We live in a scammer’s world.
We get texts from unknown numbers with an odd tone of familiarity. We have been promised breathtaking profits in ads on social media. We have encountered characters on dating apps who seemed too good to be true.
It’s not just us, of course. Most people have heard stories or know someone — a relative, colleague, neighbor — who fell for a ruse and lost money, perhaps even their life savings.
But as our phones blew up with spam calls, we asked a different question. The scammers make billions of dollars every year. How do they turn this illicit cash into seemingly legitimate income? In other words, how do they wash it clean?
So we followed the money.
Our search took us from Hong Kong, where we are both based, to Cambodia. In the coastal city of Sihanoukville, we witnessed the enduring and notorious carnival of scams, operated from barbed-wire compounds or the upper floors of unfinished buildings. We met with scammers and their launderers at Chinese restaurants that line the beach.
It took us a while to persuade insiders to speak to us but, in the end, about a half-dozen of them led us into their labyrinthine world. They showed us channels on the social media app Telegram where they conduct their trade. They taught us their jargon.
And most important, they gave us a cache of documents, a kind of money-laundering handbook, that describes their methods in detail.
The trail eventually led us to a Cambodian company called Huione Group, an established financial firm with numerous affiliates. Huione did not respond to our questions.
Some of its affiliates, we found, have created the architecture needed to launder money. And profit at every step.
You can hire a money launderer on Telegram.
One of Huione’s affiliate companies hosts an online bazaar where scammers and other criminals can find money launderers. The precise size of this marketplace is impossible to measure, but the analytics firm Elliptic has linked it to $26.8 billion in cryptocurrency transactions since 2021.
The bazaar is made up of thousands of chat groups on Telegram where anonymous users advertise money laundering and other services. It makes money by charging for ads on public groups and from maintenance fees for the private ones.
One channel called “Demand and Supply” had more than 400,000 users and received hundreds of messages every day. After we sent questions to Huione Group and others in late February, Telegram said it had removed the channel. But another one quickly sprung up to replace it and had 250,000 members within a week.
The bazaar denies any criminal association or any link to Huione Group. But it told customers on Telegram that Huione Group is one of its “strategic partners and shareholders.”
Once the scammers find money launderers, the conversations move to private groups where deals are hammered out.
A “matchmaker” will find the best deal.
Another arm of the company, Huione International Pay, offers bespoke money laundering services, according to internal documents and two people familiar with its operations.
This company serves as what it is known as a matchmaker — connecting criminals with people who control bank accounts or virtual wallets where the illicit money ends up. The matchmaker takes a cut, say 15 percent to launder money in the United States, and gives some of that to the account owners, known as money mules.
Huione International Pay did not answer our questions.
But scammers get scammed, too.
One interesting feature of this world, we found, was the “guarantee.”
The online bazaar will, for a small fee, hold deposits in escrow to guarantee the transactions between criminals and money launderers. Why? Because scammers steal from each other. The deposits enforce honor among thieves.
Most of the transactions are denominated in the cryptocurrency Tether.
The mules take on the most risk.
Once the matchmaker brokers a deal and a deposit is made, the money mules send over their bank account information. The criminal passes those numbers to the scam victim, who deposits money that will almost certainly never be seen again.
Most of these accounts are only open for a matter of weeks. Importantly, the accounts have no direct link to the scammers themselves.
That means, even if law enforcement agents or banks discover the accounts, they cannot easily trace the money to the criminals. Mules might get arrested. Scammers are harder to catch.
Money hopscotches across the globe
The mule quickly transfers the money from one account to another. Often, that first hop is out of the country. Sometimes, the money is broken into smaller chunks to avoid suspicion.
In one case we reviewed, money defrauded from victims jumped from the United States to the Bahamas. From there, it was used to buy the cryptocurrency Tether.
Finally, the mule takes a cut for services rendered, and sends the rest to the matchmaker. In the end, the criminal gets the bulk of the loot.
