Organized crime: draining the swamp



Germany's Federal Criminal Police (BKA) is set to fight organized crime. Both the German police and Europol are better equipped than criminals would expect.
The problem appears to be insurmountable: organized crime is believed to include 3,600 groups with between 20,000 and 30,000 criminals. In Germany alone, networking criminals and traveling gangs do damage amounting from 500 million euros ($ 626 million) to 600 million euros ($ 743.5 million) per year.
German police officers feel they are operating within the confines of a straitjacket. Legal restrictions often make gathering adequate evidence difficult. Data, for instance, can't be collected everywhere, and only limited storage is permitted. Material for convictions and trials is piled high in the offices of Germany's security authorities and public prosecutors. At present, one petabyte - the equivalent of 400 million files of 500 pages each - is waiting to reach the right person because international requests for judicial assistance either fail or are delayed. Eighty percent of organized criminals with victims in Germany operate from abroad. Cooperation with foreign authorities has long been a necessity.
Last year, only 15 percent of the 150,000 well-organized crimes were cleared up. Under these circumstances, criminals have reason to be quite pleased. Yet the Federal Criminal Police (BKA), Interpol and Europol are preparing to strike back.
The battle plan
"We must strike criminals at their core," says Holger Münch, the future head of the BKA.
That core would be money. The idea is to access high-tech crime and deprive it of all financial means. Interior Minister Thomas de Maizière plans to introduce draft legislation along those lines in Germany's Bundestag. Currently, criminal prosecutors must prove that money they want to confiscate actually stems from a crime. Often enough, the evidence is lacking.
In Italy, it's up to the suspects to prove that their money is from legal transactions: what lawyers call reversal of evidence.
A comparison of the sums confiscated shows the significance of that seemingly minor reversal: In Italy, the Mafia lost more than 40 million euros (50 million dollars), while Germany only managed to dispossess 80,000 euros.
That's about to change.
Police structures are being re-organized. Powerful crimefighting centers pool knowledge and capabilities. "J-CAT" is such a unit, answering to Europol. The acronym is short for "Joint Cybercrime Action Taskforce" and tackles organized crime where the bulk of it can be found today: in the digital world of the internet.
Europol's crimefighting coordinator is a Dane, Troels Oerting. Speaking on the BKA autumn conference, he said: "I am very optimistic. I don't think that we will go down. I think that we will win [the fight against organized crime] and come out of this stronger."
Oerting says that within "J-CAT," for the first time 28 states are collaborating with top experts every day and around the clock, with private security firms, retailers, public administration, universities and cyber units all providing their best professionals. On a permanent basis, they monitor criminal activities, analyze crime patterns and co-ordinate countermeasures.
Track record
Troels Oerting represents a new generation of policemen. He is linked up very well and he acts fast. Currently, Interpol's European Cybercrime Center (EC3) strikes out heavily against organized criminals.
These strikes only sometimes make it into the media, as the recent headline-making seizure of 150 cans of heroin in the West German town of Essen. As a result of collaboration between "J-CAT" and the Federal Criminal Police Office, drugs worth 50 million euros were confiscated.
So-called "dark markets," shadow markets offering criminal services, are identified and shut down. Troels Oerting: "We have counted over 7,000 dark markets. They sell drugs [on the internet]. They sell guns. They sell stolen credit cards, they sell identity, they sell any kinds of stolen goods."
Oerting's task force was able to close down 400 of those meeting points for criminals. But the fight against servers located abroad goes on: "Within the next three years from now the only thing you will do is stream from cloud services. So, for us to follow back and trace and say you did this and I can prove it [will be very difficult]." Together with his colleagues, Oerting is already working out solutions.
The efficiency which which the police combats organized crime is highlighted by the case of a Bulgarian criminal gang operating from the Dominican Republic. The gang had ordered five credit cards from an Arabic bank and planned to change the withdrawal limit of 100 euros to an unlimited amount. To this end, they hacked into the computer of a Indian service provider of the bank. Had they been successful, they would have seized about 45 million dollars (36 million euros) within two hours and ten minutes: No hazardous bank robbery, just a simple desk job.
The BKA autumn conference did not shed any light on how exactly the perpetrators were caught. Troels just gave away this much: "85 percent of our cases are Russian speaking organized criminal cases right now." And law enforcement is aware of that.
The upcoming hotspot of organized crime has been identified as well: countries in West Africa. Troels Oerting says those countries are chosen by gangs "not because they are beautiful or lovely, but because they give infrastructure and a very weak police, and this is what they want."
Experts think it is possible that organized crime at least will not grow any further - provided German police forces continue to modernize themselves.


Sam Giancana's daughter aims to cash in on gangster's memorabilia


By JOHN M. GLIONNA 



Notorious gangster's mementos to be on auction block, as well as coroner's report on his slaying
Sam Giancana liked to boast that he owned Las Vegas, Miami and Chicago -- where he was shot to death
Gangster Sam Giancana was shot to death in '75 at his Chicago-area home; family said they heard nothing
He was one of Sin City’s original gangsters, an international crime boss who liked to brag that he owned Las Vegas, and an unapologetic irritant of Atty. Gen. Robert F. Kennedy.
Sam Giancana has been dead for decades -- shot execution-style in 1975 as he prepared a midnight snack of sausages and spinach in the basement of his Chicago-area home. But many of his prized possessions are still around -- and some are being sold Saturday in Las Vegas.
Organizers say the estate auction features a significant Mafia antique collection of a crime figure once characterized as a “tough, swaggering, flamboyant murderer.”
He was the most outrageous gangster of all time - the FBI followed him everywhere. Many say he was under contract to help the CIA kill Fidel Castro.- Geno Munari, owner of Munari Auctions
Available for bidding both online and at the Gambler’s General Store in downtown Las Vegas are never-before-seen photographs, including a rare snapshot with Frank Sinatra, court transcripts, arrest reports, the coroner’s report and such personal mementos as monogrammed silverware and wine glasses.
Each item includes a certificate of authenticity, signed and verified by his surviving daughter, Antoinette Giancana, said Geno Munari, owner of Munari Auctions.
“He was the most outrageous gangster of all time – the FBI followed him everywhere,” Munari said. “Many say he was under contract to help the CIA kill Fidel Castro. He was also a guy who wrote beautiful cards to his wife. The auction features the good and the bad of a notorious crime boss.”
Born Momo Salvatore Giancana, he rose to become a powerful chief of the Chicago crime syndicate in 1955, taking over the daily operations from the aging Anthony “Big Tuna” Accardo. Both Giancana and Accardo worked in the old Al Capone gang of the 1920s and '30s.
Tony Montana, a Las Vegas resident who once served on Giancana’s staff, said Capone had no choice but to incorporate Giancana after he helped start a rival Chicago syndicate called the 42 Gang.
“He was into some things with a bunch of guys, including Milwaukee Phil and the English brothers, and they were robbing and shaking down so many joints that Capone took notice of them,” he said. “They were young and he figured he’d better bring them on board.”
Giancana soon became the new face of U.S. organized crime, leading the criminal infiltration of labor unions, gambling casinos and legitimate businesses, relying more on corrupt politicians and police than on his own thugs.
Early on, Giancana developed a reputation as a killer. During World War II the draft board labeled him “a constitutional psychopath with an inadequate personality.” In a military interview, when asked what he did for a living, Giancana matter-of-factly replied, “I steal.”
Officials sent him home as unfit for service. And they didn’t know half of it, unaware of the illegal mayhem Giancana would eventually inflict.
Years later, in Las Vegas, he bragged about rubbing elbows with Frank Sinatra and the Rat Pack as he ran various casinos. He once told an FBI agent: “I own Chicago. I own Miami. I own Las Vegas.”
Michael Green, a historian at UNLV, said Giancana’s power in Sin City was shadowy but very real. “As Woody Allen once said, ‘Organized crime figures saved a lot of money on office space.’”
Giancana was one of the first inductees into the so-called Black Book, a list of undesirables compiled by the Nevada Gambling Commission, and he had an invisible hand in running “almost certainly the Riviera and possibly the Sands,” Green said.
We all committed crimes. If we didn't, we wouldn't have anything to talk about.- Tony Montana of Las Vegas, who once served on Sam Giancana's staff
His criminal career included a shadowy relationship with the CIA. In exchange for his help organizing a plot to kill Castro, experts say, agents tapped the hotel room of comedian Dan Rowan, who Giancana suspected was interested in his then-girlfriend, Phyllis McGuire -- the youngest member of the McGuire Sisters -- whom he met in Las Vegas in 1960.
Montana said his job for Giancana was to help set up new bars and restaurants. “He had to make money somewhere legitimately and he couldn’t legally get a liquor license,” he said.
Giancana lived most of his final years in Mexico, on the lam from federal authorities, but was deported back to the U.S. in 1974. Within a year, he was dead. As federal authorities pressured him to open up to a newly formed grand jury, the aging mob boss was shot six times at close range late one night, before he got to enjoy his midnight snack – his end as violent as his life.
Dressed in a sports shirt and slacks, he was found lying face-up in a puddle of blood. His wife was on the second floor of the fortress-like home in Oak Park, and told police she heard nothing.
Experts say mob figures believed Giancana, 67, was planning to talk to federal authorities about their activities. He was set to appear before a Senate committee in Washington a few days later.
Montana said the items for auction on Saturday include several valuable photos, including one of the capo on the beach, accompanied by bodyguards including Murray “The Camel” Humphries.
Montana then launched into a brief history of which figures “got whacked” and why, including a list of their crimes.
“We all committed crimes,” he said. “If we didn’t, we wouldn’t have anything to talk about.”


This May Be the Most Dangerous — and Most Costly — Photo In Japan


By Jake Adelstein


The above picture may be worth more than $1 billion in Japan. At the very least, it's worth a severe beating by gangsters armed with baseball bats.
In September, the right-wing scandal sheet Keiten Shimbun obtained the photo of Hidetoshi Tanaka (left), the chief director of Japan University and the vice chairman of Japan's Olympic Committee. Sitting next to Tanaka is Shinobu Tsukasa, the head of Japan's largest yakuza [organized crime] syndicate, the Yamaguchi-gumi. (Note his left hand.)
The photo, which police believe was taken in early 2005, was anonymously sent to several media outlets including Keiten Shimbun; one magazine received a note with the photos that read: "I am an employee of Japan University, where many are in conflict with chief director Tanaka. Six or eight years ago, when Tanaka was elected as the chief director of the board, he went to a club in Nagoya and celebrated his promotion with the head of the Yamaguchi-gumi and many other Yamaguchi-gumi… members. He has shown us these photos over the years to intimidate us into silence. Please investigate."
Yakuza is the umbrella term for Japan's 21 organized crime groups, which boast an estimated 60,000 members. They exist as semi-legal entities in Japan with offices, business cards, and even fan magazines, and make their money principally from racketeering, loan sharking, fraud, extortion, stock market manipulation — and construction.
The 2020 Tokyo Olympics are predicted to cost at least $5 billion. That means there's a lot of money to be made in construction.
According to police and other sources, a reporter for Keiten Shimbun attempted to seek clarification from Japan University and Tanaka about when the photo was taken and what Tanaka's current relationship, if any, is to the Yamaguchi-gumi. On the night of September 30, as the reporter was walking back to the newspaper office, he was assaulted by two men with metal baseball bats who struck him repeatedly in one place on his body. A police source said they will not specify the location of the injury "because it's something only the assailant would know, and we wish to weed out possible false confessions."
The day after the assault, almost every major media organization in Japan received threatening phone calls from people telling them not to publish the photo. One magazine editor, who spoke to VICE News on the condition of anonymity, said the threat was, "'We attacked Keiten Shimbun. If you get uppity and publish that photo of those two, you'll meet the same fate.'"
More than a month later, the photo remained unpublished. (VICE News is the first outlet to publish the photo.) However, Keiten Shimbun did publish another photo of Tanaka toward the end of October. In that photo (below), from sometime in 2004, Tanaka is pictured with another senior member of the Yamaguchi-gumi named Iwao Yamamoto, who was once close to Tsukasa. Yamamoto shot himself in front of the grave of his predecessor in December 2010.
"Whether or not he (Tanaka) still has associations with Yamaguchi-gumi members is something under review," said an official at the National Police Agency. "Under the Tokyo Organized Crime Control Exclusionary Ordinances, such ties would be illegal."
Tanaka has a history of shady associations. A photo of him (below) was taken at a party commemorating the promotion of gang boss Hareaki Fukuda to chairman of the Sumiyoshi-kai crime group — a rival of the Yamaguchi-gumi — in September 1998 at the New Otani hotel in Tokyo. Tanaka allegedly went to the party to congratulate Fukuda. (Sumiyoshi-kai sources say that sometime around 2003, Tanaka began to associate more closely with the Yamaguchi-gumi.)
Fukuda and Tsukasa are both well-known to US law enforcement. An investigator for a federal agency who spoke to VICE News said, "In 2012, the United States put in place economic sanctions against these two yakuza groups and forbid US citizens to associate with the groups or their leaders. These photos raise concerns about Japan's seriousness in the fight against transcontinental crime."
Japan's Olympic Committee, however, does not appear to share those concerns. The committee plays an important role in carrying out the wishes of the International Olympic Committee (IOC) and making sure the games run smoothly. It also is said to be privy to information about construction taking place for the games, information that would be very valuable in winning lucrative construction contracts. The Japan Olympic Committee did not respond to questions submitted to them Monday.
The least likely suspects for the assault and threats are actually the Yamaguchi-gumi, who generally wouldn't resort to such tactics thanks to Tsukasa's influence.
In addition to serving as the vice chairman of Japan's Olympic Committee, Tanaka is also the chief director of Japan's largest college, Japan University, and the president of the International Sumo Association; police believe that Tanaka may have gotten to know Tsukasa and other Yamaguchi-gumi members via his sumo connections. Sumo was plagued by a scandal in 2009 when it was revealed that many wrestlers had been placing bets on baseball games with Yamaguchi-gumi bookies. There were also allegations that wrestlers had rigged matches, but the police investigation yielded nothing.
When contacted by VICE News, a spokesperson at Japan University said, "The University received these photos with a written threat in early September and have filed a report with the police on charges of intimidation. Mr. Tanaka has no memory of ever meeting these individuals and we consider the photos to be fakes." Japan University has not submitted the photos to an outside institution for forensic analysis and could not explain how the photos might have been faked. VICE News was told it was not possible to speak to Tanaka, though through the university he has admitted to accidentally meeting Fukuda several years ago. Tanaka also met Yamaguchi-gumi consigliore Heo Young Joong in the 1990s, but he has said it was not a close relationship. The meeting was reportedly to enlist the politically influential Joong's help in making sumo an official Olympic sport by 2008.
Questions remain about who exactly attacked the journalists and threatened harm to other magazines if the pictures were published. The police are currently operating on the theory that the Sumiyoshi-kai may have released the photos and staged the attacks to make people believe the Yamaguchi-gumi was responsible. This could initiate a crackdown on all Yamaguchi-gumi front companies in the construction industry, forcing them out of the lucrative Olympic racket. The remaining pie could then be divided among other yakuza.
The least likely suspects for the assault and threats are actually the Yamaguchi-gumi, who generally wouldn't resort to tactics like that against a reporter thanks to Tsukasa's influence. Since leaving prison in 2011 after serving time for weapons charges, the longtime yakuza has strictly enforced the old code of the Yamaguchi-gumi: Don't assault civilians, don't engage in petty theft or robbery, don't sell or use drugs. That said, not everyone in the organization shares Tsukasa's beliefs in traditional yakuza family values.
Questions also remain about where the photos came from and why they're surfacing now. According to the monthly news magazine FACTA, the Tokyo Regional Tax Agency has begun an investigation of Japan University on suspicion of tax evasion, and there is a possibility the photos surfaced during that process. The note attached to the photos may actually be authentic — a frustrated board member leaking photos that were used to intimidate Tanaka's political opponents in the university. The police are still attempting to date the photos, but view them as authentic.
Regardless, it is doubtful that the revelation of past or present connections between Tanaka and the yakuza will result in any attempt to clean up the committee or the Olympics. Prime Minister Shinzo Abe's grandfather Kishi Nobusuke — a former prime minister himself whom Abe is known to admire — had friendly ties with the Yamaguchi-gumi; in 1971, Nobusuke helped put up the bail money for a Yamaguchi-gumi member accused of murder. In 2012, a photo surfaced of Abe and Yamaguchi-gumi member Ichuu Nagamoto — along with US politician Mike Huckabee — taken in 2008.
Abe insisted that he didn't know Nagamoto, and claimed he'd been photo-bombed.
And so it's possible that the yakuza involvement in the Olympics isn't a problem because the Abe administration doesn't see it as a problem — just as they don't appear to see yakuza involvement in the nuclear industry, entertainment industry, and construction industry as problems. The Tokyo district court ruled in January 2013 that one of the major construction companies handling Olympic projects had hired yakuza to intimidate someone during negotiations. That has had no effect on the company's ability to land Olympic construction work.
North Korean meth, motorcycle gangs, Army snipers, and a guy named Rambo. Read more here.
Since September, two of Abe's newly appointed cabinet members have had to resign after allegations surfaced that they broke political regulatory laws. The recently appointed minister of Trade Industry and Commerce had to apologize for the use of public funds by his subordinates to attend an S&M club. And Eriko Yamatani, the current head of the Public Safety Commission, which supervises the police, has had a history of association with yakuza-backed extreme right-wing groups.
As planning and construction for the Olympics moves forward, there will be chances to ask questions. But the odds of press-club reporters asking about yakuza influence are about as likely as sumo finally becoming an official Olympic sport in 2020.

Follow Jake Adelstein on Twitter: @jakeadelstein






Tokyo cops arrest Yamaguchi-gumi yakuza in attempted extortion of Ueno club



By Tokyo Reporter on November 21, 2014 under Crime,Tokyo Daily,Yakuza

TOKYO (TR) – Tokyo Metropolitan Police on Friday announced the arrest of five suspects, including members of an organized crime group and a motorcycle gang, on charges of threatening a hostess club in Taito Ward earlier this year, reports Nippon News Network (Nov. 21).
On Wednesday, officers took Narushi Sonoda, a 34-year-old gangster in the Yamaguchi-gumi, and Tsuyoshi Hirose, 42, a member of the bosozoku group Dragon, and three other suspects into custody for allegedly threatening the 40-year-old female manager of a Chinese hostess club in the Ueno area so that she would pay 20,000 yen per week in “protection” money — termed mikajimeryo.
At approximately 1:30 a.m. on March 30, the group claimed it would “smash the shop” if she did not pay, police said. The suspects began accosting the manager in the street in December of last year.
All five suspects have reportedly denied the allegations, telling police that they did not demand money.
Last year, the National Police Agency began classifying bosozoku gangs as “pseudo-yakuza” groups to better reflect the true state of their activities.
Dragon is comprised of second- and third-generation returnees from China who came to Japan after the end of World War II.



Sumiyoshi-kai yakuza among 15 arrested in ‘special fraud’ investment scam



By Tokyo Reporter on November 18, 2014 under Crime,Tokyo Daily,Yakuza

TOKYO (TR) – Tokyo Metropolitan Police on Monday announced the arrest of a gang member and 14 others for participation in a 1.5-billion-yen scam that involved selling bonds of non-existent companies, reports Yomiuri Shimbun (Nov. 17).
Officers accused Hironori Ueda, a 38-year-old upper-level member of the Sumiyoshi-kai, and 14 others of persuading an 80-year-old woman from Osaka Prefecture to buy 85 million yen in bonds in a fictitious company called Japan Medical, which was said to be doing research and development in regenerative medicine. The money was sent to a Tokyo post office box.
Investigators suspect that the group has swindled approximately 170 elderly victims nationwide out of as much as 1.5 billion yen. Police believe the money received from the victims served as a source of revenue for the gang.
Ueda and four other members of the group have reportedly admitted to the allegations while the other 10 suspects have denied the charges, according to the Asahi Shimbun (Nov. 17).
According to data from the National Police Agency, organized crime is increasingly participating in cases referred to as “special fraud,” in which victims are conned in fake investment schemes. Police arrested a total of 484 gang members between January and September of this year for involvement in such cases, a rise of 162 over the same period the year before


Japan's Biggest Organized Crime Syndicate Now Has Its Own Web Site and Theme Song



By Jake Adelstein and Nathalie-Kyoko Stucky

Japan’s largest organized crime group, the Yamaguchi-gumi, recently launched its own website. But if you're hoping to see guys with crazy tattoos, dramatic gun battles, bloody sword fights, and fingers being chopped off — and who isn't? — it may disappoint.
For starters, the site looks like it was created in the late 1990s. Still, the criminal syndicate is hoping it'll serve as a recruitment tool as the membership of yakuza organizations shrink and public support for them falls. And the branding reflects this; the site at first appears to be for an organization known as the Banish Drugs and Purify The Nation League — or Drug Expulsion of Land Purification Alliance, as Google translates it. The "purify the nation" thing is potentially unsettling, but it still doesn't sound like a criminal organization.
But it was founded by one. The then-leader of the Yamaguchi-gumi founded it in 1963 as a group “dedicated to the eradication of amphetamine abuse.” Sources familiar with the syndicate told VICE News that the site was launched under the Banish Drugs… monicker to, one, remind Yamaguchi-gumi members to behave themselves, and two, to convince people that the Yamaguchi-gumi is not “an anti-social force,” as they're called by police, and are instead a “humanitarian organization.”
However, veteran police detective told us that they suspect the site may be a signal that the Yamaguchi-gumi plans to expand their operations. Japan has 21 designated organized crime-groups — the yakuza — each with their own corporate logo, office, and business cards. The groups are patriarchal pseudo-family organizations structured like a pyramid, with the top boss known as the oyabun ["father figure"] and those under him known as kobun ["children"]. They each control different regions of the country.
The yakuza retains a significant foothold in Japanese popular culture, with two monthly fanzines and several weekly magazines that glorify their exploits. According to the National Police Agency, from 1992 to 2010, the number of yakuza members and associates remained steady at roughly 80,000. But extensive crackdowns by police and the tightening of laws have resulted in a major decline in numbers since then; this year, the yakuza reached a record low of about 60,000 members. The Yamaguchi-gumi, based in the western city of Kobe, is by far the largest syndicate with about 25,600 members. As recently as 2008, however, it boasted more than 40,000.
A Yamaguchi-gumi video, complete with theme song
Whatever the true purpose of the site, the Yamaguchi-gumi isn't screwing around with its anti-drug message. When amphetamine-based stimulants came onto the Japanese market in 1931, they were used for everything from fighting low blood pressure to motivating kamikaze pilots. At the end of WWII, huge military stocks were dumped onto the civilian market, making it popular to combat fatigue and hunger, leading to an explosion of consumption between 1945 and 1955. Meth addicts predictably committed a number of horrendous crimes, and the public demanded government control.
Kazuo Taoka, the Yamaguchi-gumi oyabun who founded Banish Drugs and Purify the Nation, had great disdain for drug use. And the current oyabun, Tsukasa Shinobu, shares those views. Drug addicts among the Japanese mafia are generally dismissed, and drug dealing is perceived as a more harmful crime than prostitution, gambling, blackmailing, or racketeering. The yakuza believe that drugs harm people, drug addicts are prone to violent actions, and drug use creates a weak country. Dealing drugs is also considered to be an activity that lacks initiative and intelligence and is unworthy of the “noble yakuza.”
At the top of the homepage is a video of the Yamaguchi-gumi upper echelon making their first 2014 visit to the local shrine, and playing in the background is the group's newly released theme song, Ninkyo Hitosuji [“Devoted To Chivalry"]. The first refrain goes something like:
“With nothing but my courage / and this body / I’ll trust myself to the life of a yakuza / and follow this path I’ve decided on / in Nagoya / The Yamaguchi-gumi emblem is our life / dedicated to chivalry / that’s the spirit of a man”
A moving message — but maybe not a tune that'll appeal to Millennials.
The various sections of the web site offer glimpses into the gang’s daily life and efforts to get along with the community. There are videos of Yamaguchi-gumi members pounding rice cakes at the end of the year, showing that they're good neighbors. There are also photos of the emergency relief provided by the syndicate after the Kobe earthquake in 1993 and after the Tohoku Earthquake in 2011.
The true purpose of the site is probably known only to the upper echelon of the syndicate — and, judging by the way the site looks, they may also have been the ones who built it. That said, we strongly suggest that you do not make any disparaging comments on the site. Trolling the yakuza is not a good idea.
Follow Jake Adelstein on Twiiter: @jakeadelstein



North Korean Meth, Motorcycle Gangs, Army Snipers, and a Guy Named Rambo



By Keegan Hamilton

At first glance, the meeting that occurred on January 24, 2013 could have been about any ordinary business deal. A multinational organization based in Hong Kong had cornered the market on a lucrative commodity. They needed distributors to bring their product to America, and so the organization dispatched a pair of representatives to Bangkok to meet with a potential client. That client claimed to have all the right connections in New York and money to burn.
But the deal was not ordinary. The businessmen were allegedly members of a triad crime syndicate, the would-be client was an informant for the DEA, and their lucrative commodity was a massive stockpile of ultra-pure North Korean methamphetamine stashed somewhere in the Philippines. The arrangement would eventually come to involve a shady pair of British drug merchants living in Thailand, the leader of an outlaw motorcycle gang, and a team of assassins led by an ex-Army sniper nicknamed "Rambo."
Two federal conspiracy cases unsealed in late 2013 paint a lurid picture of a stranger-than-fiction international underworld that uses North Korea as a haven for meth production. According to court documents and DEA sources, the meeting in Thailand last January was a pivotal moment in an ongoing investigation that stretches from Southeast Asia to West Africa. So far eight men have been arrested and extradited to face conspiracy charges in Manhattan federal court.
News of the cases was widely reported in the days after the indictments were revealed, but scrutiny of the evidence and extensive interviews with ex-diplomats, DEA officials, and independent experts has shed light on the shadowy dynamics of the international drug trade that extends through North Korea. Authorities have suspected for years that state-owned factories are used to make meth on an industrial scale. But now it appears the North Korean regime is outsourcing the work to transnational drug cartels, allowing them to operate with impunity inside the hermit kingdom in exchange for a cut of the action.
“The overwhelming preponderance of evidence points to official North Korean involvement,” said Sheena Chestnut Greitens, a postdoctoral research fellow at Harvard and non-resident senior fellow at the Brookings Institution who studies illicit activity in North Korea. “The triads, the Yakuza in Japan — the question is one of control. I don’t think North Korea exercises much if any control over these groups. It’s an arrangement for mutual benefit, and it lasts as long as it’s convenient for both sides.”
TONS OF BINGDU
North Korea’s participation in the illicit drug trade dates back at least to the 1970s. After defaulting on international debt, former leader Kim Il-sung (grandfather of current dictator Kim Jong-un) reportedly ordered his embassies to become self-sufficient, and so diplomats exploited their legal immunity and began smuggling hash and heroin. But by the early ‘90s, a number of DPRK diplomatic personnel had been busted and booted from their host nations, forcing the regime to change tactics.
At about the same time, meth started to become increasingly popular in the United States and Asia as economic collapse and famine gripped North Korea, creating the perfect storm incentivizing North Korea to produce the drug themselves. A 2007 report to Congress describes how Kim Jong-il created an agency called “Bureau 39” to oversee all “crime-for-profit activity” in the country, including illicit drugs, counterfeit currency, and contraband cigarettes. Massive pharmaceutical factories staffed by trained scientists were repurposed into meth labs capable of churning out bingdu, North Korean slang for meth, by the ton. Police intercepted large North Korean drug shipments destined for the Philippines, Japan, Australia, and elsewhere.
'There’s no such thing as organized crime in North Korea that doesn’t involve the government. Crime is disobeying the leadership. It’s a Sopranos state.'
“These are high-quality, chemically pure shipments that are professionally packaged and shipped in large quantities,” Greitens told VICE News. “That’s been the defining trait of North Korean meth seizures since the late ‘90s.”
In early 2006, North Korea staged a public crackdown on meth. The regime issued a decree announcing that all drug offenders would be sentenced to death regardless of their “status, services, or achievements.” Meth is still common — defectors have described a grim, surreal world where bingdu is used as medicine for headaches — but international seizures have tapered off. In a report to Congress last year, the State Department stated there were “no confirmed instances of large-scale drug trafficking” involving North Korea in 2010, and “if such activity persists, it is certainly on a smaller scale.”
But David Asher, a former advisor to the National Security Council who helped develop the US strategy against Kim Jong-il's illicit activities, suspects the public crackdown was all for show. More likely, Asher says, it was a move to consolidate power.
“There’s no such thing as organized crime in North Korea that doesn’t involve the government,” Asher says. “Crime is disobeying the leadership. They passed a law solely to fool the West, and passed it in order to control the business internally to make sure people who were in the party weren’t operating behind the back of the leadership. It’s a Sopranos state. If they find somebody going around the senior leadership, that person gets whacked.”
The ongoing DEA investigation suggests the meth trade is still thriving in North Korea and is still ultimately controlled by the regime. The difference now is exemplified by men like Ye Tiong Tan Lim, a slight, balding 53-year-old Chinese man with Coke-bottle glasses. According to court documents, Lim and his 41-year-old Filipino associate told the DEA informant that their bosses in Hong Kong had exclusive access to meth manufactured in North Korea.
“It’s only us who can get from NK,” Lim said, according to his indictment. “The NK government already burned all the labs. Only our labs are not closed…. To show Americans that they are not selling it any more, they burned it. Then they transfer [the meth] to another base.”
Lim allegedly claimed his organization had squirreled away a ton of North Korean meth somewhere in the Philippines. He emphasized that the supply was limited for the time being due to the political situation in North Korea.
“We cannot get things out from North Korea right now,” Lim said. “We already anticipated this thing would happen between America, Korea, North Korea, South Korea, Japan — all the satellites are now — we cannot bring out our goods right now.”
DEA informants agreed to buy 100 kilos from Lim, who believed the load would then be sent to New York. Orchestrating a drug shipment that large and complex requires serious logistics and security planning, so the DEA enlisted the help of another gang in Thailand.
That’s where Rambo came in.
SMOKING DRAGONS
Last September, federal prosecutors unsealed an indictment charging five former elite American and European military snipers with conspiring to import cocaine for a Colombian cartel, and for plotting to assassinate a DEA agent. Preet Bharara, the US Attorney in Manhattan, described the men as “an international band of mercenary marksmen who enlisted their elite military training to serve as hired guns for evil ends.” The case, he said, was “ripped from the pages of a Tom Clancy novel.”
That makes the main character 48-year-old Joseph Manuel Hunter, a.k.a. Rambo. A former US Army sniper instructor and senior drill sergeant, Hunter has a bald head and the build of a middle linebacker. According to court documents, Hunter retired from the Army in 2004 and recruited a team of elite soldiers to work for him as a band of murderers-for-hire. Undercover DEA agents posing as Colombian drug lords last year hired Hunter as their head of security.
The indictment in Hunter’s case makes no mention of North Korean meth, but DEA sources told VICE News that the cases are intertwined. Hunter is charged with conspiring to import cocaine, not methamphetamine, but documents in Hunter’s case and Lim’s case both describe two very similar, highly sophisticated smuggling rings based in Thailand. Both investigations began in January of 2013 and unfold along similar timelines.
Jerika Richardson, spokeswoman for the US Attorney in Manhattan, declined to answer questions about Hunter and the North Korean case. According to a senior DEA official, who spoke on the condition of anonymity because he wasn't allowed to discuss an ongoing investigation, Hunter’s organization offered contract killings as a “bonus service.” Their primary role was akin to that of a subcontractor, guarding and smuggling drugs and weapons on behalf of various transnational criminal groups.
That sounds suspiciously similar to the services allegedly offered to an undercover DEA agent by Scott Stammers, a 44-year-old British man living in Thailand.
According to court documents, the DEA’s informant hired Stammers to be the middleman in charge of moving Lim’s meth from Southeast Asia to New York. Stammers was initially skeptical about the deal, telling the DEA’s informant that North Korean meth is “expensive first of all, and it’s so hard to get in.”
Stammers eventually agreed to participate, however, and soon introduced the DEA informant to Phillip Shackles, another Englishman who allegedly had experience moving DPRK meth. Documents show that Shackles sent the DEA informant emails that used “DVDs” as a code word for meth. Shackles claimed he knew someone that “used to work in North Korea making DVDs,” and said he had “good connects there for buying huge amounts.”
'Once you become involved, you remain addicted to the trade. Why would North Korea close down a profitable industry if they can get away with it?'
The notion of outsiders entering North Korea to manufacture meth seems improbable, but it's not unprecedented. In 2011, an FBI investigation dubbed Smoking Dragon —government agents must have a great time naming their operations — targeted a Chinese black-market merchant in Los Angeles named Yi Qing Chen. In addition to peddling anti-aircraft missiles and other arms, Chen sold knockoff cigarettes, counterfeit $100 bills, and extremely pure methamphetamine — all North Korean specialties.
Bob Hamer, a former FBI agent and the lead undercover investigator in Smoking Dragon, recalled how Chen was rounding up investors to finance a meth superlab in North Korea that would eventually be converted into a laundry-detergent factory. Hamer described a sort of leasing agreement with corrupt North Korean officials, and said he was even offered a tour of the facility.
“We had a detailed scenario about where it would go and how we’d set up this factory,” Hamer told VICE News. “They made it pretty clear to me that nothing was happening in North Korea without people in authority knowing it was happening and allowing it to happen.”
98 PERCENT PURE
On April 5, 2013 Shackles and Stammers received two samples of North Korean meth allegedly supplied by Lim. One was “clear and bigger shards and harder to break,” according to Stammers’ description in court documents, and the other was “whiter and in smaller granules.” The samples tested 96 percent and 98 percent pure, respectively. The following week, Stammers sent another message saying his bosses sought to contact “the NK supplier,” and inquiring about “prices and manufacturing quantities/capabilities.”
After the DEA negotiated to buy 100 kilos from Lim, Shackles and Stammers allegedly arranged for a man named Adrian Valkovic to serve as “ground commander,” overseeing the shipment when it arrived in Thailand. A tall and intimidating Eastern European with tattoos poking out of his collar and sleeves, Valkovic used a pseudonym, and introduced himself as the sergeant-at-arms of the “Outlaw Motorcycle Club.” He promised eight men from his gang to help with transportation, repackaging, logistics, and security.
On August 16, undercover DEA agents met with two of Hunter’s alleged assassins in Thailand. The men plotted a hit on a DEA agent and his source in Liberia, a shipping hub for drugs in West Africa. They planned to make the murder “look like a bad robbery,” and disguise themselves using “highly sophisticated latex face masks” that, according to the prosecutors, “can make the wearer appear to be of another race.”
The following day, also in Thailand, DEA informants met with Shackles, Stammers, and Valkovic. As a cover for the incoming drug shipment, they planned to host a party or photo shoot on a yacht docked at a marina near a large US Naval Base. Lim’s organization had already sent along 4,700 kilos of tea on a “test run” to ensure the real load went through smoothly. They didn’t realize the DEA was watching every move.
Hunter was arrested on September 25 after DEA agents pointed him out to Thai police at a country club in the southern province of Phuket. Valkovic was arrested November 19 in Thailand, and the rest of the group was taken into custody the following day. All were extradited to New York, and are currently detained, awaiting trial. At a subsequent hearing in Manhattan, prosecutors described more than 100 gigabits of digital evidence in the case, including emails, recorded phone calls, and undercover video footage. Citing the need to protect witnesses and maintain “the confidentiality of ongoing investigations,” prosecutors requested unusually tight restrictions on pretrial evidence in Lim’s case. Last month, they got it in the form of a "protective order pertaining to discovery." The reason given was that the evidence includes "certain materials that, if disseminated to third parties, could, among other things, pose a threat to public safety and the safety of witnesses, and could impede ongoing investigations."
As the cases proceed and more evidence is made public, North Korea watchers say they will be looking closely for further insight into the current state of drug trafficking in the reclusive regime. Raphael Perl, author of a detailed 2007 Congressional report on North Korean illicit activity, suspects North Korean officials are still directly involved with manufacturing and exporting meth, though the activity is now likely done in concert with organized crime groups.
“Once you become involved, you remain addicted to the trade,” Perl says. “It’s a whole military hierarchy that’s involved in both the distribution and production of methamphetamine. It’s a big time industry. Why would they close down a profitable industry if they can get away with it?”
Combine the secrecy of drug cartels with the secrecy North Korean government, and it becomes virtually impossible to know the full extent of the regime’s involvement with meth production. The recent cases in New York offer just an idea. Although Lim, Hunter, and their alleged co-conspirators are now behind bars, the limited evidence available suggests they each belonged to larger crime organizations that presumably remain in business and still have access to a steady supply of ultra-pure North Korean bingdu.

Although the DEA seized a few kilos during the course of their investigation, the one-ton stockpile in the Philippines described by Lim remains unaccounted for.