The shadow economy: illicit markets, and where legitimate businesses are exposed
This page gives the scale of the main illicit markets — drugs, money laundering, organised crime, tax evasion and fraud, forced labour and crypto-crime — as official bodies publish them, plus the red flags regulators give businesses. Most numbers are estimates, and some (such as the 2–5% of GDP laundering figure) are decades old. The main point: legitimate businesses are the usual channel. 58% of Canadian organised-crime groups are tied to businesses, and Europol says every sector is at risk, so knowing your customers, suppliers and labour brokers is the defence.
35 sources · 57 tier A · 14 tier B · 6 tier C · prepared 2026-09-21
01
Drugs
The drug trade is the largest source of criminal profit that the agencies below track. UNODC's 2026 report shows cocaine supply at a record and fentanyl deaths in North America falling for the first time in a decade — but from a very high level.
| People who used a drug worldwide (2024) 6.2% of people aged 15–64, up from 5.2% in 2014. Cannabis 256M, opioids 63M, amphetamines 32M, cocaine 25M, ecstasy 21M. UNODC World Drug Report 2026. |
331 millionA |
| Global cocaine production (2024) More than fourfold over ten years. UNODC warns supply growth 'may soon outstrip demand' and traffickers are pushing into Africa and Asia. |
>4,000 tonnes (pure)A |
| Cocaine supply from South America (2024) Colombia alone made 40% of global cocaine seizures. North America is the largest cocaine market: 6.5 million users (1.9% of people 15–64). |
4,100 t (range 3,800–4,700)A |
| Fentanyl-related overdose deaths, North America (2024) First decline in a decade, after a 2022/23 peak. North America made >99% of the world's fentanyl seizures in 2020–24. |
Down ~17% (Canada), at least 33% (US)A |
| New psychoactive substances on the market (2024) UNODC: novel synthetic opioids (nitazenes, orphines) suggest traffickers are looking for alternatives to heroin. |
755, of which 118 newA |
| US overdose deaths, 12 months to Oct 2024 DEA NDTA 2025, citing CDC provisional data. Largest 12-month reduction on record; synthetic opioid deaths fell 33% in 2024. |
84,076 (−25% year on year)A |
| Main suppliers named by DEA Designated by the US as foreign terrorist organizations in 2025, with six other groups. DEA says they rely on precursor chemicals from China and on Chinese money laundering networks to move proceeds. |
Sinaloa Cartel and Jalisco New Generation Cartel (CJNG)A |
| DEA fentanyl seizures (2024) Down 29% and 24% from 2023. |
9,950 kg powder; 61.1M fake pillsA |
| Organized crime groups assessed in Canada (2025) CISC 2025 Integrated Threat Assessment. Canada's criminal marketplace is 'import-centric': cocaine from South America, precursor chemicals from China and India. |
493 (8 high-level threats)A |
| Organized crime groups operating in Canada (RCMP) RCMP says imports of precursors have increased domestic fentanyl and methamphetamine production; 80% of groups are linked or collaborate through common associates. |
Over 4,000; most sell drugsA |
| Opioid toxicity deaths in Canada RCMP page (modified June 2026). |
About 18 a dayA |
02
Money laundering and financial crime
Money laundering is how criminal profit becomes spendable. No one measures it well: the famous '2–5% of global GDP' figure is a rough estimate from 1998. What regulators can give businesses is red flags.
| What money laundering is FATF definition. It lets criminals enjoy profits 'without jeopardising their source'. |
Processing criminal proceeds to disguise their illegal originA |
| Global scale — the widely quoted range Stated on UNODC's money-laundering page. FATF traces the range to an International Monetary Fund statement in 1998. It is old and rough, not a measurement. |
2–5% of global GDP (US$800B–2T)A |
| Global scale — UNODC's own study Per FATF's summary of the UNODC study: criminal proceeds were 3.6% of global GDP. FATF says a definitive estimate is 'impossible' and does not publish one. |
2.7% of GDP (~US$1.6T) laundered in 2009A |
| Money laundered in Canada each year CISC estimate quoted in Finance Canada's 2025 national risk assessment. A wide range — treat as order of magnitude. |
C$45–113 billionB |
| Canada: sectors most inherently vulnerable Finance Canada 2025. Threats rated high include drug trafficking, fraud, trade fraud/trade-based laundering and tax evasion. |
Big banks, private corporations, express trusts, crypto assets, some money services businessesB |
| US suspicious activity linked to Chinese money laundering networks FinCEN Financial Trend Analysis, Aug 2025. These are amounts in suspicious-activity reports, not confirmed laundering. |
US$312B in 137,153 reports (2020–24)A |
| US fentanyl-related suspicious activity (2024) | US$1.4B in 1,246 reportsA |
| FATF trade red flag: structure FATF–Egmont TBML Risk Indicators (2021). One indicator alone is not proof; several together warrant a closer look. |
Shell companies, mass-registration addresses, nominee owners, no real staff or payrollA |
| FATF trade red flag: activity Example given by FATF: a car dealer exporting clothing. |
Trade that doesn't fit the business; unreasonably low margins; new firm suddenly trading high volumesA |
| FATF trade red flag: documents and payments | Invoice/contract mismatches, vague goods descriptions, payment by an unrelated third party, last-minute payee changesA |
| FinCEN business red flags (2025 advisory) FinCEN Advisory FIN-2025-A003. Businesses it reports are commonly in shipping, freight, logistics, industrial supplies, food and technology. |
Export receipts with no inventory purchases; income out of line with the business's sizeA |
| FINTRAC fentanyl-laundering alert Written with FinCEN and Mexico's FIU for businesses that must report. Supports Project Guardian, which has generated nearly 1,000 FINTRAC disclosures since 2018. |
Operational Alert, Jan 2025A |
03
Organised crime
The Global Organized Crime Index scores 193 countries on how much organised crime they have (criminality) and how well they resist it (resilience), from 1 to 10. Canada and the US score high on resilience. Financial crime is now the most widespread criminal market in the world.
| Most affected countries — criminality (2025) Then Ecuador and Paraguay (7.48). GI-TOC Global Organized Crime Index 2025, Table 1. |
Myanmar 8.08, Colombia 7.82, Mexico 7.68B |
| Highest criminal-markets score (2025) Then Myanmar 7.67, Colombia 7.43, Iran 7.37, Nigeria 7.33. |
Mexico 8.27B |
| United States (2025) Criminal-markets average 6.13 (+0.30 since 2023). |
Criminality 5.87 (rank 60); resilience 6.96 (rank 27)B |
| Canada (2025) Criminal-markets average 4.13 (+0.26). Human smuggling score rose a full point. |
Criminality 4.17 (rank 144); resilience 7.38 (rank 21)B |
| Most resilient countries (2025) | Finland and Liechtenstein 8.42B |
| Most widespread criminal market worldwide Up 0.24 since 2023, the largest rise of the 15 markets; 78 countries got worse. It covers embezzlement, tax evasion, online scams and business email compromise. |
Financial crimes, 6.21B |
| Private-sector role From the GI-TOC foreword to the 2025 Index. |
Increasingly 'facilitators' in logistics, finance and technologyB |
| Europol: criminal use of legal businesses EU-SOCTA 2025: most reported criminal networks abuse legal business structures, to commit crimes, hide them or launder profits. |
'All business sectors are at risk'A |
| Europol: other cross-cutting threats EU-SOCTA 2025, 'The changing DNA of serious and organised crime'. |
Parallel financial systems, corruption, violence-as-a-service, recruiting young peopleA |
| Europol: cybercrime (IOCTA 2025) Criminals sell access to compromised systems. Europol says AI is making social engineering more effective. |
Stolen data is now a key criminal commodityA |
04
Tax evasion and fraud
Governments publish tax gaps — tax owed but not paid on time. Not all of it is crime; some is error. Consumer fraud losses are what victims report, which is only part of the total.
| US gross tax gap (tax year 2022, projected) 85.0% of tax is paid voluntarily and on time. Underreporting is US$539B of the gap. |
US$696 billionA |
| US net tax gap (TY2022) After US$90B of late and enforced payments. |
US$606 billionA |
| Canada gross federal tax gap (TY2022) CRA 2026 report. Net, after enforcement: C$34.7B (9.3%). |
C$59.5B (16.0% of revenue)B |
| Canada corporate income tax gap (TY2022) Personal income tax gap C$26.9B; GST/HST gap C$7.9B. |
C$23.5B gross (25% of CIT revenue)B |
| Canada: underground economy's share CRA also says the self-employed (13–15% of filers) make up about 20% of the personal income tax gap. |
About 5% of federal personal income tax revenueB |
| VAT carousel (MTIC) fraud — definition Europol: a trader charges VAT and then disappears (the 'missing trader'). Electronics, especially mobile phones, are the most-reported goods. |
Goods traded in a loop between countries so VAT is reclaimed on tax never paidA |
| EU losses to VAT fraud EU-SOCTA 2025. Europol notes the fraud is run by professionals with expertise in accounting, tax and law. |
'Several tens of billion euros' a yearA |
| Fuel laundering — definition HMRC's definition covers red diesel and kerosene. Europol reports illicit 'designer fuel' production in the EU has come back since 2022. |
Stripping the markers from low-tax fuel to sell it as road fuelA |
| US fraud losses reported to the FTC (2025) About 25% more than 2024, and the highest on record. |
US$15.9 billion; 3 million reportsA |
| US: costliest scam type (2025) Imposter scams were the most reported: more than 1 million reports, US$3.5B lost (nearly US$1B to business impersonators). |
Investment scams, US$7.9BA |
| US: scams that started on social media (2025) Nearly 30% of people who lost money said the scam began on social media. |
US$2.1BA |
| Canada fraud losses reported to CAFC (2025) Highest dollar losses: investment C$351M, spear phishing C$67.9M, romance C$63.3M, job scams C$50.6M. |
C$704M; 112,000+ reportsA |
05
Human trafficking and forced labour
Forced labour is mostly a private-sector problem, and more than half of it happens in upper-middle or high-income countries. Canada now requires larger companies to report on it every year.
| People in forced labour (2021) ILO, Walk Free and IOM Global Estimates of Modern Slavery, 2022. 50 million in modern slavery overall, including 22 million in forced marriage. |
28 millionA |
| Share in the private sector 14% is imposed by states. 52% of forced labour is in upper-middle or high-income countries. |
86%A |
| Migrant workers' risk ILO links this to 'unfair and unethical recruitment practices'. |
More than 3 times non-migrantsA |
| Illegal profits from forced labour ILO, 2024. 73% comes from forced commercial sexual exploitation. By sector: industry US$35B, services US$20.8B, agriculture US$5.0B, domestic work US$2.6B. |
US$236 billion a yearA |
| ILO's 11 indicators of forced labour 2025 revised edition, written for employers, inspectors and others. One indicator can be enough in some cases; usually several together point to forced labour. |
Abuse of vulnerability; deception; restricted movement; isolation; violence; threats; retained ID documents; withheld wages; debt bondage; abusive conditions; excessive overtimeA |
| Canada: who must report (S-211 Act) Also any firm listed on a Canadian stock exchange. Applies to firms that produce, sell, distribute or import goods, or control a firm that does. |
Firms that meet 2 of 3: C$20M assets, C$40M revenue, 250 employeesA |
| Canada: what the report covers Due by May 31 each year. Failing to report can bring a fine of up to C$250,000. |
Supply chains, due diligence, risk areas, remediation, training, effectivenessA |
| Trafficking linked to scam centres Reported by Chainalysis. Links fraud losses to forced labour. |
Victims forced to run scams in Cambodia, Myanmar and elsewhereC |
06
Crypto-crime
Only one source counts illicit crypto flows at scale: the blockchain-analytics firm Chainalysis. Its numbers are minimums, based on addresses it has identified, and it revises them upward over time. Treat them as indicative.
| Received by illicit crypto addresses (2025) Up 162% on 2024, mostly because sanctioned entities received 694% more. Chainalysis calls it a lower bound. |
At least US$154 billionC |
| Illicit share of crypto volume Chainalysis estimate for all attributed crypto transactions. |
Under 1%C |
| Stablecoins' share of illicit volume | 84%C |
| Crypto stolen by DPRK-linked hackers (2025) Includes a single exchange hack of nearly US$1.5B. |
US$2 billionC |
| Crypto scams and fraud (2025) Chainalysis projects the figure up from what it had identified by publication. Impersonation scams grew 1,400% year on year. |
About US$17B (projected)C |
07
Where businesses get exposed
Legitimate firms are exposed as customers, suppliers, employers and payment channels — often without knowing. Here is where the regulators above say it happens.
| Canadian crime groups tied to businesses CISC: through ownership, employment or exploitation, to move goods, launder proceeds and hide how big they are. |
58% (2025)A |
| Cash and cash-based sectors Finance Canada 2025. FATF lists cash deposits just under reporting thresholds as a red flag (s8). |
Cash is attractive for its anonymityB |
| Import/export and logistics FinCEN's 2025 advisory names shipping, freight, logistics, industrial supplies, food and technology firms (s9). |
Trade-based laundering and trade fraud rated a high threatB |
| Electronics and luxury goods sellers FinCEN business red flags in trade-based laundering schemes. |
Revenue out of line with size; paying cards of unrelated peopleA |
| Real estate FinCEN red flag. Finance Canada also names real estate as a way to legitimise proceeds (s12). |
Purchases through shell companies or unrelated foreign firmsA |
| Customs brokers NOC 1320 51,985 employed in Canada EU-SOCTA 2025, on customs import fraud. |
Some 'lend their specialist knowledge' to import fraudstersA |
| Accounting, tax and legal professionals NOC 1110 391,235 employed in Canada EU-SOCTA 2025. |
VAT fraud run by people with this expertiseA |
| Hiring, recruiters and labour brokers ILO forced-labour indicators. Canada's S-211 reports must cover supply-chain risk (s26). |
Employer or recruiter abuse of workers' vulnerability; debt bondageA |
| Employees recruited as money mules CAFC: 'Never … accept money and send money to a third party. You may be participating in money laundering.' Job scams cost Canadians C$50.6M in 2025. |
Job offers that ask staff to receive and forward moneyA |
| Staff targeted by fraud and corruption Europol reports people with access to digital systems are targeted for corruption (s14). |
Spear phishing C$67.9M (Canada, 2025); insiders with system access targetedA |
| Trade finance FATF–Egmont indicators. |
Letters of credit extended without reason; mixed trade-finance productsA |
08
Where to report
If someone is in immediate danger, call 911. Otherwise, use the channels below. The hotlines are confidential and open 24/7.
| Canadian Human Trafficking Hotline 24/7, confidential, multilingual. Run by the Canadian Centre to End Human Trafficking. |
1-833-900-1010A |
| US National Human Trafficking Hotline 24/7, confidential. TTY 711. |
1-888-373-7888 (text 233733)A |
| Fraud in Canada — Canadian Anti-Fraud Centre Online reporting goes through the Report Cybercrime and Fraud system. Also report to local police. CAFC notes its phone line has had outages. |
Report online, or call 1-888-495-8501A |
| Fraud in the US — FTC The FTC's portal for fraud, scams and bad business practices (s20). |
ReportFraud.ftc.govA |
| Canada — businesses covered by the AML law Required 'as soon as practicable' once there are reasonable grounds to suspect. There is no dollar threshold. |
File a Suspicious Transaction Report with FINTRACA |
| Canada — anyone else FINTRAC cannot follow up or recover funds. Send fraud losses to police or CAFC. |
Voluntary information to FINTRAC; can be anonymousA |
| US — financial institutions Required of institutions under the Bank Secrecy Act. FinCEN advisories ask filers to cite the advisory code, e.g. FIN-2025-A003. |
File a Suspicious Activity Report with FinCENA |
| US — whistleblowers Covers Bank Secrecy Act and sanctions violations. Awards are possible where penalties exceed US$1 million. |
FinCEN Whistleblower ProgramA |
?
Looked for and not found
Claims this page would have made if a source could be opened. They are left out rather than guessed.
- A 2025 Consumer Sentinel Data Book was not yet on the FTC's reports page. FTC 2025 totals come from its March 2026 testimony and 2026 press releases instead.
- The CAFC's claim that only a small share of fraud (often quoted as 5–10%) is reported was not on the CAFC pages I opened, so it is left out.
- The DEA site blocked direct download. The 2025 NDTA was read from an Internet Archive copy of the same DEA PDF URL. No 2026 NDTA had been published as of September 2026.
- No EU-wide MTIC-only loss figure was sourced. Europol gives only 'several tens of billion euros' a year for VAT fraud overall; the European Commission's VAT gap report was not opened.
- The CISC full 2025 report is available only on request. Canadian figures here come from its public summary.
- The FATF FAQ page is behind a bot check. It was read from an Internet Archive copy (2025); the FATF–Egmont TBML indicators PDF was also read from an archive copy.
- UNODC's money-laundering overview page carries no date. The 2–5% range on it traces, per FATF, to an IMF statement in 1998.
- The Finance Canada 2025 risk assessment and the CRA tax gap report block scripted downloads. Both were read with a fetch tool that summarises the page, so the figures quoted are as it returned them.
§
Sources
- World Drug Report 2026 — press release — UNODC, 2026-06A
- World Drug Report 2026 by region: Americas — UNODC, 2026-06A
- 2025 National Drug Threat Assessment — U.S. Drug Enforcement Administration, 2025-05A
- Summary – 2025 Public Report on Organized Crime in Canada — Criminal Intelligence Service Canada, 2026-01A
- Death and dollar signs: how organized crime groups profit from the illicit synthetic drug market — Royal Canadian Mounted Police, 2026-06A
- Frequently asked questions: What is money laundering? How much money is laundered per year? — Financial Action Task Force, 2025A
- Money laundering — overview — UNODC, undated web pageA
- Trade-Based Money Laundering: Risk Indicators — FATF and Egmont Group, 2021-03A
- FinCEN Advisory FIN-2025-A003 on the use of Chinese money laundering networks by Mexico-based transnational criminal organizations — U.S. Treasury, FinCEN, 2025-08A
- FinCEN issues Advisory and Financial Trend Analysis on Chinese money laundering networks (news release) — U.S. Treasury, FinCEN, 2025-08A
- FINTRAC publishes money laundering indicators aimed at combatting fentanyl and other illegal synthetic opioids (news release) — FINTRAC, 2025-01A
- 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada (read through a page-summarising tool, not the document itself) — Department of Finance Canada, 2025B
- Global Organized Crime Index 2025 — Global Initiative Against Transnational Organized Crime, 2025B
- The changing DNA of serious and organised crime — EU Serious and Organised Crime Threat Assessment (EU-SOCTA) 2025 — Europol, 2025-03A
- Steal, deal and repeat — Internet Organised Crime Threat Assessment (IOCTA) 2025 — Europol, 2025-06A
- Tax Gap Projections for Tax Year 2022 (Publication 5869) — U.S. Internal Revenue Service, 2024-10A
- Overall federal tax gap report: estimates and key findings for non-compliance, tax years 2014–2022 (read through a page-summarising tool, not the document itself) — Canada Revenue Agency, 2026B
- HCOS1150 — Oils fraud: general (Hydrocarbon Oils Strategy manual) — HM Revenue & Customs, undated manual pageA
- FTC testifies before the Joint Economic Committee on agency's efforts to combat fraud — U.S. Federal Trade Commission, 2026-03A
- FTC data show people reported losing $3.5 billion to imposter scams in 2025 — U.S. Federal Trade Commission, 2026-06A
- New FTC data show people have lost billions to social media scams — U.S. Federal Trade Commission, 2026-04A
- Top 10 frauds in 2025 — Canadian Anti-Fraud Centre, 2026-02A
- 50 million people worldwide in modern slavery (Global Estimates of Modern Slavery, 2022) — ILO, Walk Free and IOM, 2022-09A
- Annual profits from forced labour amount to US$236 billion (Profits and Poverty: The economics of forced labour) — International Labour Organization, 2024-03A
- ILO indicators of forced labour, 2025 revised edition — International Labour Organization, 2025-11A
- Fighting Against Forced Labour and Child Labour in Supply Chains Act (S.C. 2023, c. 9) — Justice Laws Website, Government of Canada, current to 2026-07A
- 2026 Crypto Crime Report — introduction — Chainalysis, 2026-01C
- 2026 Crypto Crime Report: Scams — Chainalysis, 2026-01C
- Canadian Human Trafficking Hotline — Canadian Centre to End Human Trafficking, 2026A
- National Human Trafficking Hotline — National Human Trafficking Hotline (U.S.), 2026A
- Report fraud and cybercrime — Canadian Anti-Fraud Centre, 2025-11A
- ReportFraud.ftc.gov — U.S. Federal Trade Commission, 2026A
- Providing voluntary information — FINTRAC, 2026A
- Reporting suspicious transactions to FINTRAC (guidance) — FINTRAC, 2026A
- Whistleblower Program — U.S. Treasury, FinCEN, 2026A