Environmental crimes are often hidden by ‘flying money’ laundering schemes (commentary)

In the Tang dynasty, Chinese merchants began buying rice on credit with a system that relied on trust and trade to sidestep the authorities — and taxes — to deliver goods immediately.

In China it’s called, feiqian, and across the Middle East and South Asia, it’s known as hawala. These days it’s about more than rice. It’s called “flying money,” and it’s the tool for concealing financial crimes: tax-free remittances, washing dirty money, even funding terror and concealing wildlife crime.

“Flying money is often used to denote Chinese money laundering or paying in-kind with a commodity instead of cash,” explains Vanda Felbab-Brown, a senior Brookings Institute fellow studying crime and terrorism.

This can make cutting timber in Africa, mining Amazonian gold — even selling endangered species online — easier than drug smuggling. Police are trained to identify a kilo of cocaine, but spotting an outlaw bone tonic is another story. That’s also why buying a bowl of shark fin soup or taking a tiger selfie means you’re probably supporting organized crime.

Gangs in Asia want wildlife products and natural resources that often come from Latin America, while gangs in Latin America want the ingredients to make drugs, which Asian companies make and ship via Chinese container ships traveling the world.

“This money laundering scheme is the engine that fuels the fentanyl trade,” says Leland Lazarus, who tracks the Chinese-Latin American crime connection at Florida International University. Researchers and law enforcement agencies agree, saying this system also allows the trade in the precursor chemicals that cartels use to make opiates (which killed 87,000 people in the U.S. in 2023).

With Asia a market for environmental goods from Latin America, and Chinese criminals supplying the chemicals that allow drug gangs to make synthetic drugs, it’s a perfect match.

“That’s why from Ecuador to Mexico, China to Asia, more and more criminal groups are getting into wildlife trafficking,” says Felbab-Brown, the author of The Extinction Market: Wildlife Trafficking and How to Counter It, who notes that resources are also used as in-kind payment. “The Sinaloa cartel, for example, uses timber commodities [and] marine commodities like abalone and shrimp, to pay for the precursor chemicals for fentanyl.” Paying with totoaba fish swim bladders, dubbed the cocaine of the sea, “is easier than paying with cocaine.”

The U.S. Congress has debated how to fight this flying money, but chances are you’ve never heard of this underground system with no paper trail, and buyers and sellers who never touch any financial systems. It’s the go-to for laundering cash linked to human and drug trafficking, mineral and resource smuggling, and one of the most overlooked and lucrative global threats: environmental crime.

Environmental crimes are still crimes

Let’s face it: say the word “crime” and people perk up. Put wildlife in front, though, and watch the eye-rolls.

But wildlife crime doesn’t mean just protecting cute animals. It’s one of many environmental crimes, like deforestation and wildcat gold mining, which threaten clean rivers, clean air, and a healthy planet. That’s not wishful thinking from some tree hugger, it’s hard science. We’re on pace to lose 1 million plant and animal species by 2050, and when habitats go, we all lose.

Carbon sequestration drops, fires and floods rise, even infectious diseases start and spread.

I’ve spent my life fighting this threat, not only because I care about our planet’s future — which I do — but also because the same crooks trafficking people, drugs and weapons are increasingly trafficking elephant ivory, tiger bones and many other natural resources.

That’s why I believe flying money is the greatest national security risk you’ve never heard of.

This crime convergence means professionals like me aren’t just fighting wildlife traffickers — we’re fighting global organized crime. Whether it’s Taliban selling heroin, FARC paramilitaries exporting cocaine, or cartels trafficking totoaba, the environmental connection is vast and growing: up to $281 billion a year, according to the Global Initiative Against Transnational Organized Crime, with much of it fueled by this untraceable system.

How it works

Picture this: you’re a Mexican trafficker with a client in China who wants totoaba, whose swim bladders cost $80,000 per kilogram (it has zero health value but high value according to Chinese traditional medicine).

How do you get the goods? Or the money?

This currency swap is run by Chinese brokers around the world, helping traffickers pool profits from wildlife, illegal timber, gold, and even drug networks. Part of that stash is handed to local, affluent Chinese residents who want hard currency and are then repaid inside China with cash, bypassing Chinese capital controls. The rest of the dollars are “flown” through the same underground network to China — or onward to places like the U.S. — with the money now scrubbed clean of its illegal origins, with no bank wires and no paper or digital trail.

It’s a house of cards with shell companies and cutouts, a fiscal black hole where Chinese groups are “key actors,” according to a 2024 U.S. Treasury Department report.

Fighting back

In 2023, evidence gathered by my team, which includes former FBI agents, helped the U.S. Fish and Wildlife Service and Homeland Security Investigations arrest key players in an international totoaba network. We have worked in 30 countries, from Cambodia to Suriname, going undercover and building cases to help authorities stop crimes. I started this conservation NGO to stop natural resource trafficking, stepping out of the shadows and speaking out in films, but it’s not enough.

One way to fight flying money, according to a 2023 congressional study, is targeting the individuals, entities and countries facilitating these financial crimes, meaning sanctions. Last year, the Treasury Department sanctioned two Chinese companies that make fentanyl precursor drugs, and a buyer for a cartel run by notorious drug trafficker El Chapo’s son. We need more.

Second, we need to make this a policy priority (and don’t mention wildlife!). Framing it as a drug problem might help, and fight the fentanyl crisis, too.

Third, give this problem financial resources. Boost funding for frontline authorities, like Homeland Security Investigations, whose arrest of Chinese money launderers recently led to a Chinese national being sentenced to a decade in prison for laundering $62 million in drug money.

Fourth, share data, including with China. This may be the toughest ask: five years after the U.S. Government Accountability Office recommended more information sharing to fight this threat, federal agencies still can’t agree on how to do it.

Information silos are killing us — law enforcement, nations, conservation groups need more data sharing, more staff embeds, more eyes on the ground — even in China. The only way to defeat a threat stretching from Asia to Africa is by working together.

Isn’t it time we all start fighting back?

Andrea Crosta is the founder of Earth League International, a nonprofit that uses intelligence methods like surveillance and undercover monitoring to investigate and dismantle environmental crime networks.

See more coverage of wildlife trafficking:

Increase in gibbon trafficking into India has conservationists worried

See a related conversation with this author:

Undercover in a shark fin trafficking ring: Interview with wildlife crime fighter Andrea Crosta

Citations:

Lazarus, L., & Gocso, A. (2023). Triads, Snakeheads, and Flying Money: The underworld of Chinese criminal networks in Latin America and the Caribbean. Research Publications, 58. Retrieved from https://digitalcommons.fiu.edu/jgi_research/58

Rigueira, D. M., & Mariano-Neto, E. (2023). Structural changes and carbon reduction due to habitat loss in Atlantic Forest. Frontiers in Forests and Global Change, 6. doi:10.3389/ffgc.2023.1041448

Ramadhan, C., Dina, R., & Nurjani, E. (2022). Spatial and temporal based deforestation proclivity analysis on flood events with applying watershed scale (Case study: Lasolo watershed in Southeast Sulawesi, Central Sulawesi, and South Sulawesi, Indonesia). International Journal of Disaster Risk Reduction, 93, 103745. doi:10.1016/j.ijdrr.2023.103745

Mahon, M. B., Sack, A., Aleuy, O. A., Barbera, C., Brown, E., Buelow, H., … Rohr, J. R. (2024). A meta-analysis on global change drivers and the risk of infectious disease. Nature, 629(8013), 830-836. doi:10.1038/s41586-024-07380-6

González-Félix, M. L., Perez-Velazquez, M., Castellanos-Rico, M., Sachs, A. M., Gray, L. D., Gaines, S. D., & Goto, G. M. (2021). First report on the swim bladder index, proximate composition, and fatty acid analysis of swim bladder from cultured Totoaba macdonaldi fed compound aquafeeds. Aquaculture Reports, 21, 100901. doi:10.1016/j.aqrep.2021.100901

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