[HN Gopher] A Chinese American gangster transformed money launde... ___________________________________________________________________ A Chinese American gangster transformed money laundering for drug cartels Author : Jerry2 Score : 84 points Date : 2022-10-14 19:59 UTC (3 hours ago) (HTM) web link (www.propublica.org) (TXT) w3m dump (www.propublica.org) | O__________O wrote: | TLDR: "Li and his fellow Chinese money launderers married market | forces: drug lords wanting to get rid of dollars and a Chinese | elite desperate to acquire dollars. The new model blew away the | competition." | | Comment: Nation states have been waging asymmetric warfare for | long time, this is not new. China has become a major player in | the illegal drug trade by supplying money laundering and | chemicals [1]. Oldest modern reference I am aware of on the topic | as it relates to China is a book on military strategy written in | 1999 by two colonels in the People's Liberation Army titled | Unrestricted Warfare.[2] | | __________________ | | [1] https://google.com/search?q=china+fentanyl | | [2] https://wikipedia.org/wiki/Unrestricted_Warfare | imwillofficial wrote: | This is a fantastic and vastly underrated book | [deleted] | bluepizza wrote: | I really do wonder where China might even have got this idea | from. | dwringer wrote: | Sun Tzu? | layman51 wrote: | Are you referring to the Opium Wars? | joe_the_user wrote: | Yes, "The First Opium War (Chinese: Di Yi Ci Ya Pian Zhan | Zheng ; pinyin: Diyici Yapian Zhanzheng), also known as the | Opium War or the Anglo-Sino War was a series of military | engagements fought between Britain and the Qing dynasty | between 1839 and 1842, during the Century of humiliation. The | immediate issue was the Chinese seizure of private opium | stocks at Canton to stop the banned opium trade, and | threatening the death penalty for future offenders. The | British government insisted on the principles of free trade | and equal diplomatic recognition among nations, and backed | the merchants' demands."[1] | | https://en.wikipedia.org/wiki/Opium_war | GauntletWizard wrote: | I was going to guess they were thinking of the CIA's | "Golden Triangle", which operated similarly and makes a | narratively nice "turnabout is fair play" argument[1] | | [1] https://en.wikipedia.org/wiki/Allegations_of_CIA_drug_t | raffi... | joe_the_user wrote: | As the OP says, every state has been doing this stuff | since forever. | | The US has had maintain a certain "better than that" | image at times but states have managed their images for a | long time too. | chrischen wrote: | Isn't the Chinese government trying to curtail capital outflow? | Scoundreller wrote: | No, their entire economy revolves around exporting value- | added goods. | | They restrict currency movements, but that doesn't work when | you can ship out goods and deposit payments overseas. Drugs | is one way to do this, but so is virtually any other good. | Aunche wrote: | This doesn't seem to be the case here as most of the "value | add" is occurring in the US. Bitcoin is another Chinese | export that enable capital outflow, but China is taking a | lot measures to crack down on it. I'm sure the Bitcoin | miners that are still allowed to operate have connections | in the CCP, but that doesn't mean the party itself is | particularly happy about mining. | Scoundreller wrote: | For drugs yes, but China is a machine that takes raw | materials and manufactures them into finished goods. Just | look for the "Made in ______" label on so many goods. | | Sure there's lots of margins on the marketing side that's | captured and retained wealthy countries, but China is | capturing some percentage of so many finished products. | joe_the_user wrote: | China tries to curb capital outflows but they are so huge | they're essentially institutionalized despite these efforts. | okasaki wrote: | Ah yes the Chinese version of the Protocols of the Elders of | Zion | bergenty wrote: | Who are the Jews in this version? | zoklet-enjoyer wrote: | Fentanyl came in from China for years before they moved the | synthesis to Mexico. I was active in online drug forums before, | during, and shortly after Silk Road. So many drugs came from | China and their government didn't care. It would not surprise me | if they encouraged it not just because of monetary gain, but | because of political objectives. I have believed since 2010 that | it was a form of warfare that they could plausibly deny. So much | fentanyl was coming in for so cheap, it was crazy. I don't know | anything about what's going on now, but they were practically | giving it away back then | db1234 wrote: | Chinese seem to have learned a thing or two about drug trade | from their former adversary, the British. | | https://en.wikipedia.org/wiki/Opium_Wars | readthenotes1 wrote: | And they make video games to consume endless hours of Western | productivity | mc32 wrote: | It's a double-edged sword. They also lose productivity due to | games addiction by their own pop. | hayst4ck wrote: | I think this point is underrated (albeit a bit unrelated). | | If China is looking to abuse the world in the way it has been | abused, and to cause humiliation to others the way it has | been humiliated, then getting the nations workforce to spend | their time sitting in front of a computer doing an almost | entirely unproductive activity for hours on end, creating a | dopamine high that most other activities and certainly hard | acitivities like studying can't compete with, then video | games share an aweful lot of properties with opium. Real | money for digital currency or goods is also something that is | ridiculous enough it should probably be heavily regulated. | Scoundreller wrote: | It's just easy to synthesize and potent so it's easy to | smuggle. | | Manufacturers get pitted against each other and end up selling | for cost + markup and a small risk premium. | | Overall, drugs are cheap, it's the regulations that make it | expensive/difficult to acquire. | | Easy to interdict heroin or opium from Afghanistan, not so easy | for potent synthetics coming from an export powerhouse. | | Safety for the consumer isn't a concern for the regulators so | you end up with this situation. | dirtyid wrote: | >political objectives | | Perhaps, but it's mostly: | | >government didn't care | | There's no reason to dedicated domestic PRC resources to | crackdown (technically) legal cancer drug manufacturers to | subsidize US/DEA war on drugs. Priority is to crack down | domestic drug trafficing in PRC / golden triangle. The entire | reason synthesis moved to Mexico with PRC precursors was | because past US admins politically pressured PRC to do | something about it. Like if PRC wanted to be politically | belligerant, they'd start exporting directly again. | ttul wrote: | Nowadays, the precursors go to Mexico, essentially in unchecked | volumes. A widespread network of tiny independent producers | then manufacture a kilo at a time in little shacks all over the | place, selling their stock to the cartels, who handle | transportation to the US market. | hayst4ck wrote: | I was pretty skeptical about a lot of the negative press about | China for a long time. Then the Chinese colonial takeover over | Hong Kong went from soft to hard in 2019, during which they | leveraged organize crime to try to quell dissent. | | https://en.wikipedia.org/wiki/Triad_(organized_crime)#Chines... | | This made it very clear to me that organized crime is a wing of | the Chinese government. | | Before I probably wouldn't have believed a post like this, but | now it seems enough in alignment with all parties interests | that I find it more likely to be true than false. | CTDOCodebases wrote: | The US has done this as well.[0] | | Though I think it's fair to distinguish between using | organised crime during times of war against an enemies | military vs using organised crime during times of peace to | grind down a competing nations civilian population. | | [0] - https://en.wikipedia.org/wiki/Operation_Underworld?wpro | v=sft... | hayst4ck wrote: | I would imagine in the US the best parallels or examples | would involve corporations or para-government entities | (like political parties) leveraging organized crime to | fight labor movements or civil rights movements. I would be | extremely surprised if there weren't examples, but I don't | know them off the top of my head. | klooney wrote: | In fairness, you could say this about the state security | services in any major country. Criminals are useful, and | will do stuff the state doesn't want to get caught doing. | ipaddr wrote: | Why bring up another country as a defense? | jimt1234 wrote: | The FBI has used organized crime to help achieve its own | goals. One example: https://www.theguardian.com/world/2007/ | oct/31/usa.internatio... | xkcd-sucks wrote: | Tangentially related, this reminded me of a documentary | film on mass killings in Indonesia titled "The Act of | Killing": https://en.wikipedia.org/wiki/The_Act_of_Killing. | It is an excellent film. | | Basically it comprises interviews of gangsters who were | recruited by the government to conduct mass executions of | undesirable people, and the subjects describe some reasons | for which the work was tasked to organized crime rather | than to official government employees. | pphysch wrote: | [deleted] | burkaman wrote: | ProPublica also reports on HSBC money laundering: | https://www.propublica.org/article/hsbcs-money-laundering-la... | ASalazarMX wrote: | And it was linked right there in the first paragraphs of the | article! | pphysch wrote: | manuelabeledo wrote: | > ... this global criminal is working on behalf of the | notoriously anti-drug Chinese government | | Anti-drug _inside_ their borders. They are very pro-drug | everywhere else, especially the US [0]. | | Regardless, what's with the whataboutism? Yes, HSBC, like | many other major banks, have been facilitating drugs and | arm trade worldwide, but that is not the topic at hand, | thus it is irrelevant to the discussion. | | [0] https://www.brookings.edu/blog/order-from- | chaos/2022/03/07/c... | pphysch wrote: | Fentanyl is a legal but controlled substance in the US. | It is not malicious for a company to supply fentanyl to | US hospitals. | | But the bottom line is that blaming China or its | government for private companies selling chemical | _precursors_ that may end up in street fentanyl is like | blaming Canada for supplying US with deadly firearm | _precursors_ in the form of aluminum. Blaming Canada for | our gun crisis is analogous to blaming China for our | opioid crisis. Meanwhile, the Sacklers are sleeping | soundly on piles of blood money. | | It is a deeply unserious, and 100% politically motivated | narrative. Just because it is incessantly regurgitated | does not make it any less unserious. | glogla wrote: | > blaming China or its government for private companies | | There are no truly private companies in China, once they | reach a certain size or influence level. | collegeburner wrote: | we don't have a "gun crisis". | manuelabeledo wrote: | > Fentanyl is a legal but controlled substance in the US. | It is not malicious for a company to supply fentanyl to | US hospitals. | | This is a naive take, and one that proves that you didn't | even care to read the article. These substances are not | sold to hospitals, which should be obvious since | hospitals do not import tons of opioids and chemical | precursors in bulk. | | Also, it hardly compares to Canada exporting aluminium. A | more accurate comparison would be if Canada would export | gunpowder to Mexico, and arm trade happened massively | through the southern border. | | > It is a deeply unserious, and 100% politically | motivated narrative. Just because it is incessantly | regurgitated does not make it any less unserious. | | So banks, big pharma, and the US may be to blame, but | China wouldn't? The US played drug politics for decades | now, and China would not? That's an odd take. Even if | this was all a huge smear campaign against China, | ignoring the fact that the Chinese government would be | interested in destabilising other countries is naive at | best. | JamesianP wrote: | I thought they made guns out of steel. What's the | aluminum for? | collegeburner wrote: | something like an AR lower is probably aluminum though | bolt/BCG/barrel are still steel. | [deleted] | consumer451 wrote: | Tu quoque falacy | | https://en.wikipedia.org/wiki/Tu_quoque | pphysch wrote: | Since when does rebutting an article's lede amount to "tu | quoque"? I think you have your logical fallacies mixed | up. | djmips wrote: | You essentially said "what about HSBC" 'tu quoque' - | whataboutism is a form. | | I agree with you on the lack of evidence for implicating | the Chinese government involvement with their quote from | "some guy" - "why wouldn't they". rolling my eyes. | rr888 wrote: | > Because China bad, and he's Chinese, or something like | that... Meanwhile, HSBC gets a gentle slap on the wrist now | and then | | HSBC might be headquatered in London but its largely a | Chinese bank still (assuming HK is China) | Aunche wrote: | HSBC is operating in a mostly distinct part of the same | industry. HSBC doesn't hire waiters to carry suitcases full of | money. | paywallasinbeer wrote: | Related: a fascinating article about Asian drug networks | https://www.reuters.com/investigates/special-report/meth-syn... | chatterhead wrote: | alx__ wrote: | Ironic that the CIA showed other countries the basics of how to | do this :/ | | https://en.wikipedia.org/wiki/Allegations_of_CIA_drug_traffi... | joe_the_user wrote: | The thing about the article is it talks about "it's hard to | distinguish corruption and policy" in China. It seems like a | large look at drug and money flows would say the same about the | US, China and Mexico and look at the particular agencies in | each nation where the corruption is concentrated. | _jal wrote: | > It seems like a large look at drug and money flows would | say the same about the US | | It is policy in the US. There are a number of simple policy | changes that would make money laundering much harder for | most. Start with anonymous corporation ownership. | | Or you could get serious and enforce already existing AML | laws against large banks. Of course then a lot of people who | actually matter would be in trouble, and more would have to | pay taxes, and we can't have that, now can we? | JumpCrisscross wrote: | > _anonymous corporation ownership_ | | Who does this? Non-public or behind an attorney is very | different from anonymous. | _jal wrote: | Lots of people. | | There is a legal difference, of course, between "truly | anonymous" and merely effectively so. I am including | situations like the designated trustee knows who the | owner is, and if subpoenaed, will disclose that the owner | is an Isle of Man corporation with a Panama address. | | Here is discussion about it for Delaware corporations, | but my understanding is South Dakota is currently the | most popular US state in which to incorporate for, uh, | privacy reasons. | | https://gfintegrity.org/press-release/delaware-bills- | mere-wi... | [deleted] | 20221014ta wrote: | In this incoming cold war, expect the Chinese to attract support | by setting up tax havens the IRS can't touch | | Already seen with Russian oligarchs sending their yachts to HK | | The US shall, of course, return the favour | chatterhead wrote: | Considering they are hiring so many new IRS agents I just might | be on board the China Trust Truck. | [deleted] | forkLding wrote: | Just a note: The money-laundering system this criminal is part of | is called a Di Xia Qian Zhuang in Chinese or "underground banks" | (https://fintrac-canafe.canada.ca/intel/advisories- | avis/bank-...), originally started in the 1980s in Mainland China | when free-market reforms brought non-regulated "banks" (more just | a group of people calling themselves a bank) and informal "loan" | companies/loan sharks, they were soon co-opted by corrupt | officials to bring money out of the country and since about 2018 | any Chinese citizen who wishes to bring money for big purchases | like real estate investment outside of China uses a form of | underground banking since China puts an annual limit of $50,000 | USD on money that can be taken out of the country | (https://nhglobalpartners.com/moving-money-in-and-out- | china-r...). | | Technically speaking, if you want to exceed the limit, you can | send in an application form to explain and hopefully get approved | to take out more money than that $50,000 limit but the original | intent of this law was to restrict money flowing out of China and | it is very hard to get approved beyond the limit. | ttul wrote: | It's almost as if handing a $600B industry to criminals might | have been a bad idea. Instead of dealing with national level | corruption, we could just end the war on drugs. | newsclues wrote: | Check out Wilful Blindness by Sam Cooper about the Vancouver | model of OC money laundering | dirtyid wrote: | >Prosecutors charged him with leading a conspiracy that washed at | least $30 million, a number backed by direct evidence. The full | amount was likely in the hundreds of millions, according to law | enforcement documents and interviews. | | ... | | >"They had to know it was illegal," Ciesliga said. "Just the | sheer amount of money, and the volume and consistency and | frequency, there's no legitimate businesses that are moving that | kind of money. Any alert anti-money laundering investigator would | have detected this kind of activity." | | This article has been given folks conniptions over PRC influence | in Americas / Unrestricted warfare memes. Honestly even given | generous interpretation of 100s of millions as a billion, over | the alleged timeframe (first courier picked up in 2016, we're | talking about ~150M per year, aka a few hundred houses in a nice | western city or a few thousand international university tuitions. | Operation is peanuts. Especially vs 20B-40B per year drug trade | in Americas, 20B per year PRC telecom scams, or the 100s of | billion per year PRC capital flight racket. Doesn't feel large | enough to be on PRC radar for domestic enforcement, nor is PRC | short of $$$ to do influence OPs to need laundering via such | schemes. That said, I'd like to see a more detailed accounting of | PRC/Asian syndicate influenced footprint in the Americas. | Tangokat wrote: | "Wealthy Chinese who want to get around limits on moving money | out of China "buy" the $350,000 from Li's couriers in the U.S. | They often use the U.S. dollars to buy real estate or pay for | U.S. college tuition. " | | You can buy real estate in the US in cash no questions asked? Is | that true? | conductr wrote: | > A Form 8300 must be filed by any trade or business (including | real estate) that receives more than $10,000 in cash in the | course of a single transaction or two or more related | transactions. It is not a SAR and is not used to report | suspicious activity. Form 8300 is an information report that is | required to be filed by any trade or business (such as a car or | boat dealer) that receives in excess of $10,000 in cash in a | single transaction. Therefore, if for any reason a real estate | agent or broker receives more than $10,000 in cash from a buyer | or seller in the course of a real estate transaction, the form | must be filled out and filed, and can be found at | http://www.irs.gov/pub/irs-pdf/f8300.pdf(link is external). | | https://www.nar.realtor/money-laundering-and-terrorism-finan... | | This is also usually how drug dealers get busted after paying | cash for a car. It goes to the IRS and then basically every | federal agency has it (DEA, FBI, etc) | heelix wrote: | Ah man. The dealerships do not appreciate a large bag of | cash. I found a car that I wanted and got a cashiers check | for it at my local bank. They wanted what I considered an | outrageous amount of fees (like $8) to do it. So... I asked | for cash. Nope - don't have that on hand... will take time, | yada yada. At that point, it was the principal of the | thing... and said fine, see you in a day or two. Eventually I | got it - drove over to pick up the car, and the dealership | freaked out. They took it. Filled out all sorts of extra | forms. My Bride is correct - I am a dumbass. Won't do that | again. | schainks wrote: | Yes, agents do minimal due diligence on the origins of cash. As | long as buyer and seller are happy to make a deal, agents get | paid and everyone gets what they want. | | A friend of mine who is an interior designer in an affluent | area has received calls from clients that go like this: | | 1. A Chinese couple showed up at their door with a suitcase of | cash in the middle of the day offering to buy their house, on | the spot. The cash value was about 2x the value of the home. | | 2. The client declined. They _just_ remodeled, why leave? | | 3. The Chinese couple gets upset, not understanding why paying | 2x for a home on the spot isn't a sweet deal. They leave to go | find someone else willing to take the cash to move out ASAP. | powersnail wrote: | As someone who has never bought real estate, why not? Is cash | not universally accepted as a currency? | mavili wrote: | It's not about the cash per se, it's big brother wanting to | know how you got the money in the first place. If you can | show it's all legal and taxes paid then no problem cash is | fine. But of course as soon as you mention cash, eyebrows are | raised "why would someone want to keep that much cash and not | want to put it in a bank if they are all clean?" | | Big brother wanting its lion share in everything you earn is | the crux of it. | mutt2016 wrote: | Federal tax. Provincial tax. School tax. Sales tax. Federal | sales tax. Tax on fuel. Tax on alcohol. Tax on tax on tax. | | Well... At least the infrastructure isn't falling apart and | crime isn't rampant...in rich neighbourhoods. | markdown wrote: | In America, if you have unexplained wealth, the government | can sue your notes and coins. | smackeyacky wrote: | It would raise a lot of red flags with agencies[0] looking to | crack down on using the proceeds of crime. That doesn't mean | it can't be done. | | [0]https://www.fincen.gov/what-we-do | [deleted] | givemeethekeys wrote: | Let's say you sell a house for $1MM on paper where in reality | you've accepted 2MM more in cash. | | There's not much the government can do, but you now have 2MM in | cash that you need to hide. The buyer knows you have 2MM, and | who knows who they'll tell about it. | | Now, if you accepted cash for the full value of the house and | deposited it in a bank, then yes, the bank reports it for you, | and the IRS - if it is a priority - would look into it. | | The IRS got a massive funding boost recently. Let's see how | they use the money in the next little while. | foobarian wrote: | Say you deposit the money, let the IRS find out about it, but | then just report it on the tax return and pay the taxes - | what is the problem? | givemeethekeys wrote: | No problem with that. The reporting happens when you | deposit the money. At that point the question is one of, | "from whom did you get all this cash and how did they get | it?" | newsclues wrote: | I'm guessing these transactions occur within the community. | | A local realtor/finance company works with these clients. | alaskamiller wrote: | Yes. Silicon Valley, Orange County, Seattle, Dallas, Vancouver | Washington or Canada. | | EB5 visa is $550k minimum to buy a business in impacted | investment areas designated by USA. | kevin_thibedeau wrote: | Even better when the "impacted area" your visa is fixing is | in midtown Manhattan and you solve the blight by building | your own luxury pied-a-terre after moving Harlem 80 blocks | south. | gautamdivgi wrote: | Don't you have to show you've employed Americans citizens or | green card holders? Or is just showing some investment good | enough? | | Either way - pretty sure it easy enough to fudge the | employees too. | usednet wrote: | cuteboy19 wrote: | I thought they were talking about Changpeng Zhao for a moment ___________________________________________________________________ (page generated 2022-10-14 23:00 UTC)