1154: Sean Williams | The North Korea-China-Drug Cartel Connection

Summary

The Jordan Harbinger Show: Episode 1154 – Sean Williams on The North Korea-China-Drug Cartel Connection

Release Date: May 15, 2025

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Introduction

In Episode 1154 of The Jordan Harbinger Show, host Jordan Harbinger engages in a compelling conversation with journalist Sean Williams. The duo delves deep into the intricate web connecting North Korea, China, and international drug cartels. They uncover how these entities collaborate to fund illicit activities, sustain authoritarian regimes, and perpetuate global criminal networks.

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North Korea's Illicit Revenue Streams

Sean Williams begins by elucidating how North Korea survives economically despite international sanctions and isolation. He asserts that "it really does all come down to the money" (03:17), emphasizing that North Korea operates more like a mafia than a conventional nation-state. The regime relies heavily on illegal operations to generate revenue, ensuring its longevity and influence on the global stage.

• Forced Labor Abroad: North Korea dispatches hundreds of thousands of its citizens to work in labor camps across the globe, particularly in Russia's Far East and China. Williams remarks, "Nearly all of their wage goes back into the state and into the coffers of the dictatorship" (04:48), highlighting the exploitative nature of these labor practices.

Human Trafficking and Exploitative Work Conditions

The conversation deepens as Williams shares harrowing accounts of North Korean workers abroad. He recounts witnessing North Koreans subjected to deplorable working conditions, such as welding without proper safety gear in Poland. A notable moment occurs when Williams describes a North Korean labor agent in Poland openly disregarding laws:

"She wasn't sugarcoating it. She was like, 'This is 100% illegal. We just don't care. It's organized crime. It was shameless.'" (07:24)

These testimonies paint a grim picture of the human cost behind North Korea's quest for foreign currency.

North Korea's Shift to Drug Trafficking

Williams transitions to discuss North Korea's pivot from traditional illicit activities like heroin production to methamphetamine manufacturing in the mid-1990s. This shift was primarily driven by devastating famines that crippled the country's economy. The production of meth became a lucrative endeavor, both for domestic consumption and international distribution.

"It's way cheaper to produce. You can make it in factories if you've got the know-how... North Korea starts making meth and becomes a major shipper of the drug around the region" (21:30)

This strategic move not only diversified North Korea's revenue streams but also exacerbated global drug crises, particularly in regions like Australasia and Southeast Asia.

Chinese Involvement and Money Laundering

A significant portion of the discussion focuses on China's role in facilitating North Korea's illicit activities. Williams explains how Chinese money laundering networks, known as "Flying Money" or Feitian, enable the transfer of vast sums without detection.

"It's almost like digital teleportation for your content... Chinese money laundering techniques are just rocking up in Mexico City and whatnot." (64:16)

These networks exploit traditional and modern financial loopholes, making it exceedingly difficult for international authorities to trace and intercept illicit funds.

Bureau 39: The Nerve Center of North Korea's Illicit Economy

The conversation then shifts to Bureau 39, North Korea's central organization responsible for managing all illicit revenue-generating activities. Williams likens Bureau 39 to the "nerve center" of an organized crime syndicate, overseeing operations ranging from arms dealing to cybercrime.

"These are the guys devising all the scams and schemes. They're going to get all this money... Bureau 39 is the nerve center of everything illegal that happens in the North Korean state." (39:15)

Under Bureau 39's direction, North Korea has become a formidable player in global cybercrime, spearheaded by groups like the Lazarus Group, responsible for significant cyberattacks and financial heists worldwide.

Cybercrime and the Lazarus Group

Williams highlights North Korea's proficiency in cyber operations, particularly through the Lazarus Group. This state-sponsored hacking collective has orchestrated some of the most significant cybercrimes in recent history, including the notorious WannaCry ransomware attack and the Bangladesh Bank heist.

"These are people who sit in office buildings and run heists for the regime... This is extremely professionalized. People working in North Korea's case, probably 20 hours a day, just trying to pull off that one heist." (41:33)

The Lazarus Group's sophisticated techniques pose a severe threat to global financial systems, leveraging vulnerabilities in international banking infrastructure to siphon billions in illicit funds.

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Conclusion

Episode 1154 of The Jordan Harbinger Show offers an in-depth exploration of the symbiotic relationship between North Korea, China, and international drug cartels. Sean Williams provides a nuanced understanding of how these entities collaborate to sustain North Korea's regime through illicit means. From forced labor and human trafficking to cybercrime and complex money laundering networks, the episode sheds light on the multifaceted strategies employed to generate revenue in the face of global sanctions and isolation.

"There's a state driven meth industry that violently poisons its own people while also supplying international drug markets. It's doubly disgusting..." (21:23)

By unveiling these dark connections, the conversation underscores the challenges faced by global authorities in combating such entrenched and multifaceted criminal networks.

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Notable Quotes:

• "North Korea is essentially not a quote unquote, real country in that it's more of a mafia." – Sean Williams (03:35)

• "They're slaves. You can do whatever you want." – Sean Williams discussing North Korean labor conditions (07:57)

• "Bureau 39 is the nerve center of everything illegal that happens in the North Korean state." – Sean Williams (39:15)

• "These are people who sit in office buildings and run heists for the regime." – Sean Williams on the professionalism of North Korean cybercriminals (41:33)

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For a comprehensive understanding of North Korea’s illicit operations and their global impact, Episode 1154 serves as an essential listen, offering valuable insights from an expert in the field.

Transcript

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[Jordan Harbinger]

Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger show, we decode the stories, secrets and skills of the world's most fascinating people and and turn their wisdom into practical advice that you can use to impact your own life and those around you. Our mission is to help you become a better informed, more critical thinker through long form conversations with a variety of amazing folks from spies to CEOs, athletes, authors, thinkers, performers, even the occasional former jihadi gold smuggler, Russian spy or special operator. And if you're new to the show or you're looking for a handy way to tell your friends about the show, I suggest our Episode Starter packs. These are collections of our favorite episodes on topics like persuasion and negotiation, psychology and geopolitics, disinformation, China, North Korea, crime and cults, and more. That'll help new listeners get a taste of everything we do here on the show. Just visit jordanharbinger.com start or search for us in your Spotify app to get started. Today on the show, journalist Sean Williams and I rap about North Korea, how they generate revenue for the regime using illegal operations such as human trafficking, drug trafficking, cryptocurrency heists. They're really big on those these days. We also dip into Chinese money laundering, drug cartels and more. I talk a lot during this episode because China, North Korea, money laundering seemed to be a nice the Venn diagram of those passions and interests overlap quite a bit for me personally. So yeah, don't email me whining about how much I'm talking during this episode. I think this is fascinating and you'll.

[Sean Williams]

Be able to tell my enthusiasm during.

[Jordan Harbinger]

The episode itself, and I hope that.

[Sean Williams]

You share that with us.

[Jordan Harbinger]

Here we go with Sean Williams. We've been trying to have this conversation.

[Sean Williams]

For quite some time. Your Underworld podcast, you guys do so many amazing episodes. We had your compadre Danny Gold on a long time ago as well. And you and I share this.

[Jordan Harbinger]

Can we call it a passion for North Korea? Is that a thing?

[Guest Speaker]

Yeah, we can say that. Yeah. Yeah, it's healthy.

[Jordan Harbinger]

I know that you covered some pretty.

[Sean Williams]

Interesting topics about North Korea. We talked about meth, which we'll get to a little bit later in the show. But I want to talk about the forced labor and the way that North Korea generates revenue, because I think this.

[Jordan Harbinger]

Is that old cliche is follow the money.

[Sean Williams]

Right?

[Jordan Harbinger]

And so when you look at North Korea, people are like, how is this place still around? What's going on with it?

[Sean Williams]

How come they're causing trouble internationally?

[Jordan Harbinger]

What's the deal?

[Sean Williams]

It really does all come down to the money.

[Jordan Harbinger]

And a lot of people who watch.

[Sean Williams]

North Korea casually read the news about North Korea.

[Jordan Harbinger]

Once you realize that North Korea is.

[Sean Williams]

Essentially not a quote unquote, real country in that it's more of a mafia.

[Jordan Harbinger]

That runs a country, it makes way more sense.

[Sean Williams]

Does that jibe with your understanding of the place?

[Guest Speaker]

Yeah, it's like when you drill down into it, there's not a lot below the surface in a way, because it's just the Kim family and then a bunch of very benighted poor people around them that happen to be within the borders of a country called North Korea. And the way that it makes money, like you said, there's just so much illicit stuff that goes on, and it pretty much has become the economy now, apart from some stuff going into China, which they're still kind of friends with, they just use their people as capital now to try and get foreign exchange, which is the gold dust for them going back all the way to like 60s and 70s when Kim Il Sung, the, like godfather of this mafia, he basically ditches like the Soviets and ditches the Chinese and their views of communism. He's like, I'm going to go full out despot, cult of personality. This is going to be a country that revolves literally around me and nothing else. And this is what we know as juche, this like cult of personality around the Kims and I guess a communist royal family. If that even sort of makes Sense.

[Jordan Harbinger]

Yeah, it doesn't.

[Sean Williams]

Right. Like communism, we're all equal. And the guy's like, by the way, I'm God, just to start. And it's okay.

[Jordan Harbinger]

What?

[Guest Speaker]

Yeah, I'm king now. I've changed the rules. Yes, it's fine now. It's okay. And so, like, from the 70s onwards, he's just getting sanctioned to the hill by the UN by everyone. And the way that they figure out that they need to make money is by getting onto the black market. And so one of the ways they do this is by dispatching hundreds of thousands of their own people abroad to work in what essentially are kind of labor camps in the worst form of the word. And most of them go to the Soviet Union at the time. So they work in logging, which is the typical one out in the Russian Far east, which, if people don't know, Russia is way big. And it has a bunch of forests out in the middle of nowhere, near Japan, which is crazy how huge Russia is. So the North Koreans use these forced laborers, basically. Like, nearly all of their wage goes back into the state and into the coffers of the dictatorship. And so that continues. And then in the 1990s and the mid-1990s, especially, a kind of, like, the breaking point for a lot of things in North Korea, you've got Kim Il Sung dies, his son Kim Jong Il, who people know from Team America and other funny things. He basically leads the country through this insanely devastating famine. Crops fail. Many people die. I mean, it's only a country of what, like, 24, 25 million people? And I think several million people die. And then they ramp up this illicit economy to try and just claw back anything like grain, gold, absolutely anything they can get their hands on, they will. And that's when this illicit activity, including the labor stuff, just really goes crazy. And so, like, today, you even see North Korea has laborers. I think it's like between a hundred and two hundred thousand North Koreans working abroad these days. They're still in the logging camps out in the Far east of Russia, all over the border. There's some people working in China. I think there was, like, a Vice documentary a few years ago where someone followed them all the way to China. Western Poland.

[Sean Williams]

Yes, in Poland. And they found them, I think, welding ships or something like that or doing some kind of welding thing. And I remember watching this. This guy is welding, and he has no eye protection and no protection at all. Like, he's not even wearing anything but, like, gloves, I think, and a shirt and, like, a regular shirt. And he's welding inside this enclosed space. No breathing apparatus, nothing. He just has on like a pair of crappy sunglasses.

[Jordan Harbinger]

This man is going blind, getting burned.

[Sean Williams]

And inhaling all of that whatever that gas is from welding.

[Jordan Harbinger]

And there was this Polish lady who.

[Sean Williams]

Was the labor agent, and they filmed her secretly. And she was just like, I don't care, it's illegal. Screw it. And they're like, yeah, is this going.

[Jordan Harbinger]

To be a problem?

[Sean Williams]

And she's like, no one's going to find out. It's definitely illegal. They basically had her on camera being like, this is 100% illegal. We just don't care. And it's organized crime. It was shameless.

[Jordan Harbinger]

She wasn't sugarcoating it. She wasn't like, no, this is all above board and totally fine. And they're not from there.

[Sean Williams]

It was just like, yeah, these are slaves. You can do whatever you want. It was just crazy to me.

[Guest Speaker]

When you hear the stories of the guys who defect from the north as well, like the way that they describe Juche or this cult of personality is like, there is no God, right? There are Kims. So you serve them and serving them is like a kind of semi religious, just an incredible honor, right? So people are out there laboring in the worst conditions imaginable on earth. And this guy, like, no protection. I mean, it must cost a dollar to protect him, but that's too much for the Polish woman. And they're doing it because there is a religious belief that the country is the Kims. I met a guy actually in Seoul a few months ago, and he was a defector. And the way that he described, he'd been pretty high up in the politburo. He'd been a propagandist. Now he works one of those radio stations that broadcast stuff across the border like Kim Jong Un's a dick, basically, over and over again.

[Sean Williams]

Yeah, he's a human with a butthole that is working overtime or whatever they said in the movie.

[Guest Speaker]

Yeah. And the way that he described it was. I didn't know that religion exists or anything like philosophy existed. There was one philosophy that was the Kims. And so anything you do, therefore for them, no matter what you go through, is good, including starvation and forced labor and trafficking, drugs and whatever. I mean, I used to live in Berlin, lived in Berlin for many years. And the North Korean embassy there was in the old east, obviously, and it ran a backpacker's motel. So all these foreign backpackers coming through Berlin were heading to this like, crappy motel in the middle of town. But it was run by the North Korean embassy, and it was funneling foreign exchange straight back to Pyongyang.

[Sean Williams]

How does that fall under the diplomatic rules?

[Jordan Harbinger]

I know you can do pretty much.

[Sean Williams]

Anything out of an embassy, but running a business that's open to the public seems like one thing that might not totally qualify.

[Guest Speaker]

Yeah, I don't know, to be honest. I should know. My partner's a diplomat. I should figure this out. But, yeah, they do this all over the world. There's a bunch of North Korean restaurants all over the world. There's one in Dubai, I think, in Abu Dhabi.

[Sean Williams]

Been to one in Dandong, China.

[Guest Speaker]

They have all these crazy dance shows, traditional female dancers doing these crazy dances in traditional dress, and that's funneling money back to the Kim. So it's quite an impressive racket, and it is just so global, and it's happened for so many years now. It's so entrenched. I think the backpackers hotel in Berlin was shut down in the end, and I think a few more have shut down. A few of these restaurants and other businesses that had shut down during COVID and they haven't popped up because I think countries that they're in realize, oh, yeah, this is a good excuse to shoo this thing on without anyone really making us think about it. But it's still up and running, and there's far more naughty stuff happening than traditional dances and noodle soups.

[Sean Williams]

I'm curious about that, because when I was in Dandong, first of all, I didn't know that there were, like, a hundred thousand North Korean workers in China and like 80,000 in Dandong. I didn't know that. I mean, now I assume that every Korean person I met in Dandong was actually from North Korea, which is probably a safe, ish assumption.

[Jordan Harbinger]

We went to one of those.

[Sean Williams]

I forget what they're called, but it's. The floor is heated, and you, like, lay down in this sauna and you hang out. And I remember a lot of guys in there were Korean, were, like, Chinese Koreans. And there was a girl who was very pretty and young who was talking with us. And the guys that she was with were old enough to be her dad, and they were just laying around, and.

[Jordan Harbinger]

I remember thinking, like, wow, there's so many Chinese Koreans. But now I'm like, were they Chinese Koreans, or are these, like, North Korean.

[Sean Williams]

Dudes that work in this area or are somehow allowed by the regime because they were really unfriendly?

[Jordan Harbinger]

That could be anything.

[Sean Williams]

That doesn't mean anything. But the restaurant we Went to. The women there were really interested in me and my friend because we showed them photos of our trip to North Korea that my friend had on his iPad. He's a photographer, so he had like really good photos of North Korea that they had also probably never seen. Something taken on a Sony, whatever DSLR camera. They'd probably never seen a photo of North Korea like that, or very rarely, right? They had these crappy phones that barely took photos at the time. This is like 2011 or something like that.

[Jordan Harbinger]

So we were showing them the photos.

[Sean Williams]

And they were hanging out and talking with us and stuff like that. And these Chinese tourists came in and I thought, oh, okay, now it's their turn to get the treatment that we're getting. And it wasn't like that. The women were really like all hanging around me and my friend. My friend has tattoos from head to toe. So he was also a really interesting looking guy for them. And they kept touching him and lifting up his shirt and stuff. And we were just having a good time.

[Jordan Harbinger]

And we went there two days in a row.

[Sean Williams]

And then one of the women was like, oh, you.

[Jordan Harbinger]

Do you guys live here?

[Sean Williams]

And my friend was like, no, we're just tourists. And he goes, but you should come out with us and we should go eat at a different restaurant here in China and like hang out and you can see more photos. I'll bring more photos and stuff like that.

[Jordan Harbinger]

And the girls were like, leave this place and go with you. And my friend was like, yeah, sure, why not?

[Sean Williams]

We can just figure it out. Do you have a night off tomorrow? And they were like, hold on. And the manager came over and I was like, I think we're gonna get in trouble. Kicked out. The manager was like, you wanna take the girls out of the restaurant? And we're like, not right now, but maybe tomorrow or the next day. And he was like, huh? I'll think about it and I'll talk to you after the meal. And I remember thinking, like, I want to be really clear that we are not purchasing these women.

[Jordan Harbinger]

Yeah, like, I don't understand what's going on. And then as we left, the girls.

[Sean Williams]

Were like pushing each other out the door jokingly and like laughing and saying stuff in Korean to my friend especially, who was like, really flirting with them. And the boss guy came down and he's sorry, it's not possible. And we were like, yeah, we understand. Okay, bye. And I remember the girls were disappointed when he told them because I think that was news to them too. I think they thought like, oh, our time's gonna get purchased and we're gonna go on and today.

[Jordan Harbinger]

And then after we got back to.

[Sean Williams]

The hotel, my friend was like, that.

[Jordan Harbinger]

Would have been so fun. And I was like, I'm pretty sure that was on the table.

[Sean Williams]

And we just didn't say the right things. We didn't flash cash to, like, rent these women, but I don't want to do that. And he's like, yeah, me neither. That's really weird.

[Jordan Harbinger]

But it seemed like they weren't allowed to leave. They also. Oh, by the way, they told us.

[Sean Williams]

They lived upstairs, which I thought was extra creepy. They told us they lived upstairs. Right.

[Jordan Harbinger]

One of the women had said something, and again, could be lost in the translation, but she had said something like.

[Sean Williams]

I've never been out of this building since I've been to China. And I was like, outside in the restaurant. And she's like, no, I've never been anywhere but here. And I was like, yeah, bit of a rest.

[Jordan Harbinger]

Am I understanding her?

[Sean Williams]

And I think she'd never left the building.

[Guest Speaker]

Yeah, that makes sense. Is Dandong like, a happening place? Is it like a. No, there's much going on.

[Jordan Harbinger]

Dandong, China.

[Sean Williams]

If the river's frozen, you can walk to North Korea. Now there's a fence.

[Jordan Harbinger]

But before there wasn't a fence and you could just walk there.

[Sean Williams]

This place was so bizarre, man, I gotta tell you. Like, there's all these coffee shops now. Every place has WI fi. But back then I was like, I need WI fi to do stuff.

[Jordan Harbinger]

So I'd go to the coffee shop.

[Sean Williams]

That had WI fi.

[Jordan Harbinger]

And I remember sitting in a place.

[Sean Williams]

And they had a blonde white girl working the register. And I thought, oh, that's cool.

[Jordan Harbinger]

She works abroad. And then my friend's like, what is this music?

[Sean Williams]

And I was like, oh, yeah, it's.

[Jordan Harbinger]

All like, jesus is the savior, blah, blah, blah. Every song is like, super Jesus.

[Sean Williams]

Y, huh?

[Guest Speaker]

Crazy.

[Jordan Harbinger]

So I went up to the girl and I go, what's up with the religious music?

[Sean Williams]

Is this like a religious establishment? She's like, no, we're all Mormon. And I am like, who's all? And she's like, everyone that works here. And a bunch of these cafes were all Mormon.

[Jordan Harbinger]

And I was like, so are you on mission? She's like, nope, we live here. And I was like, what on earth is going on? And then I noticed that there were.

[Sean Williams]

A ton of people in the back of this place. And they weren't all white, but they were mostly Asian. I don't know if they were doing.

[Jordan Harbinger]

Bible study or what.

[Sean Williams]

But people would also come in and they would go back there and they'd be like, oh, hi, Angela, or whatever. And they would walk in the back.

[Jordan Harbinger]

And I just thought like, okay, something.

[Sean Williams]

Else is going on here. Because this building is huge. They obviously have the whole building, but only the front is this coffee shop. And literally the front. So I told my buddy, I was like, something is going on here. He's. I know, I just can't figure out what it is. So we went back the next day and we started asking her, like, so what's up?

[Jordan Harbinger]

You guys have the whole building?

[Sean Williams]

And she would not answer a single freaking question. Years later, I get back home and I'm talking about North Korean refugee smuggling with some people from this ngo.

[Jordan Harbinger]

And they told me almost certainly what's.

[Sean Williams]

Going on there is these Mormons are smuggling refugees from North Korea. And North Koreans have instructions to look for a certain sign and like walk in and there's a white person there.

[Jordan Harbinger]

Because this place was open late AF.

[Sean Williams]

Too, by the way. It was open to like 1 o' clock in the morning, which is weird for a Mormon coffee shop. And don't Mormons also not drink coffee?

[Jordan Harbinger]

So I was just like, what is going. So I think what they did was.

[Sean Williams]

They had these coffee shops, by the way, they were all right on the river. They were on the street next to the river. I think they have these people cross.

[Jordan Harbinger]

The river, run to that place, say a code word or whatever it is.

[Sean Williams]

Run to the back and get hidden from any authorities that might be pursuing them. And then they get smuggled through South Korea. Because this woman had no time for our bullshit.

[Jordan Harbinger]

Like, she was just like, take your coffee, sit over there, shut up, don't.

[Sean Williams]

Ask me any more questions, basically. And all of it was off. Every single bit of it was off. And it was only when I finally started talking to people who smuggle refugees through China and into South Korea that there's safe houses everywhere. And a lot of them are run by Mormons and other religious people who essentially have a calling to risk a lot. Because if you get arrested doing this in China, I can't imagine they're like, ah, it's fine, here's your fine, or here's your flight home. I think they probably put you in prison. Even if you're a cute blonde 18.

[Guest Speaker]

Year old, I don't think you're gonna be like cleaning up graffiti on the side of a building for that. I think you're gonna be in a bit of trouble.

[Sean Williams]

No. So me and my friend were creeped out by Dan Dong, man. We were uber creeped out. And we'd already been to North Korea a couple times.

[Jordan Harbinger]

That was the time.

[Sean Williams]

And I'll shut up now at some point here and let you talk during.

[Jordan Harbinger]

Your interview, but that was the time. I also went on a boat tour.

[Sean Williams]

Of North Korea from Dandong, and I didn't speak Chinese at the time. But you're driving around in this boat, and it was summer, so the river wasn't frozen, but we were driving around on this boat, and you could see the North Korean guards on the shore. And I remember the captain of the boat was kind of alarmed, and people were taking photos. And I said, what's going on? And one of the Chinese guys was like, oh, usually the guards are in the tower or they don't come out, but now they came out to look at the boat. So this guy was snapping photos with a telescopic lens.

[Jordan Harbinger]

And then you hear the boat captain go, something.

[Sean Williams]

And then I was like, what's that? And he's like, oh, they don't want us to take photos. But the guy was like, screw it. Everybody was just like, screw it. I'm gonna take photos anyway.

[Jordan Harbinger]

The guard on the shore raises his.

[Sean Williams]

Rifle and aims it directly at the boat and is angry.

[Jordan Harbinger]

And then the captain over the loudspeaker.

[Sean Williams]

Is screaming in Chinese and turns the boat around, and that was the end of the tour.

[Guest Speaker]

I mean, that's more exciting than most boat tours I've ever taken.

[Jordan Harbinger]

However, when I got back, I read.

[Sean Williams]

That a few months or years prior, some Chinese fishermen had been fishing in the river. Their engine died, and they drifted to the North Korean side. And when they got out, they were just summarily executed by the border guards. They just got shot. It wasn't like, oh, let's push your boat out.

[Jordan Harbinger]

Let's call the other guy.

[Sean Williams]

No, they just shot him, like, on the beach, and were like, hey, come pick up the bodies of these guys who tried to get into North Korea.

[Guest Speaker]

Wow.

[Sean Williams]

Yeah.

[Guest Speaker]

They don't do those fishermen on Discovery Channel shows, do they?

[Sean Williams]

No.

[Jordan Harbinger]

Second Deadliest Catch is now the one with crabs. The deadliest one is the one where.

[Sean Williams]

You get executed by North Korean border guards for setting foot on the beach because your boat is disabled.

[Jordan Harbinger]

Yeah. So Dandong.

[Sean Williams]

No, it's not happening. It's just a bed of spies, espionage, and human trafficking, basically.

[Guest Speaker]

I once met a guy in Yangon who. I think he was a Chinese national, but he was. Basically. He got more and more drunk and told me that he was a gun runner and he was working in Dandong, so he must have been working on this, like, illicit arms trade that goes through there as well, which is another way that the Koreans make a lot of money.

[Jordan Harbinger]

Tell me more about that.

[Sean Williams]

Because I've heard things like the North Koreans get caught smuggling heroin to Australia in boats.

[Guest Speaker]

Yeah, you're thinking of the Pong SU thing in 2003 where they found that freighter off the coast of Australia. I think it was flagged in Tuvalu, which is. I don't think Tuvalu has a particularly huge fleet. That's probably a big blue flag.

[Jordan Harbinger]

Well, it's like Liberia also, right?

[Sean Williams]

Panama, Liberia, those flags of convenience. I've done a few shows on flags of convenience. And for those who are interested, go listen to those episodes. But the summary is you basically, when you have a ship and it's American.

[Jordan Harbinger]

You go, oh, I'm subject to American law?

[Sean Williams]

And then you go, nah. And you buy a flag of convenience from Liberia and suddenly you're under. You have to follow Liberian law, which says, do whatever you want, bro.

[Jordan Harbinger]

Just whatever. Give us $10,000 a year and you.

[Sean Williams]

Can have slaves on your ship and we'll never inspect it.

[Guest Speaker]

Basically, yeah. Feels like a loophole they should have closed quite a while ago.

[Jordan Harbinger]

But there's no incentives to close it.

[Sean Williams]

Right. I remember learning this.

[Jordan Harbinger]

Who's going to close it?

[Sean Williams]

The people who make millions of dollars a year for their countries?

[Jordan Harbinger]

No, the boat owners who are like, huh, I can be subject to the.

[Sean Williams]

Laws of Denmark, where I have to pay fair wages and repair the ship.

[Jordan Harbinger]

Or the laws of Liberia, where I.

[Sean Williams]

Can keep human captives on here and force them to fish for me for years and then kill them.

[Jordan Harbinger]

Like, all right, I'll choose the one that allows me to make money and has no ethics.

[Sean Williams]

And so there's no incentive to change that. Because even if every government in the free world was like, you can't do that.

[Jordan Harbinger]

Well, the boat's in international waters.

[Sean Williams]

What are you going to do about that? You're going to change that law too?

[Guest Speaker]

Yeah. Multilateralism is not going so well at the moment. No, there's probably no chance of that happening. I think that 2003 incident, I think it was the Pong sue. They found over 125 kilos of heroin stashed in the hole. This was at a time, I think it was moored off the Victoria coast. So, like, Melbourne basically is one of the richest drug markets in the world. So that was all going there. But even in 22 years since that happened, the Whole drug industry has changed for North Korea. So they've got more into met. I mean, who isn't into meth these days?

[Sean Williams]

It's let he who's not into meth cast the first stone.

[Guest Speaker]

Exactly. Wait, can I check his. Fine.

[Sean Williams]

Wait.

[Jordan Harbinger]

I don't know. So tell us about the North Korean meth problem.

[Sean Williams]

Then we'll wrap up the slave labor and human trafficking stuff and go into Bureau 39.

[Guest Speaker]

Yeah. Again, it's the 90s that change everything. Right. So the 2003 Pong Su that's at the tail end of North Korea being deep into heroin because it's poppy fields. It was growing its own. Basically, it was homegrown heroin and it was selling it on the international market until the mid to late 90s. The famine hits, all of these poppy fields freeze over and they kind of lose the entire industry from that point. They never get it back. So they do. What is happening in the Golden Triangle, as I'm sure you know, well, in the mid-90s is they just switched to yabba meth, crazy pills. It's all the rage all over the Golden Triangle, especially in Burma, Myanmar. Whereas getting made by the Wa, this crazy kind of ethnic Chinese tribe on the border with China.

[Jordan Harbinger]

I did a show about the wa.

[Guest Speaker]

Yeah, they are an interesting bunch. I've met a few of those guys. They're really nice, actually, because they don't give a crap. No one cares what they do in Myanmar, so they're under no threat whatsoever. So they just like, chat to you openly.

[Sean Williams]

Episode 966 Patrick Wynn was state. It's basically when a drug cartel becomes a country.

[Guest Speaker]

Yeah, he knows better than anyone. He's such a great writer.

[Sean Williams]

Yeah, he went there, wrote a book about it. He's basically just homeboys with a bunch of WA people who are famous for.

[Jordan Harbinger]

Putting heads on spikes from outsiders, which.

[Sean Williams]

Is kind of a thing that I didn't think happened anymore.

[Guest Speaker]

Yes. But in my sample size of about five guys, they're lovely.

[Jordan Harbinger]

Yeah, I think it's.

[Sean Williams]

If you're welcome, you're fine. If you show up unannounced, you're getting your head put on a spike.

[Guest Speaker]

But my head is still firmly attached, so I'm all right. But in the mid-90s, middle to late 90s, North Korea goes with the flow and it starts making meth. Obviously, it's way cheaper to produce. You can make it in factories if you've got the know how. And if you've got the backing of an entire state that's willing to chuck a few MIL at the industry, then you can do it overnight almost. So meth starts becoming the drug of choice in North Korea and they start becoming a major sort of shipper of the drug around the region, especially over to Australasia and Southeast Asia. They become a big player in it. You get to the point now when meth has taken over in the North Korean state to such an extent that they've got a huge domestic consumption issue. There's a bunch of stories came out late last year about it being more easier to get a wrap of meth than it is to get cigarettes or a loaf of bread or something like that, which is pretty grim from what I've read and what I know about this. Like, it's state driven. There is a state driven meth. I see industry for domestic consumption as well as selling it overseas. Doubly disgusting to kind of poison your own people as well as incarcerate and send them out the labor market. You know, all of this horrible stuff is, you would think with North Korea, surely it's going to all implode at some point soon, but it hasn't so far. I mean, it looks like it's getting even more bellicose between them and the South.

[Sean Williams]

So I remember one time when I was there, we asked our guide about marijuana because we saw some growing just randomly and it grows everywhere. And I said, do people smoke it? And he's like, some people do, but I don't know anyone that does.

[Jordan Harbinger]

But he told us a lot of people will chew it or something like that. And it sounded like he didn't really know.

[Sean Williams]

We asked him about meth and he said that it wasn't a problem, but kids did it sometimes. And I was like, that sure sounds like a problem.

[Jordan Harbinger]

It was if you ask an adult.

[Sean Williams]

Who doesn't really know a lot or is trying to conceal how bad things are if kids do marijuana, like, oh, only those hippie kids do that.

[Jordan Harbinger]

And it's okay.

[Sean Williams]

But we're talking about meth. So the fact that any kids that.

[Jordan Harbinger]

Do it is a little bit alarming.

[Guest Speaker]

Yeah, slightly.

[Jordan Harbinger]

Yeah, slightly alarming.

[Guest Speaker]

They also big into moonshine as well, because I think alcohol is just far too expensive. And they make vodka basically out of like spuds and other stuff. And we were talking about the stuff that the diplomats do. And I think one of the things I saw was that in Pakistan and Kuwait and some other dry countries, North Korean diplomats have been selling whiskey and beer and other black market alcohol. So they're like, even if it's making them sort of 10 bucks they're doing it. It's like any little helps the Kims. So it's a crazy place.

[Sean Williams]

The fact that diplomats are self funded in North Korea. Like if you're a North Korean diplomat.

[Jordan Harbinger]

They'Re not like, here's all the money.

[Sean Williams]

You need to run your embassy. It's for many countries, they just have to figure out how to survive there. If you're the North Korean ambassador to Sierra Leone, you're essentially in charge of running organized crime rackets so that you can run the embassy and then send proceeds back to the Kim family. And if you can't do that, I assume they recall you and put somebody else in place who's just maybe more enterprising because the idea is you're generating revenue. They don't really probably care that much. I mean, diplomatic relations for the Kim family is what are you bringing to the table? How much money are you generating for North Korea? It doesn't matter if it's legal or not. And so the legal stuff would be like, hey, we're going to have guest workers come over here and build an airport and clear a jungle and do that. That's going to be brutal. And the illegal stuff is, oh, and also we're going to sell people or run guns from here through there, or run drugs through the country to another country.

[Guest Speaker]

There's some Australian guy in Melbourne needs a new fix and he gets a text from his dealer, meet me here. And he goes to the house and it's just got a North Korean flag flying out the top of it. You're like, oh, okay, this is weird, whatever.

[Jordan Harbinger]

But you know what though, I get it.

[Sean Williams]

Cuz sure, state security is monitoring all.

[Jordan Harbinger]

Embassies, but they're maybe not able to figure out exactly what's going on inside because it's not like they can get.

[Sean Williams]

A warrant to go in there. So yes, state security might be monitoring them, but if they start arresting random small time drug dealers that pop out, they're gonna figure out that they're under surveillance and maybe do something about it.

[Jordan Harbinger]

So essentially, if you go in there and you buy a kilo of cocaine or heroin, the government has to decide.

[Sean Williams]

Whether or not they really care about that enough to potentially disclose sources and methods in how they catch you.

[Jordan Harbinger]

And if it's a place with rule.

[Sean Williams]

Of law, they have to say, we have a wiretap on the North Korean embassy and here's them talking with you about this. And they're not gonna do that because they want real intelligence. So what they're gonna try to do is catch you randomly coming out with it, but that's gonna eventually add up and be too much for a coincidence.

[Jordan Harbinger]

And if you're not selling the drugs in that country, right, if you're going through Sierra Leone, but you're only selling.

[Sean Williams]

Your drugs in Ivory coast or something.

[Jordan Harbinger]

Are they gonna do anything about it?

[Sean Williams]

Or are they gonna be like, look, the guy doesn't sell the stuff here. Screw it, he's bringing money back. He's greasing the palms of certain people high up in the government, Whatever. What do we care?

[Guest Speaker]

And that's why you keep that backpacker motel open in Berlin, right? Letting them have some crappy hostel keeps them in the tent. Then, yeah, I guess you're going to just keep them in the city no matter what, to find out what the hell they're doing.

[Jordan Harbinger]

I think that's probably true. And also, oh, they're making a bunch.

[Sean Williams]

Of money from a backpacker hostel, and they said, hey, if we ever close this place down, let's just sell guns and drugs to neo Nazi gangs, eh?

[Jordan Harbinger]

Right, let's keep the hostel open, and if they start selling guns and drugs to the neo Nazi gang, we'll crack down on all of their operations. But until then, I feel like having.

[Sean Williams]

Cheap bunk beds and some cheap beer is probably relatively harmless. I'm just trying to get in the head there. A friend of mine, Charles Rue, again, also an episode of the show, he mentioned that he was repatriated from China because his dad was Chinese, also a drug dealer. He got repatriated to North Korea after escaping, and they put him in a labor camp domestically because we were talking about working outside of North Korea and that generating revenue. But there's people inside North Korea, tremendous numbers of them. He was a kid. He was like 12 at the time or something, or 15, I can't remember. And he worked in the mines, like he worked in coal mines, basically. And he actually said it wasn't that bad. And he stayed after his punishment to continue working there, and he spent his money on alcohol and saved a little bit and then escaped to China again.

[Guest Speaker]

Jeez, what a life.

[Jordan Harbinger]

Wow.

[Guest Speaker]

Yeah.

[Sean Williams]

Yeah, he's a really interesting dude. I'm gonna have him back on the show now that his English is better. But I wanted to highlight that because a lot of people think, oh, why.

[Jordan Harbinger]

Escape from something and then go work in this other place?

[Sean Williams]

Or why volunteer to work abroad like this? And the truth is, it's actually better to be in a North Korean mine than it is to be maybe unemployed in North Korea because he was homeless before that. And it's better to be working abroad welding with no glasses and no protective clothing than it is to be working in North Korea where maybe you just don't even have food.

[Guest Speaker]

This is a cold place, right? I was doing an interview in January and just south of the North Korean border, It was like minus 12 degrees C. It's crazy cold. You're going to die if you're not inside. So maybe just being inside is the reason that you work. It's grim stuff.

[Jordan Harbinger]

Since I don't traffic in meth or stolen crypto, I'm stuck relying on you to support the amazing sponsors who support this show. We'll be right back. This episode is sponsored in part by IQ Bar. IQ Mix is a zero sugar drink mix from IQ Bar that hydrates, boosts your mood and promotes mental clarity. Anybody who knows me knows I'm borderline.

[Sean Williams]

Obsessive about staying hydrated. But let's be honest, plain water gets.

[Jordan Harbinger]

Real old real fast. And especially when you're out rucking seven miles in the heat with a 60 pound pack on your back. At that point, water's just not enough.

[Sean Williams]

To put Humpty Dumpty back together again.

[Jordan Harbinger]

That's why I've been loving IQ Mix from IQ Bar. It is a zero sugar drink mix that packs three times the electrolytes of your average sports drink without all the weird junk. No sugar, no gluten, no soy, no GMOs. Why would you put soy in electrolytes? It's even vegan. It's kosher. So if you're an orthodox Jewish extreme.

[Sean Williams]

Athlete, you can still drink it.

[Jordan Harbinger]

My go to flavor is is Pina colada, but I'm just imagining like a.

[Sean Williams]

Really sweat soaked yarmulke or one of those Russian fur hats. But you're running an ultramarathon. Anyway, this is about IQ Mix. Sorry.

[Jordan Harbinger]

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[Audible Advertiser]

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[Jordan Harbinger]

This episode is also sponsored in part by BetterHelp.

[Sean Williams]

BetterHelp.

[Jordan Harbinger]

You know, it's wild how much the.

[Sean Williams]

Conversation around mental health has just changed, just in the past decade or so. It used to be this taboo thing, oh, you're in therapy. What's wrong with you? Now it's more like, wait, you're not in therapy.

[Jordan Harbinger]

You just raw dog reality. Just like that. And I think that shift is huge. I mean, BetterHelp just did this big state of stigma report for Mental Health Awareness Month. They surveyed over 16,000 people in 23.

[Sean Williams]

Countries and here's what stood out.

[Jordan Harbinger]

75% of people say it's wise to get support when you're struggling, but only.

[Sean Williams]

27% of Americans are actually in therapy.

[Jordan Harbinger]

And the thing is, when people put.

[Sean Williams]

Off getting help, it doesn't just impact them, it affects their relationships, their work, their families.

[Jordan Harbinger]

It really ripples out. So breaking that stigma, it's not just good for individuals, it's better for everyone.

[Sean Williams]

I've definitely benefited from BetterHelp. It's helpful having an outside perspective.

[Jordan Harbinger]

Therapy is not just about crisis or trauma.

[Sean Williams]

It's about growth, self awareness, just being a better human.

[Jordan Harbinger]

BetterHelp's got over 35,000 therapists and they've.

[Sean Williams]

Already helped more than 5 million people worldwide.

[Jordan Harbinger]

The whole thing is online, super convenient. And if your first therapist isn't the right fit, switch anytime.

[Audible Advertiser]

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[Jordan Harbinger]

How I managed to book all these great authors, thinkers and creators every week, it is because of my network. And I'm teaching you how to build your network for free [e-mail] Some of.

[Sean Williams]

You are probably not booking for a.

[Jordan Harbinger]

Podcast, but let's say, hypothetically, you're a meth trafficker from North Korea. You're gonna love this course because it inspires other people to build a relationship with you. And it does it all in a super easy, non cringe, down to earth way. No awkward strategies or cheesy tactics. Just practical exercises that'll make you a better connector, a better colleague, a better friend, a better peer, and maybe even a better money launderer. But I can't really guarantee you that just six minutes A day is all it takes and many of the guests on the show subscribe and contribute to the course. So come on and join us. You'll be in smart company where you belong. You can find the course again. It's all [e-mail] now back to Sean Williams. The slavery element, or the forced labor.

[Sean Williams]

Element inside North Korea is so widespread. I read in a piece that I think you wrote, some farms and factories don't pay wages or provide food to their workers. And it says during implementation of short term economic plans, factories and farms increase workers hours and ask workers for contributions of grain and money to purchase supplies for renovations and repairs. So basically you have to work there and you don't get paid. That's slavery, basically, yeah.

[Guest Speaker]

Straight up and down. Yeah. If you don't work for us, you die. We're not going to pay you, we're not going to give you anything. You might live. You'll probably die anyway. But yeah, it's better to go with us. What a great offer.

[Jordan Harbinger]

Yeah, not that compelling when you phrase it like that, but sure.

[Sean Williams]

On one of my trips in North Korea, we saw so many people working in the fields and our guide told us that every year they have to stop going to school for a couple of months and they go and help the farmers harvest food, which is nuts. And you're working for free for a couple of months in the fields because it's just so labor intensive and they don't have machinery to do it.

[Guest Speaker]

Oh, man. Increasingly, all of this money is just going into making bombs that Kim can threaten everyone with so that he stays going for another, what, a few months or a year until whenever his heart gives out. But it's not changing.

[Jordan Harbinger]

These guys are bastards.

[Sean Williams]

I wouldn't trade my life for theirs, I'll tell you that. There's no way they're not under constant chronic stress.

[Guest Speaker]

Yeah, you can see it on the cut.

[Jordan Harbinger]

He looks like a guy who's got.

[Sean Williams]

Some things on his mind.

[Jordan Harbinger]

He was 27 a few years ago.

[Sean Williams]

And now he's 67. By the look of it, he is just aging terribly. Ironically, my guide in North Korea, she said that she loved working in the fields because you get to meet new people and you almost never actually get to do that in North Korea because you go to school with the same people, then you go to college. But if you go to the college that she went to, which is like a foreign language university, it's basically the same privileged cadre of people that you've known your whole life. From other schools in Pyongyang. There's maybe a few new people, but that's kind of it. And then so when you go work in the fields, they just assign you geographically, so you just meet all these new people. And she's like, so many girls that she knows met their boyfriends while working in the fields because otherwise you're just with the same people you grew up with. And you know how it is when you're dating. You're tired of those people, right?

[Jordan Harbinger]

You see those people grow up, it's like, eh. Then you meet some new guy and he's like working with his shirt off.

[Sean Williams]

Outside, and you're just like, woo, it's hot out here.

[Jordan Harbinger]

She loved it.

[Sean Williams]

She said everybody loved it. And they would play music at night and stuff. It sounds fun. Until you realize that you're actually a slave for the Kim family working on a farm.

[Guest Speaker]

Yeah, I was going to say, like, sometimes my WhatsApp groups and my friends from home get a little bit meme y and boring. But I guess if we wanted to work in the fields for no money and we were dying, it'll be a little bit worse. So I don't have a lot to complain about.

[Jordan Harbinger]

So to put a bow on this.

[Sean Williams]

Forced labor thing, they work 12 to 16 hours a day, sometimes 20 hours a day. They're allowed two days off per month. And they work in a wide range of industries in hazardous conditions. Apparel, construction, footwear manufacturing, hospitality, information technology, services. Logging the IT services thing. I want to put an asterisk by that and find out more because that doesn't make a ton of sense to me.

[Guest Speaker]

Yeah, they're not working for Airbnb. I think they might be doing something less lubricant.

[Jordan Harbinger]

Yeah, like what IT services are you.

[Sean Williams]

Providing when you're a forced laborer? That screams dodgy to me. Logging medical, pharmaceuticals also, I don't know. I assume they're packaging medications, maybe restaurants, ppe.

[Guest Speaker]

I think they did loads of that during COVID as well.

[Sean Williams]

Seafood processing, textiles and shipbuilding. The stuff we were talking about in Poland. Go's report that the government manages these workers as a matter of state policy. This is from an NGO report. They're under close, constant surveillance by government security agents. They live in shared dormitories. Poor living conditions, obviously. No freedom of movement, freedom of communication. Their passports are confiscated. And if they complain, or attempt to complain to outsized parties or escape, their families are punished inside North Korea. And their salaries, of course, are appropriated and deposited into accounts controlled by the government of North Korea. If They're a shipbuilder. The average pay, I think was €90 per month. They cover your food and your living conditions are terrible. But they take all of your money except for €90 per month, which is actually a lot. That's why people take these jobs if they are allowed to choose, because it's actually way better than working inside North Korea.

[Guest Speaker]

Yeah, I mean, the real bastards in this story are the Poles. Right, who are doing it, because those are the kind of countries that you can control. You would think of being in the Western sphere or whatever you want to think of it. And they're taking slave laborers for 90 bucks a month. It's just, that's the terrible part. You can't really change a lot what happens in North Korea, but you can change that.

[Sean Williams]

You can change the demand for this kind of thing. Yeah, exactly. It's estimated that the regime earns up to a billion dollars a year from this because they're all over Africa, Middle east, things like that, and apparently Europe. And women are trafficked as well. I'll let you imagine what happens there. They're sold as wives many times and that's horrific. And this is illegal in China. So the kids, they have.

[Jordan Harbinger]

What happens to the kids? You have any idea? Because if you have kids with your illegal North Korean wife who doesn't exist.

[Sean Williams]

On paper, is your kid Chinese or are they stateless?

[Guest Speaker]

Yeah, I would assume they're Chinese, but I don't know, like, where's the money coming from? Where's it going? I would assume that the Chinese have genuinely tried to crack down on that a bit because I think they have with the drugs as well. They did a big anti Drug Drive in 2014, 15, which is part of the fentanyl problem now. They drove a lot of meth production out of China and I think they stamped out a lot of North Korean stuff, arranged marriages. It's just like a dark economy upon a dark economy. Where the hell is that money going? I have no idea.

[Jordan Harbinger]

So tell us about Bureau 39. We've touched on some of these money.

[Sean Williams]

Making activities, but Bureau 39 is the organization in charge of this whole thing.

[Jordan Harbinger]

So this is not just like accidentally.

[Sean Williams]

These people are earning money for the regime. This is a very conscious process. It is one of the top priorities, if not the top priority of the Kim family.

[Guest Speaker]

Yeah, if it's a mafia, then this is the guys hanging out at the strip club in the Sopranos. These are the guys devising all the scams and schemes. They're going to get all this Money, it goes back a long way. It goes Back to the 70s again with Kim Il Sung. It's not new. And it's called Bureau 39 because it's in the 9th room of the 3rd floor of the Finance Department in Pyongyang. And it's supposed to maintain the various informal networks of money that keep the despots afloat. One of the most famous or infamous ones of this is this thing called the Kippun Jo, which is like the pleasure squat, which back in the day, Kim Il Sung had some pretty weird views about sex and women that veered into, I'm going to say problematic. That's the phrase that everyone uses that, right?

[Sean Williams]

Okay.

[Guest Speaker]

But he had basically, you know, sex was the fountain of youth. So he just had this conveyor belt of young women coming through. Bureau 39 that were basically was a state brothel. But then it branched into other stuff like we've been talking about dealing weapons, dealing in drugs. One of the things is counterfeiting, which was a huge deal back in 90. Still going forward now, stuff called these things called super dollars, which account of it usually hundred dollar bills that are so good that they've actually caused a genuine dent in the value of the US currency at various points in history. I think there was one story where there was so much of it floating around parts of Africa at the time that U.S. officials even thought about stopping runs on $100 bills at the mint. So these things are pretty hardcore. There's all other kinds of illicit that Bureau 39 does. It deals in ivory, wildlife trafficking, DVDs, Blu Rays, whatever you can think of as pirates, kids toys, just crappy electronic devices, gold, cars, guns, grenades, whatever you can think of. It's like the nerve center of everything illegal that happens in the North Korean state. And then part of that, of course, is the cybercrime, right? Which has become a huge earner, if not the biggest earner, bigger than the billion that they're getting from these poor people working in fields in the middle of nowhere.

[Sean Williams]

Yeah, let's talk about that in a second. By the way, if you're interested. More on the arms trade with North Korea, episode 527. We had this guy, my friend Ulrich Larson, they made a movie called the Mole. You've heard of this, right?

[Jordan Harbinger]

Yeah.

[Sean Williams]

So this guy Ulrich, he is a retired chef and he basically got really bored and infiltrated the North Korean Friendship association, which is basically like unemployed losers and old people who are really lonely all across the world who have these meetings to talk about how great North Korea is, but it's the height of pathetic.

[Jordan Harbinger]

Anyway, he stays in there for like.

[Sean Williams]

A decade or some crazy amount of time going to these meetings and it comes up with an idea to earn money for the regime and that it gets run up the flagpole and they end up meeting these arms traffickers in Beijing. And it's an absolutely batshit crazy story with Ulrich and another guest on the show. Mr. James plays Mr. James in the movie. And it's just, it's fascinating. It's one of the coolest documentaries I've ever seen. It's basically a civilian run sting operation that showed that North Korea was willing to sell arms to anyone, especially if they were gonna get to, you know, whatever, Syria or Africa. They just don't care. So Bureau 39, they get the money back to DPRK, to North Korea, through diplomatic channels.

[Jordan Harbinger]

Are they literally carrying duffel bags full.

[Sean Williams]

Of money through the airport and just having them not be inspected because they're diplomats? Is that how this works?

[Guest Speaker]

Yep, that's exactly what's going on. Just big old bags of stuff in the diplomatic bags and cases going through the airports, you can't search them. That's how a lot of this stuff is being done. Genius, in a way. Just use your entire diplomatic corps as a mafia who are working under threat of death and the deaths of their entire families. So it's a pretty well oiled system. But yeah, like just about any illicit market that you can imagine in the world, North Korea is skimming some of it somewhere. Whether it's old books or headphones or whatever they're flogging on the black market. But the stuff that they've become world leaders in is cybercrime. There's a group called the Lazarus Group, I think some of your listeners probably would have heard of it before. It basically started out as a sort of asymmetrical warfare group, which just still is to some extent. And I think it started in 2009, carried out a bunch of attacks people might remember. The WannaCry ransomware attack in 2017 ran into billions of dollars of damage. All of these hackers working out of Pyongyang, most of them trained in China. I remember putting together a piece for the economist back in 2012, and me and my co writer figured out that some of these hackers have been using keyboards that would have initially been into the Korean Alphabet. As the years go by, they realize they can also not just do attacks, but they can actually pwn a lot of people's money. They start doing smaller attacks, they start like malware, ransomware. People who remember the Internet when it was really good, when there were more than sort of four websites, there were a bunch of. Getting a virus from some GeoCities website was an actual thing. And some of that was run by the North Korean regime. But then like in the last, what, 10 years or so, they've really ramped up these schemes to be serious financial crimes. So you. Bangladesh bank heist in 2016. It's one of the biggest cybercrimes in history. They managed to basically convince people to trade a bunch of money, but it's being stolen by North Korea on the way.

[Sean Williams]

The Bangladesh bank heist, I remember learning about this, but I don't understand how it worked.

[Guest Speaker]

It's basically that they managed to imitate the trading systems of the bank. And I mean, the clue as to where the weaknesses were in the system are in the title of the heist. So Bangladesh wasn't using the most up to date security to run some of his systems. So basically what they did was they tried to ape the bank trying to trade a bunch of money and they would have actually gotten away with nearly a billion dollars if it weren't for those pesky guys at the New York Federal Reserve. Because what they did was that the hackers, in trying to mimic transfer, they actually misspelled one of the words and that's what gave them away. So as the money was pouring out, they were able to actually just shut the valve down because they're like, oh, okay. I don't think that's actually spelled like that. It's like proper Nigerian print scam style stuff.

[Sean Williams]

Yeah.

[Guest Speaker]

But it was incredibly successful.

[Sean Williams]

That guy got fired out of a cannon.

[Jordan Harbinger]

So you mean to tell me we lost $900 million because you don't know.

[Sean Williams]

How to spell Bangladesh?

[Jordan Harbinger]

I was typing really fast.

[Sean Williams]

Where's the anti aircraft gun and the dogs?

[Guest Speaker]

Exactly. Yeah. You wouldn't want to be that guy.

[Sean Williams]

No.

[Guest Speaker]

Monday.

[Sean Williams]

No, that's a bad Monday.

[Jordan Harbinger]

Wow.

[Sean Williams]

But I don't know a lot about the inner workings of this type of thing. But isn't this all digital when you're.

[Jordan Harbinger]

Talking about bank wires for this amount of money? So can't you go, oh yeah, we.

[Sean Williams]

Wired a bunch of money to North Korea. No, we're undoing that. That's ridiculous. Any money from North Korea is not valid. This came from Bangladesh. This is ridiculous. You're not getting. It's not like they had a truck full of money going across the border. So I don't get why you can't undo something like that. It's not cryptocurrency, it's not on the blockchain.

[Guest Speaker]

I'm really not sure. I think that the key was that they mimicked the bank and that the bank had sent some of the money before they realized they'd made a terrible error. But I think once you reroute some of that money, it is gone. And it goes into sort of dark bank accounts, probably in Switzerland. Everyone loves a Swiss bank account. And then it's disappeared. That's it. That money's off the books. That's part of the reason that there is such a problem with dark money in the world. I think they're like one in eight dollars that's traded in. The entire planet is part of the dark economy, shadow economy. So yeah, once it's gone, it's gone.

[Jordan Harbinger]

Speaking of methamphetamine and money laundering, how about a word from our sponsors? We'll be right back. This episode is sponsored in part by NordVPN. If you're online without a VPN, you're kind of walking around the Internet with your fly down.

[Sean Williams]

And you know, some of you are into that, but most of us aren't.

[Jordan Harbinger]

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[Sean Williams]

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[Jordan Harbinger]

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[Sean Williams]

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[Jordan Harbinger]

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[Sean Williams]

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[Sean Williams]

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[Sean Williams]

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[Jordan Harbinger]

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[Jordan Harbinger]

This episode is also sponsored by Shopify. You ever try to buy something online and wonder why it's so dang hard to give them your money? Clunky checkout. They got to make an account.

[Sean Williams]

Then you got to log in, you.

[Jordan Harbinger]

Got to enter your password, you got to verify your email. It's a mess. For real. This happened to me recently. I just kind of thought to myself, screw it.

[Sean Williams]

I'm just gonna find this somewhere else.

[Jordan Harbinger]

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[Sean Williams]

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[Jordan Harbinger]

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[Sean Williams]

Puzzle to buy a stinkin armband or whatever.

[Jordan Harbinger]

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[Jordan Harbinger]

I've got homes.com as a sponsor for this episode. Homes.com knows when it comes to home.

[Sean Williams]

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[Jordan Harbinger]

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[Jordan Harbinger]

So when it comes to finding a home, not just a house, this is everything you need to know, all in1place.homes.com We've done your homework. If you like this episode of the show, I invite you to do what other smart and considerate listeners do. Take a moment and support the amazing sponsors who make the show possible. All of the deals, discount codes and ways to support the show are searchable and Clickable over at jordanharbinger.com deals if you can't remember the name of a sponsor or you can't find the code, feel free to email us over here. Jordanordanharbinger.com we are happy to surface codes for you. It is that important that you support those who support the show. Now for the rest of my conversation with Sean Williams.

[Sean Williams]

I know that North Korea has something like 1600 hackers, which might not sound like a lot, but is a lot since they're all working with each other. I mean, this is. It's not like the United States has 10,000 hackers, but it's kids in their mom's basement who are like, dude, I totally took down pornhub for five minutes. It's not that kind of hacker. These are people who sit in office buildings and run heists for the regime. And wasn't there a crypto heist recently where they stole like a billion dollars or more like a crazy huge crypto heist recently?

[Guest Speaker]

Yeah. The good thing about crypto is the blockchain, but the bad thing about crypto is the blockchain.

[Sean Williams]

The blockchain. This is like March 2025. Yeah.

[Jordan Harbinger]

North Korean hackers cash out hundreds of.

[Sean Williams]

Million, stole 1.5 billion from something called Bybit, which I've never heard of because I don't keep my money in exchanges, which is because they get hacked by North Korea. Yeah.

[Ulric the Mole]

Wow.

[Sean Williams]

Record breaking $1.5 billion crypto heist, unrecoverable funds. They've converted at least $300 million of that into cash. Yet the criminals known as the Lazarus Group swiped the huge haul of digital tokens in a hack on crypto exchange Bybit in February. It's been a cat and Mouse game to track and block hackers from moving the crypto into usable cash, which is of losing proposition, of course. The hacking team is working nearly 24 hours a day, funneling the money into the regime's military development, most likely. Interesting.

[Jordan Harbinger]

Every minute matters for the hackers who.

[Sean Williams]

Are trying to confuse the money trail. And they are extremely sophisticated in what they are doing. This is on the BBC, so we can link to this article. Yeah, as needed.

[Guest Speaker]

That's a hell of a lot of money. And, yeah, it just shows you that I think when we talk about these groups, we think of it in the west as individuals and hacking groups and kind of bands of disparate punky outfits trying to rip off people. But out there, and it's the same when you talk to people about Russian and Chinese misinformation groups. These aren't just a couple of dozen people sitting in an office, like, typing out tweets, although that is sometimes what they do. But this is extremely professionalized. People working in North Korea's case, probably 20 hours a day, just trying to pull off that one heist.

[Sean Williams]

Smoking that meth.

[Jordan Harbinger]

Smoking that domestic meth.

[Guest Speaker]

Yeah, exactly. Jeez. Double shift, guys.

[Sean Williams]

Yeah. It says they're working 20 hours a day.

[Jordan Harbinger]

And I'm like, how do you stay up for.

[Sean Williams]

Oh, no, nevermind. I got it, I got it.

[Jordan Harbinger]

20% of the money has gone dark.

[Sean Williams]

And multiple people are sharing rewards for identifying the money. So essentially they've crowdsourced tracking a lot of this as well. That's so blockchain, isn't it? Being like, hey, everybody track this money. And it looks like they're funneling it through, like, really shady exchanges a little bit at a time. This is so interesting. God, this is fascinating. Yeah. Oh, my God. Oh, and here's a. Wanted by the FBI. They identified someone in the Lazarus Group. This guy looks so North Korean. He's just dressed like he's a North Korean guy. Right on the nose, man. Yeah.

[Guest Speaker]

Yeah. Good luck catching him. I don't think he's going to be walking around Florida or California anytime soon, but I don't know, maybe he wants to go on holiday in the States. Yeah. Then when you look at the back catalog of these guys, the ROI on this is unbelievable. Right. In the case of the drugs or the labor, you've got to put in a hell of a lot of effort sending thousands and thousands of people into the world trying to get some money back. And like I just said, some of them are just selling bottles of whiskey to Pakistani diplomats. Whereas this is, you Making billions overnight, potentially. So no wonder they're pouring all their funds into this.

[Sean Williams]

That's really interesting. The problem here is hacking is a fungible skill set. Right. If you're really that good that you can change a digital wallet address inside a company that really cares a lot about security, like Bybit or any crypto exchange, you can certainly take down the power system in Boston, which hasn't updated its crap and uses Windows 95 or something on most of its other systems and doesn't have any sort of updated infrastructure. Security is an afterthought because it's expensive. That's going to be taking candy from a baby if you can do something sophisticated, like steal $600 million from a crypto exchange.

[Guest Speaker]

Yeah. And like on the attacking front as well. Right. They downed parts of the NHS in the uk. It's one of the biggest systems in the whole world. They were just running on, like, Windows xp. So North Koreans hacked them, sent a bunch of stuff down. People missed their surgeries, people died. It's crazy the kind of chaos that you can cause. It is actually like one of those crappy Hollywood movies they made in the 90s about Y2K. Like, it's happening. It's just not quite as schlocky as that.

[Sean Williams]

Yeah, it's really terrifying. And the only upside is the Kim.

[Jordan Harbinger]

Family really has no real incentive so.

[Sean Williams]

Far to do something truly horrible to the US because what they don't want is for the US to do something truly horrible back. Like, we're sanctioning them right now, all this.

[Jordan Harbinger]

But what they're afraid of is a.

[Sean Williams]

Real effort to take down North Korea. Yes, they have nukes. They can hold us off for a while. But I'm going to go ahead and guess there's a lot more that we could do to the Kim family specifically.

[Jordan Harbinger]

He's not looking well.

[Sean Williams]

Him and a lot of his family members could suddenly die tomorrow. And I know that the Chinese. This sounds way more heavy duty and cool than it is, but I'll say it anyway. I have an inside source who deals with negotiations between China and North Korea, stuff like that. China is so sick of dealing with the North Koreans shit that it's not even funny.

[Jordan Harbinger]

Yes, they have them as a buffer.

[Sean Williams]

State, so there's not a refugee crisis on the Chinese border from North Korea, but they are beyond sick. Like, instability is bad for business, and China is all about business. And so when North Korea is like, we're gonna nuke you, China's like, shut up, man.

[Jordan Harbinger]

We're trying to sell Cheap shit to.

[Sean Williams]

The whole planet, can you not?

[Jordan Harbinger]

And Kim's, but I need food and money.

[Sean Williams]

And China's like, God damn, shut up already.

[Jordan Harbinger]

We'll figure this out.

[Sean Williams]

You don't need to spout off and.

[Jordan Harbinger]

Piss off everybody who's got missiles, right?

[Sean Williams]

So they're super sick of these guys and doing something truly horrible. China's kind of like, you're putting us between a rock and a hard place. Right? And so they're sick of this crap too. So that's the upside. The downside is that it could all change in a second. If the Kim family feels truly threatened by something, they could do something truly horrible because they have nothing to lose. They certainly don't care if their country gets attacked. If they're already going down, screw it, burn it all to the ground. That's where these guys are going to be.

[Guest Speaker]

Yeah, Korea got flattened once before because of that. Why not do it again? It's crazy. Like, you're talking about the embarrassment of the Chinese and what the North Koreans are doing now, sending these troops into Ukraine as well. That must be terrible for their relationship with China. The Chinese are doing stuff that is somewhat sophisticated, sending material and weapons and things like this to the Russians in the war. And then the North Koreans are sending these basically under equipped slaves to fight on the front line who are getting captured and parading around in the media. That's not good for the Chinese. I mean, it's just terrible.

[Sean Williams]

North Korea sends their special forces shock troops or whatever.

[Jordan Harbinger]

I know there's Chinese troops getting caught in Ukraine.

[Sean Williams]

And I'm saying this just based on what I know about China and no inside information. I'm no expert by any means, but I don't think that if you pick up a Chinese guy in Ukraine that it was sent by Xi Jinping secretly. I think it's a guy who went, man, my job really sucks over here in rural Hunan province.

[Jordan Harbinger]

I am going to walk into this.

[Sean Williams]

Recruiting office that my friend told me about and I'm going to go to Ukraine and I'm going to make $37,000, which is five times what I make here on this farm. And I'm going to come home and.

[Jordan Harbinger]

Buy stuff for my family.

[Sean Williams]

And then they get sent to the front, they get blown up or captured and they're like, whoops, that didn't work out how I planned. I really don't think China is sending handfuls of Chinese.

[Guest Speaker]

China does not need to do this.

[Jordan Harbinger]

They don't need the money.

[Sean Williams]

It's a bad look for China. All Around. I just really don't see that being a state sanctioned thing. If China decides to help Russia and Ukraine, everyone is going to know because they're going to have massive shipments of tanks and armaments and 100,000 troops or something shoring up the back lines and the supply lines and logistics in Ukraine, it's not going to be 50 guys or five guys or whatever they've caught so far. It's just not going to be that.

[Guest Speaker]

No, not at all.

[Jordan Harbinger]

One thing I wanted to ask about was the forced labor that we see.

[Sean Williams]

In China from North Koreans.

[Jordan Harbinger]

Are Chinese factories outsourcing this stuff to North Korea? Because if that's the case, you know.

[Sean Williams]

How Nike will go to China, inspect the factories and then tell us like, hey, these are all above board, it's fine, we inspected the factory. I'm wondering if China doesn't outsource some labor to North Korea, because what I might consider doing if I was a shady Chinese factory owner.

[Guest Speaker]

Yeah, I think that has happened in the past. People have flagged it up that places like Dandong being a good example where people are being forced into work in factories. It's kind of part of the synergy between China and North Korea. Right. When one needs money or the other needs labor, there seems to be a rule between the two that you can exchange the two pretty freely. And there's plenty of factories and manufacturing centers in China where a lot of North Korean labor is showing up. I think there's a place I'm going to get the name wrong, but it's a really famous city in southern China, which I think they call it the world's largest small economic goods marketplace. Which is basically when you think about when you go on Temu or Alibaba and you look at tripod for iPhone or USB port for this, it's all that kind of tiny electronic stuff. It's coming out of this one city, I think it's called Yuwu. And there's a lot of North Korean labor in that city where they're building pretty cheap, pretty unsophisticated electronic equipment that just gets flooded onto Western markets. And I have heard of people working in mines and other really dirty industries as well. So, yeah, it definitely does happen. And I think it's probably going to continue to happen because that's the stuff that no one really in the west can do anything about, nor truly gives much of a crap about changing because China has become so powerful now. And there are all these flashpoints around the world where we're terrified of China kicking off in Taiwan or the Philippines or Europe or wherever that we're not really going to bother the Chinese Communist Party if they are using forced labor from North Korea and propping up the regime there in their own borders. So it's just beyond anyone's purview.

[Sean Williams]

Okay, let's say we laid down the law and sacrificed a bunch of goodwill to get them to not do that with North Koreans, they're just going to have Burmese people do it instead of. Or Cambodians. Right. It's not sort of a unique thing. Forced labor exists where there's a market for it and there's always going to be a market for it.

[Guest Speaker]

In China, it's the same thing in drugs. China went on this massive anti drugs run because it realized all its people were getting addicted to meth. But all it did was push all of these ethnic Chinese gangs across the borders of its neighbors. And now you have gigantic gangs in Burma and Laos, wherever, producing maybe more drugs for international markets which are causing even more chaos. Even as far away as where I am in New Zealand. You've got stuff coming from the golden triangle now. And meth addiction is a real huge issue. It's always the incentives below the incentives. With China, I think there's always a top line, a headline of what we think China is incentivized to do, but below it, usually the reverse is true. And I think something else that we're going to talk about with money laundering as well, that is definitely the case with drugs and money laundering.

[Jordan Harbinger]

You're right.

[Sean Williams]

There's this strange tradition, if I can say that, among China, the nation of. And I'm not even blaming them for this. I think it was like essentially just a consequence of their history.

[Jordan Harbinger]

But you see all these people come from China pre Mao because they're poor.

[Sean Williams]

And they settle in San Francisco and they settle in, I don't know, whatever, Australia and all these other places. And there's this massive diaspora.

[Jordan Harbinger]

And then Mao comes and all these people leave and they go to Taiwan and they go to America and they go to Canada.

[Sean Williams]

Increases the diaspora again a hundredfold.

[Jordan Harbinger]

And then now, oh man, this place is pretty rough.

[Sean Williams]

I want to get my capital out of here.

[Jordan Harbinger]

So it increases the diaspora and the money from China again in the west. And then they go, hey, we gotta get all these drugs and crime outta here. So they push them into Southeast Asia and all over the rest of Asia and so there's this massive Chinese that's fled or left or been exiled and.

[Sean Williams]

It'S just like a consequence of all the Crazy crap that keeps happening there. And people leave so they can do business elsewhere, whether it's legal or not. It's just a fascinating way because there are Chinese people literally everywhere. It's in part because they fled for.

[Jordan Harbinger]

Better, greener pastures or they were going.

[Sean Williams]

To get prosecuted at home. So now they're doing whatever they're doing overseas.

[Jordan Harbinger]

And every wave of that has had.

[Sean Williams]

Massive amounts of organized crime. It pales in comparison, I would imagine, to the amount of legitimately talented immigrants that end up leaving China and coming to places like the United States.

[Jordan Harbinger]

I always try to clarify that because.

[Sean Williams]

I don't want people to think, oh, he hates China and he hates Chinese people. My family's literally Chinese, so I'm not doing that.

[Jordan Harbinger]

The biggest victim of anything that's ever.

[Sean Williams]

Happened in China, Mao, pre Mao, post Mao. It's always the Chinese people. They're the biggest victims of all this, as well as the people that end up taking the most flak. So I try to be as fair as I can about that. Yeah.

[Jordan Harbinger]

On that note, let's talk about Chinese money laundering.

[Guest Speaker]

Here we go. What a segue.

[Jordan Harbinger]

So tell me about this. This is called flying money, right? Feitian, Fei Tian.

[Guest Speaker]

Yeah.

[Jordan Harbinger]

Where did this come from?

[Guest Speaker]

It's like you say, Chinese people have been traveling the world for a hell of a long time. And this form of money laundering, or mirror transactions, whatever you want to call it, people might know it better by its Arab version, which is hawala, which is networks of formal money networks. This has been going on for around about 13, 1400 years. Starts out in the Tang Dynasty, around the 7th century, we think, could be a bit earlier, but it's basically the invention of paper money. And some people consider flying money to be the first form of banknotes, essentially. So what would happen is Chinese merchants would till the fields, do whatever they do, and make a bunch of money. It's all in coins. But you don't want to be carrying coins across a provincial border because there are bandits. And I don't want to be carrying coins across the provincial border today.

[Sean Williams]

No kidding.

[Guest Speaker]

So what you do, you get a note from the local treasury in your region saying, okay, he's got the funds. Like, here's a note to prove it. You take that note, you travel across the country, you give it to the other treasury. Okay? It's early banking. Basically, it's a promissory note, very similar to what we even do today, basically. And so the money hasn't physically changed locations. It's still in a lockbox in guy a's home back in Xi' An. But now he's picked up a bunch of money in Beijing and the transaction has taken place, but the money hasn't physically moved. And that's the key thing to remember with flying money off a Chen. It's. Even to this day, it's almost impossible to detect because the money hasn't changed location. So you can't just check a bank's details. You can't just see money going over a border where authorities would traditionally get a look in to see where money's going to. So as Chinese merchants, they're not just traveling in China anymore, say 12th, 13th, 14th century. You get great Chinese travelers who have been lost to Western history because we tend to focus on European settlers and colonists. But that is when you get Chinatowns popping up all over the world. Incidentally, the first Chinatown in the world is in Manila in the Philippines.

[Jordan Harbinger]

I did not know that.

[Guest Speaker]

It's one of my favorite places on earth. It's so cool. But in these Chinatowns, obviously, then you'll get people wanting to remit money back home. They're not going to use traditional systems where it's going to cost them a ton of money in commissions to financiers or bankers, whomever is existing at that time. So they're going to use flying money. So then this system goes global, right, this fei tian. And it works on this system of Guanxi, which is an honor system. It's like a familial honor system. It's almost like an ometa in the. In the mafia, you don't snitch, you don't speak out. No one tells you where the money is except for the guys who do it. So this all dies down when Mao takes over in the People's Republic of China, comes into existence in 1949, because obviously they want the state to be all powerful. They don't like these informal money lending or money remittance networks. A lot of these informal fei tian networks that are profligating all around the world, they get shut down in favor of huge state institutions. But they carry on, obviously, because where there's money, there's going to be a way to move it. They kind of bubble around in the early years of Communist China. And then in 1978, when the economy opens up and Den Xiaoping sends Chinese merchants again all over the world to try and get exchanged for the benefit of China, then it kind of ramps up again. And so it's never gone away. It's always been incredibly popular. It's the Thing that everyone knows but doesn't really talk about. Even now, if you go on WeChat or any other Chinese social media network, you can type in flying money, or you can type in money bank or transfer. You'll find hundreds, if not thousands of people popping up, like all of these identities willing to do flying money transactions. And it's just not worth the government's time and investiture to get involved in this, because everyone is using it. Right? Is the Greece that lets this informal money network prosper in China, Huh?

[Sean Williams]

Interesting. You'd think that the state would have an interest in knowing where and who has money, especially a state like China, which is authoritarian. Even the United States wants to know, hey, where you got your money? All right?

[Jordan Harbinger]

We just want to know where it is.

[Sean Williams]

That's all.

[Jordan Harbinger]

We're just making sure you're paying taxes.

[Sean Williams]

That kind of thing. They want you to declare your cryptocurrency.

[Jordan Harbinger]

They want you to declare that you have money hidden under the mattress. They don't care that it's under the mattress.

[Sean Williams]

They just want to know that you have it. You think China would be like that, and I'm sure they are, But I think part of the problem is man. Have you ever tried to transfer money from a Chinese bank to another bank?

[Guest Speaker]

Thankfully, no.

[Jordan Harbinger]

I will tell you, I don't know how fast Fei Chen is.

[Sean Williams]

I'm going to guess it's basically instant. You better bring a sack lunch. If you go to a Chinese bank and you want to do a complicated transaction, that's international, especially, and you also better hope that it's under $50,000 per.

[Jordan Harbinger]

Year that you are transferring. Because if you want to transfer $400,000.

[Sean Williams]

Out of China, good luck. You can wait eight years and do it the legal way, or you can probably do it in a day or less because there's capital flight restrictions.

[Guest Speaker]

There's stories that I heard from people who'd worked in Shanghai, Beijing, major international cities, and they're going into banks to try and send funds back to Europe or the US or wherever they're headquartered. And they've got people walking around the bank forecourt saying, would you like to save yourself an entire day and a lot of money by sending a flying money transaction with me? And even the banks sometimes don't stand in the way of those guys because it's so prevalent.

[Jordan Harbinger]

The best gig in China would be the person who handles these transfers. And is, we can do this one of two ways. You can do it through me, or you can do it through my brother who Happened to have his phone right.

[Sean Williams]

Next to me, and I can set it up right now. And you can do it in this Fei Chan system.

[Jordan Harbinger]

Because to clarify, what I was saying before, $50,000 a year is, I think.

[Sean Williams]

It'S one of the capital flight restrictions in China. So this is a real case study. Somebody I know sold a house somewhere in Beijing, and I don't know, it.

[Jordan Harbinger]

Was probably 400 grand or more.

[Sean Williams]

Who knows? Beijing, a house you've owned since the 90s could be worth a lot.

[Jordan Harbinger]

So that house gets sold, you have all this money in a Chinese bank.

[Sean Williams]

Account, hundreds of thousands of dollars. You can transfer $50,000 a year.

[Jordan Harbinger]

What you can also do is call your friends who aren't transferring money back.

[Sean Williams]

To another country, and you can say.

[Jordan Harbinger]

Hey, if I give you $51,000, can you transfer 50 of it to my friend in Canada?

[Sean Williams]

And you do that with five of your closest friends.

[Jordan Harbinger]

Suddenly, you've got all your money, and.

[Sean Williams]

Your friends are very thankful because you just paid for their entire Christmas season or whatever with the little commission that they got. But you have to trust them, because they can also go, thanks for the money. I'm not transferring this sucker. So you have to really trust these people to do that. But there's whole networks of people that do that essentially for a living. If you can earn an extra grand a year doing this, these people don't want that gravy train to stop, and they certainly don't want to get kneecapped by Chinese gangsters either. So they're gonna do it that way. And that is very common. Fei Chen makes perfect sense, right? If I've got to do a bunch of transactions like that, I don't want to have to count on 300 different people to do it. I just want to get it done.

[Jordan Harbinger]

But are drug cartels not using this?

[Sean Williams]

It seems like they would be using this.

[Guest Speaker]

Yeah. To bring it up to where it is today. Like, the whole modern history of Fei Chen is basically bumping up the system by a series of blunders or missed opportunities by the authorities, either in the US Or China. I guess we're going to mostly talk about those two countries because we're talking about how cartel was using them as well to sort of wash Canada.

[Sean Williams]

I did a show on this a zillion years ago, but basically, like real estate, Canada is bought up with a lot of Chinese funds that have been transferred, and then they take fentanyl money locally, and then that's the money that they use to buy the real estate. It's not necessarily the Chinese people who buy the house who are selling the fentanyl. It's just that gangs who have fentanyl money, they move it into real estate by using the Fei Chen system. This reporter in Canada uncovered that. So that's one of the reasons why there's so much money off the books. And they literally will walk into a laundromat and there'll be like 400, $500,000 on the floor of this laundromat.

[Guest Speaker]

Yeah, it's fully insane. It comes into the public consciousness in the 90s, right, because there's this famous case of a woman called Sister Ping who's a so called snakehead. She's like smuggling people into New York's Chinatown from Fujian in China. And she gets rumbled with one of her ships grounds off the coast of Queens and a bunch of people die. And it's big news. And it turns out that she's been using Fei Tian to get money to smuggle people illegally into the US and it becomes like a news story for a short while. But in 2001, the World Trade center is attacked. Then the US focuses not on Chinese stuff, but on stuff coming out of the Middle East. Hawala networks, which it believes are funding like Al Qaeda and whatnot, which they are. And so flying money literally flies under the radar. And it gets another boost in 2007 when you, like you say that the Chinese Communist Party is trying not to leak cash out of the country. So it slaps this $50,000 sort of personal limit on how much money you can transfer. And that kind of gives another incentive to use informal banking networks. Right. Like you say, it just gives the Fei Chen networks another boost. You get to this point in 2010, 2015, when fentanyl is becoming a huge issue in the States. Meth as well. The general power of the cartels to flood the US with drugs is an all time high, whether it's coke, meth or anything else. They realize at that point the Sinaloa cartel, let's say they don't have to use their friend in Panama City or Bogota anymore, who's taking 15 to 20% off the top of every single money laundering deal that he's making. There's these Chinese guys and by the way, Chinese community in Mexico has been there a very long time and they were instrumental in early marijuana smuggling going back over 100 years. So they're very embedded. And then the cartels realize, why are we doing it over here? We could just be using the Chinese and use them with their own system. You get this increasing synergy between the cartels and Chinese professional money launderers who are just rocking up in Mexico City and whatnot. I spoke to some people for an article I wrote a couple of months ago, and they said it could be a $2 trillion industry, Chinese money laundering alone. And with the amount of unknowns there are, this is all a shadow economy. Right. It could be way more. The cartels are almost unilaterally using Chinese money laundering techniques now. There is no point using any other stuff. And like you say, they're just like pumping money into real estate in Canada. I think Vancouver, Right. Is like a huge place for this. Toronto is also massive. Sydney and Australia, I think they've got a big problem with this. I was in LA in November and there's that huge tower block in downtown la. It got like shuttered and it's now covered in graffiti.

[Jordan Harbinger]

Yeah.

[Sean Williams]

What is that?

[Guest Speaker]

Yeah, that is a Chinese money laundering story as well. I think a lot of that was bought with drugs. So it's like it's now become so big that it's visibly there in major cities.

[Jordan Harbinger]

I saw that and I couldn't believe. It was like.

[Sean Williams]

It's like a symbol of how screwed L. A is.

[Guest Speaker]

Yeah.

[Jordan Harbinger]

It's like a skeleton of a skyscraper that. Yeah.

[Sean Williams]

Is just covered in graffiti. And you're like, wait a minute, they're just not working on that. That's something out of North Korea. An unfinished skyscraper that's just a concrete hulk in the sky. It's like that thing in Skyline.

[Jordan Harbinger]

Yeah, it's so gross. And I'm like, can we do something about this, for God's sake?

[Sean Williams]

Just the blight is ridiculous.

[Guest Speaker]

Yeah. And so this gets to the nub of what is going on. And this is why I'm saying that the incentives are all kind of skew with and back to front. So you would think. I think it was talked about during the Biden years that, like, this is a great chance for cooperation with China. Right. Because on the face of it, we want to stop the fentanyl OD's. China also wants to build a bridge, wants to try and help the States out in a sort of moralistic way. But it's pretty cheap to do for the Chinese, so it will be an easy diplomatic win. And for America, we can help the Chinese keep their economy afloat by stopping all that money coming out of the Chinese economy. You've got Janet Yellen going over there and eating psychedelic mushrooms and going, hey, I'm best friends with the Chinese now. And we're going to help each other on money laundering laws because it helps both countries. And by the way, it stops terror networks, whatever the hell they mean by that. They're talking about hawala again. But actually, when you dig below the surface, those incentives, they're the other way around because they can talk all the talk. But at the end of the day, the Chinese want chaos in the US and chaos is being caused by the cartels and drugs. And the Americans would like nothing more than for the Chinese economy to collapse in the CCP to go under. So it makes it even worse. Right, because they're talking about and they're committing funds to, not busting it.

[Sean Williams]

It's a weird dance.

[Guest Speaker]

The appearance is actually providing cover for it to become even bigger.

[Sean Williams]

Yeah, that's so ugly. It does make perfect sense, right? This serves the US to have Chinese capital flight 100%. But then China's like, well, cool. We're not going to stop the fentanyl thing because no skin off our nose. And if you're going to have a bunch of dead people and drug cartels and violence, like, good, we want that. The U.S. state Department estimates something like 154 billion in illicit funds a year passed through China. It's probably more than that now. That estimate is a couple years old.

[Guest Speaker]

That's way more.

[Sean Williams]

154 billion. So that's a fraction of it. China launderers have emerged as the number one underwriter of drug trafficking in the Western hemisphere. So that means they're not doing the trafficking themselves, they're laundering the money from drug trafficking. It says the Chinese government is at least tacitly supporting the laundering activity.

[Jordan Harbinger]

It's hard to say though, right? Is it state sanctioned because China is.

[Sean Williams]

Actually corrupt in general? A lot of people don't realize that. It doesn't necessarily seem like that, but it is, especially at the higher levels. So you get crackdowns on things, but it doesn't really matter. It becomes really hard to separate official state policy from just generalized criminal activity when it comes to things like that.

[Guest Speaker]

Yeah. And every time that you have a kind of totalitarian state, to whatever degree, if you're on the other side, if you're in the treasury or whatever in Washington, you can easily say this is state sanctioned, just because everything in China ostensibly is state sanctioned. Right, because the state is all powerful. But like you say, the level of corruption in China is huge. They know full well that if they busted a bunch of these, like, flying money networks, the whole small economy, like mom and pop restaurants, whatever they would collapse and then you would have a massive problem on your hands. They can't just go in and bust all of these guys. They have gone in and gone after some of the high level corruption in the financial institutions, the Chinese. But again, the incentives don't really work. It still makes money for the ccp. I don't really see a way that they can stop it, to be honest. The problem is the drugs for Americans. That's the bottleneck you want to get. You can't really strangle the money transactions. Yeah, well, they're not even transactions.

[Sean Williams]

That's right. I asked my federal prosecutor buddy, I.

[Jordan Harbinger]

Said, is this illegal?

[Sean Williams]

And I basically explained Fei Chan. And he's like, huh, no, money's actually moving. And I said, ok, you're a federal prosecutor. How do we go after these people if we're working together? And he goes, I would look for weird declarations, violations where it's like, hey.

[Jordan Harbinger]

You'Re technically importing over $10,000. Even if you're not actually bringing the money in, you're technically doing it.

[Sean Williams]

It's constructive. And he's like, but would a judge really believe that it's not the same thing? And then he said, we'd probably actually go after not even the individual clients or even the drug cartels who are doing this. Unless we can find them and we can prove that they know they're laundering.

[Jordan Harbinger]

Money, then it's money laundering. But if it's just like a Chinese.

[Sean Williams]

Kid who's going to college in Vancouver and He's buying a $3 million apartment and his family sent him the down payment and the mortgage payments via Fei.

[Jordan Harbinger]

Chan, it's not really money laundering. Unless you could prove that guy and his family knew that this was laundered.

[Sean Williams]

Money, which they wouldn't know because the Chinese gang's not, hey, launder some of our fentanyl money. Here it is. They're just saying, here's how your parents send you money.

[Jordan Harbinger]

The only real thing that they can.

[Sean Williams]

Do is go after these little technical things.

[Jordan Harbinger]

And of course my friend said the.

[Sean Williams]

Best case scenario off the top of his head was going after the literal Chinese restaurant or laundromat where they're holding the money and saying, you are dealing in a financial service without a license, so we're shutting you down. But like, that's not a crime where everybody involved goes to prison for 15 years.

[Guest Speaker]

Exactly.

[Jordan Harbinger]

That's like a don't do it again, you're on probation and you're getting a.

[Sean Williams]

90 day jail, suspended sentence and blah, blah, Blah. And then the person's like, cool, my cousin's doing this now out of his garage.

[Guest Speaker]

Yeah. And there's like. What's the term? Like, smurfing, I think they call it. You would get a bunch of Chinese students, all of whom can max out the 50 grand, like you said, and then you can take a million out of the country because you've got 20 students or whatever, and they don't know anything. They're just literally selling their limit. That's all they're doing. They don't know anything about the stuff. You can't prosecute them. You can't prosecute the guys in China. It's almost impossible. You have to go for the cartels. You have to do the hard bit.

[Sean Williams]

Yeah, exactly. Yeah.

[Jordan Harbinger]

Even if you got money couriers in.

[Sean Williams]

Canada and the U.S. you're busting a kid who's 18 and an engineering student. He's got a duffel bag full of $50,000, and he says, my friend's uncle's.

[Jordan Harbinger]

Cousin told me to go pick this.

[Sean Williams]

Up and drop it off at a restaurant. What are you charging that guy with?

[Jordan Harbinger]

Being a dumbass. That's it. You got nothing, man. And then you go after that person. Yeah.

[Sean Williams]

This is money from my family in China, and I needed somebody to drop it off at the restaurant. Cause I'm really busy and I trust this kid. I wanted an excuse to give him 500 bucks.

[Jordan Harbinger]

Okay.

[Sean Williams]

There's just no crime here that you can prove without a ton of work and no roi.

[Guest Speaker]

Yeah. There was a great Politico piece from, I think, a couple years back about one guy who's a Mexican Chinese national, and he had done some crazy stuff, and he was sitting on tens of millions of dollars that he was directly liaising with the Sinaloa cartel. Okay. He's gone down for a while. He's screwed. But beyond that, there's really not a lot that you can do. And the good thing is, I guess, from an American's perspective, that fentanyl deaths are down a lot in the last year. So something is working either on harm reduction or strangling that supply at the border. But I think it's around 75 to 80,000 people dying per year from fentanyl IDs. And now, of course, like, it's not being made in China, it's being made in Mexico by the cartel was using precursors from China. That step of the process being taken out of the game as well. It's not all bad news. There are some wins being made by law Enforcement against the drug issue. But the money thing is going to continue going for God knows how long.

[Sean Williams]

By the way, the episode I did about this was episode 677. Sam Cooper, about the real estate and the Chinese Fei chan and the fentanyl cash. That was episode 677. We'll link to that in the show notes as well.

[Jordan Harbinger]

Sean, thank you so much. Man. North Korea, Chinese money laundering, meth.

[Sean Williams]

Just a typical Tuesday here on the Jordan Harbinger Show.

[Guest Speaker]

I guess it's been a pleasure. Always nice to talk about the darker sides of the world.

[Sean Williams]

You're about to hear a preview of the Jordan Harbinger show with a retired chef that somehow infiltrated the illicit North Korean arms trade.

[Ulric the Mole]

There was a meeting where people could come and see how North Korea is the propaganda way. It was like three hours praising Kim Il Sung by what he did for the country. When people ask me, how is it to go to North Korea? Well, it's quite difficult to describe because it's like your whole body is on overtime. You know you are being followed. And what do I say and what do I do? How do I react to things? I'm going to the US to meet up with a CIA agent. I was like, wow. And I found out how that agent thinks. One of the most important things he taught me was to be a perfect mole or undercover agent is that you have to be 95% yourself and then 5% mole. The last 5% is the one who observed. And I was really good to networking with people without people actually know I was networking with them. Everything was recorded. So I just literally took the pants down on the whole regime exposing their weapons program. It's a never ending story.

[Jordan Harbinger]

For more on how Ulric the Mole.

[Sean Williams]

A Danish chef and family man, wound.

[Jordan Harbinger]

Up working undercover in North Korea to expose its illicit arms trademark, check out.

[Sean Williams]

Episode 527 of the Jordan Harbinger Show. I forgot to mention during the show that North Korea armed Syria with chemical weapons and knowledge which Assad ended up using against his own people. That was of course also to generate revenue for the regime.

[Jordan Harbinger]

They also use false flag ships.

[Sean Williams]

I talked about this with Ian Urbina on the show a while ago.

[Jordan Harbinger]

They essentially use false flag ships to.

[Sean Williams]

Do sanction busting oil trade.

[Jordan Harbinger]

So they'll have a ship that is.

[Sean Williams]

Let'S say from Iran, go and drop anchor somewhere off the coast in international waters.

[Jordan Harbinger]

They'll pump the oil from that ship.

[Sean Williams]

Into a North Korean ship after turning off transponders and trying to sort of disguise what they're doing and then the North Korean ship heads back to North Korea.

[Jordan Harbinger]

New York Times did a really interesting.

[Sean Williams]

Piece about this a year or two ago. We'll try to link it in the show Notes. They show the ships, they show satellites.

[Jordan Harbinger]

Of them doing it, they show how.

[Sean Williams]

They figured out what they were doing. It's really interesting.

[Jordan Harbinger]

A little bit in the weeds on.

[Sean Williams]

Oil and sanctions busting, but you know.

[Jordan Harbinger]

If you're a nerd on this stuff like I am, you're in the right place. All things Sean Williams will be in the show [e-mail], advertisers, deals, discount codes, ways to support the show, [e-mail] deals Please consider supporting those who support the show. Also our newsletter Wee Bit Wiser. I love writing it. You guys love reading it. The idea is to give you something.

[Sean Williams]

Specific and practical that'll have an immediate.

[Jordan Harbinger]

Impact on your decisions, your psychology, your relationships in under two minutes. We send it out every Wednesday. Ish. And if you haven't signed up yet, I invite you to come check it out.

[Sean Williams]

It is a great companion to the show.

[Jordan Harbinger]

Jordanharbinger.com news is where you can find it. Don't forget about six minute networking as well. Over at sixminutenetworking.com I'm jordanharbinger on Twitter and Instagram. You can also connect with me on LinkedIn. I love chatting with you wherever you might find me. This show is created in association with Podcast One. My team is Jen Harbinger, Jace Sanderson, Robert Fogarty, Ian Baird, and Gabriel Mizrahi. Remember, we rise by lifting others. The fee for the show is you share it with friends. When you find something useful or interesting, the greatest compliment you can give us is to share the show with those you care about. If you know somebody who's interested in crime, drug smuggling, gun smuggling, arms dealing, North Korea, definitely share this episode with them. In the meantime, I hope you apply what you hear on the show. That sounds a little weird for an episode about drug trafficking and money laundering, but y' all know what I mean. So you can live what you learn or not, and we'll see you next time.