied by suggesting Sweeney might be “thick” and that he could not break a contract with Bayrock even if Sater’s mob ties were established to his satisfaction.

Sater’s tenure at Bayrock wasn’t just confined to leveraging the Trump brand. He was accused of threatening gruesome acts of violence against erstwhile business associates who were in a position to disclose his shady history. In 2007, the manager of one Trump hotel-condo in Phoenix, Arizona, sued Sater after he allegedly threatened to get a cousin to electrocute the manager’s testicles, dismember him and leave him “dead in the trunk of his car.” Sater reportedly settled that case out of court, but denied the charges.

By 2010, Sater was out at Bayrock — but in at the Trump Organization. He reportedly brandished a business card naming him as a “Senior Advisor to Donald Trump.” He also had a valid email address at the organization, a phone number that had previously belonged to one of Trump’s general counsels, and his own office in Trump Tower on Fifth Avenue.

Sater’s role as an employee of the Trump Organization also came to light when he was accused of shaking down one of his former colleagues at Bayrock.

Jody Kriss, the former finance director of Bayrock, alleged that he was entitled to a share of the $227 million profits in the Trump SoHo project. As reported by The Daily Beast in August 2016, Kriss claimed, in a court case filed in Delaware, that he was owed $7 million for his work on the project but offered a settlement of only half a million dollars. His principal antagonist in recouping his investment, he said, was Felix Sater.

In sworn testimony, Kriss stated that his money had become entangled with an Icelandic financial company known as FL Group, which seemed to draw Russian investors “in favor” with Vladimir Putin. (Bayrock founder Tevfik Arif was also part of this deal.) According to Kriss:

“Felix Satter [sic] told me that the deal with FL prohibited me from getting the rest in that I could either take the money and shut up or risk being killed if I made trouble. I knew at that time Satter had served a prison sentence for first degree assault (stabbing someone in the face with a wine glass stem) and with learning what would soon become common knowledge, that Satter had had a decades-long involvement with the New York and Russian mafia and had just in 2007 been sued in a civil action in Phoenix.”

The Delaware case ultimately was dismissed because of jurisdiction; but the judge stated on the record that Kriss’s accusations appeared to be legitimate. Sater’s defense team denied allegations.

In a separate and still-pending suit to which Kriss is a plaintiff, this one filed in New York’s Southern District, he has alleged that “tax evasion and money-laundering are the core of Bayrock’s business model.”

The defendants have argued that the suit amounts to a shakedown, but the judge has ruled that Kriss has enough of a case to warrant moving forward.

As for Sater, he had coffee the other day with the president’s personal lawyer and discussed a peace plan for Ukraine. [Continue reading…]

 

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New Trump deportation rules allow far more expulsions

The New York Times reports: President Trump has directed his administration to more aggressively enforce the nation’s immigration laws, unleashing the full force of the federal government to find, arrest and deport those in the country illegally, regardless of whether they have committed serious crimes.

Documents released on Tuesday by the Department of Homeland Security revealed the broad scope of the president’s ambitions: to publicize crimes by immigrants; enlist local police officers as enforcers; strip immigrants of privacy rights; erect new detention facilities; discourage asylum seekers; and, ultimately, speed up deportations.

The new enforcement policies put into practice the fearful speech that Mr. Trump offered on the campaign trail, vastly expanding the definition of “criminal aliens” and warning that such unauthorized immigrants “routinely victimize Americans,” disregard the “rule of law and pose a threat” to people in communities across the United States.

Despite Mr. Trump’s talk, research shows lower levels of crime among immigrants than among native-born Americans. [Continue reading…]

A report published by Pew Research Center in 2013 states: The crime rate among first-generation immigrants—those who came to this country from somewhere else—is significantly lower than the overall crime rate and that of the second generation. It’s even lower for those in their teens and early 20s, the age range when criminal involvement peaks. [Continue reading…]

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Trump pursues his attack on Sweden, with little evidence

The New York Times reports: President Trump escalated his attack on Sweden’s migration policies on Monday, doubling down on his suggestion — based on a Fox News report — that refugees in the Scandinavian country were behind a surge in crime and terrorism.

Mr. Trump set off consternation and ridicule on Saturday when he seemed to falsely imply to a throng of supporters at a rally in Florida that a terrorist attack had occurred in Sweden, which has admitted tens of thousands of refugees in recent years.

On Sunday, as questions swirled, a White House spokeswoman, Sarah Huckabee Sanders, said that “he was talking about rising crime and recent incidents in general, not referring to a specific issue.”

Mr. Trump then said on Twitter that he was referring to a Fox News segment about an American filmmaker who argues that the police in Sweden are covering up a migrant-driven crime wave.

Officials in both countries expressed alarm and dismay at Mr. Trump’s remarks. Senator Bob Casey, a Pennsylvania Democrat, said the president should get his information from intelligence agencies and not from television. The Swedish Embassy in Washington offered the Trump administration a briefing on its immigration policies. On Monday, Sweden’s prime minister, Stefan Lofven, said he was surprised by Mr. Trump’s comments, and noted that Sweden ranked highly on international comparisons of economic competitiveness, human development and income inequality. [Continue reading…]

FactCheck.org reports: Sweden saw a dramatic increase in asylum applicants in 2015, with more than 162,000 people arriving in the country, according to the Swedish Migration Agency. Of those, more than 51,000 were from Syria, with another roughly 42,000 from Afghanistan and 21,000 from Iraq. All told, Sweden has taken in nearly 200,000 refugees and migrants in recent years, more than any other country per capita in Europe, the BBC reported.

That’s a big number for a country with a population just under 10 million. (By way of reference, a comparable number based on the population of the U.S. would come to about 5.2 million. President Barack Obama set the level of refugees the U.S. would accept in fiscal year 2017 at 110,000 before he left office, but Trump cut that number to no more than 50,000.)

While there has been an uptick in some crime categories, government statistics from Sweden do not corroborate the claim of a major crime wave due to immigrants.

According to the Swedish National Council for Crime Prevention (Brå), lethal violence (murder, manslaughter and assault that results in death) totaled 112 victims in 2015. That’s up by 25 (a sizable increase) from 2014, but it’s about the same as the number in 2007, which was 111 victims.

“In a long-term perspective, ever since the 1990’s when Brå started the measurements, the trend shows that lethal violence is declining,” the website says. [Continue reading…]

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