China’s Dirty Money Problem, Explained

0:00 (upbeat music) (background chatters)- These people are ghost,

0:04 authorities don't see absolutely anything.

0:10 (bright music) Inside of this bag is a hundred thousand dollars.

0:15 What should I spend it on?

0:16 I could buy a fancy orange jacket, I could buy a new drone.

0:20 I could buy like really nice antique maps,

0:22 but actually I can't spend this money 'cause I have a big problem,

0:25 this money is dirty.

0:29 (bright music) No, not like germs,

0:32 I mean I'm sure there's plenty of those, but it's a different kind of dirty.

0:34 This money is dirty because I got it from selling drugs.

0:38 (bright music) And in fact,

0:40 I can't spend it because I need to get it back to my bosses in another country.

0:44 (Johnny sighs) I could take it to a bank and deposit it,

0:47 but they'll end up asking questions and report it to the government.

0:50 (siren shrieking) I could try to ship it,

0:53 bring it with me on a flight, but that also can get pretty risky.

0:58 (bright music) Ultimately, I need to clean this money, to launder it.

1:07 It's not gonna be easy though.

1:08 (air whooshing) Okay, no, I did not sell drugs to get this money and know

1:16 it is not dirty and in fact it's not even real.

1:19 (bright music) But we'll leave it here to remind us what money looks like,

1:24 because a lot of money that moves around our world is dirty.

1:28 (bright music)- More than $50 million in drug cash vanish from U.S.

1:36 streets without tripping a single bank alarm, and this was just one city.

1:43 Multiply this around the world and you can see how much money is flowing around.

1:49 I mean, we're talking, you know, trillions and trillions of dollars.

1:53 Roughly three to 5% of world GDP is the proceeds of crime.

1:57 That equates to roughly $4 trillion.

2:01 Drugs, human trafficking, weapons, illegal wildlife parts,

2:05 it all needs money to work.

2:08 Criminals, criminal organizations commit crime for what?

2:11 For money.

2:12 Money.

2:13 (bright music)- And if I were in this hypothetical scenario,

2:17 I actually have another option, an option that will allow me to move

2:21 my money without any government or law enforcement knowing.

2:25 It is called flying money.

2:27 (bright music) It's a mostly invisible system.

2:32 It secretly connects the whole world of organized crime and helps to fund it.

2:36 Connecting illegal gold mines in Congo, to the cocaine trade,

2:39 to weapons, to the illegal trade of Oregon,

2:41 which is connected to illegal timber and tusk

2:44 poaching and shark fins and jaguar bone wine.

2:47 All of this somehow linked to unassuming places,

2:50 like a restaurant in Lima, Peru, or a clothing store in Rome.

2:54 It's all connected, but it's almost impossible to see.

2:57 (bright music)- [Sean] The money doesn't move.

3:00 It flies, right?

3:01 It's kind of a ghost, so you can't trace it.

3:04 These people are ghosts flying 30,000 foot around us.

3:07 That's Andrea Crosta.

3:08 He actually came to us and pitched me on this story,

3:12 because he's spent years infiltrating this system.

3:15 He and his team have been risking their lives

3:17 to see how this actually works to try to find solutions.

3:20 So thanks Andrea and his team and many others.

3:24 We have this story and we're starting to understand it,

3:27 and I wanna show it to you,

3:28 how it works, what it enables, and what we might do about it.

3:32 (bright music) (upbeat music) I'm in Taiwan right now, working on my next story,

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5:29 Let's get back to this story about flying money.

5:31 So it goes back to the Tang Dynasty.

5:33 (bright music)- This is one of the golden ages of China's history.

5:36 The capital is huge.

5:37 It's one of the most populous cities in the world and it's thriving.

5:40 People are using money in the form of copper coins.

5:43 (bright music) Let's say I'm a businessman who sells tea.

5:48 I live up here.

5:49 And I routinely go to the capital to sell my harvest.

5:52 I sell it off to the nobles and the elites and the tea

5:55 drinkers of the capital and I get paid in copper coins.

5:58 Uh, oh, these coins are not light.

6:00 This is gonna be hard to bring all these coins back up to my home region,

6:04 and I'm gonna be vulnerable to robbers as I go along my journey.

6:08 (bright music) So let's do this.

6:11 I'll take my bag of coins to a merchant and he'll give me

6:14 a little piece of paper and he'll tell me that once I'm back home,

6:17 I should go see his merchant friend and give him this piece of paper,

6:21 this light, easy to carry piece of paper.

6:25 Nice.

6:26 Once I'm home, I take that paper

6:28 to the merchant that the guy from the capitol knows.

6:30 And because these two are trusted partners,

6:33 the merchant in my hometown honors it, and gives me a bag of copper coins,

6:38 that's the exact same amount as what I gave his friend back in the capital.

6:43 The relationship between these two, I don't totally know.

6:45 They'll settle up later.

6:46 All I care about is I got paid my copper

6:49 coins and I didn't have to carry them from the capital.

6:51 This is magic, built on trust.

6:54 In fact, this was flying money.

6:56 (bright music)- Flying money is actually thought

7:01 to be the first form of paper money.

7:03 Now China and the Tang Dynasty were not the only people to come up with this.

7:07 They were one of the earlier and one of the more widespread,

7:09 but other cultures settled on these mirror transactions as a way to transfer

7:15 value without having to carry a bunch of money or gold a long distance.

7:20 (bright music) We're talking about the Chinese version here because this would

7:24 go on to inform a global network that we see today.

7:28 As tens of millions of Chinese immigrants spread throughout the world,

7:33 they were often persecuted, segregated,

7:35 and excluded, and they stayed tight knit.

7:37 China towns became not only a cultural refuge,

7:39 but also commercial hubs that were anchored by family association,

7:43 clan networks with strong cultural ties maintained with the homeland.

7:48 With mainland China, these communities are built off of some strong core values,

7:53 self-reliance, mutually beneficial relationships that are based on trust,

7:56 reciprocity and personal bonds,

7:59 and often a very strong work ethic and business sense,

8:03 making money with often cash based businesses,

8:06 sending a lot of that money to family around the world.

8:09 But soon this global diaspora network of trust and connection

8:13 would be abused by criminals who would use it to wash

8:18 dirty money using this to create a shadow banking system

8:22 that was near impossible for outsiders to understand or infiltrate.

8:27 (bright music) So let me show you how this works today.

8:34 How those same concepts that we saw in the Tang

8:37 Dynasty play out in a real world scenario today.

8:40 Wealthy Chinese individuals are using flying money

8:44 to get their money out of China.

8:46 Any change in the Politburo, or any change in the kind of rulings or legal

8:50 system could have your money taken off you at any time.

8:52 (bright music)- So let's say there's man in China named Mr.

8:56 Chen.

8:57 He's very rich, he's got a lot of extra

8:59 money and he wants to invest his money elsewhere.

9:01 Got 2 million extra dollars that maybe he

9:04 wants to buy a luxury apartment in Miami with.

9:06 He has a cousin in the U.S.

9:07 who could help him, but he's got a problem.

9:10 In 2017, the Chinese government implemented a 50,000 U.S.

9:14 dollars limit on the amount of money that you could get out of China.

9:17 This is the way for the Chinese government to stop

9:19 tons of money from flowing out of the country.

9:22 Now that's not gonna stop anyone.

9:23 So they turn to the underground banks.

9:25 (bright music)- So Mr.

9:27 Chen goes to a broker in China and he pays him the $2 million.

9:31 He does this from one Chinese bank account to another,

9:33 maybe in a series of small transactions.

9:35 So he doesn't draw too much attention and reminder, this is dirty money.

9:38 Mr.

9:39 Chen just makes a lot of money in his job and wants to invest it elsewhere.

9:43 He didn't get it from like drugs or anything, okay?

9:45 So anyway, the broker tells Mr.

9:47 Chen to tell his cousin in the U.S.

9:50 to go to a shop in Chicago and ask for the broker's trusted contact

9:55 who's another broker in the United States and to give him a special code.

9:59 Meanwhile, here in the United States, there's something else going on.

10:03 There's a drug dealer from a Mexican drug cartel.

10:05 He has his own financial puzzle to solve and it has nothing to do with Mr.

10:09 Chen yet.

10:10 He's been selling drugs on the street of Chicago

10:12 and now he has $2 million in cash.

10:15 Now this cash is definitely dirty.

10:16 It's the definition of dirty money, has no paper trail from where it came from.

10:20 Just a huge amount of cash from drugs.

10:22 He needs to somehow make this money look legitimate

10:26 and get it back to his cartel bosses in Mexico.

10:29 And these days it's not easy to do that.

10:31 So he goes to this same Chinese broker in the United States,

10:35 the same guy that Mr.

10:36 Chen told his cousin to go to, and he gives him this $2 million saying,

10:40 I need this to get to my bosses back in Mexico.

10:44 So this broker now owes the cartel $2 million.

10:47 And this maybe goes without saying,

10:49 these are all simplified numbers and examples to show the concept.

10:52 (bright music) Okay, this is where these two start communicating.

10:58 These two brokers.

10:59 They know each other.

11:00 They're probably a member of the same extended family, clan, tribe.

11:04 They're not gonna take advantage of each other.

11:07 (bright music)- They're talking over an encrypted communication app.

11:11 And the broker in China tells the broker in the United States that Mr.

11:15 Chen's cousin is coming and that he will give him a special code,

11:18 and when he does give him $2 million.

11:22 The cousin arrives at the shop, gives him the code,

11:25 and in exchange he gives the cousin $2 million.

11:28 The $2 million in fact that he got from the drug dealer.

11:32 That cousin then deposits into a variety of family

11:36 business accounts under a bunch of different names.

11:38 So he doesn't raise any flags and eventually he uses

11:41 that money to buy a luxury apartment in Miami for his cousin.

11:46 So look, Mr.

11:47 Chen now has a $2 million asset and he didn't have

11:50 to send any money across any borders or through financial system.

11:54 His $2 million stayed in China and the $2

11:57 million used for his apartment stayed in the United States.

12:00 (bright music) Okay, but look, there's still some imbalance here.

12:04 There's still people who owe each other money.

12:05 The broker in China still has that $2 million that Mr.

12:09 Chen gave him and the cartel in Mexico still

12:11 needs to get their $2 million of drug money.

12:14 And this is when they turn to the global economy,

12:16 (upbeat music)- When they wanna settle up accounts,

12:22 oftentimes they go back and settle accounts through trade.

12:27 Traditional, historically and culturally, that's what they did.

12:30 We always talk about following the money.

12:33 Sometimes it's more important to follow the value.

12:36 By the way, that's John Cassara, who is a former U.S.

12:40 intelligence officer.

12:41 He was a special agent for the treasury

12:42 where he spent decades investigating these types of crimes.

12:45 He now writes books.

12:47 He's very helpful for this story.

12:48 Okay, so it turns out that the broker in China has a company,

12:52 a legal legitimate looking company.

12:54 He sells kitchen appliances that are made in China,

12:58 and this is a perfect cover for what he's about to do next because the cartel

13:02 in Mexico also has a front company where they

13:06 sell kitchen appliances in a retail store in Mexico.

13:10 Okay, now watch this clever move between these two.

13:12 (bright music) The cartel purchases $10 million of refrigerators,

13:18 from the Chinese broker's appliance company,

13:20 but instead of charging $10 million, the broker only charges $8 million.

13:27 And on the invoices they just put, these are $8 million worth of refrigerators.

13:31 $2 million is secretly transferred illegally in this legal

13:37 looking trade transaction that flows through the global economy.

13:41 These appliances roll into port,

13:43 they're transferred to the retail floor, they're sold.

13:47 And look, everyone in this little transaction

13:51 is settled and the authorities have no idea.

13:54 How could they?

13:55 Because most of this transaction left no paper trail.

13:57 [Andrea] The ledger is only trust.

13:59 (bright music)- And let me just reemphasize

14:03 that this is not just a Chinese diaspora thing.

14:05 This kind of informal trust-based value transfer has been

14:10 used by many different groups and networks around the world.

14:14 [Andrea] Hawala is, in effect, the defacto banking system of Afghanistan.

14:19 All eyes are on Hawala and the Middle East

14:21 and terrorism coming out of that part of the world.

14:24 From terrorists using it to fund attacks,

14:26 to allowing the Italian mafia to have a global footprint.

14:29 This is a very common way of transferring laundering money.

14:32 But flying money specifically this Chinese diaspora network in many

14:36 different countries is much bigger than all of those other networks.

14:41 (upbeat music) (background chatters) Hey, real quick,

14:51 a little behind the scenes thing that I wanna tell you about.

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15:25 Okay, let's keep going.

15:27 So if this is so hard to track and infiltrate

15:30 and see how do we even know any of this?

15:34 And the answer is the hard work and risk

15:37 taking of investigators like the ones we've been talking to.

15:40 It's very hard to break into for law enforcement.

15:42 Any investigator in financial crimes,

15:45 investigator worth their salt will tell you that it's

15:49 human source information that makes the best cases.

15:52 AI by itself is not gonna make it the case.

15:55 To infiltrate this network you need time, you need to get their trust,

16:00 you need to use certain kind of undercover operatives.

16:04 Andrea told me that when he got into this 13 years ago,

16:06 he had no idea that he would

16:08 end up investigating money laundering and shadow banking.

16:11 In Kenya, working as a security and geopolitical consultant.

16:15 And it was right in the middle

16:16 of the elephant poaching crisis when we were losing 40,

16:19 50,000 elephants per year for the ivory trade.

16:22 We definitely needed a change of strategy, new ideas.

16:27 So I resigned to create the first intelligence agency for Earth.

16:33 It's sort of CIA for the environment.

16:36 And so I started a recruiting former FBI,

16:39 former CIA crime analyst, undercover specialist.

16:44 Andrea quickly realized that environmental crimes like

16:47 poaching are not just their own thing,

16:49 they operate in the same networks and systems as seemingly unrelated crimes.

16:56 Trafficking wildlife, illegal fishing, illegal logging,

16:59 illegal gold mining, money laundering,

17:01 human smuggling, human trafficking, drug trafficking,

17:04 weapons trafficking and so forth.

17:05 And even though we live in a world of electronic money and surveillance and AI,

17:10 the reality is this system, it's built off of old school methods.

17:15 And so the only way to infiltrate it is through human intelligence.

17:20 You have to physically meet and befriend with the very guy who is doing that.

17:26 That's classic human intelligence.

17:29 from the old generations of spies and intelligence officers.

17:33 You need the Chinese speaking undercover operatives.

17:36 These are rare commodity, I'm telling you, it's really,

17:39 really difficult to find them and train them and trust them.

17:42 Undercover missions in all continents infiltrating dozens

17:46 and dozens of organized crime groups and trafficking groups.

17:50 We are usually able to film and record every meeting we have with these people.

17:55 So we have tons of intelligence coming from this recordings.

17:58 Sending some people to jail, putting together an incredible amount

18:02 of intelligence about how these groups operate.

18:05 We regularly produce intelligence reports for law enforcement agency.

18:10 They receive a lot of information from us about

18:13 the most important members of this network with profiles and everything.

18:17 (bright music)- [Johnny Harris] Andrea gave us some of his undercover footage,

18:24 showing these flying money networks in action.

18:26 Truly the most important and revealing undercover operation

18:30 in over 10 years of work in the field.

18:33 [Johnny Harris] This is shot by two of his undercover

18:35 operators who have spent months getting close to this one guy.

18:39 He's a trafficker from China,

18:40 he's living in Mexico and he's a big player in the illegal seafood trade.

18:44 And this undercover operators are posing as businessmen

18:47 interested in putting money into the illegal seafood trade.

18:50 With time these undercover operators successfully earn his trust and he

18:54 agrees to introduce them to other people in his network.

18:57 Trusted partners in the trafficking ring.

18:59 Two days later, the same two undercover operators meet

19:02 one of these contacts in a Starbucks in Mexico City.

19:05 This guy's also from China,

19:07 and focuses on trafficking product and money between Mexico and the U.S,

19:11 but not just for seafood.

19:13 It's also revealed that he traffics people and uses mirror transaction

19:16 to clean huge amounts of money for the cartels in Mexico.

19:20 (speaking in foreign language)- [Johnny Harris] The undercover

19:25 operators are getting deeper and deeper into this ring,

19:27 and soon they're being offered an introduction to a corrupt

19:30 customs and immigration officer at the Mexico City Airport.

19:33 Someone who helps clear illegal products coming in and out of the country.

19:36 They go to dinner for this meeting and the customs officer shows them his badge.

19:40 During the dinner, the corrupt customs officer

19:42 leaves the table and they start speaking Chinese.

19:45 This original trafficker telling the undercover operatives

19:48 just how valuable this customs contact is.

19:52 (speaking in foreign language)- While the customs officer is gone,

20:07 the undercover operators try to get a glimpse of his notebook.

20:11 He returns and the conversation turns to cash,

20:13 what techniques they use to hide huge amounts of cash

20:16 when it's going in and out of the airport.

20:19 (speaking in foreign language)- [Johnny Harris] This special dye

20:24 makes the cache completely invisible to airport scanning equipment.

20:28 (speaking in foreign language)- [Johnny Harris] You can see

20:40 how difficult but useful this kind of human intelligence is.

20:43 The level of insight and understanding

20:45 of how these networks operate is unprecedented.

20:50 [Johnny Harris] But what this also reveals is how what

20:52 originally looked like someone trafficking seafood is something much bigger.

20:57 (speaking in foreign language)- There's Chinese traffickers and money

21:20 launderers were at the center of all sorts of crimes.

21:25 But this was confusing to me.

21:26 When Andrea originally approached me,

21:28 I didn't understand this concept how wildlife poaching

21:32 could be deeply interconnected with the drug trade.

21:37 (bright music) Okay, another example, let's start here.

21:47 The Sinaloa cartel is in northern Mexico

21:50 and they've gotten into the fishing business,

21:52 hiring local fishermen to go after valuable products like shark fins,

21:57 which can sell for up to $630 a piece.

21:59 Sea horses, which end up in jars like this to make wine,

22:03 sea cucumbers, abalone, but most valuable of all are these.

22:10 They call this the cocaine of the sea.

22:12 The swim bladder of a fish called totoaba.

22:15 Now this is a highly endangered fish

22:17 whose bladder despite having no proven health benefits,

22:21 is highly valued in traditional Chinese medicine.

22:25 But more importantly, they are a modern status symbol in China.

22:28 And the reason this is called the cocaine of the sea

22:30 is because it sells for tens of thousands of dollars a kilogram.

22:34 (bright music) So the cartel is going after this stuff

22:40 and let's say they harvest $6 million worth of illegal seafood products,

22:45 including these very expensive fish bladders.

22:48 This is not dirty cash, it's dirty product though.

22:52 And in order to get across the borders,

22:54 they go also to a broker, a Chinese broker in Mexico.

22:58 So they coordinate the smuggling of let's say half of this product,

23:02 $3 million worth to China.

23:04 Maybe this would be bribing a shipping company not to inspect the shipment.

23:07 Or maybe they'll just carry these fish bladders

23:10 in their luggage on a flight back to China.

23:12 Maybe they'll hide them in legal products

23:14 like roof tiles or other fish products.

23:17 One way or another they get to China.

23:18 (bright music) (dramatic music) Once there,

23:25 the Chinese mafia takes it and sells it in their own market to the rich.

23:29 They make their money back, probably get some profit.

23:31 But again, for our simple math, let's just keep this at $3 million,

23:35 they have 3 million extra dollars, but they haven't paid for the product yet.

23:38 They haven't paid the cartel.

23:40 To pay the cartel back they're once again gonna turn to the global economy.

23:43 This time they're gonna sell a chemical Phenylethyl bromide,

23:47 which is actually a legitimate pharmaceutical for like farming chemicals,

23:50 but it's also a key ingredient to make fentanyl.

23:53 They'll doctor the invoices once again

23:55 and value has been exchanged and these two

23:58 are now settled with no money being exchanged for the illegal marine products.

24:03 (dramatic music) Okay, but remember there's a second half to this.

24:05 The other $3 million gets smuggled into the United States where a Chinese

24:10 broker receives the products and sells them to rich Chinese consumers there.

24:14 This U.S.

24:15 broker in the United States is now in possession of $3 million of dirty money.

24:20 And the only thing that has crossed any borders

24:21 into the United States are these illegal seafood products.

24:24 At the same time, let's say that the cartel in the United States,

24:28 has also amassed another $10 million in drug money,

24:32 drug sales, and they need to clean that money and get it back to Mexico.

24:35 So they bring that cash to the same Chinese

24:38 broker who now has $13 million of dirty money,

24:41 three from the sea products, 10 from the drug cash,

24:45 and all of that is owed to the cartel in Mexico.

24:47 And here comes the trust that makes flying money work.

24:50 These two Chinese brokers know each other, they do business together.

24:54 They're constantly in communication on a encrypted platform like WeChat,

24:58 and they want to keep the cartel happy.

25:00 So the Chinese broker in the U.S.,

25:02 asks the Chinese broker in Mexico to just quickly pay

25:06 $13 million of their own to the cartel in pesos.

25:09 The cartel is now made whole for all

25:11 of the fish bladder and the $10 million of dirty cash.

25:14 And yet the Chinese broker up in the United States is still

25:17 sitting on $13 million of dirty money that they need to clean.

25:21 They also need to somehow repay their trusted broker in Mexico.

25:24 So how will they do this?

25:25 (bright music) Well, as we're seeing, they've got a couple options here,

25:30 but one that is becoming more and more

25:31 common is to just cheat the global economy.

25:35 (bright music) This broker in the U.S.

25:38 runs an electronics store.

25:40 This is their front for their real business.

25:43 And to make this all work, this broker puts in an order for $14 million worth

25:48 of electronics from a company in China that you guessed it,

25:52 is actually a front for the Chinese mafia.

25:54 The mafia sources and ships off these electronics to the U.S.,

25:59 in an official legal looking $14 million transaction for electronics.

26:04 It's on its way to the United States, but actually if anyone were to look

26:09 and evaluate what is inside of these shipping containers,

26:12 they would see a bunch of cheap electronics worth probably only $1 million,

26:17 a bunch of knockoff watches and cameras and tablets.

26:20 The broker receives those electronics and puts them for sale in their store.

26:26 You've maybe been into a store where stuff like this is being sold.

26:28 All of this helps drive the perception that this is a legitimate business.

26:32 But really this whole transaction was purely meant to transfer $13

26:36 million to the Chinese mafia in this complex deal involving marine wildlife,

26:42 drugs and a bunch of money that is now

26:45 clean because it flowed through a legitimate looking transaction.

26:48 (bright music) And there are so many

26:53 more forms that this can take value transfer.

26:55 Maybe the mafia in China will hire the cartel to smuggle Chinese

26:59 immigrants into Mexico and then across the border into the United States.

27:03 That's a lucrative human trafficking effort that both

27:05 groups make a lot of money off of.

27:07 The cartel could extract even more value from the transaction by enlisting

27:11 these migrants to carry drugs for them into the United States.

27:16 (bright music) So these are simplified examples,

27:23 but they're based off of real world

27:27 cases that have been revealed by these investigations,

27:30 from people like Andrea and his team.

27:32 Within these transactions, there's a lot more nuance.

27:35 All the brokers are taking commission.

27:37 There are bribes usually for officials to look the other way.

27:40 The complexity of the ledgers, much more than what we've laid out here.

27:45 And when you start to go into these investigations,

27:47 you see the attempt of the investigators

27:49 to like piece together some of these networks,

27:52 all the different nodes in just one country or one community.

27:57 And they very quickly become too complex to follow.

28:00 They get dizzying really fast.

28:02 (bright music) And by the way, we've been focusing on this triangle,

28:08 China, United States, Mexico, it's a very common one here.

28:11 But this system is global.

28:13 (bright music) It moves money all around the world.

28:17 It allows the Italian mafia to offload their ill-gotten cash to a Chinese

28:22 broker in Rome who then might buy luxury cars for a Russian oligarch,

28:27 helping them evade taxes or sanctions and being

28:31 part of other mirror transactions in China and elsewhere.

28:34 Transactions that deal in rubles and euros and Chinese yuan,

28:38 all evading official transactions or taxes.

28:41 That same broker might be approached again by the mafia

28:44 who just received a cocaine shipment from Columbia.

28:48 They need to pay the cartel $5 million in drug money.

28:51 So they give them a duffle bag full of $5 million in the form of Euros.

28:55 And this broker gets on WeChat and messages

28:58 a longtime friend running a restaurant in Columbia,

29:01 telling them to release that same amount in local currency to the cartel.

29:06 The money is transferred and these two will

29:09 settle up in some transaction in the future.

29:11 Maybe a series of WeChat transactions

29:13 or messing with trade invoices as we've seen.

29:16 So you can see this network touches everything,

29:20 and it links casinos in Myanmar to struggling fishermen

29:24 in Peru and Jaguar fangs to illegal gold mining,

29:28 crypto scams and unassuming electronic stores in New York City.

29:32 Illegal timber and human trafficking and shark fins,

29:35 gold bars into Dubai and meth labs and seahorses and rhino horns,

29:40 cocaine and ivory and luxury apartments in Vancouver and border tunnels.

29:46 Flying money is one shadow banking network that could touch all of it.

29:51 (bright music) As I've made abundantly clear, fighting this is hard,

29:59 and in part because of how low tech it is.

30:02 Back in the day, it was much easier for law

30:04 enforcement to tap into people and listen to people.

30:06 They know that the more they stay

30:09 away from anything digital or computer related,

30:14 the better it is and the safer it is.

30:16 And yet we're entering an era of encryption and decentralized currency,

30:21 which are two very powerful technologies

30:25 to enable and improve a system like this.

30:28 You have flying money pair with crypto, pair with the encrypted communication.

30:33 The system is almost unbreakable from the outside.

30:38 If there's one thing I feel in looking at this, is

30:40 that like there are people who are taking this seriously,

30:43 working on this, trying to infiltrate these systems.

30:45 And in fact, governments are getting on board and getting

30:48 savvy to how serious of an issue this is.

30:52 U.S Congress and even the EU parliaments now

30:56 treat Chinese money loaned organization as priority threats.

31:01 Chinese government itself is recognizing that this is a big

31:03 problem in assessing ways to crack down on it.

31:05 (bright music) But, these are small dense in a very huge problem.

31:14 $4 trillion of illicit proceeds every year.

31:17 That impacts everybody.

31:19 Honestly we have the laws, the rules and regulations we need now.

31:23 What these experts stress is that the real key

31:26 to enforcement is actually dedicating enough actual humans and funding,

31:31 most importantly enough patients to investigate and infiltrate these networks.

31:37 If I was a government agency, I would put together a task force and start

31:41 laundering and moving money around the world with them.

31:44 That's what I call the last mile.

31:46 What we as an NGO cannot do.

31:49 Law enforcement is rated and rewarded because of statistics,

31:53 but in order to make this work,

31:56 we have to change the incentives for law enforcement.

32:00 We have ICE, immigration and customs enforcement.

32:04 They'll go after the quick border stats.

32:07 All the resources are going into immigration

32:10 instead of going after these long-term,

32:13 complex, meaningful money laundering cases, criminals are motivated by money.

32:20 And once they have the money they have to launder it.

32:23 Whether it be the fentanyl, whether it be human trafficking that occurs

32:27 in the strip malls across this country, a romance scam, an investment scam,

32:33 somebody trying to fleece you out

32:35 of your hard earned money that affects everybody.

32:39 (bright music)