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<\/p>\nHOW INTERNATIONAL MONEY LAUNDERING WORKS!<\/p>\n
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Every few weeks, fireworks light up the night sky in Cambodia, set off by scammers to salute their biggest swindles.<\/p>\n
By the time the shells pop and crackle, somebody\u2019s life savings are probably gone. Maybe the victim fell for an online romance scam or bought into a fake cryptocurrency exchange. Whatever the scheme, the money has vanished, sucked into a complex money-laundering network that moves billions of dollars at a dizzying speed.<\/p>\n
The F.B.I., China\u2019s Ministry of Public Security, Interpol and others have tried to combat scammers, who \u200boften lurk on social media and dating apps, luring people into bogus financial schemes or other ruses. Telecom companies have blocked numbers. Banks have issued repeated warnings.<\/p>\n
Yet the industry persists because its money-laundering operation is so efficient. Unsuspecting victims worldwide lose tens of billions of dollars each year, money that must be scrubbed of its criminal origins and deposited into the legitimate economy. The money-laundering system is so hydra-headed that when governments strike it in one place, it pops up in another.<\/p>\n
This underworld peeks out in the Cambodian capital, Phnom Penh, home to a global clearinghouse for money launderers. It can be glimpsed, too, in the coastal city of Sihanoukville, a notorious refuge for fraudsters. Scammers ply their trade from call centers, operating in fortified compounds or on the upper floors of unfinished high-rises. Seaside restaurants are packed with money launderers and other criminals doing business over spicy Chinese food.<\/p>\n
Image<\/p>\n
Outside the Golden Sun Sky Casino & Hotel in Sihanoukville, Cambodia, in March. Documents show that the British and American authorities have linked this casino to online scammers and human trafficking.<\/p>\n
We obtained a cache of documents, a kind of money-laundering handbook, and spoke to nearly a half-dozen scammers and their launderers. The documents are not linked to any one scam or victim but reveal a method for moving illicit money that has proved all but impossible to stop.<\/p>\n
The map locates the Cambodian capital city of Phnom Penh, in south-central Cambodia, as well as the southern coastal city of Sihanoukville.<\/p>\n
By The New York Times<\/p>\n
The money launderers are as vital to criminals as getaway drivers are to bank robbers. Without them, there would be no loot.<\/p>\n
Once scammers persuade strangers to part with their savings, they need to quickly move money from one account to another, and one country to another, before \u200btheir targets discover the ruse and alert their banks\u200b or the police.<\/p>\n
In the end, the money arrives \u201cclean\u201d \u2014 with virtually no trace to the original scam.<\/p>\n
So how does it get done?<\/p>\n
Following the trail led us, surprisingly, to an established financial conglomerate in Cambodia called Huione Group.<\/p>\n
This is not a back-alley shop with a side hustle in cleaning dirty money. Huione is an established firm that does brisk and legitimate business in Southeast Asia and has satellite companies in other parts of the world. Its QR codes are everywhere in Cambodia \u2014 customers use them to pay their bills in hotels, restaurants and supermarkets. Huione ads are plastered along major highways. Its suite of financial services include banking and insurance.<\/p>\n
But Huione (pronounced Hu-WAY-wahn) is a constellation of affiliates, and not all of them are legitimate. One arm offers bespoke money laundering services, according to the documents, <\/strong>which come from the company, and interviews with two people who are directly familiar with the operation. They spoke on the condition of anonymity out of fear for their safety. The company did not respond to requests for comment.<\/p>\n Another affiliate openly runs an online bazaar for criminals to find money launderers. The precise size of this marketplace is practically impossible to measure, but the analytics firm Elliptic has linked it to $26.8 billion in cryptocurrency transactions since 2021. The industry is so opaque that it is difficult to separate legitimate transactions from illegal ones, but Elliptic says the bazaar is the world\u2019s largest illicit internet market.<\/p>\n Hun To, a cousin of Cambodia\u2019s prime minister, is a director of one Huione company.<\/p>\n Huione\u2019s clients include large criminal enterprises, such as a group in Myanmar that exploits human trafficking victims, according to a scammer, a money launderer and examinations of their cryptocurrency trade by the analytics firms Elliptic<\/a> and Chainalysis<\/a>.<\/p>\n Huione is a constellation of affiliates. The headquarters of one of its companies, Huione Pay, is in Phnom Penh, Cambodia.<\/p>\n And yet, this money-laundering network operates with impunity. The group has never been targeted for sanctions by any government. The cryptocurrency company Tether has frozen some of the group\u2019s accounts, at the behest of unspecified law enforcement officials, and the messaging app Telegram has shut down some of its channels. But neither measure made a lasting effect.<\/p>\n This is how it works.<\/p>\n Imagine you\u2019re a scammer, cheating people out of their life savings. You need a way to get money out of countries around the world. You need a matchmaker.<\/p>\n A matchmaker is a trusted intermediary who will shepherd your loot home. A good matchmaker has a worldwide network of people, known as mules, who can move money within hours.<\/p>\n The money mule can be a person or a shell company that controls a local bank account or a cryptocurrency wallet.<\/p>\n Once you find a matchmaker, he will deposit money into escrow, essentially ensuring he won\u2019t run away with your money along the way.<\/p>\n Now you are ready to start your scam.<\/p>\n Let us say that you\u2019ve tricked someone into sending you $40,000.<\/p>\n Step 1: You, the scam boss, cut a deal with a matchmaker. For a U.S. scam, the matchmaker typically demands 15 percent of the proceeds for himself and his mules.<\/p>\n Step 2: Your matchmaker finds the right mules for the job, and gets you a deal.<\/p>\n Step 3: The matchmaker sends you the mule\u2019s bank account or crypto wallet details. You send that information to your victim.<\/p>\n Step 4: Your victim sends $40,000 to your money mule\u2019s account.<\/p>\n Step 5: The mule moves the money from one account to another account and eventually converts it to cryptocurrency.<\/p>\n Step 6: Finally, the mule takes a cut for his services and sends the rest to the matchmaker. The matchmaker pays himself, and gives you $34,000.<\/p>\n Moving Bricks<\/strong><\/p>\n Huione makes money at every step of the process.<\/p>\n First, one affiliate, which until recently was called Huione Guarantee, hosts the marketplace where scammers can find matchmakers. The matchmakers are essential to the system and their work is so repetitive that the Chinese name for it is \u201cmoving bricks,\u201d according to Yanyu Chen, an anthropologist who studies money-laundering schemes<\/a> in Cambodia.<\/p>\n The online bazaar is made up of thousands of chat groups on Telegram.<\/p>\n Some Huione Pay branches advertise money-exchange services, including converting between Tether cryptocurrency and U.S. dollars.<\/p>\n On these Telegram channels, anonymous users advertise money laundering services with the wink and nod of barely disguised language. The posts are public; anyone with the Telegram app can see them. Some merchants also sell stolen personal data, applications for impersonating others and other essential services to scammers.<\/p>\n One channel, called \u201cDemand and Supply,\u201d had more than 400,000 users with hundreds of daily messages, including advertisements for money-laundering services. After we sent questions to Huione Group and others in late February, Telegram said it had removed the channel. But another quickly sprung up, with some 250,000 members joining within a week.<\/p>\n Huione Guarantee did not respond to repeated requests for comment but has denied its relationship with Huione Group, the financial conglomerate. It even changed its name in October, shedding the Huione name. But it told customers on Telegram that Huione Group remained one of its \u201cstrategic partners and shareholders.\u201d<\/p>\n Second, the bazaar guarantees the laundering transactions. Why? Because there is little honor among thieves, and scammers get scammed, too. To prove their credibility, matchmakers and money mules pay a deposit to Huione Guarantee, which holds it in escrow. This assures scammers that nobody will abscond with their money (or if someone does, that person will lose some of their own money).<\/p>\n The price to launder money is determined by the crime committed to get it. Scams like impersonating government officials incur a higher cost because the victims are more likely to call the police or alert their banks.<\/p>\n