armed Spanish police raided a cocaine-laden trawler

When armed Spanish police raided a cocaine-laden trawler on the high seas late last month, just one member of the smuggling gang was onboard. But police knew exactly where to look for the foreigners linked to the $400 million haul. The ringleaders, a Brit and two Irishmen, were arrested back on the Costa del Sol.

If organized crime is a globalized business these days, then Spain could be its European headquarters. More than 60 percent of the cannabis that enters the continent, as well as half the cocaine, is believed to pass through Spanish territory. And for a concentration of villainy there's nowhere to beat the Costa del Sol, a sun seekers' paradise that doubles as a mobsters' trading post. Local media cite an Interpol estimate that the region is now home to 18,000 foreign criminals of 70 nationalities. Shady services on offer range from arms trafficking to prostitution and money laundering. "This is the center of crime for Europe and maybe the whole world," says Wensley Clarkson, a British crime writer who spends six months of the year at his home near Marbella, the Costa's principal resort. "It's a combination of Chicago in the 1930s and Miami in the 1990s."

The Costa's international allure presents an awesome challenge to crime busters. With 320 days of sunshine and more golf courses per head than anywhere else in the world, it pulls in the largest and richest mix of expats and holidaymakers in Europe. In its polyglot world, British residents number about 350,000, Swedes run their own newspaper and restaurant menus can be found in Russian. Where better for a foreign mobster to escape police attention or do business than among a year-round crowd of 8 million visitors? "Invisibility and anonymity are part of the problem," says Per Stangeland, a criminologist at the University of Malaga.

But the Costa's clinching criminal charm is location. Morocco, which supplies most of Europe's cannabis, is just 30 kilometers across the Mediterranean, and not far away the tiny British colony of Gibraltar makes a fat living as a tax haven and money laundry. "The Costa del Sol is a crossroads," says Letizia Paoli, an expert on organized crime at the Max Planck Institute in Freiburg, Germany. Add some historical ties with Latin America—think of the Colombian cocaine trade—and some tricky extradition laws, and it's easy to see why the Costa has become a bolt-hole known to the British tabs as the "Costa del Crime."

Up to now, the authorities have often looked away—or collaborated. Crime and tourism have combined to bring unprecedented prosperity. A booming construction industry has provided a perfect outlet for cleansing dirty money. Inevitably, that's tainted local politics. The sprawling developments that cover vast stretches of hillside testify to officials' willingness to overlook zoning regulations in return for backhanders. The 12-year term of Marbella's former mayor, Jesus Gil, who died last year, ended in a flurry of fraud and corruption scandals as well as a stint in jail.