The Jordan Harbinger Show
1154: Sean Williams | The North Korea-China-Drug Cartel Connection
Thu, 15 May 2025
Sean Williams gives us a peek beneath a global shadow economy that thrives as countries like North Korea and China operate like criminal enterprises.Jordan's must reads (including books from this episode): AcceleratEdFull show notes and resources can be found here: jordanharbinger.com/1154What We Discuss with Sean Williams:North Korea operates as a massive organized crime outfit, generating revenue through forced labor, human trafficking, drug production/trafficking, and cybercrime to fund the regime's survival.North Korean hackers (Lazarus Group) have become sophisticated cybercriminals, stealing $1.5 billion in cryptocurrency from ByBit exchange in February 2025.Chinese "flying money" (Fei Chen) operates as an ancient, untraceable money transfer system now widely used by drug cartels and for capital flight from China, possibly totaling $2 trillion annually.Chinese money laundering has had a visible impact on real estate markets in Vancouver, Toronto, Sydney, and Los Angeles, where properties purchased with laundered funds remain unfinished or abandoned.Despite public diplomatic cooperation between US and China on financial crimes, both countries have conflicting incentives — China benefits from US drug chaos while the US benefits from Chinese capital flight.And much more...And if you're still game to support us, please leave a review here — even one sentence helps! Sign up for Six-Minute Networking — our free networking and relationship development mini course — at jordanharbinger.com/course!Subscribe to our once-a-week Wee Bit Wiser newsletter today and start filling your Wednesdays with wisdom!Do you even Reddit, bro? Join us at r/JordanHarbinger!This Episode Is Brought To You By Our Fine Sponsors:Jordan's must reads (including books from this episode): AcceleratEdIQBAR: 20% off: text "Jordan" to 64,000BetterHelp: 10% off first month: betterhelp.com/jordanNordVPN: Exclusive deal: nordvpn.com/jordanharbingerShopify: 3 months @ $1/month (select plans): shopify.com/jordanHomes.com: Find your home: homes.comSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
Chapter 1: Who are the hosts and guests in this episode?
Welcome to the show. I'm Jordan Harbinger. On The Jordan Harbinger Show, we decode the stories, secrets, and skills of the world's most fascinating people and turn their wisdom into practical advice that you can use to impact your own life and those around you.
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Just visit jordanharbinger.com slash starts or search for us in your Spotify app to get started. Today on the show, journalist Sean Williams and I rap about North Korea, how they generate revenue for the regime using illegal operations such as human trafficking, drug trafficking, cryptocurrency heists. They're really big on those these days.
We also dip into Chinese money laundering, drug cartels, and more. I talk a lot during this episode because China, North Korea, money laundering seem to be a nice... The Venn diagram of those passions and interests overlap quite a bit for me personally. So yeah, don't email me whining about how much I'm talking during this episode.
I think this is fascinating, and you'll be able to tell my enthusiasm during the episode itself, and I hope that you share that with us. Here we go with Sean Williams. We've been trying to have this conversation for quite some time. Your Underworld podcast, you guys do so many amazing episodes.
We had your compadre Danny Gold on a long time ago as well, and you and I share this, can we call it a passion for North Korea? Is that a thing? Yeah, we can say that.
Yeah, yeah.
It's healthy. I know that you covered some pretty interesting topics about North Korea. We talked about meth, which we'll get to a little bit later in the show. But I want to talk about the forced labor and the way that North Korea generates revenue, because I think this is that old cliche is follow the money. Right.
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Chapter 2: How does North Korea use forced labor to fund its regime?
a quote-unquote real country in that it's more of a mafia that runs a country, it makes way more sense. Does that jibe with your understanding of the place?
Yeah. It's like when you drill down into it, there's not a lot below the surface in a way because it's just the Kim family and then a bunch of very benighted poor people around them that happen to be within the borders of a country called North Korea. And the way that it makes money, like you said, there's just so much illicit stuff that goes on.
And it pretty much has become the economy now, apart from some stuff going into China, which they're still kind of friends with. They just use their people as capital now to try and get foreign exchange, which is the gold dust for them. Going back all the way to the 60s and 70s when Kim Il-sung, the godfather of this mathia,
He basically ditches like the Soviets and ditches the Chinese and their views of communism. He's like, I'm going to go full out despot cult of personality. This is going to be a country that revolves literally around me and nothing else. And this is what we know as Juche's like cult of personality around the Kims and I guess a communist royal family, if that even sort of makes sense.
Yeah, it doesn't, right? Like communism, we're all equal. And the guy's like, by the way, I'm God, just to start. And it's okay.
What? Yeah. I'm king now. I've changed the rules. Yes. It's fine now. It's okay. And so like from the 70s onwards, he's just getting sanctioned to the hilt by the UN, by everyone. And the way that they figure out that they need to make money is by getting onto the black market.
And so one of the ways they do this is by dispatching hundreds of thousands of their own people abroad to work in what essentially are kind of labor camps in the worst form of the word. And most of them go to the Soviet Union at the time.
So they work in logging, which is the typical one out in the Russian Far East, which if people don't know, Russia is way big and it has a bunch of forests out in the middle of nowhere near Japan. which is crazy how huge Russia is. So the North Koreans use these false laborers, basically like nearly all of their wage goes back into the state and into the coffers of the dictatorship.
And so that continues. And then in the 1990s and the midnight 90s, especially a kind of like the breaking point for a lot of things in North Korea, you've got Kim Il-sung dies, his son, Kim Jong-il, who people know from team America and other funny things. Um, He basically leads the country through this insanely devastating famine. Crops fail. Many people die.
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Chapter 3: What are the conditions like for North Korean workers abroad?
We went to one of those, I forget what they're called, but it's the floor is heated and you like lay down in this sauna and you hang out. And I remember... a lot of guys in there were Korean. They were, like, Chinese Koreans, and there was a girl who was very pretty and young who was talking with us, and the guys that she was with were old enough to be her dad, and they were just laying around.
And I remember thinking, like, wow, there's so many Chinese Koreans, but now I'm like, were they Chinese Koreans, or are these, like... North Korean dudes that work in this area or are somehow allowed by the regime because they were really unfriendly. That could be anything. That doesn't mean anything.
But the restaurant we went to, the women there were really interested in me and my friend because we showed them photos of our trip to North Korea that my friend had on his iPad. He's a photographer. So he had like really good photos of North Korea that they had also probably never seen.
something taken on a Sony, whatever, DSLR camera, they'd probably never seen a photo of North Korea like that, or very rarely, right? They had these crappy phones that barely took photos at the time. This is like 2011 or something like that. So we were showing them the photos and they were hanging out and talking with us and stuff like that. And these Chinese tourists came in and I thought,
oh okay now it's their turn to get the treatment that we're getting and it wasn't like that the women were really like all hanging around me and my friend my friend has tattoos from head to toe so he was also a really interesting looking guy for them and they kept touching him and lifting up his shirt and stuff And we were just having a good time. And we went there two days in a row.
And then one of the women was like, oh, do you guys live here? And my friend was like, no, we're just tourists. And he goes, but you should come out with us and we should go eat at a different restaurant here in China and like hang out and you can see more photos. I'll bring more photos and stuff like that. And the girls were like, leave this place and go with you?
And my friend was like, yeah, sure. Why not? We can just figure it out. Do you have a night off tomorrow? And they were like, hold on. And the manager came over and I was like, I think we're going to get in trouble slash kicked out. The manager was like, you want to take the girls out of the restaurant? And we're like, not right now, but maybe tomorrow or the next day.
And he was like, huh, I'll think about it and I'll talk to you after the meal. And I remember thinking like, I want to be really clear that we are not purchasing these women.
Yeah.
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Chapter 4: How does North Korea's methamphetamine production impact the region?
Let he who's not into meth cast the first stone. Exactly. Wait, can I?
Yeah, I don't know.
So tell us about the North Korean meth problem. Then we'll wrap up the slave labor and human trafficking stuff and go into Bureau 39.
Yeah, again, it's the 90s that change everything, right? So the 2003 Pongsu, that's the tail end of North Korea being deep into heroin because it's poppy fields. It's grown its own, basically. It's homegrown heroin and it was selling it on the international market.
Until the mid to late 90s, the famine hits, all of these poppy fields freeze over, and they kind of lose the entire industry from that point. They never get it back. So they do what is happening in the Golden Triangle, as I'm sure you know well, in the mid 90s, is they just switch to yaba, meth, crazy pills.
It's all the rage all over the Golden Triangle, especially in Burma, Myanmar, where it's getting made by the Wa, this crazy kind of ethnic Chinese tribe on the border with China.
Yeah, I did a show about the Wa.
Yeah, they are an interesting bunch. I've met a few of those guys. They're really nice, actually, because they don't give a crap. No one cares what they do in Myanmar. So they're under no threat whatsoever. So they just like chat to you openly.
Episode 966, Patrick Wynn, Wa State. It's basically when a drug cartel becomes a country.
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Chapter 5: What illicit activities are North Korean diplomats involved in?
Yeah.
Straight up and down.
Yeah. If you don't work for us, you die. We're not going to pay you. We're not going to give you anything. You might live. You'll probably die anyway. But yeah, it's better to go with us. What a great offer.
Yeah. Not that compelling when you phrase it like that. But sure. On one of my trips to North Caribbean, there's so many people working in the fields. And our guide told us that every year they have to stop going to school for a couple of months and they go and help the farmers harvest food. which is nuts.
And you're working for free for a couple of months in the fields because it's just so labor intensive and they don't have machinery to do it.
Oh, man. Increasingly, all of this money is just going into making bombs that Kim can threaten everyone with so that he stays going for another, what, few months or a year until whenever his heart gives out. But it's not changing.
These guys are bastards. I wouldn't trade my life for theirs, I'll tell you that. There's no way they're not under constant chronic stress. Yeah, you can see it on the kite. He looks like a guy who's got some things on his mind. He was 27 a few years ago, and now he's 67 by the look of it. He is just aging terribly.
Ironically, my guide in North Korea, she said that she loved working in the fields because you get to meet new people. And... You almost never actually get to do that in North Korea because you go to school with the same people, then you go to college.
But if you go to the college that she went to, which is like a foreign language university, it's basically the same privileged cadre of people that you've known your whole life from other schools in Pyongyang. There's maybe a few new people, but that's kind of it. And then, so when you go work in the fields, they just sign you geographically. So you just meet all these new people.
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Chapter 6: What is Bureau 39 and how does it finance the North Korean regime?
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I know that North Korea has something like 1,600 hackers, which might not sound like a lot, but is a lot since they're all working with each other. I mean, this is not like the United States has 10,000 hackers, but it's kids in their mom's basement who are like, dude, I totally took down Pornhub for five minutes. It's not that kind of hacker.
These are people who sit in office buildings and run heists for the regime. And wasn't there a crypto heist recently where they stole like a billion dollars or more? Like a crazy huge crypto heist recently.
Yeah. The good thing about crypto is the blockchain, but the bad thing about crypto is the blockchain. The blockchain.
This is like March 2025. Yeah. North Korean hackers cash out hundreds of millions, stole 1.5 billion from something called Bybit, which I've never heard of because I don't keep my money in exchanges, which is because they get hacked by North Korea. Yeah. Wow, record-breaking $1.5 billion crypto heist, unrecoverable funds. They've converted at least $300 million of that into cash.
Yep, the criminals known as the Lazarus Group swiped the huge haul of digital tokens in a hack on crypto exchange Bybit in February. It's been a cat-and-mouse game to track and block hackers from moving the crypto into usable cash, which is a losing proposition, of course. The hacking team is working nearly 24 hours a day, funneling the money into the regime's military development, most likely.
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Chapter 7: How do Chinese money laundering and drug cartels connect to North Korea?
OK, let's say we lay down the law and sacrificed a bunch of goodwill to get them to not do that with North Koreans. They're just going to have Burmese people do it instead or Cambodians. Right. It's not sort of a unique thing. Forced labor exists where there's a market for it and there's always going to be a market for it in China.
It's the same thing in drugs. China went on this massive anti-drugs run because it realized all its people were getting addicted to meth. But all it did was push all of these ethnic Chinese gangs across the borders of its neighbors away.
And now you have gigantic gangs in Burma and Laos, wherever, producing maybe more drugs for international markets, which are causing even more chaos, even as far away as where I am in New Zealand. You've got stuff coming from the Golden Triangle now, and meth addiction is a real huge issue. It's always the incentives below the incentives with China.
I think there's always a top line, a headline of what we think China is incentivized to do, but below it, usually the reverse is true. And I think something else that we're going to talk about with money laundering as well, that is definitely the case with drugs and money laundering.
You're right. There's this strange tradition, if I can say that, among China, the nation of, and I'm not even blaming them for this. I think it was like essentially just a consequence of their history. But you see all these people come from China pre-Mao because they're poor and they settle in San Francisco and they settle in, I don't know, whatever, Australia and all these other places.
and there's this massive diaspora. And then Mao comes, and all these people leave, and they go to Taiwan, and they go to America, and they go to Canada. Increases the diaspora again a hundredfold. And then now, oh man, this place is pretty rough. I want to get my capital out of here. So it increases the diaspora, and the money from China again in the West.
And then they go, hey, we got to get all these drugs and crime out of here. So they push them into Southeast Asia and all over the rest of Asia. And so there's this massive Chinese that's fled or left or been exiled. And it's just like a consequence of all the crazy crap that keeps happening there. And people leave so they can do business elsewhere, whether it's legal or not.
It's just a fascinating way because there are Chinese people literally everywhere. It's in part because they fled for better, greener pastures, or they were going to get prosecuted at home. So now they're doing whatever they're doing. overseas. And every wave of that has had massive amounts of organized crime.
It pales in comparison, I would imagine, to the amount of legitimately talented immigrants that end up leaving China and coming to places like the United States. I always try to clarify that because I don't want people to think, oh, he hates China and he hates Chinese people. My family's literally Chinese. So I'm not doing that.
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Chapter 8: What role does cybercrime play in North Korea's illicit economy?
But that is when you get Chinatowns popping up all over the world. Incidentally, the first Chinatown in the world is in Manila in the Philippines. I did not know that. It's one of my favorite places on earth. It's so cool. But In these Chinatowns, obviously, then you'll get people wanting to remit money back home.
They're not going to use traditional systems where it's going to cost them a ton of money in commissions to financiers or bankers, whomever is existing at that time. So they're going to use flying money. So then this system goes global, right? This Fei Qian. And it works on the system of guanxi, which is an honor system. It's like a familial honor system. It's almost like an omerta in the mafia.
You don't snitch. You don't speak out. No one tells you where the money is except for the guys who do it. So this all dies down when Mao takes over and the People's Republic of China comes into existence in 1949, because obviously they want the state to be all powerful. They don't like these informal money lending or money remittance networks.
A lot of these informal Feixian networks that are profligating all around the world, they get shut down in favor of huge state institutions. But they carry on, obviously, because where there's money, there's going to be a way to move it. They kind of bubble around in the early years of communist China.
And then in 1978, when the economy opens up and Deng Xiaoping sends Chinese merchants again all over the world to try and get exchanged for the benefit of China. Then it kind of ramps up again. And so it's never gone away. It's always been incredibly popular. It's the thing that everyone knows but doesn't really talk about.
Even now, if you go on WeChat or any other Chinese social media network, you can type in flying money or you can type in money bank or transferer. You'll find hundreds, if not thousands of people popping up like all of these identities willing to do flying money transactions. And it's just not worth the government's time and investiture to get involved in this because everyone is using it, right?
Is the Greece that lets this informal money network prosper in China?
Huh. Interesting. You'd think that the state would have an interest in knowing where and who has money, especially a state like China, which is authoritarian. Even the United States wants to know, hey, where you got your money? All right. We just want to know where it is. That's all. We'll just make sure you're paying taxes. That kind of thing. They want you to declare your cryptocurrency.
They want you to declare that you have money hidden under the mattress. They don't care that it's under the mattress. They just want to know that you have it. You'd think China would be like that. And I'm sure they are. But I think part of the problem is, man, have you ever tried to transfer money from a Chinese bank to another bank?
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