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A Chinese American gangster transformed money laundering for drug cartels
- 20221014ta 4y agoIn this incoming cold war, expect the Chinese to attract support by setting up tax havens the IRS can’t touch Already seen with Russian oligarchs sending their yachts to HK The US shall, of course, return the favour
- chatterhead 4y agoConsidering they are hiring so many new IRS agents I just might be on board the China Trust Truck.
- deleted 4y ago[deleted]
- sumedh 4y ago> support by setting up tax havens the IRS can’t touch The problem is China can touch your money in that tax haven.
- O__________O 4y agoTLDR: “Li and his fellow Chinese money launderers married market forces: drug lords wanting to get rid of dollars and a Chinese elite desperate to acquire dollars. The new model blew away the competition.” Comment: Nation states have been waging asymmetric warfare for long time, this is not new. China has become a major player in the illegal drug trade by supplying money laundering and chemicals [1]. Oldest modern reference I am aware of on the topic as it relates to China is a book on military strategy written in 1999 by two colonels in the People's Liberation Army titled Unrestricted Warfare.[2] __________________ [1] https://google.com/search?q=china+fentanyl https://google.com/search?q=china+fentanyl [2] https://wikipedia.org/wiki/Unrestricted_Warfare https://wikipedia.org/wiki/Unrestricted_Warfare
- imwillofficial 4y agoThis is a fantastic and vastly underrated book
- deleted 4y ago[deleted]
- bluepizza 4y agoI really do wonder where China might even have got this idea from.
- layman51 4y agoAre you referring to the Opium Wars?
- joe_the_user 4y agoYes, "The First Opium War (Chinese: 第一次鴉片戰爭; pinyin: Dìyīcì Yāpiàn Zhànzhēng), also known as the Opium War or the Anglo-Sino War was a series of military engagements fought between Britain and the Qing dynasty between 1839 and 1842, during the Century of humiliation. The immediate issue was the Chinese seizure of private opium stocks at Canton to stop the banned opium trade, and threatening the death penalty for future offenders. The British government insisted on the principles of free trade and equal diplomatic recognition among nations, and backed the merchants' demands."[1] https://en.wikipedia.org/wiki/Opium_war https://en.wikipedia.org/wiki/Opium_war
- GauntletWizard 4y agoI was going to guess they were thinking of the CIA's "Golden Triangle", which operated similarly and makes a narratively nice "turnabout is fair play" argument[1] [1] https://en.wikipedia.org/wiki/Allegations_of_CIA_drug_trafficking#Golden_Triangle_(Southeast_Asia) https://en.wikipedia.org/wiki/Allegations_of_CIA_drug_traffi...
- joe_the_user 4y ago
- pphysch 4y ago
- Aunche 4y agoHSBC is operating in a mostly distinct part of the same industry. HSBC doesn't hire waiters to carry suitcases full of money.
- burkaman 4y agoProPublica also reports on HSBC money laundering: https://www.propublica.org/article/hsbcs-money-laundering-lapses-by-the-numbers https://www.propublica.org/article/hsbcs-money-laundering-la...
- pphysch 4y ago
- manuelabeledo 4y ago> ... this global criminal is working on behalf of the notoriously anti-drug Chinese government Anti-drug inside their borders. They are very pro-drug everywhere else, especially the US [0]. Regardless, what's with the whataboutism? Yes, HSBC, like many other major banks, have been facilitating drugs and arm trade worldwide, but that is not the topic at hand, thus it is irrelevant to the discussion. [0] https://www.brookings.edu/blog/order-from-chaos/2022/03/07/china-and-synthetic-drugs-geopolitics-trumps-counternarcotics-cooperation/ https://www.brookings.edu/blog/order-from-chaos/2022/03/07/c...
- pphysch 4y agoFentanyl is a legal but controlled substance in the US. It is not malicious for a company to supply fentanyl to US hospitals. But the bottom line is that blaming China or its government for private companies selling chemical precursors that may end up in street fentanyl is like blaming Canada for supplying US with deadly firearm precursors in the form of aluminum. Blaming Canada for our gun crisis is analogous to blaming China for our opioid crisis. Meanwhile, the Sacklers are sleeping soundly on piles of blood money. It is a deeply unserious, and 100% politically motivated narrative. Just because it is incessantly regurgitated does not make it any less unserious.
- chatterhead 4y ago
- usednet 4y ago
- zoklet-enjoyer 4y agoFentanyl came in from China for years before they moved the synthesis to Mexico. I was active in online drug forums before, during, and shortly after Silk Road. So many drugs came from China and their government didn't care. It would not surprise me if they encouraged it not just because of monetary gain, but because of political objectives. I have believed since 2010 that it was a form of warfare that they could plausibly deny. So much fentanyl was coming in for so cheap, it was crazy. I don't know anything about what's going on now, but they were practically giving it away back then
- Scoundreller 4y agoIt’s just easy to synthesize and potent so it’s easy to smuggle. Manufacturers get pitted against each other and end up selling for cost + markup and a small risk premium. Overall, drugs are cheap, it’s the regulations that make it expensive/difficult to acquire. Easy to interdict heroin or opium from Afghanistan, not so easy for potent synthetics coming from an export powerhouse. Safety for the consumer isn’t a concern for the regulators so you end up with this situation.
- ttul 4y agoNowadays, the precursors go to Mexico, essentially in unchecked volumes. A widespread network of tiny independent producers then manufacture a kilo at a time in little shacks all over the place, selling their stock to the cartels, who handle transportation to the US market.
- hayst4ck 4y agoI was pretty skeptical about a lot of the negative press about China for a long time. Then the Chinese colonial takeover over Hong Kong went from soft to hard in 2019, during which they leveraged organize crime to try to quell dissent. https://en.wikipedia.org/wiki/Triad_(organized_crime)#Chinese_government_connections https://en.wikipedia.org/wiki/Triad_(organized_crime)#Chines... This made it very clear to me that organized crime is a wing of the Chinese government. Before I probably wouldn't have believed a post like this, but now it seems enough in alignment with all parties interests that I find it more likely to be true than false.
- paywallasinbeer 4y agoRelated: a fascinating article about Asian drug networks https://www.reuters.com/investigates/special-report/meth-syndicate/ https://www.reuters.com/investigates/special-report/meth-syn...
- ttul 4y agoIt’s almost as if handing a $600B industry to criminals might have been a bad idea. Instead of dealing with national level corruption, we could just end the war on drugs.
- scottLobster 4y agoSo you want to de-regulate Fentanyl, and let the chips fall where they may? How darwinian of you. I've seen what legally prescribed fentanyl did to my mom's mind during her battle with cancer, at one point she had to go into rehab, from legally prescribed painkillers, just so she could get another surgery a few months later (giving the cancer time to grow further of course). She admitted later to not remembering multiples months of certain years. No one should be able to touch that shit without a legitimate medical need, and even then it should be taken with extreme caution. I'm all for "ending the war on drugs" with regard to marijuana, LSD, mushrooms and such, all the drugs that got banned because they were politically inconvenient at the time. But that doesn't mean ending all regulation for all drugs.
- novok 4y agoBig difference between vending machine at cost fenatyl, and Rx controlled harm reduction expensive-ish fenatyl... You don't get war on drugs stupidity with tobacco tariffs, and if alcoholics only have access to the opiate equivalent of pure vodka, those alcoholics are going to do a lot worse when they have access to a spread of options. Today you still get it cheap and uncontrolled beyond the queasy uninitiated, you fund organized crime and you get more humans into horrible cycles of criminality when they didn't need to be.
- yieldcrv 4y agoI'm for legitimizing the supply chain and consumer protection so that only the people looking for fentanyl ever get exposed to it. I'm for having narcan available at the same prevalence of a fire estinguisher. Your experience has to do with tighter regulation of legal fentanyl. Thats its own crusade.
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- Tangokat 4y ago"Wealthy Chinese who want to get around limits on moving money out of China “buy” the $350,000 from Li’s couriers in the U.S. They often use the U.S. dollars to buy real estate or pay for U.S. college tuition. " You can buy real estate in the US in cash no questions asked? Is that true?
- powersnail 4y agoAs someone who has never bought real estate, why not? Is cash not universally accepted as a currency?
- smackeyacky 4y agoIt would raise a lot of red flags with agencies[0] looking to crack down on using the proceeds of crime. That doesn't mean it can't be done. [0]https://www.fincen.gov/what-we-do https://www.fincen.gov/what-we-do
- markdown 4y agoIn America, if you have unexplained wealth, the government can sue your notes and coins.
- mavili 4y agoIt's not about the cash per se, it's big brother wanting to know how you got the money in the first place. If you can show it's all legal and taxes paid then no problem cash is fine. But of course as soon as you mention cash, eyebrows are raised "why would someone want to keep that much cash and not want to put it in a bank if they are all clean?" Big brother wanting its lion share in everything you earn is the crux of it.
- mutt2016 4y agoFederal tax. Provincial tax. School tax. Sales tax. Federal sales tax. Tax on fuel. Tax on alcohol. Tax on tax on tax. Well... At least the infrastructure isn't falling apart and crime isn't rampant...in rich neighbourhoods.
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- alx__ 4y agoIronic that the CIA showed other countries the basics of how to do this :/ https://en.wikipedia.org/wiki/Allegations_of_CIA_drug_trafficking https://en.wikipedia.org/wiki/Allegations_of_CIA_drug_traffi...
- joe_the_user 4y agoThe thing about the article is it talks about "it's hard to distinguish corruption and policy" in China. It seems like a large look at drug and money flows would say the same about the US, China and Mexico and look at the particular agencies in each nation where the corruption is concentrated.
- _jal 4y ago> It seems like a large look at drug and money flows would say the same about the US It is policy in the US. There are a number of simple policy changes that would make money laundering much harder for most. Start with anonymous corporation ownership. Or you could get serious and enforce already existing AML laws against large banks. Of course then a lot of people who actually matter would be in trouble, and more would have to pay taxes, and we can't have that, now can we?
- JumpCrisscross 4y ago> anonymous corporation ownership Who does this? Non-public or behind an attorney is very different from anonymous.
- _jal 4y agoLots of people. There is a legal difference, of course, between "truly anonymous" and merely effectively so. I am including situations like the designated trustee knows who the owner is, and if subpoenaed, will disclose that the owner is an Isle of Man corporation with a Panama address. Here is discussion about it for Delaware corporations, but my understanding is South Dakota is currently the most popular US state in which to incorporate for, uh, privacy reasons. https://gfintegrity.org/press-release/delaware-bills-mere-window-dressing-will-nothing-curb-abuse-anonymous-companies/ https://gfintegrity.org/press-release/delaware-bills-mere-wi...
- newsclues 4y agoCheck out Wilful Blindness by Sam Cooper about the Vancouver model of OC money laundering
- cuteboy19 4y agoI thought they were talking about Changpeng Zhao for a moment
- dirtyid 4y ago>Prosecutors charged him with leading a conspiracy that washed at least $30 million, a number backed by direct evidence. The full amount was likely in the hundreds of millions, according to law enforcement documents and interviews. ... >“They had to know it was illegal,” Ciesliga said. “Just the sheer amount of money, and the volume and consistency and frequency, there’s no legitimate businesses that are moving that kind of money. Any alert anti-money laundering investigator would have detected this kind of activity.” This article has been given folks conniptions over PRC influence in Americas / Unrestricted warfare memes. Honestly even given generous interpretation of 100s of millions as a billion, over the alleged timeframe (first courier picked up in 2016, we're talking about ~150M per year, aka a few hundred houses in a nice western city or a few thousand international university tuitions. Operation is peanuts. Especially vs 20B-40B per year drug trade in Americas, 20B per year PRC telecom scams, or the 100s of billion per year PRC capital flight racket. Doesn't feel large enough to be on PRC radar for domestic enforcement, nor is PRC short of $$$ to do influence OPs to need laundering via such schemes. That said, I'd like to see a more detailed accounting of PRC/Asian syndicate influenced footprint in the Americas.
- from 4y agoYeah these kinds of articles always have the tendency to exaggerate the scale of what they describe. People have been doing this kind of thing for the past 30-40 years, including using a serial number on a dollar bill as a token. None of this is really new except they identified people who want dollars in America (rich Chinese) that are willing to pay a premium for them. This is from 1997 (https://www.fincen.gov/sites/default/files/shared/advisu9.pdf https://www.fincen.gov/sites/default/files/shared/advisu9.pd...) when Colombia had capital controls that made accessing dollars very difficult: 1) The Colombian drug cartels export drugs to the United States; 2) Drugs are sold for dollars in the U.S.; 3) A cartel in Colombia enters into a “contract” with the Colombian Black Market Peso Exchanger who is usually in Colombia; 4) The cartel sells its U.S. dollars to the Exchanger’s U.S. agent; 5) Once the U.S. dollars are delivered, the peso exchanger in Colombia deposits the agreed upon equivalent (of U.S. dollars) in Colombian pesos into the cartel’s account in Colombia; (At this point, the cartel representative is out of the picture because he has successfully converted his drug dollars into pesos.) 6) The Colombian Black Market Peso Exchanger now assumes the risk for introducing the laundered drug dollars into the U.S. banking system; this is done through a variety of structured transactions; 7) The Colombian Black Market Peso Exchanger now has a pool of laundered funds in U.S. dollars to sell to Colombian importers who use the dollars to purchase goods, either from the U.S. or from collateral markets; and 8) Finally, these goods are transported to Colombia. And this is still happening on the scale of billions in the LA fashion district, 47th street in Manhattan, electronics distributors in Miami, etc. There are some newer schemes where people involved in healthcare fraud who need cash to pay their "patients"/runners or want money the Medicare fraud investigators can't find will write checks in exchange for cash from drug sales. Essentially it's just being an intermediary for people who want cash and people who want to get rid of cash.
- forkLding 4y agoJust a note: The money-laundering system this criminal is part of is called a 地下钱庄 in Chinese or "underground banks" (https://fintrac-canafe.canada.ca/intel/advisories-avis/bank-eng https://fintrac-canafe.canada.ca/intel/advisories-avis/bank-...), originally started in the 1980s in Mainland China when free-market reforms brought non-regulated "banks" (more just a group of people calling themselves a bank) and informal "loan" companies/loan sharks, they were soon co-opted by corrupt officials to bring money out of the country and since about 2018 any Chinese citizen who wishes to bring money for big purchases like real estate investment outside of China uses a form of underground banking since China puts an annual limit of $50,000 USD on money that can be taken out of the country (https://nhglobalpartners.com/moving-money-in-and-out-china-rules/ https://nhglobalpartners.com/moving-money-in-and-out-china-r...). Technically speaking, if you want to exceed the limit, you can send in an application form to explain and hopefully get approved to take out more money than that $50,000 limit but the original intent of this law was to restrict money flowing out of China and it is very hard to get approved beyond the limit.
- chaostheory 4y agoHow can this still survive the constant crackdowns from Xi? The reason I ask is because I have relatives trying to move money out, and it seems near impossible now except for the allowable yearly amount, which is low.
- hbbwebw 4y agoIf you’re willing to pay there are always ways to move value out. For example, buy $1M worth of t-shirts inside China. Sell for a 5% loss outside of China but say you sold at a 20% loss. Now you have money outside of China. You had to pay a decent fee and have a partner outside of China to do it but hey, that’s what gangs are for.
- nl 4y agoEver wonder why both Chinese investors and the Saudi sovereign fund were prepared to pay huge premiums in valuations when investing in companies, even though it was apparent it was likely they'd make a loss? This is it. If you have $100M inside China, can take a 30% loss but end up with $70M in the US that isn't a bad deal.
- photochemsyn 4y agoGiven China's known role in fentanyl production and now this revelation about the other end of the trade, could it be they view this as some kind of long-term payback for things that took place some 200 years ago? Source: Smuggler Nation: How Illicit Trade Made America by Peter Andreas (2013) https://www.goodreads.com/book/show/13689883-smuggler-nation https://www.goodreads.com/book/show/13689883-smuggler-nation > "Smuggling was also common practice for U.S. merchant ships penetrating the Chinese market for the first time... In the first decade of the nineteenth century, U.S. merchants would also begin to make inroads into the ilicit China opium market, much to the alarm of the British East India Company, which jealously protected its opium-smuggling monopoly. Jacque Downs, the foremost historian of the early U.S.-China opium trade, writes: "The Americans were marvelously ingenious in their exploitation of the commerce. They managed to circumvent both the East India Company's franchise and the Chinese Government's prohibition and carried on a very lucrative, if antisocial and ultimately ruinous trade." Dominated by a handful of players, opium smuggling by American shippers would become increasingly vital to U.S.-China trade relations, with opium sales generating the revenue to buy Chinese goods such as silks and teas. Many of America's most elite merchant families made fortunes in the opium trade: "Girard, Astor, Joseph Peabody of Salem, John Donnell of Baltimore, and the Perkins firm (now allied with Bryant and Sturgis) were among the largest shippers of the drug." " Yes, legalization/decriminalization plus public health education campaigns and a ban on marketing and doctor kickbacks would probably destroy drug profits around the world.
- fma 4y agoWell, per the article... "Some U.S. officials go further, arguing that Chinese authorities have decided as a matter of policy to foster the drug trade in the Americas in order to destabilize the region and spread corruption, addiction and death here."
- throwaway12388 4y ago
- kurthr 4y agoIf you read mandarin language posts (and even some semi-official ones), the answer is yes. It is considered "pay back". Just as it is used in other countries, racial hatred and jingoism is also used in China for political and social control (or to justify immoral profits). Sales within China would be much more tightly controlled and severely punished. It's about half way to funding Contras with crack sales in LA.
- AtlasBarfed 4y agoThe US funds these cartels with its ludicrous war on drugs. Decriminalization would fix so many things. China gets to turn the historical tables on the Opium wars. And it's not like the US/EU banking system isn't complicit in money laundering. When they get caught, they are handslapped a pittance. And we tolerated outrageous opium farming by the former corrupt Afghanistan government. The US needs a rational policy to deal with its bored suburban teenager problem that is turning Latin america into a dual-continent mafia state that puts Putin to shame.
- Ekaros 4y agoRational and moral solution would be total free market... But I don't see that happening. Just too much power, control and publicity in totalitarianism.
- AtlasBarfed 4y agoTotally unregulated capitalism is what cartel wars are. A prohibition on murder is a regulation. In a totally free market a corporation could murder to obtain market advantage. This is what criminal economics involves. But of course free market zealots won't want to allow unregulated murder. There's no assurance of property rights (which is also regulation). So there are no true free market advocates, merely people that want to set the regulation boundary to the point that maximally benefits them.
- ct520 4y agoGood site if you into narco news.. http://www.borderlandbeat.com/2021/04/chinese-nationals-used-us-banks-to.html?m=1 http://www.borderlandbeat.com/2021/04/chinese-nationals-used...
- DeathArrow 4y agoMeanwhile CIA and other US agencies never used criminal organizations in foreign countries to further their goals...
- somebody3 4y ago