These people are ghost. Authorities don't see absolutely anything. Inside of this bag is $100,000. What should I spend it on? I could buy a fancy orange jacket. I could buy a new drone. I could buy like really nice antique maps. But actually, I can't spend this money cuz I have a big problem. This money is dirty. No, not like germs. I mean, I'm sure there's plenty of those, but it's a different kind of dirty. This money is dirty because I got it from selling drugs. And in fact, I can't spend it because I need to get it back to my bosses in another country. I could take it to a bank and deposit it, but they'll end up asking questions and report it to the government.

I could try to ship it, bring it with me on a flight, but that also can get pretty risky. Ultimately, I need to clean this money to launder it. It's not going to be easy, though. Okay. No, I did not sell drugs to get this money. And no, it is not dirty. And in fact, it's not even real. But we'll leave it here to remind us what money looks like. Because a lot of money that moves around our world is dirty. More than $50 million in drug cash vanish from US streets without tripping a single bank alarm. And this was just one city. Multiply this around the world and you can see how much money is flowing around. I mean we're talking,

you know, trillions and trillions of dollars. Roughly 3 to 5% of world GDP is the proceeds of crime. That equates to roughly $4 trillion. Drugs, human trafficking, weapons, illegal wildlife parts. It all needs money to work. Criminals, criminal organizations commit crime for what? For money. And if I were in this hypothetical scenario, I actually have another option. an option that will allow me to move my money without any government or law enforcement knowing. It is called flying money.

It's a mostly invisible system. It secretly connects the whole world of organized crime and helps to fund it. Connecting illegal gold mines in Congo to the cocaine trade to weapons to the illegal trade of organs which is connected to illegal timber and tusk poaching and shark fins and jaguar bone wine. All of this somehow linked to unassuming places like a restaurant in Lima, Peru or a clothing store in Rome. It's all connected, but it's almost impossible to see. The money doesn't move. It flies, right? It's kind of a ghost, so you can't trace it.

These people are ghosts flying 30,000 ft around us. That's Andrea Costa. He actually came to us and pitched me on this story because he's spent years infiltrating this system. He and his team have been risking their lives to see how this actually works to try to find solutions. So thanks to Andrea and his team and many others. We have this story and we're starting to understand it. And I want to show it to you how it works, what it enables, and what we might do about it. I'm in Taiwan right now working on my next story. But I want to quickly tell you about the sponsor of today's video, which is something I actually use quite a bit. We are currently engaged in a very crazy time where your data, your

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requests to get me off these lists. It's made a big difference in my life. I am a big fan. Grateful that they sponsor this channel. Again, it's incogn.com/jny harris. Go get 60% off and reclaim your privacy. Today, I'm working on this incredible video from Taiwan. There's claw machines and arcades everywhere. This is an amazing country. Let's get back to this story about flying money. So, it goes back to the Tang Dynasty. This is one of the golden ages of China's history. The capital is huge. It's one of the most populous cities in the world and it's thriving. People are using money in the form of copper coins.

Let's say I'm a businessman who sells tea. I live up here and I routinely go to the capital to sell my harvest. I sell it off to the nobles and the elites and the tea drinkers of the capital and I get paid in copper coins. Uh-oh. These coins are not light. This is going to be hard to bring all these coins back up to my home region. And I'm going to be vulnerable to robbers as I go along my journey. So, let's do this. I'll take my bag of coins to a merchant. And he'll give me a little piece of paper. And he'll tell me that once I'm back home, I should go see his merchant friend and give him this piece of paper. This light, easy to carry piece of paper. Nice. Once I'm home, I take that paper to the merchant

that the guy from the capital knows. And because these two are trusted partners, the merchant in my hometown honors it and gives me a bag of copper coins that's the exact same amount as what I gave his friend back in the capital. The relationship between these two, I don't totally know. They'll settle up later. All I care about is I got paid my copper coins and I didn't have to carry them from the capital. This is magic built on trust. In fact, this was flying money. Flying money is actually thought to be the first form of paper money. Now, China and the Tang Dynasty were not the only people to come up with this.

They were one of the earlier and one of the more widespread, but other cultures settled on these mirror transactions as a way to transfer value without having to carry a bunch of money or gold a long distance. We're talking about the Chinese version here because this would go on to inform a global network that we see today. As tens of millions of Chinese immigrants spread throughout the world, they were often persecuted, segregated, and excluded. They stayed tight-knit, Chinatowns became not only a cultural refuge, but also commercial hubs that were anchored by family association, clan networks with strong cultural ties maintained with the homeland, with mainland China. These communities are

built off of some strong core values. Self-reliance, mutually beneficial relationships that are based on trust, reciprocity, and personal bonds, and often a very strong work ethic and business sense. Making money with often cashbased businesses, sending a lot of that money to family around the world. But soon this global diaspora network of trust and connection would be abused by criminals who would use it to wash dirty money. Using this to create a shadow banking system that was near impossible for outsiders to understand or infiltrate. So let me show you how this works today. how those same concepts that we saw in the Tang Dynasty play out in a real world scenario today.

Wealthy Chinese individuals are using flying money to get their money out of China. Any change in the polit bureau or any change in the kind of rulings or legal system could have your money taken off you at any time. So, let's say there's a man in China named Mr. Chen. He's very rich. He's got a lot of extra money and he wants to invest his money elsewhere. got $2 million extra dollars that maybe he wants to buy a luxury apartment in Miami with. He has a cousin in the US who could help him. But he's got a problem. In 2017, the Chinese government implemented a $50,000 limit on the amount of money that you could get out of China.

This is a way for the Chinese government to stop tons of money from flowing out of the country. Now, that's not going to stop anyone. So, they turn to the underground banks. So, Mr. Chen goes to a broker in China and he pays him the $2 million. He does this from one Chinese bank account to another, maybe in a series of small transactions so he doesn't draw too much attention. And reminder, this isn't dirty money. Mr. Chen just makes a lot of money in his job and wants to invest it elsewhere. He didn't get it from like drugs or anything. Okay, so anyway, the broker tells Mr. Chen to tell his cousin in the US to go to a shop in Chicago and ask

for the broker's trusted contact, who's another broker in the United States, and to give him a special code. Meanwhile, here in the United States, there's something else going on. There's a drug dealer from a Mexican drug cartel. He has his own financial puzzle to solve, and it has nothing to do with Mr. Chen yet. He's been selling drugs on the street of Chicago, and now he has $2 million in cash. Now, this cash is definitely dirty. It's the definition of dirty money. Has no paper trail from where it came from. Just a huge amount of cash from drugs. He needs to somehow make this money look legitimate and get it back to his cartel bosses in Mexico. And these days, it's not easy to do

that. So, he goes to this same Chinese broker in the United States, the same guy that Mr. Chen told his cousin to go to, and he gives him this $2 million saying, "I need this to get to my bosses back in Mexico." So, this broker now owes the cartel $2 million. And this maybe goes without saying, these are all simplified numbers and examples to show the concept. Okay, this is where these two start communicating. These two brokers, they know each other. They're probably a member of the same extended family, clan, tribe. They're not going to take advantage of each other.

They're talking over an encrypted communication app. And the broker in China tells the broker in the United States that Mr. Chen's cousin is coming and that he will give him a special code. And when he does, give him $2 million. The cousin arrives at the broker shop, gives him the code, and in exchange, he gives the cousin $2 million. The $2 million, in fact, that he got from the drug dealer. That cousin then deposits into a variety of family business accounts under a bunch of different names so he doesn't raise any flags. And eventually he uses that money to buy a luxury apartment in Miami for his cousin. So look, Mr. Chen now has a $2 million asset and he didn't have to send any money across any borders or

through any financial system. His $2 million stayed in China and the $2 million used for his apartment stayed in the United States. Okay, but look, there's still some imbalance here. There's still people who owe each other money. The broker in China still has that $2 million that Mr. Chen gave him. And the cartel in Mexico still needs to get their $2 million of drug money. And this is when they turn to the global economy. When they want to settle up accounts, often times they go back and settle accounts through trade. Traditional,

historically, and culturally, that's what they did. We always talk about following the money. Sometimes it's more important to follow the value. By the way, that's John Casara who is a former US intelligence officer. He was a special agent for the Treasury where he spent decades investigating these types of crimes. He now writes books. He's very helpful for this story. Okay, so it turns out that the broker in China has a company, a legal, legitimate looking company. He sells kitchen appliances that are made in China. And this is a perfect cover for what he's about to do next because the cartel in Mexico also has a front company where they sell kitchen appliances in a retail store in

Mexico. Okay, now watch this clever move between these two. The cartel purchases $10 million of refrigerators from the Chinese broker's appliance company. But instead of charging $10 million, the broker only charges $8 million. And on the invoices, they just put these are $8 million worth of refrigerators. $2 million is secretly transferred illegally in this legal looking trade transaction that flows through the global economy. These appliances roll into port. They're transferred to the retail floor. They're sold. And look, everyone in this little transaction is settled. And the authorities have no idea. How could they? because most of this transaction left no paper trail.

The ledger is only trust and let me just re-emphasize that this is not just a Chinese diaspora thing. This kind of informal trustbased value transfer has been used by many different groups and networks around the world. Hala is in effect the de facto banking system of Afghanistan. All eyes are on hala in the Middle East and terrorism coming out of that part of the world. From terrorists using it to fund attacks to allowing the Italian mafia to have a global footprint, this is a very common way of transferring and laundering money. But flying money, specifically this Chinese diaspora network in many different countries is much bigger than all of those other networks.

Hey, real quick, a little behind the scenes thing that I want to tell you about. This video that you're watching right now has been available for people to watch early and adree over on our new platform, New Press. New Press is the place where anyone for free can come contribute to our journalism, make it better. It's also a place where you can support the work that we're doing here. And for those who do support, you get access to our videos early and ad free. So, if you want to support us or just contribute to our journalism for free, head to New Press to sign up to check it out. We're building a community of curious people over there. And if you like this video, you might like what's

going on over there. Okay, let's keep going. So, if this is so hard to track and infiltrate and see, how do we even know any of this? And the answer is the hard work and risktaking of investigators like the ones we've been talking to. It's very hard to break into for law enforcement. Any investigator in financial crimes investigator worth their salt will tell you that it's human source information that makes the best cases. AI by itself is not going to make a case to infiltrate this network. You need uh you need time. You need to get their trust. You need to use certain kind of undercover operatives. Andrea told me that when he got into this 13 years ago, he had no idea that he would

end up investigating moneyaundering and shadow banking in Kenya working as a security and geopolitical consultant and it was right in the middle of the elephant poaching crisis when we were losing 40 50,000 elephants per year for the ivory trade. We definitely needed a change of strategy, new ideas. So I resigned to create the first intelligence agency for Earth, a sort of CIA for the environment. And so I started recruiting former FBI, former CIA, crime analyst, undercover specialist. Andrea quickly realized that environmental crimes like poaching are not just their own thing. They operate in the same networks and systems as seemingly unrelated crimes. trafficking, wildlife, illegal fishing, illegal locking, legal gold mining,

money laundering, human smuggling, human trafficking, drug trafficking, weapons trafficking, and so forth. And even though we live in a world of electronic money and surveillance and AI, the reality is this system, it's built off of old school methods. And so the only way to infiltrate it is through human intelligence. You have to physically meet and be friend with the very guy who is doing that. That's classic human intelligence from the old generations of spies and intelligence officers. You need Chinese-speaking undercover operatives. These are a rare commodity. I'm telling you, it's really difficult to find them and train them and trust them. undercover missions uh in all continents infiltrating dozens and dozens of organized crime groups and

trafficking groups. We are usually able to film and record every meeting we have with these people. So, we have tons of intelligence coming from these recordings, sending some people to jail, putting together an incredible amount of intelligence about how these groups operate. We regularly produce intelligence reports for law enforcement agencies. They received a lot of information from us about the most important members of this network with profiles and everything. Andrea gave us some of his undercover footage showing these flying money networks in action. Truly the most important and revealing undercover operation in over 10 years of work in the field.

This is shot by two of his undercover operators who have spent months getting close to this one guy. He's a trafficker from China. He's living in Mexico and he's a big player in the illegal seafood trade. And these undercover operators are posing as businessmen interested in putting money into the illegal seafood trade. With time, these undercover operators successfully earn his trust. And he agrees to introduce them to other people in his network, trusted partners in the trafficking ring. 2 days later, the same two undercover operators meet one of these contacts in a Starbucks in Mexico City. This guy's also from China and focuses on trafficking product and money between Mexico and the US, but not

just for seafood. It's also revealed that he traffics people and uses mirror transaction to clean huge amounts of money for the cartels in Mexico. The undercover operators are getting deeper and deeper into this ring. And soon they're being offered an introduction to a corrupt customs and immigration officer at the Mexico City airport. someone who helps clear illegal products coming in and out of the country. They go to dinner for this meeting and the customs officer shows them his badge. During the dinner, the corrupt customs officer leaves the table and they start speaking Chinese. This original trafficker telling the

undercover operatives just how valuable this customs contact is. While the customs officer is gone, the undercover operators try to get a glimpse of his notebook. He returns and the conversation turns to cash. What techniques they use to hide huge amounts of cash when it's going in and out of the airport. This special dye makes the cash completely invisible to airport scanning equipment. Yes, I do. You can see how difficult but useful this kind of human intelligence is. The level of insight and understanding of how these networks operate is unprecedented. But what this also reveals is how what originally looked like someone

trafficking seafood is something much bigger. This Chinese traffickers and money launderers were at the center of all sorts of crimes. But this was confusing to me. When Andrea originally approached me, I didn't understand this concept, how wildlife poaching could be deeply interconnected with the drug trade. Okay, another example. Let's start here. The Sinoaoa cartel is in northern Mexico and they've gotten into the fishing business, hiring local fishermen to go after valuable products like shark fins, which can sell for up to $630 a piece. Seahorses, which end up in jars like this to make wine, sea cucumbers, abalone. But most valuable of all are these.

They call this the cocaine of the sea, the swim bladder of a fish called toaba. Now, this is a highly endangered fish whose bladder, despite having no proven health benefits, is highly valued in traditional Chinese medicine. But more importantly, they are a modern status symbol in China. And the reason this is called the cocaine of the sea is because it sells for tens of thousands of dollars a kilogram. So, the cartel is going after this stuff. And let's say they harvest $6 million worth of illegal seafood products, including these very expensive fish platters. This is not dirty cash, it's dirty product, though. And in order to get across the borders, they go also to a broker, a Chinese broker in Mexico.

So, they coordinate the smuggling of, let's say, half of this product, $3 million worth to China. Maybe this would be bribing a shipping company not to inspect the shipment. Or maybe they'll just carry these fish bladders in their luggage on a flight back to China. Maybe they'll hide them in legal products like roof tiles or other fish products. One way or another, they get to China. Once there, the Chinese mafia takes it and sells it in their own market to the rich. They make their money back. Probably they get some profit, but again, for our simple math, let's just keep this at $3 million. They have $3

million extra dollars, but they haven't paid for the product yet. They haven't paid the cartel. To pay the cartel back, they're once again going to turn to the global economy. This time, they're going to sell a chemical, phenthyl bromide, which is actually a legitimate pharmaceutical for like farming chemicals, but it's also a key ingredient to make fentinol. They'll doctor the invoices once again, and value has been exchanged, and these two are now settled with no money being exchanged for the illegal marine products. Okay, but remember there's a second half to this. The other $3 million gets smuggled into the United States where a Chinese broker receives the products and sells them to rich Chinese consumers

there. This US broker in the United States is now in possession of $3 million of dirty money. And the only thing that has crossed any borders into the United States are these illegal seafood products. At the same time, let's say that the cartel in the United States has also amassed another $10 million in drug money, drug sales, and they need to clean that money and get it back to Mexico. So, they bring that cash to the same Chinese broker who now has $13 million of dirty money. Three from the sea products, 10 from the drug cash. And all of that is owed to the cartel in Mexico. And here comes the trust that makes flying money work. These two Chinese brokers know each other. They do business together. They're constantly in

communication on a encrypted platform like WeChat. And they want to keep the cartel happy. So the Chinese broker in the US asks the Chinese broker in Mexico to just quickly pay $13 million of their own to the cartel in pesos. The cartel is now made whole for all of the fish bladder and the $10 million of dirty cash. And yet the Chinese broker up in the United States is still sitting on $13 million of dirty money that they need to clean. They also need to somehow repay their trusted broker in Mexico. So, how will they do this? Well, as we're seeing, they've got a couple options here, but one that is becoming more and more common is to just cheat the global economy.

This broker in the US runs an electronic store. This is their front for their real business. And to make this all work, this broker puts in an order for $14 million worth of electronics from a company in China that, you guessed it, is actually a front for the Chinese mafia. The mafia sources and ships off these electronics to the US in an official legal looking $14 million transaction for electronics. It's on its way to the United States. But actually, if anyone were to look and evaluate what is inside of these shipping containers, they would see a bunch of cheap electronics worth probably only $1 million. A bunch of knockoff watches and cameras and tablets. The broker receives

those electronics and puts them for sale in their store. You've maybe been into a store where stuff like this is being sold. All of this helps drive the perception that this is a legitimate business. But really, this whole transaction was purely meant to transfer $13 million to the Chinese mafia in this complex deal involving marine wildlife, drugs, and a bunch of money that is now clean because it flowed through a legitimate looking transaction. And there are so many more forms that this can take. Value transfer. Maybe the mafia in China will hire the cartel to smuggle Chinese immigrants into Mexico and then across the border into the United States. That's a lucrative human

trafficking effort that both groups make a lot of money off of. The cartel could extract even more value from the transaction by enlisting these migrants to carry drugs for them into the United States. So, these are simplified examples, but they're based off of realworld cases that have been revealed by these investigations from people like Andrea and his team. Within these transactions, there's a lot more nuance. All the brokers are taking commission. There are bribes usually for officials to look the other way. The complexity of the ledgers much more than what we've laid out here. And when you start to go into these investigations, you see the attempt of the investigators to like piece together

some of these networks, all the different nodes in just one country or one community, and they very quickly become too complex to follow. They get dizzying really fast. And by the way, we've been focusing on this triangle, China, United States, Mexico. It's a very common one here, but this system is global. It moves money all around the world. It allows the Italian mafia to offload their illgotten cash to a Chinese broker in Rome, who then might buy luxury cars for a Russian oligarch, helping them evade taxes or sanctions and being part of other mere transactions in China and elsewhere. Transactions that deal in rubles and euros and Chinese yuan, all evading official transactions or taxes. That same broker might be approached

again by the mafia who just received a cocaine shipment from Colombia. They need to pay the cartel $5 million in drug money. So they give them a duffel bag full of $5 million in the form of euros. And this broker gets on WeChat and messages a longtime friend running a restaurant in Colombia telling them to release that same amount in local currency to the cartel. the money is transferred and these two will settle up in some transaction in the future. Maybe a series of WeChat transactions or messing with trade invoices as we've seen. So you can see this network touches everything and it links casinos in Myanmar to struggling fishermen in Peru and Jaguar fangs to illegal gold mining, crypto scams and unassuming

electronic stores in New York City, illegal timber and human trafficking and shark fins, gold bars in Dubai and meth labs and seahorses and rhino horns. Cocaine and ivory and luxury apartments in Vancouver and border tunnels. Flying money is one shadow banking network that could touch all of it. As I've made abundantly clear, fighting this is hard and in part because of how low tech it is. Back in the day, it was much easier for law enforcement to tap into people and listen to people. They know that the more they stay away from anything digital or computer related, the better it is and the safer it is. And yet, we're entering an era of

encryption and decentralized currency, which are two very powerful technologies to enable and improve a system like this. You have flying money pair with crypto pair with the encrypted communication. the system is almost unbreakable from the outside. If there's one thing I feel in looking at this is that like there are people who are taking this seriously working on this trying to infiltrate these systems and in fact governments are getting on board and getting savvy to how serious of an issue this is.

US Congress and even the EU parliament now threat Chinese money loan organization as priority threats. The Chinese government itself is recognizing that this is a big problem and assessing ways to crack down on it. But these are small dents in a very huge problem. $4 trillion of illicit proceeds every year that impacts everybody. Honestly, we have the laws, the rules, the regulations we need. Now, what these experts stress is that the real key to enforcement is actually dedicating enough actual humans and funding, most importantly, enough patience to investigate and infiltrate these networks. If I was a government agency, I would put together a task force and start laundering and moving money around the

world with them. That's what I call the last mile. What we as an NGO cannot do. Law enforcement is rated and rewarded because of statistics. But in order to make this work, we have to change the incentives for law enforcement. We have ICE, immigration, and customs enforcement. They'll go after the quick border stats. All the resources are going into immigration instead of going after these long-term complex meaningful moneyaundering cases. Criminals are motivated by money and once they have the money they have to launder it. Whether it be the fentanyl, whether it be human trafficking that occurs in the strip malls across this country, a romance scam, an investment scam, somebody trying to fleece you out of your hard-earned money that affects

everybody.