[nickpsecurity]

Another great, fun write-up by Ratliff. I'm surprised by by a number of things which I'll comment on in a disorganized way. :) One is how often Israeli commandos turn up in these organizations. In parallel, there's their well-known effectiveness plus the risk of Mossad connections that can burn you. Mexican cartels, Colombian, Paul Le Roux... they all buy them up. Cheap, too. I'd like to hear their logic on that.

That he was still producing 200kilos out of thin air was interesting. Operations are still going somewhere with possibly millions moving. Either his that are still running autonomously or others with him just having 3rd parties that can pull a huge transaction at once.

His OPSEC sucks. I mean, I'm amazed that he didn't get caught earlier in some unrelated investigation using his real name and emails on all kinds of shady stuff. Many I know are too paranoid to do that thinking someone would connect dots. He did it and nobody connected dots until piles of high risk crimes added up with benefit of easy tracing. Even police said a little more obfuscation would've thrown them. This means we've overestimated the police's ability to connect dots on suspicious items. Just don't know how much.

Spamhaus says a quarter of stuff came from this company. I read much in INFOSEC but never heard them connect it to something like this. Another "under the radar" aspect that's amazing. Plus, owning a registrar for spam cover is excellent example of subversion at protocol level.

$200-400 million a year could buy tons of INFOSEC and OPSEC. He could've rebranded under a new company to move his name further from the transactions. He could've potentially paid his Israelis to straight up break in and steal/alter records. He could've dropped a few mil strategically in Brazil on key people to spot legal and financial risks along with strats people use to dodge or buy cops. Before he went there. Far as Liberian deal, he should've sent one of his well-paid, experienced people to negotiate that. At his level, he should never leave protection or associate himself with something that's tainted. And when busted, getting immunity to flip is a rational option in his situation but admitting to murders was just stupid.

How about "An arrogant way of living?" Haha.

[ben_jones]

I dunno. My personal opinion is that humans to some extent are innately good, and that it's the broken ones who turn to crime. Furthermore it's the EXTREMELY broken ones that become the crime lords etc. and those people often have massive flaws in their character such as the arrogance you described.

Basically I don't think he could've ever accomplished what he did if he wasn't arrogant and wreckless to his core.

[tetrep]

> ...it's the broken ones who turn to crime.

If law were derived from universal morals (heh...) then that might be accurate. But due to the relatively arbitrariness of whether or not someone is a criminal, especially with respect to the great variety of countries in which virtually all of HN would be criminals for freely speaking about various topics, I think it's a bit presumption and mean to call those who "turn to" crime as broken.

Additionally, I would posit that many criminals are not "turning to" crime so much as not "turning away." By that, I mean that crime is not sought out, but rather the criminality of their actions is ignored, much like I presume the mindset is of the majority of jaywalkers.

> Furthermore it's the EXTREMELY broken ones that become the crime lords etc. and those people often have massive flaws in their character such as the arrogance you described.

Once again, I take issue with the use of broken to describe someone's actions simply on the basis that a group of people disagree with them. "Extremely broken" implies some serious psychological issues, which are not at all requisite for running an illegal enterprise. I would posit that many of the people involved in controlling bootleg DVD sales or knockoff brand name goods are in fact very normal and psychologically uninteresting.

I do agree with the assumption of arrogance, as much like politicians, the drive to control on a grand scale typically requires a decent amount of ego, it's incredibly difficult for an individual to exert control of an empire with humility, although I think it's possible, it's just very unlikely outside of a very peaceful organization, which his was most certainly not. Violent groups of people are difficult to control in a non-Machiavellian manner (I would think impossible, but I haven't given it much thought) and I sincerely disbelieve one could rule in such a manner without a decent ego.

[nickpsecurity]

Good points. I'll add that the majority of his funds came from illegal pharmacy that was selling drugs people could get from local doctors but might be turned down. To put that into perspective:

1. It's legal to get the drug if a single doctor agrees you need it, you can afford to pay them, and you can afford to pay for the drug.

2. It's illegal to get the drug if Le Roux's doctors do it with their methods at probably lower prices.

So, just being poor means you can't get medicine. That's illegal. But immoral? The law itself sounds immoral here. Further, the law relegates the decision to any human with authorization to prescribe drugs. That makes it quite arbitrary given their range of opinions and actions. So, there's no connection between the law and morality here except perhaps an immoral transfer of money from companies that benefit from the situation to middlemen that pass it to lawmakers. Sounds... like Le Roux's network a little bit, eh? ;)

[badloginagain]

They mentioned in the article how they wrote it up as providing prescripted medication without a client-doctor relationship. The likelihood of someone buying these drugs for the purposes of abuse are likely much greater than some poor person looking for their brain medication.

The fact that the government later made one of the drugs being sold a controlled substance gives credence to such a theory.

Whether or not that says anything about the morality of law, I'll leave up to you.

[celticninja]

Marijuana is a schedule 1 drug and Methamphetamine is schedule 2. Alcohol and Nicotine are legal.

Let's not pretend that there is logic behind the controlling of substances by government and law enforcement.

[carboncopy]

There is logic but is certainly not uniformly applied!

[nickpsecurity]

Probably. Doesn't invalidate my claim. There's all kinds of people who go to the doctor to get drugs like these because it feels better that way. They just have to pay more and get it from specific people for it to be legal. Their motives, the drugs themselves... all the same.

Let's take it further. The drug you need is a cancer treatment that costs $100,000. The drug itself was paid for with a mix of tax dollars and private R&D that resulted in a patent. The patent at this point has paid off its private R&D plus plenty of profit. A Chinese supplier can make the same ingredients with a Le Roux-like company selling it to you. It's illegal to acquire that as the law says you must die or make that drug company richer.

Is morality and the law in alignment when someone is being murdered for someone else to make extra money? Or for people to do time for trying to save their life with a clone?

[drzaiusapelord]

>If law were derived from universal morals (heh...) then that might be accurate.

Well, there's a pretty big difference between "I shouldn't get arrested for smoking pot" and "I shouldn't get arrested for murdering rival pot dealers."

Maybe western law is mostly derived from a sensible universal moralism with certain exceptions. That doesn't mean that all criminality is rational or that the OP's opinion that most criminals are irrational is wrong. For every Robin Hood there's hundreds of thousands of street thugs. I think you're overpleading the edge cases here. Many studies have shown your average criminal to be a fairly messed up individual: mental illness, strong personality faults, poor reasoning skills, poor executive control, poor discipline, etc.

[nickpsecurity]

Alternatively, the law makes a distinction between types of harmful activity that are legal and types that are illegal with interesting results. The kind of very damaging activity smart, disciplined people do that ruins lives is often legal. These are [Wall] street thugs. Then, there's other types of harm the lesser people can pull off that are illegal. There's also stuff they do that doesn't harm other people but is severely illegal.

So, I don't think there's an average criminal given the variety of crimes, levels of harm, and criminals themselves. However, the average criminal on drugs in my area is a working class person who poses no threat to society but smokes weed on occasion. There's also a number of addicts who are similarly not a threat but will receive long sentences. There's also thugs who range from your description to well-educated people who say "screw being someone's b for minimum wage when I can be my own boss for $50k slinging this stuff!" On thugs, similar predatory behavior as many business owners except their type of harm is allowed and affects more people. Even when it's indirect murder.

What's law and what's ethical isn't the same. The law can enforce evil, stop good, and do arbitrary things hard to judge.

[thaumasiotes]

> Maybe western law is mostly derived from a sensible universal moralism with certain exceptions.

It's actually easy to show that this isn't possible, because the amount of western law is much larger than a single person could ever hold in his head. This could not be the case for "universal" moralism, which is by definition shared by everyone.

> Many studies have shown your average criminal to be a fairly messed up individual: mental illness, strong personality faults, poor reasoning skills, poor executive control, poor discipline, etc.

I suspect these are studies of caught criminals. They can't apply to uncaught criminals, and they specifically don't apply to Paul le Roux (caught or not) without adjustment for the type of crime being committed. He filled a managerial role; "most criminals" in those studies (and most criminals generally) don't.

[pizza]

Is there a meta-analysis that corroborates your last claim?

[stcredzero]

My personal opinion is that humans to some extent are innately good

I agree.

it's the EXTREMELY broken ones that become the crime lords etc. and those people often have massive flaws in their character such as the arrogance you described.

If you examine crime lords and their activities and morality, then compare them with world leaders from before 1800, then you will find that the behavior they exhibit is fairly common in the repertoire of history.

Also note that our present culture has been tremendously influenced by the governments they ran. That's why it takes so long to "wake up from history."

[drjesusphd]

Why do you think world leaders before 1800 are significanly different than the ones since?

[stcredzero]

I don't, really. There isn't a sudden demarcation. It's more of a gradual shift. If you go back in time before then, you're predating the enlightenment. Democratic revolutions will be following the example of the British Colonies after that point.

[drjesusphd]

I guess I'm asking: how do you know that world leaders before about 1800 are significantly more sociopathic than now?

[nickpsecurity]

Interesting point. There's a lot careful criminals with big empires. It's a prerequisite for most of them. So, I disagree on wreckless being general case. Arrogant is probably right.

[sspiff]

High-achieving people in any environment tend to be arrogant, whether it is crime, politics, business, religion, sports, ...

Not sure whether arrogance is something that helps people achieve more, or if it is a byproduct of their achievements.

[fweespee_ch]

> How about "An arrogant way of living?" Haha.

Yeah, it is amazing how much his arrogance and pride seemed to play into his behavior. He could have exited this whole situation in Brazil [Retiring] a wealthy man and would have been largely immune since they didn't have the ability to get their hands on him.

> His OPSEC sucks. I mean, I'm amazed that he didn't get caught earlier in some unrelated investigation using his real name and emails on all kinds of shady stuff. Many I know are too paranoid to do that thinking someone would connect dots. He did it and nobody connected dots until piles of high risk crimes added up with benefit of easy tracing. Even police said a little more obfuscation would've thrown them. This means we've overestimated the police's ability to connect dots on suspicious items. Just don't know how much.

I found that amazing as well but I think it has to do with the fact he was basically a black market profiteer dealing in low level stuff.

> Le Roux couldn’t have known that this new venture had made him a narco-terrorist in the eyes of the U.S. government. Until he had fled for Brazil, his case had been the province of the DOJ’s Consumer Protection Division, the federal prosecutors that handle pill-mill cases, and the Minnesota investigation team anchored by Kim Brill.

The Consumer Protection Division likely doesn't have the resources to break even a criminal with essentially no OPSEC based on this.

My guess is if he stayed out of hard drugs, arms, etc. he might have also stayed completely safe because it sounds like they simply couldn't handle him until it got kicked to the FBI/DEA/etc.

[altotrees]

>"He did it and nobody connected dots until piles of high risk crimes added up with benefit of easy tracing"

All really good points. I found myself having to re-read the part where he was actually brought in by the authorities, thinking to myself how hard it would have to be to actually trace Le Roux the man. I wasn't fully expecting him to be captured until the next installment, actually.

It just seems amazing for someone who had been security-minded to let arrogance and big risks, mainly the high risk crimes, bring him down. In a way, this part of the story reminds me of the recently deceased Howard Marks who went bigger and bigger until he went down.

Even so, stories like these make me wonder how many drugs/weapons smugglers, etc. do turn in for that "early retirement" as millionaires. Must be quite a few.

[carboncopy]

To be fair to Le Roux, he switched to the methamphetamine/cocaine trade after his holdings in Hong Kong were seized. It's possible I misinterpreted the article, but it appeared to me that he was trying to recover his previous wealth. It seems like a psychologically normal thing for a multimillionaire who lost millions (but is still wildly wealthy) to attempt to restore that wealth.

[nickpsecurity]

Sure, but he went in person. If he was smart, he wouldnt do that for unknown partners that might be cops.

[nickpsecurity]

"My guess is if he stayed out of hard drugs, arms, etc. he might have also stayed completely safe because it sounds like they simply couldn't handle him until it got kicked to the FBI/DEA/etc."

That's basically Ratliff's claim, too. He would've gotten away with it.

[fweespee_ch]

Correct. I'm just restating it because I find it amazing given what that implies for grey market and white collar crime.

It is basically a public admission that the Government is completely ineffective with anything vaguely resembling a competent criminal. It makes me question if we are allocating law enforcement resources correctly.

-----

Edit due to rate limit:

> I know that sounds far-fetched. Our government employs many smart, capable people in FBI and SEC that could certainly stop it.

I'm honestly not sure it is as far-fetched as it sounds. Resources appear to be allocated to "narcotics" and "terrorist" buckets very heavily with little regard to the impact on less glamorous investigations. My concern is this allocation may have opened very large holes around threats that are unlikely to create headlines.

Smart, capable people can only do so much if they lack the resources to investigate people with serious and competent OpSec.

> I'm just... paranoid... that the Le Roux case means bigger things might be going on that would do way more damage than addicts getting drugs reliably.

Honestly, I don't think you are paranoid. I think if something like that happened the current investigatory capability of the various agencies appears to be unable to do much if such a plot was competently executed.

That said, I think it is unlikely anyone would attempt to execute an action on such a scale because he clearly had to flee to another country.

I think legal means are more effective on a risk-adjusted basis in terms of financial costs. The critical slice of people whose opinions can be shifted between candidates seem vulnerable to advertising and rhetoric. Truth remains malleable enough that sufficient funds expended can create it during the election cycle and that is the only real control that matters.

> You'd think that with this level of incompetence a few banks could straight up foreclose on millions of mortgages cooked up Enron style. Hell, they might one-up Paul Le Roux by buying or installing a Treasury head. At this rate, you'd think they'd cut a deal for immunity while keeping lots of money due to less recklessness. They might even use the complexity of their operations to negotiate for more money to prevent fall-out coming back on everyone else. Might cost $1-6 trillion dollars in such a scenario.

Honestly, I'm pretty sure our system has largely legalized bribery via campaign contributions and the fact they can keep them on retirement.

http://abcnews.go.com/Business/campaign-finance-senators-hou...

> Turns out that despite strict Federal Election Commission rules, Bayh and other exiting elected officials do have ways to keep unspent political contributions.

So I'm not sure I'm the best person to talk to about this. I'd just reinforce your paranoia since I think you are largely correct on the political side.

On the commercial side, I think that is honestly why we have so many problems like LIBOR fixing that go unnoticed:

http://archive.is/vMZV5

> Simply put, then, it seems the misreporting of Libor rates may have been common practice since at least 1991. Although the difference between the reported rate and the actual rate might seem small, the total amount of money involved is material, given that Libor rates affect contracts worth hundreds of trillions. Also important is what such misreporting says about the culture.

I think this misallocation has led to alot of the recent banking scandals, honestly, and its disturbing to see further evidence in a secret-now-public criminal case that is unrelated.

[nickpsecurity]

Oh, I know you saw it. Was just saying he corroborates your opinion. Especially...

"It is basically a public admission that the Government is completely ineffective with anything vaguely resembling a competent criminal. It makes me question if we are allocating law enforcement resources correctly."

...that. You'd think that with this level of incompetence a few banks could straight up foreclose on millions of mortgages cooked up Enron style. Hell, they might one-up Paul Le Roux by buying or installing a Treasury head. At this rate, you'd think they'd cut a deal for immunity while keeping lots of money due to less recklessness. They might even use the complexity of their operations to negotiate for more money to prevent fall-out coming back on everyone else. Might cost $1-6 trillion dollars in such a scenario.

I know that sounds far-fetched. Our government employs many smart, capable people in FBI and SEC that could certainly stop it. I'm just... paranoid... that the Le Roux case means bigger things might be going on that would do way more damage than addicts getting drugs reliably.

[nickpsecurity]

The funny thing is I was messing with you by citing the exact circumstances of the 2008 financial crisis that's still reported on periodically. I was thinking you'd catch that. Good to know that you've been seeing signs in other places, too, though. ;)

[fweespee_ch]

I thought it was obvious enough I didn't feel the need to repeat it given how repetitive I was with the OP. ;)

[nickpsecurity]

Good, good. I was getting worried there. :)