July 27 (Bloomberg) -- London is a “honeypot” for organized crime rings hawking fake tickets and other scams preying on tourists descending upon the city for the Olympic Games starting today, police say.
Nick Downing, head of the Metropolitan Police Service’s 47- officer anti-fraud team Operation Podium, said visitors may not even know they are victims until they arrive at stadiums and arenas with counterfeit tickets that were sold to them months ago in their home countries.
The 320,000 global visitors attending the Olympics will be part of an economic boost of an additional 804 million pounds ($1.3 billion) in consumer spending from the games, according to a report published in June by Visa Inc. Downing said the combination of money and unsuspecting holidaymakers creates a “honeypot” for attracting crooks.
“It’s a multimillion pound criminal industry that’s behind ticketing,” Downing said in an interview this week. “That’s every day, but with the Olympics we’ll see a much bigger opportunity.”
One of his top priorities is shutting down as many as 70 websites offering bogus or unauthorized tickets and it has been “quite a challenge” asking Internet service providers to suspend the sites.
“You map out what the crime is in the first place and you look at what enables that crime to occur,” he said. “So if you look at ticket fraud well, one of the aspects that makes that crime occur is the website.”
Operation Podium has made 186 arrests for a range of offenses including ticket scalping, known as touting in the U.K., fraud and theft. Of those, 100 have been charged, and 57 convicted. The team currently has 20 open investigations.
Downing has also tried to “police the world” as a significant amount of the ticket fraud occurs long before tourists reach London.
The directors of Euroteam AS, a Norwegian ticketing agency, have been charged with fraud by authorities in the Scandinavian country working with Operation Podium, Downing said. The U.K. Office of Fair Trading, in conjunction with police, yesterday won a court order to stop Euroteam and other Norwegian companies from offering tickets to the event. John Christian Elden, a lawyer for one of Oslo-based Euroteam’s directors, couldn’t be immediately reached to comment.
Downing’s team, which is being funded by the Home Office, is just one element of the security effort to keep the games safe. An additional 9,500 police officers will be working in London on the busiest days of the games. The capital will also see 18,200 soldiers deployed to Olympic venues, more than twice as many as U.K. soldiers in Afghanistan.
Culture Secretary Jeremy Hunt said this week that nothing should be left to chance “on the eve of the largest peacetime event ever staged in this country.”
About 320,000 visitors will converge on the city during the Olympics, surpassing the 250,000 visitors to Barcelona for the 1992 games and Athens’ 150,000 tourists in 2004, according to a study by researcher Oxford Economics Ltd. The number of trips on subways, buses and trains will rise by 25 percent to 15 million a day, Transport for London says.
Simon Bevan, a partner at the accounting firm BDO LLP in London said that ticket fraud pales in comparison to other crimes spurred by the games.
“Ticket fraud during the Olympics will be dwarfed by procurement and construction fraud,” Bevan said.
Operation Podium may lead to more arrests as criminal gangs make large financial gains from relatively low-risk activities such as ticket fraud, Downing said.
“We will prosecute them,” Downing said. “There’s no middle ground here -- it’s very clear -- as we started this we said it would be a very hostile environment and it has been.”
The biggest economic losses are felt by credit card companies that often have to repay their customers for any losses, Downing said.
“The value of credit card charge-backs could be millions, and no merchant acquirer or credit card company wants that,” he said.
Tickets aren’t the only fraud targeted by Operation Podium.
Stephen Moonesamy was sentenced July 17 to two years in prison after pleading guilty to leading 75 children from Northamptonshire in central England to believe they would take part in the closing ceremony.
The impact of the crimes is “not just economic,” Downing said. “This is what we have been working to prevent. That’s the big issue for me.”