Episode 7 - Against the Ropes

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Previously on Hot Money, US undercover agents made a connection between money launderers working for European drug traffickers and top level officials in Iran. It was part of a ski to help the regime evade American sanctions and source heavy weapons. This time, a whole new money laundering operation comes into view, invented by the man at the top of the Dubai Supercartel, Daniel Kinahan. Back in episode four, we left him living

Hello there, I'm just after getting off the phone with Daniel Kinahan.

That's world famous heavyweight champion Tyson Fury. He's a fast talking shaven headed nineteen stone Man Mountain and on that afternoon he's even more excitable than usual. He posts on social media, He's just informed.

Me that the biggest fight in Bridges boxing history has just been agreed.

Gear that my boy.

Big shout out done.

He got this done.

Two fight deal Tyson Fury versus Anthony josh next year.

The announcement it stuns the world of boxing. After winning a world heavyweight title five years earlier, Fury's career it's been in a slump, but since meeting Daniel Kinahan, he's made an epic comeback. He's beaten the previously undefeated and reigning WBC champion Deonte Wilder in this huge Las Vegas showdown, and that means Fury's upcoming bout against fellow British heavyweight Anthony Joshua. It's immediately billed as one of the biggest fights in the history of the sport. It's going to

Aram.

He's promoted Muhammad Ali and he's an inductee into the Boxing Hall of Fame.

We have great confidence in Kenahan. We think he's very very, very honest, very astute. He has great connections.

And now he's singing the praises of Daniel Kinahan.

You know, I like to deal with guys, no nonsense, people whose word is their bond, and that's what it's been with Daniel.

But just as Daniel Kinahan's reputation as a boxing magnate starts to soar, some people are starting to look more closely at the source of his fortune. I'm Miles Johnson and from the Financial Times and Pushkin Industries. This is Hot Money, season two, the New Narcos, episode seven, Against the Ropes. The thing that first pulled me into this story was when a source told me, if you really want to understand the exploding European cocaine trade, you need to take a close look at a murder in a

I'm a French police commander. I am currently working in the EUROPEOL which he's the European agency for criminal police.

I first met Quentin after other police contacts told me that he was one of the best in the world at complex money laundering cases. He's got dark, floppy hair, a stubbly beard, and he talks with the unassuming calmness of a gallic colombo. He doesn't miss a trick if you're trying to launder your drugs money in a shipman of seafood. He's the sort of guy who'll swivel around at the last minute and say just one more thing.

You know, instinct kicks in. You tell me is that you imported a hundred thousand euros worth of shrimps. But what shrimp was at a frozen shrimp big streams? But I guess cash scrips? Then what was exactly in the continue? You don't know. That's that's how it.

Works, Quentin. He lives and breathes this sort of stuff, and he's actually written a book about it. It's called gen Salle or Dirty Money.

So I started to pick up on these aspects of the job because essentially everybody wakes up for money, including the criminals, and I really started to enjoy it.

Quentin actually worked on part of the DEA's investigation into Iman Kobesi and ended up arresting a French associate of hers. He says there's one important reason why drug traffickers might end up working with someone like Kobesi. Criminals and sanctioned governments. They've got a problem in common. They can't just freely move money around the international banking system, so both need to find more creative methods, methods that law enforcement agencies can't track.

And that is the beauty of it, to be honest, because basically this appeal for and a NIMI is something that the wood underworld has in common.

As a cocaine market in Europe has boomed, massive amounts of dirty cash are started to pile up and to make their businesses work to pay suppliers in Latin America, pay henchmen, or buy a mansion in Dubai. The car tells they need to keep that money from getting stuck. It's a critical logistical headache of being a drug trafficker but moving billions secretly around the world. It's actually quite hard. Imagine a drug trafficker has say ten million dollars in the Netherlands and.

You would like that to be in Dubai. So now he's got a number of options. You could move it himself, as that's been setting some cash careers, taking zerisk of being spudied at the airport. He could try to transform it into something else, maybe jewelry, wa cheese, whatever. But again you need to transport it. You could try to hide these tracks by converting that money into other goods such as cars, and then ship them away, get the cars somewhere in another country, sell them, justify the profit

Pick up your phone and call a money broker. They're specialists to operate in a huge underground banking system and it's critical infrastructure for the underworld.

So I would simply contact the money brokers. The money broker would send me a money collector. That money collector will come to me, usually with a banknote.

It's pretty hard to feel comfortable handing over massive suitcases of cash to a stranger, so they've come up with a sort of verification system. The person picking up the cash they have to show a serial number of a specific banknote to prove their identity.

And it was in two three days, I would have an equivalent talment of money in the country I want.

So it's sort of like a secret currency exchange service, but for major criminals. But the concept that took me a little while to get my head around is that the actual physical cash it doesn't ever move. It stays in the same place. The networks have supplies of cash in different countries, in places like warehouses, and instead of moving it, they simply pay you out from the supply they have in the place you need it, minus a commission.

The most basic often comes in the form of a little shop grocery stores that opens late and so very expensive apples, and then everybody goes. But how is it possible that it is still open where.

There's a lot of that.

Before I'd heard about this, I'd assumed that modern money laundering was high tech, using things like cryptocurrencies or complex financial instruments. Actually really surprised to learn that it's pretty old school. Quentin says that this modern shadow banking system, it's similar to the principles of hawala networks that were used by Eastern traders from the fourteenth century.

So the Hawala system is basically a very ancient system that consisting is based on trust and it's based on a network of Hawala dhas before running this kind of informal network. It was used a long time ago, even in the Middle Aged when you were traveling, you didn't want to, you know, wander around the roads with golden use. So what you would do you would make a deposits in the merchant who has an agreement with his suppliers.

I'm also just interested in the capacity of his systems because we're talking hundreds of millions of not billions potentially of money. The liquidity that deep that you can move that much money through this.

Start it's going to be a short term swer it yes, wow, it is.

So there are billions of dollars circulating through these black market brokers, and it's not just drug barons who are using them. There are tax evaders, human traffickers, warlords, terrorist groups, and people moving money for sanctioned governments. There's this strange thing in Europe and it's that the number of physical banknotes in circulation over the last decade, it's actually gone up, but the number of people paying for stuff with cash,

I've seen the commission drop. It's not a good sign because they're asking for less and less money. Zans that there are more and more competitors and there is more and more money out there.

Like Quentin said at the start, everybody in the world a crime. They wake up for money. And over in the United States, one lawyer is starting to dig deeper into the Kinahan money machine.

In the Middle East, Daniel Kinahan is living in Dubai. They're having a party in Dubai. They're getting away with, you know, a lot of stuff. It seems to be in Dubai and he felt, I think untouchable.

Eric Montalvo is an attorney in Washington, DC and before getting into law, he served for twenty one years as an active duty marine in the US military in the First Golf War in Iraq and in Afghanistan.

When I transitioned into the civilian community, I eventually started my firm in twenty eleven and I practice national international law.

And then one day in twenty twenty, Eric got a call from a boxing promoter who was furious one of the promoters most successful fighters was leaving. He'd switch to another promotion company, one called MTK. It's the company that Daniel Kinahan co founded back in Spain, and by twenty twenty one, MTK Global, like Daniel, is based in Dubai.

Before this, I was not really a boxing litigator, if you will, like the boxing profession was not something that I was intimately familiar with in terms of the business side. Right, you know, I'm a fan and I would watch a fight, you know what have you, But I really had never got from a litigation standpoint into the back end of what was going on, so I really was in a learning curve on this.

Eric's not studying the contracts, and MTK looks just like any other multinational company.

On its face, it looked very legitimate and very powerful compared to even any US company. No one could really compete with them, and they had endorsements from high level boxing professionals, right Bob aram So my first review of them was that they were a big professional boxing corporation international and that I just had to hold them accountable for contract issues.

But then Eric comes across the name Daniel Kinahan. At the time, back in twenty twenty one, most of the boxing world had embraced Kinahan as a legitimate businessman, Eric's or something else.

When I focused in on him, obviously, I'm a former prosecutor, so you know that got my eyebrows raised.

Now, there's a long history in boxing of people with let's say, a colorful past, and initially Eric thought that the rumors around Daniel Kinahan would have no bearing on the contractual dispute. But as Eric started to look at MTK's business model, it seemed strange. One of the ways that the company was able to recruit so many fighters to its roster was by offering them hugely favorable terms, terms that seemed to defy financial logic.

When I started trying to understand the financials of what was happening, nothing made sense. No business can spend the amount of money in litigation, you know, fighter bonuses, all of these things when that money is not coming from fights.

For example, you could have a situation where a boxer makes, say five hundred thousand dollars in a fire, but the boxing company promoting them pays them seven hundred thousand dollars.

Where's that money coming from.

Daniel Kinahan had officially parted ways with MTK back in twenty seventeen. His links to organized crime had made it difficult to be the public face of the company.

Everyone's paying attention to you, probably for a good reason, so you know, take a back seat and you're no longer part of MTK. The problem is is that mister Kinahan wasn't able to do that. He either loved the boxing game, loved the limelight whatever it was, but he could not help himself, and so he was publicly coming out over and over again and participating in the fighting arena.

And as Eric digs deeper into MTK's finances, he discovers that the company seems to have found an innovative way of moving money around the globe.

It became clear to me as a prosecutor that what they were doing is they were using the fighters as a way to move money through the system. And so preliminarily, what I see is that let's say they put a million dollars in the fighter's account that wasn't for the fighter to keep. What it was was they would then take that money out a month or two later, and then it would go to a property or go to

Let's stop here for a moment, because what Eric claims is happening using boxing to launder money. It's a pretty serious allegation. Up until now, most people have seen Daniel Kinahan's rise in boxing as an attempt to clean up his reputation. But maybe, if Eric's right, it was more than that. The boxing and the crime, they weren't two different worlds, they were part of the same thing. Eric's next move is to file a legal case in California

Most of the people that were around me that knew what I was doing thought I was a little bit of a crackpot, right like you know, what are you talking about. Like, first of all, MTK's legitimate, you know organization. I mean, people were saying as Bob Aaron was saying it, the California Commissioner was saying it. Everybody was like, you know, this Montavo guy is crazy and all of the stuff.

You're going up in this instance against people who at.

The time.

Are seen as extremely dangerous, you know, like some of the most dangerous criminals in the whole world, people who are linked to multiple, multiple homicides. And I was just wondering what you were sort of thinking at the time about that part of it.

I mean, in terms of my own personal safety or.

In terms of your own personal safety.

Maybe I'm not, you know, the most normal person in the world, but I mean, you know, I went to war at twenty right, I'm not gonna not do what I have to do because I'm afraid that's somehow shape or form, someone's gonna want me dead because I'm complaining about what they're doing.

You know.

I just if that's the case, I shouldn't be an attorney right.

To start the US legal case against Kinahan. They're going to have to find him so they can serve him the papers and finding a man who's been busy evading law enforcement agencies for years. It might sound a bit tricky, but Eric had a plan.

When you're trying to be a legitimate businessman, you have to register your business, and so in Dubai it's no different right they expect you to file the proper documents, et cetera. So once I saw he was in Dubai, I focused my efforts there. And if you look at Palm Islands, right, there's two of them.

They're two man made islands jutting out from the coast of both engineered in the shape of palm trees so that each luxury property has its own waterfront.

And if you have the amount of money that you know mister Kinahan has access to, and you know the pictures and everything else you see, it made sense that he was likely living on one of those islands.

So Eric he'd figured out where Daniel Kinahan was living in Dubai, and he'd hired someone to go and deliver the US court papers to his address. Now, the next question was how would Daniel respond. So Daniel's figuring out how to deal with this legal case against him, and at the same time there are now signs that Dubai, once a paradise for your criminals, has begun to crack down. The first members of the supercartel are starting to fall. Ridu Antargi one of the guests at Daniel Kinahan's wedding

And this isn't some.

Cobbled together home video. It's a professional project. It's a dramatic reenactment of the assassination attempt against Daniel in twenty sixteen in Dublin. It features a handsome actor playing him, who's portrayed as the victim in the whole thing.

When Daniel Kinahan arrived at the Wayne.

For Clash of the Clans, the first thing that he noticed was that there were no Gada to police the event. This was unnerving because Daniel was used to having his every move shadowed by police.

Not only that, it's unlikely the film convinced anyone, but it showed that Daniel Kinahan was starting to get nervous. Back in Dublin, John O'Driscoll, the man in charge of Island's response to the Kinahan's wave of violence. He's been watching Daniels rise in boxing with frustration.

The sport of boxing which is very important, and I knew it to be so, having policed in inner city communities for many years, many kids were diverted from crime through an involvement in the sport of boxing, and here we saw the Kinahan organization potentially destroying that sport. They were corrupting the sport and that was operating at a global level.

John's been trying to come up with a plan, a plan to take the Kinahans down. But even if they build a bulletproof case, there's another problem. The Kinahans are in Dubai, and Dubai has no formal extradition agreement with Ireland. John he realizes something.

That no one entity, no one law enforcement entity, could ever achieve any realistic success on its own entackling one of these criminal enterprises.

So John starts flying around the world, meeting with other law enforcement agencies, sharing information, discussing strategies. He knows that back in twenty ten, police across Europe tried to stop the kiinner Hans with Operation Shovel, but the case had fallen apart, and John He's determined that will never happen again. He needs a silver bullet. Then one morning he's talking to a US official when they mentioned something that John

From that day, it was part of our objective that we would acquire sufficient information to provide to the US Department of Treasury to encourage it to take on the Kinnahans as a target, for them to be placed under a list of priorities.

It was just an idea, but it was a radical one, a new tool to target individuals connected to European organized crime. John immediately gets to work. He needs to bring in as many international partners into the operation as possible, but to convince the US Treasury to take action, the joint operation needs watertight evidence that the Kinnahans have evolved into a global threat.

Throughout the process, I would have been privy to the intelligence that we had gathered ourselves in Ireland, and then other jurisdictions had gathered additional information, and bit by bit dijigsaw was being put together in terms of establishing how significant in fact the Kenahans were on the global stage.

Months and months passed, with countless meetings between law enforcement agencies from different countries sharing the intelligence they've gathered on the Kinnahans, and then the US side of the joint operation they discovered something pretty big. At the time, it

As time emerged and as the eyes of US law enforcement more generally were focused on the Kenhen's, it was realized that the money laundering associated with that drugs empire involved the Kenahan's utilize organizations that may potentially have links to international terrorism.

As we're talking, as John's telling me this, I want to know what he means which international terrorists? Is it a group, is it a government? But when you say terrorist related to activity, does that relate to any particular countries. John doesn't really answer this, so I ask him directly the thing I'm thinking, the thing you might be thinking too. Is he talking about Iran.

Well, that would be a conclusion that would be reached primarily by the US authorities haven't been satisfied having received initially information from the Irish law enforcement, UK law enforcement, and they then pursuing that line of inquiry, would then have concluded that, in fact, there is potential that there is a financing of activity that can could be associations with the Iranian station.

John's saying it in a guarded way, but here's what it sounds like to me. It's the money, the money laundering, that's the connection between the Kinahans, the supercartel and Iran. An Udi Levy, the former head of the Mossad's Economic warfare unit, He says the same thing. He tells me that Iran's money laundering channels are regularly used by criminal networks across the world as well as other sanctioned governments.

The sanction caused the Iranian to be very creative to find I think today the number one in the world out of circlements the sanction how to build very very smart way to laundering money. They are giving a suggestion to the Irusian and other countries and the North Korean out to circlements the sanction, they became so expert they.

Know very well how to do it.

And as we know, it's not just sanctioned regimes that need to find secret ways of moving money around the world.

No, the direct trafficking need the ideas and their way out to build infrastructure that nobody identify. So and they run and have today, I think the best infrastructure in the world to transfer money from one point to the other and that nobody will have identified. So not only that they are using the direct trafficking, but they even making the world, let's say more bad by allowed the cartels and the direct trafficker to use their infrastructure to transfer money.

I really haven't come across any evidence that the members of the Supercartel are connected to Iran for ideological reasons. It's likely it was just business, the money laundering. It was a service, one that worked, but having access to new and sophisticated ways to move money, it made the

I think Iran is not alone. I think today is a new trend by some let's say intelligence forces, that it's easier, sometimes cheaper to use drag dealers and criminals to make assassination because if they call, you cannot blame Iran, you can blame drug trafficking. It's something that related to drug trafficking. They are preferred to go to criminal and to drug dealers, to pay them money, to give them guidance and to send them to the mission.

But I still have a big question. Is it possible to find out who in Iran worked with the supercarteil to assassinate Alimtomed to solve this murder?

Yes, but it will be a little bit difficult because they're not stupid. In most of the cases, they're putting a buffer between themselves and the last end. Let's say something like that. Let's say the Iranian from Good Sports Agent well will approach to someone that it will approach to somebody else, and then it will approach to the third party and will give him the mission.

To find someone buried deep in a shadowy, hidden world where espionage and organized crime me it seems impossible, And then I came across a case a top Iranian spy arrested in Europe, found with a red notebook full of secrets, and perhaps inside that notebook we can find the answer. That's next time on our season finale of Hot Money. Hot Money is a production of The Financial Times and