Stratfor: Criminals come out of the woodwork as countries roll out COVID-19 vaccines

With the recent approval of several COVID-19 vaccines and several countries already administering shots, criminal groups have numerous means of exploiting the global vaccination campaign. 

Incentives to cheat

Criminal groups do not typically traffic in vaccines. Only isolated examples exist of the theft of small batches of vaccines, primarily due to two factors.

First, in the interest of public health, vaccines are typically readily available to the public at either very low or no cost. This means criminal organizations don’t stand to gain much from the sale of stolen vaccines.

Second, vaccines are typically more difficult to store and administer than the pills that criminal organizations more commonly target for pharmaceutical theft.

Between those two challenges, vaccines are much more difficult to fence than medications like opioid pain relievers, anti-anxiety medications or erectile dysfunction treatments commonly targeted for theft. 

Even so, the unprecedented endeavor that is the COVID-19 vaccination campaign will create opportunities criminals can exploit. While most governments are covering the costs of the vaccine in the interest of public health, doses of the vaccine are not readily available to most of the general population. Given limited numbers of doses, most countries are officially prioritizing front-line health care workers and emergency responders and older individuals with underlying health issues at higher risk of dying from COVID-19.

Healthy adults in noncritical professions in developed countries will likely have to wait several months, if not longer, before they can obtain the vaccine. For many people in the developing world and emerging market countries, vaccines likely will not be widely available until late 2021 or 2022.

The gap between demand and availability creates the potential for a black market for vaccination earlier than designated by national vaccination programs. Criminal groups are well placed to provide this service for substantial fees.

The second limitation, storage and administration of vaccine doses, is certainly an obstacle, but not an insurmountable barrier, especially by more sophisticated and well-funded organized criminal groups. Of the three vaccines currently approved by major developed countries, two of them (Pfizer PFE, -0.14% and Moderna MRNA, -0.05% ) require storage in freezing temperatures — conditions that are expensive and difficult to maintain.

The third, the AstraZeneca AZN, +0.10% vaccine, can be stored at standard refrigeration temperatures (36-46 F), making it easier to handle and more attractive to criminal organizations looking to steal and fence COVID-19 vaccines.

When it comes to administration, preparing two shots over a couple of weeks is more complicated than taking a pill, but advanced criminal organizations in Japan, Italy, Brazil and Mexico have proven able to hire or coerce medical assistance from professionals in the past.

For example, El Universal reported in July 2020 that one of the most wanted cartel leaders in Mexico, Nemesio Oseguera Cervantes (aka El Mencho), built his own private hospital in a small town in Jalisco state.

Criminal tactics

As the Interpol notice suggested, criminal organizations could use multiple tactics to exploit the delta between demand and access to COVID-19 vaccines over the coming year, including:

• Corrupting medical staff and selling access to vaccine doses.
• Stealing and reselling doses of legitimate vaccines.
• Fraudulent offers of vaccine for sale.

Corrupting medical staff

One of the more direct and scalable ways for criminal actors to bypass national vaccine distribution plans that the Interpol warning did not touch on is to corrupt the health officials who oversee the vaccination process.

Given the challenges of storing and administering the vaccines, criminal actors could use bribery and corruption in tandem with the threat of physical force to gain and sell access to vaccination slots in designated hospitals and clinics.

Rather than carrying out risky thefts of vaccines and overseeing logistically complicated administrations of the vaccine, criminals could act as middlemen to arrange for paying customers to receive vaccines from their official source. This would shift the logistical burdens of the vaccine campaign to the health care sector while still ensuring revenue for criminal actors. As an added bonus to the buyer, by using the official channels, recipients of the legitimate vaccine would receive official records of their shot(s).

The health sector is just as vulnerable to corruption or coercion as any other sector, and it can be seen at all levels, from the petty corruption of individuals to high-level misappropriation of international aid.

The chaos caused by COVID-19 and the infusions of government funds into the health care sector to manage the pandemic has already contributed to some criminal opportunism, while more traditional false claim filings continue. 

• August 2020: Police in Sao Paulo, Brazil, executed search and arrest warrants in an investigation into corrupt contracts worth $2.1 million to supply hospitals with personal protective equipment (PPE) for use in preventing the spread of COVID-19. 
• December 2020: Federal indictments accused two owners of a New York-area pharmacy chain of conducting $30 million worth of fraudulent Medicare claims linked to COVID-19 policies.
• December 2020: Thailand’s National Health Security Office identified $6.5 million worth of fraudulent charges filed by 190 clinics for procedures that were never performed. 

Copious numbers of anecdotes also exist of hospital staff around the world accepting under-the-table cash payments for favored treatment, or simply any service at all. In developing countries — where there is already an expectation of informal payments to receive a service — criminal corruption may not even be necessary; such arrangements may be a natural development of the vaccination program. 

Stealing and reselling doses of legitimate vaccines

Another more conventional way that organized criminal groups could exploit the COVID-19 vaccine campaign is to directly intercept vaccines and resell them through cargo theft. More sophisticated criminal groups are capable of stealing vaccines and selling them to more discerning customers who want to cut in line. Cargo theft groups have been targeting high-value shipments for decades, including pharmaceutical products. 

Existing cargo theft trends

Cargo theft is a traditional source of revenue for organized criminal groups around the world with particular characteristics by country. Cargo theft tends to target shipments of food and beverages, electronics and apparel, goods typically not protected by extra security and easy to resale on black markets. In the United States, 703 cases of cargo theft worth over $83 million in losses were reported in 2019, according to cargo theft tracking service SensiGuard. In Mexico, cargo theft activity has increased dramatically since 2016 as the government has cracked down on other forms of illicit sources of revenue. In Brazil, highly coordinated criminal groups attack targets nearly at will, stealing an estimated $365 million worth of cargo in 2016, according to NTC & Logistica. Heavily armed criminal groups in Brazil have taken on highly secured targets such as banks and transfers of precious metals at airports, typically with insider help. Cargo theft is also a common threat in Argentina, India, Italy and South Africa. 

While vaccines are rarely targeted in cargo theft attacks, pharmaceutical products are a niche target for more specialized cargo theft gangs. Cargo theft targeting pharmaceutical goods only accounted for about 2.9% of all incidents before the pandemic, but they tend to be much more valuable than the typical theft of processed foods or clothing, according to Anthony Pelli of BSI Supply Chain Security. One of the most valuable cargo thefts ever recorded in the United States involved a $60 million truckload of antidepressants stolen from a warehouse in Connecticut in 2010. The capability to steal vaccines is there; what has been lacking until now is the interest in doing so.

Emerging cargo theft trends 

Over the course of the COVID-19 pandemic, anecdotal evidence has suggested that criminal groups (or opportunistic thieves) are shifting targeting to account for new demands. The theft of medical supplies like PPE, hand sanitizer and COVID-19 test kits appears to have grown. For example, In Spain, PPE and medical supplies did not even register as a category of cargo theft in 2019, but they accounted for 37% of all cases in 2020 — the most targeted product by far. Similar statistics are unavailable in other countries, but there have been elevated numbers of reports from around the world of thefts targeting medical supplies. Masks, gloves, aprons and bottles of hand sanitizer are much easier to fence than vaccines, but it is clear that criminal actors see the pandemic as an opportunity to cash in. As vaccine doses enter the supply chain, they could be the next logical target for theft. 

Fraudulent offers of vaccine for sale

Online criminals have been exploiting COVID-19 since before it was labeled a pandemic in March, and related scams have contributed to a fourfold increase in reported online fraudulent activity in 2019 compared to 2020. Online scams have ranged from selling fake PPE and COVID-19 test kits to fraudulent invoices for legitimate tests, costing U.S. consumers more than $74 million, according to the Federal Trade Commission. Authorities in New York reported in December that scammers were calling residents offering them access to the Pfizer vaccine for $79.99. Such scams are unsophisticated and routine, but can still be lucrative, especially when targeting more vulnerable groups like the elderly. While online criminal groups can exploit their control over botnets to scale up these efforts or more effectively exploit payment information or credentials harvested from such scams, just about anyone so inclined can carry them out. Defending against them requires a healthy dose of skepticism of unsolicited and unrealistic offers from unknown vendors.

Impacts from the criminal threat

The impact of corrupt access and theft are potentially much more severe than those for online fraud. At the most strategic level, vaccines are the quickest, safest way for countries to overcome the disruptions caused by the pandemic, and vaccination campaigns are only successful if a vast majority of individuals participate.

According to polls of residents in the United States and Europe, populations there are already skeptical of the vaccine, with surveys suggesting that less than half of people in France want to get the vaccine. Anything else that might undermine the integrity of the vaccine, ranging from the security of the supply chain to the administration process at hospitals and clinics, could further undermine support for getting vaccinated and ultimately mitigating the health risks and overcoming the economic shocks of COVID-19.

Isolated cases of reported theft or fraud are unlikely to meaningfully impact public perception of vaccine safety, but evidence of systemic criminal activity could scare off significant portions of the population already on the fence. 

On a more local level, threats against the COVID-19 vaccine supply chain don’t just apply to trucking companies and warehouse workers: as recipients and administrators of the vaccine, hospitals and clinics make for attractive and soft targets for criminals seeking to steal doses.

Access to vaccines through corruption also could see physical violence. As seen over and over again in places like Mexico, organized criminal groups are quick to resolve disputes with violence. Any deals between paying customers and vaccine providers that result in disagreement risk accompanying violence. Conflicts in Mexico routinely spill over into hospitals and clinics, including an attack on a drug rehabilitation center last year in Guanajuato state that killed 24 people as part of an ongoing cartel feud.

Any extension of criminal activity into the health care sector brings with it the threat of physical violence to enforce agreements. This is true anywhere, but especially so in Mexico or other places where organized criminal groups exert significant influence. 

The staggered distribution of the COVID-19 vaccines therefore creates a market vulnerable to criminal exploitation. This means those involved in the distribution and administration of vaccines should be aware of the potential to exploit the world’s newest and highly coveted commodity.

Ben West is a security analyst at Stratfor, studying trends in terrorism, crime and espionage around the world.

This article was published with the permission of Stratfor, a global intelligence-research firm.