The Journal. - The Suitcases Full of Cash Flowing Through Airports

Episode Date: May 8, 2024

London and Dubai's international airports have become conduits for billions of dollars of illicit funds, potentially linked to corruption, drug trafficking and other crimes. WSJ's Margot Patrick explains how couriers in one money-laundering operation transported millions in dirty money on flights. Further Reading: - Billions in Dirty Money Flies Under the Radar at World’s Busiest Airports  Further Listening: - How The Government Tied One Couple to Billions in Stolen Bitcoin  Learn more about your ad choices. Visit megaphone.fm/adchoices

In August of 2020, a woman named Jo Emma Larvin made her way to the Heathrow Airport in London with seven suitcases. Larvin was nervous because inside those suitcases were stacks of cash wrapped in rubber bands and plastic worth nearly $3 million. Larvin texted her boyfriend on the way to the airport. Heart rate's gone up a little. If you aren't comfortable, do not do it. You have to be comfortable, Joe.

The text messages, which eventually came out in court documents, are being read by our colleagues. Larvin and another traveler had been hired to sneak the money on a flight from London to Dubai. But by doing so, they'd be breaking the law, which requires passengers to tell customs how much money they're taking out of the country. If they were caught, Larvin and her travel partner risked arrest.

At the airport, Larvin and her partner wheeled the suitcases inside and dropped them off at the Emirates airline counter. Then, she texted her boyfriend again. Just gonna go through security. Okay, that's good. Do you feel okay? Five minutes later, Larvin was through. Yes.

Phew. Is that the difficult bit done? Was it okay? Straightforward? I think so, yes. Phew. Soon, Larvin and her companion were sitting in business class on their way to Dubai, as if they were just any other international travelers.

But the money they were carrying was part of a money laundering scheme involving tens of millions of dollars. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Wednesday, May 8th. Knutson. It's Wednesday, May 8th. Coming up on the show, the money laundering machine that funneled millions from London to Dubai.

Attention all soccer fans. From Orlando to Los Angeles, take to the fields of the USA We'll see you next time. You'll love it so much you'll want to extend your stay beyond the matches. Get the ball rolling on your soccer getaway. Head to visittheusa.com. Every year, more than $2 trillion of illicit money makes its way into global financial systems. But getting dirty money into the financial system is tricky. Criminals can't just deposit millions of dollars into the bank without drawing attention. Banks will ask questions. Where did you get this money? How did you make it? That's our colleague Margot Patrick. She covers international banking. She says banks have gotten in big trouble for not preventing money laundering in the past.

So we've had banks across the world be fined billions of dollars for having allowed Mexican drug cartels or other organized crime gangs use the banks to wash their ill-gotten gains. And so there's been a really big focus on stamping out money laundering through banks and financial institutions. Criminals can take steps to cover their tracks, but with added scrutiny, they don't always work. You know, you can set up a company, you could have a front company,

pretend you have a legitimate business, that's another form of money laundering. But there's a good chance you're going to get caught at some point because banks monitor your transactions and they'll be noticing if you're moving money, you know, to other people or offshore. And they have know your customers laws where they need to know like who you are. So you can't really be that anonymous

when you're doing this. Exactly. So if you turned up at a bank with a lot of money that you wanted to get into the system, they'd be doing customer due diligence, they'd be screening your transactions. They would be reporting any suspicious activity to authorities. So you could be creating a big digital trail for the police to follow. So if they can't go through a bank, criminals have to take their money elsewhere. For the criminals, they had to find other ways. And they found a really old-fashioned way,

which is to just move cash physically across borders. Because once you move cash across a border, it's that much closer to getting somewhere more legitimate, or at least you've started to disguise its origin. So if you can just get it out of the country, then you can start moving it into the local financial system of that country. moving into the local financial system of that country. That is why Jo Emma Larvin turned up to Heathrow Airport with seven suitcases full of cash.

She was a cog in an international money laundering scheme. Tell me about Jo Emma Larvin. Who is she and how did she get into this kind of work? Larvin had been a successful model and actor in the 2000s in the UK. She appeared in celebrity magazines. She was at movie premieres. She was quite a glamorous person. But over the last 10 years or so, she had kind of fallen out of the public eye.

She was doing other lines of work. She was doing some wildlife photography, digital marketing. I'm just, you know, she was just, you know, trying to make a living, essentially. In July 2020, Larvin got a lead for a new job. A friend put her in touch with a woman who she believed worked for the United Arab Emirates Embassy. They met up, and the woman explained the job to her, according to court testimony Larvin provided later. She showed her documents that she would be carrying, like the cash declaration forms, and, you know, essentially presented it, according to her testimony, as a legitimate form of work.

So here was a potential job. The pay was 3,000 pounds, or about $4,000. And for that amount of money, she would go to the airport with some suitcases and she would fly to Dubai and she would stay in Dubai for two or three nights and then come back with the empty suitcases. Not bad for a couple of days work. Yeah, pretty easy money. Did Larvin know that she would be transporting suitcases of cash? I think it's clear from initial texts between Jo-Emma Larvin and her boyfriend that she didn't really know what she was doing. They were sort of questioning, what's it all about? She knew she was transporting cash, but she didn't know for whom.

To be fair to them, they clearly didn't really know what they were getting into. Larvin's first job took place in August 2020, which we told you about at the start of this episode. She was asked to fly from London to Dubai in the United Arab Emirates, along with another courier. At one point during the trip, Larvin texted her boyfriend, wondering about where all the money came from. I'd love to know what they do for this.

I wonder what it is they do for it to be so much. Larvin seemed to think the job was legitimate, but she was still breaking the law. In the UK, where she was flying from, passengers are required to tell customs authorities if they're leaving the country with more than about $10,000 in cash. But Larvin and the person she was traveling with were leaving with nearly $3 million. Customs authorities if they're leaving the country with more than about $10,000 in cash. But Larvin and the person she was traveling with were leaving with nearly $3 million,

and they didn't declare it on the way out. Why was it that Larvin was able to check all those bags full of cash so easily? I think the answer is no one was asking, what's in your bags? And, you know, in this day and age, you don't even get asked, did you pack the bags yourself? It's like you might have to attest to that somewhere on a form or something. But basically, no one asked questions. But don't checked bags go through x-ray scanners? Why wouldn't the scanners flag that there's cash in the suitcase? Well, that was something I was pretty astounded to find out.

Every checked bag at Heathrow goes through a scanner. However, those scanners do not look for anything apart from explosives, incendiary devices, anything that could really harm someone or harm the aircraft. You know, that software is not typically programmed to look for cash or drugs or any other contraband. Those scanners are there for security. Those scanners are there for physical security of passengers and aircraft. They are not there to detect crime. Okay, so once Larvin gets to the Heathrow Airport and out of London, what happens when she lands in Dubai?

So Larvin lands in Dubai and she and her traveling companion, they go through security procedures there and they essentially follow signs to declare the cash. So the way it was described to me is there is an office that you report to and you say, hey, I've got all this money.

And they say, fine, put your suitcase on this table and we're going to count some of it. And they might check part of it or they might count all of it and keep you waiting for a while. But they'll offer you a cup of tea and essentially treat you very well. Like, you know, it's described to me as sort of red carpet treatment once you get there. Most countries heavily scrutinize travelers who bring in lots of cash. But that's not the case in the UAE, which is why they flew there. There's no limit in the UAE

on how much money you can bring in. So as long as you tell them about it, it's fine. They will check it, or they might check it. They might check the amount. But you'll walk out with a stamped piece of paper

saying, yes, this amount came in. They record it. They record the amount. They record the name of the person making the declaration. But they don't ask, where did this come from? Why not? Well, there's really sort of historic reasons why some countries will allow that and some won't. In part, places like UAE, it's because historically people use a lot of cash there. And it can be very difficult, in fact, to open a bank account if you're not from the UAE. So if you want to go there and conduct business, you may actually need large amounts of cash to,

say, buy property or to start your business, to buy inventory, things like that. And UAE also, particularly Dubai, presents itself as sort of a crossroads for the global rich, for people to come from all over the world and do business or take a vacation and relax. And it doesn't want to create friction for them. Larvin's first trip went smoothly. She didn't face any scrutiny in either London or Dubai. So she did it again, and even enlisted her boyfriend, Jonathan Johnson, to help her on her next trip.

The couple was nervous about the amount of cash they had to transport. This time, they were told to carry eight suitcases. Johnson texted Larvin, and he was not happy about it. How the f*** do two people carry eight cases? It's f***ing ridiculous. Talk about conspicuous. So he was clearly a little bit uncomfortable. And, you know, right, it sounds mad, doesn't it?

I mean, to just think like, you know, one person or a couple is going to be carrying eight suitcases does seem like it might arouse some suspicion, but they decided still to go ahead. Why so many suitcases, though? I mean, like, it is kind of conspicuous, so why not just have the couriers take smaller loads of cash? I think it was just efficient, and I think this also speaks to the sort of idea that no one was that worried that the couriers would be caught, or the people that were directing the activities weren't too worried that the couriers would be caught or the people that were directing the activities

weren't too worried that anyone was going to be caught. And no one was caught. Larvin and her boyfriend completed the trip, eight suitcases in all, without an issue. But the money laundering ring they worked for would eventually run out of luck. That's after the break. 1800 Tequila believes that taste is more than just a detail.

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Please enjoy responsibly. Summer's here, and you can now get almost anything you need for your sunny days delivered with Uber Eats. What do we mean by almost? Well, you can't get a well-groomed lawn delivered, but you can get a chicken parmesan delivered. A cabana? That's a no. But a banana? That's a yes. A nice tan? Sorry, nope.

But a box fan? Happily, yes. A day of sunshine? No. A box of fine wines? Yes. Uber Eats can definitely get you that. Get almost, almost anything delivered with Uber Eats. Order now. Alcohol and select markets. Product availability may vary by regency app for details. Criminals with a lot of money stuck in the UK, money that needed to be laundered,

had a guy they could turn to. Abdullah Al-Falazi. Al-Falazi was at the top of the money laundering ring that Joe Emma Larvin and others had worked for. And Al-Falazi was well-connected. So Abdullah Al-Falazi was married to a woman who came from an extremely wealthy family in the UAE. And that actually perplexed investigators a little bit about his motive. Well, if he's got so much money already through his family, why is he, you know, doing money laundering? Some of that wealth came from Al-Falazi's father-in-law. He'd been the UAE's director general of aviation and was in charge of customs at the airport before pivoting to retail. Al-Falazi also claimed he had connections with one of the UAE's royal families. But another chunk of his wealth came from his business,

laundering other people's money, money that UK investigators believe came from drug traffickers. When did Alfalozzi start this money laundering operation and how did he, and why did he expand it and grow it? So investigators saw evidence that Alfalozzi had been acting as a courier himself and bringing money over to the UAE, at least since 2017, possibly much longer. And then they also found evidence that he had started to involve other people. So people he knew, it was sort of a word of mouth thing. A few other people had flown for him early in 2020. A few other people had flown for him early in 2020. And then things really seemed to explode once the first wave of COVID has sort of died down in airports and airports were reopening.

To keep up with demand, Al-Falazi needed a lot of couriers. And he tapped one courier to help him, Michelle Clark. Clark was an executive assistant who first got involved in Al-Falazi's operation when she was looking to relocate from the UK to Dubai. By July 2020, she'd become a crucial player in his operations. Text messages later released in court show Al-Falazi asking Clark to recruit new people. Do you have someone who can work with us like you? Because I want to do twice a week, Saturday and Tuesday. You will make Tuesday, and she will make Saturday. You know everything, and you can teach her. Sure, I'll have a think.

Yes, I need someone I can trust. At one point, Al-Falazi asked Clark to find 12 new people. She texted one of her associates about it, asking for ideas. Just have a think who we could onboard. But it has to be the right person. Can't talk, trust, reliable, and fit. They want me to have 12. 12 people.

Can you even believe that? One of the people Clark recruited was Joe M. Alarvin. Michelle Clark was really the essential part of it. She was helping to organize, you know, pickups by the driver to get those people to the airport. She was helping provide instructions to people on what to do once they got there, if they hadn't done it before. So she was really a coordinator. At every step, Clark would keep Al-Falazi updated. Everything okay with the flyers?

All good. Just boarded, flight delayed, but they're on the plane now. While Clark managed a lot of the day-to-day operations, Al-Falazi focused on the clients who needed their money laundered. He was still involved as far as helping to arrange, first in the UK, like helping to arrange the criminals to drop off the cash to sort of counting houses. And so he was ultimately responsible to make sure the money got where it needed to be. How would he clean it or get it back into the system to legitimize it?

So once the cash was in Dubai, the investigators pretty much lost the trail of most of it, but they did find some evidence from seizing phones owned by Al-Falazi. So they had some data from his phone showing that some of it went into his own bank account, some went into crypto. They think a lot of it was used to buy gold. They think a lot of it was converted into the local currency in UAE or into other currencies just through money changers

where there's not a lot of questions asked. At its peak, Al-Falazi's operation grew to 36 couriers and they moved tons of money. In just a few months, from July to October 2020, they transported $125 million to Dubai. How rich did this make Al-Falazi and Michelle Clark? Well, Al-Falazi collected about 10% of the total as his fee. So if it's $125 million, and probably much more, you can see where he was, you know, getting a nice cut. We don't know how much Michelle Clark was making, in part because she's still at large, and police haven't had access to her bank accounts or her wealth in the

UAE to really know what she might have been making. In October 2020, Al-Falazi's empire started to fall apart. That month, two of his couriers were on a routine trip to Dubai, hauling almost $2.5 million in cash. When they reached their gate at Heathrow, the women were approached by UK Customs and questioned. It's not clear what tipped authorities off. When one of the women was asked why she had five suitcases for her trip,

she said it was because she wasn't sure what to wear. They explained that they were going away to Dubai. They were going on a girly weekend away. And so that was their cover story was basically, well, we're just going to have fun in Dubai. And they, according to the customs officials who questioned them, they increasingly got nervous as they were told, well, we're going to get your suitcases off the plane and we're

going to look at them. In a text exchange, one of the couriers told Michelle Clark that she'd been caught. OMG, Shell, we've been held by border control. WTF? I've had later deleted the texts. The women were arrested, and investigators searched their phones. And they quickly figured out that Al-Falazi was behind the whole thing. Because Al-Falazi booked the flights for all of the couriers and alleged couriers. So he was booking flights for dozens of people in his name, on his credit cards. And so once the U.K. authorities had stopped these two women in October 2020, once they looked at the women's phones, that's how they discovered who had booked their flights. And so Al-Falazi had really left a digital trail leading straight back to him by having booked the courier's flights, by having all those tickets on his own accounts.

In December 2021, Al-Falazi was arrested in London. In June the next year, he pleaded guilty and was sentenced to almost 10 years in prison. The government seized around 3.5 million pounds worth of Al-Falazi's assets. Michelle Clark is under investigation in Dubai for money laundering. UK investigators have not been able to question her. She couldn't be reached for comment. Several other couriers were also arrested, including Joe Emma Larvin and her boyfriend. They were found guilty of money laundering last year. They got suspended sentences.

In court, they sought to blame Heathrow, Emirates Airlines, and the UAE for failing to ask questions. In a statement to Margo, Larvin's boyfriend, Jonathan Johnson, said they were two ordinary people who were, quote, lied to and duped. So whose responsibility is it to prevent operations like this from happening?

Whose responsibility? Well, while I was reporting it and asking for comments, there was a lot of finger pointing. Emirates Airlines, their stance was, we screen for suspicious activities, but it's really up to the outbound country. And Heathrow declined to comment on its security practices. It said that all of its equipment complies with government rules.

And the UK government said the airport's responsible for screening and that all of the equipment meets international standards. for screening and that all of the equipment meets international standards. And the UAE didn't comment on its practices and just said it works with the UK on combating illicit finance. So when you take that all together, whose fault was it? Well, no one's because the airport isn't required to look for cash. You could say maybe it's UK Customs. It's their fault. They have the rules. They should enforce them. UK Customs should probably be checking

what's going in and out. But why not, though? I mean, like, why not use these x-ray scanners to look inside every bag for cash? I had the same thought. This all kind of comes down to post 9-11, airports and the world in general were very focused on passenger safety

and just, you know, plane safety and not having planes used as weapons or passengers on planes bringing weapons. And so the focus was so overwhelmingly on that physical security that crime detection just fell a bit by the wayside and became a bit of a secondary function of anything to do with airport security. It's just not a priority. It's just not for international aviation security. Crime detection is just not the focus at all. So people will just continue to exploit the system

as long as they can. That's all for today. Wednesday, May 8th. The Journal is a co-production of Spotify and The Wall Street Journal. Special thanks to Victoria Dominguez, Enrique Perez de la Rosa, Heather Rogers, Griffin Tanner, and Tatiana Zamis for providing voiceovers for those text messages. Thanks for listening. See you tomorrow.