Speaker 1: This story contains adult content and language. Listener discretion is advised.
Speaker 2: And they can see all of these messages and they
Speaker 2: realize these phones this is where the criminals have been hided.
Speaker 1: I'm Kate Winkler Dawson, a nonfiction author and journalism professor
Speaker 1: in Austin, Texas. I'm also the co host of the
Speaker 1: podcast Buried Bones on Exactly Right, and throughout my career
Speaker 1: research for my many audio and book projects has taken
Speaker 1: me around the world. On Wicked Words, I sit down
Speaker 1: with the people I've met along the way, amazing writers, journalists, filmmakers,
Speaker 1: and podcasters who have investigated and reported on notorious true
Speaker 1: crime cases. This is about the choices writers make, both
Speaker 1: good and bad, and it's a deep dive into the
Speaker 1: publish details behind their stories. In twenty eighteen, the FBI
Speaker 1: discovered that high level criminals around the world were using
Speaker 1: encrypted devices to plot intricate crimes. When a powerful, secure
Speaker 1: new app began courting these syndicates, members of the underworld
Speaker 1: flocked to it. One problem for the criminals, though the
Speaker 1: app was created by the FBI. Joseph Cox tells us
Speaker 1: the incredible story from his book Dark Wire. Why don't
Speaker 1: you give me sort of your elevator pitch of what
Speaker 1: this book is about. When you're talking to someone who says, oh,
Speaker 1: I heard you read a book. I don't know anything
Speaker 1: about it. Tell me about it.
Speaker 2: I mean to come out swinging straight away. It is
Speaker 2: about how the FBI secretly ran a tech startup for
Speaker 2: organized crime in order to wiatap the world. It's very
Speaker 2: crazy when you put it into one sentence like that,
Speaker 2: but this was the largest sing operation ever. Usually you
Speaker 2: may think about the FBI investigating one drug trafficking ring,
Speaker 2: or some money launderers, or even one murder. Here they
Speaker 2: investigated thousands, potentially over ten thousand at once. By providing
Speaker 2: the critical infrastructure that these criminals use. It's basically the
Speaker 2: biggest wire app that's ever existed. And of course tons
Speaker 2: of interesting questions come up from that. And I really
Speaker 2: think the book is about trust. These criminals trusted this
Speaker 2: phone so much that they were willing to commit crimes
Speaker 2: on it. The FBI trusted its international partners, which I'm
Speaker 2: sure we'll get into, the Germans, the Swedes, the Dutch,
Speaker 2: and hoping that this audacious operation would not leak. It
Speaker 2: was basically a miracle and then also, I think for
Speaker 2: us trusting, well, when are we really communicating in private?
Speaker 2: And how do we know when the messaging apps that
Speaker 2: we're using, or the phone line we're using or whatever
Speaker 2: is really secure? And it's almost getting harder and harder
Speaker 2: to answer that question.
Speaker 1: How did the FBI get this kind of information about
Speaker 1: organized crime before we had wire taps and apps and
Speaker 1: all of that, was that mostly informants.
Speaker 2: Yeah, you're going to have human intelligence like informants, you're
Speaker 2: going to have old fashioned police work. I mean, the
Speaker 2: wiretap now is over a century old, right, and they
Speaker 2: were very very quick to exploit that, as were other
Speaker 2: law enforcement agencies. But then there is always this cat
Speaker 2: and mouse between law enforcement and criminals, and criminals will
Speaker 2: then move to something like a pager, for example, or
Speaker 2: then maybe they start using cell phones and mobile phones
Speaker 2: and that sort of thing. And you can imagine, of course,
Speaker 2: you know, the wire or the sopranos or something like that,
Speaker 2: and those are sort of the stereotypical cases of well,
Speaker 2: this is how the FBI or other agencies investigate organized crime.
Speaker 2: But there's been a technological leap that I think people
Speaker 2: in the general public aren't really aware of, which is
Speaker 2: that criminals have started using these very sophisticated encryptive phones,
Speaker 2: and it's basically the most important technological leap that criminals
Speaker 2: have made since the invention of the cell phone in
Speaker 2: the first place. So whereas for decades upon decades, as
Speaker 2: you say, going back, all of that time is informants
Speaker 2: and the normal phone lines, we're in a different world
Speaker 2: now where many top tier criminals can basically communicate securely,
Speaker 2: and they can communicate in such a way where law
Speaker 2: enforcement probably aren't actually going to get the contents of
Speaker 2: their communications. It's an entirely different world now to even
Speaker 2: you know, the eighties or seventies, the nineties, it's just
Speaker 2: a different ecosystem now.
Speaker 1: I know this might be an odd question. I'm curious,
Speaker 1: is there a way to easily explain why the FBI
Speaker 1: at some point in history might have been able to
Speaker 1: tap landlines but then not cell phones, Because I feel
Speaker 1: like in every kind of cloak and Dagger movie, it's like, oh, no,
Speaker 1: we're safe, let's talk on a cell phone, but we
Speaker 1: can't talk on landlines. So what would be the difference.
Speaker 1: As we're moving more towards the modern part of the story.
Speaker 2: Back with original wire taps. It was literally that law
Speaker 2: enforcement would go and they would place a device or
Speaker 2: even crocodile clips or some sort of interception capability onto
Speaker 2: the literal wires which are carrying the communication. Of course,
Speaker 2: when criminals start to move towards cell phones, the infrastructure
Speaker 2: of that has changed, and then that's where you see
Speaker 2: the FBI or other agencies doing closer collaboration with AT
Speaker 2: and TV, Verizon, T Mobile, whoever. And they're always catching
Speaker 2: up to where the criminals are moving towards. And that's
Speaker 2: just a constant theme over the past one hundred years
Speaker 2: and decades. The criminals go a few little steps forward,
Speaker 2: and then the law enforcement agencies catch up, and it's
Speaker 2: gone from something that was purely physical as in touching
Speaker 2: the cable getting the communication to of course, now not
Speaker 2: just cell phones, but the Internet writ large, and there
Speaker 2: are places where you can go and intercept Internet data.
Speaker 2: Thinking about the NSA and GCHQ, where they literally tap
Speaker 2: the undersea cables that carry the world data. Of course,
Speaker 2: that's not something that law enforcement is typically going and doing.
Speaker 2: That's in the realm of intelligence agency. So there's always
Speaker 2: going to be a divide there as well.
Speaker 1: Well. Before we get into the sting operation that just
Speaker 1: seems so elaborate and overwhelming and creative. I do want
Speaker 1: to dip in a tiny bit about the encrypted apps,
Speaker 1: because you know, in the last month or two apps
Speaker 1: that are encrypted, like Signal, have popped up in hearings
Speaker 1: and house hearings through a lot of controversy. To simplify it,
Speaker 1: are there sort of three levels of secure phone lines.
Speaker 1: There's the lowest level like what I use, where anybody
Speaker 1: could probably tap into it. Then there is something like Signal,
Speaker 1: you know, an app where it says it's encrypted, but
Speaker 1: obviously it's not as secure as the third highest level,
Speaker 1: which would be whatever the government is using. I'm not
Speaker 1: even one hundred percent sure what encrypted means, so maybe
Speaker 1: give me the dummy version of all of that.
Speaker 2: I think that's a totally fair characterization, where you have
Speaker 2: those free levels of a completely ordinary phone line, which yes,
Speaker 2: it might be rypt in some ways, but it's not
Speaker 2: exactly done in a robust way, and you can have
Speaker 2: people intercepting it, or you can have wide apps as
Speaker 2: well that next level, such as the Signals or potentially
Speaker 2: the telegrams of people familiar with that app as well.
Speaker 2: What that does is that it will take the message
Speaker 2: that you've typed out on your phone, a text message
Speaker 2: or a voicemail or whatever, and it will encrypt it
Speaker 2: while it's still on the phone, so it hasn't crossed
Speaker 2: the cables yet, it hasn't entered the wider Internet yet,
Speaker 2: and it's safely packaged that up it transmits across and
Speaker 2: then hopefully only the person who's supposed to receive that
Speaker 2: is able to decrypt it. And you don't notice any
Speaker 2: of this, right You're just using signal or whatever, and
Speaker 2: it happens instantaneously, but in the background, that very robust
Speaker 2: set of security steps is happening. Now, if somebody did
Speaker 2: intercept that, it would just be absolute gibber. It should
Speaker 2: be ones and zeros or random letters, and they could
Speaker 2: intercept something, but they won't be able to read any
Speaker 2: of it. And then, as you say, the next layer
Speaker 2: is the device and the systems that hopefully members of
Speaker 2: the US governments and other governments are using, whereas it
Speaker 2: won't just be encrypted, but the phone or the device
Speaker 2: itself will be hardened as well. You know, you can
Speaker 2: have the best encryption in the world. If someone has
Speaker 2: hacked your phone, that's the place where the message is landing, well,
Speaker 2: then potentially they can read it as well.
Speaker 1: What is the danger of sending something that's very sensitive
Speaker 1: through signal if they're not going to receive any kind
Speaker 1: of a real quote unquote information.
Speaker 2: The benefit of signal is that you can send stuff
Speaker 2: and then if it's intercepted, it's not going to be
Speaker 2: readable by any authorities or any third parties they're getting it.
Speaker 2: But yes, if you hack onto the if somebody hacks
Speaker 2: the phone at the end of that, they're going to
Speaker 2: be able to read that. And that's just something which
Speaker 2: is the limit of encryption technology. Encryption can protect the
Speaker 2: contents of your messages and can protect it as it's sent.
Speaker 2: It can't protect you if a hacker is broken into
Speaker 2: your phone, or if you accidentally add a journalist to
Speaker 2: a group chat and then they are of course receiving
Speaker 2: all of that data as well. It can't protect against
Speaker 2: mistakes or to be less charitable, stupidity depending on the
Speaker 2: way that you're looking at it. You have to use
Speaker 2: the technology in the right way. And the great thing
Speaker 2: about these consumer apps like Signal or other ones like it,
Speaker 2: they try to eliminate the room for you to make mistakes. Basically,
Speaker 2: encryption has been around for decades, but I remember when
Speaker 2: I started using it round about the time of the
Speaker 2: Edward snowd Of revelations of twenty thirteen. It was so difficult.
Speaker 2: It was cumbersome. You had to use all these different
Speaker 2: tools and encrypture email in this really fancy way. Nowadays,
Speaker 2: you can just use WhatsApp, which is also end to
Speaker 2: end encrypted. You can use I Message, you can use
Speaker 2: any of these other ones and we don't even have
Speaker 2: to think about it. And that's a net positive that
Speaker 2: billions of people around the world are able to communicate
Speaker 2: more privately with confidentiality, and of course criminals can now
Speaker 2: do that as well.
Speaker 1: So was there to get to your story? Was there
Speaker 1: an incident that started all of this for the FBI?
Speaker 1: Did they start realizing that the criminal enterprises around the
Speaker 1: world were getting these encrypted phones that they could not access.
Speaker 2: Yeah, So, in around twenty fifteen twenty sixteen, the FBI
Speaker 2: is investigating this drug trafficker called Owen Hanson, and it
Speaker 2: seems he's pretty successful. They use an informant to basically
Speaker 2: bait him into doing a methmthetamine deal. They presume he's
Speaker 2: selling many more drugs. But they actually can't get a
Speaker 2: tap on his phone because he's using this very unusual
Speaker 2: BlackBerry back when those were cool and popular.
Speaker 1: I love blackberries.
Speaker 2: They had they're very cool keyboard. Drug traffickers loved those
Speaker 2: as well. But the FBI found that owen Hanson was
Speaker 2: using one of those and it could send encrypted emails.
Speaker 2: It also had the microphone removed, the camera taken out,
Speaker 2: the GPS as well. It basically wasn't a phone, it
Speaker 2: was like a computer in his pocket that could send
Speaker 2: encrypted messages. So the FBI investigate him without fully understanding
Speaker 2: all of the contours of his crimes, they still have
Speaker 2: enough to prosecute him. They get hold of this phone
Speaker 2: made by a company called Phantom Secure. Unfortunately for owen Hanson,
Speaker 2: he hadn't changed the default password, so the FBI were
Speaker 2: able to log in very very quickly, and they can
Speaker 2: see all of these messages because again now they're on
Speaker 2: the endpoint, they're on the device, and they're scrolling through
Speaker 2: and there's just thousands talking about criminal activity and they realize, oh,
Speaker 2: these phones, this is where the criminals have been hiding.
Speaker 2: They're not on the normal phone lines anymore. They're not
Speaker 2: on the cell phones. They're on these really sophisticated, customized
Speaker 2: pocket sized computers, And that basically starts the FBI's near obsession,
Speaker 2: or the San Diego fbis near obsession with looking into
Speaker 2: these companies, shutting them down, and eventually running their own
Speaker 2: as well.
Speaker 1: So the FBI's understanding in twenty fifteen or before was
Speaker 1: that these enterprises were run over at and T cell phones,
Speaker 1: normal cell phones that were encrypted.
Speaker 2: I think when they've been investigating drug trafficking rings before
Speaker 2: or other criminals, the sort of approach of these criminals
Speaker 2: has just been to sort of compartmentalize information, only tell
Speaker 2: people certain things, maybe use code words, all of the
Speaker 2: very stereotypical things you see in TV. But then when
Speaker 2: they're scrolling through these messages Owen Hanson and other people
Speaker 2: later on, they're not using code words. They're saying I'm
Speaker 2: going to send the five thousand kilos of cocaine or whatever.
Speaker 2: Because they're so confident in this encryption technology. Well, what's
Speaker 2: the point of using code words. We can just be
Speaker 2: explicit and blunt about it and say I'm sending the
Speaker 2: heroin to this place. And as they were going through
Speaker 2: the messages. There were addresses of where where these drugs
Speaker 2: were being picked up, where they were being sent to,
Speaker 2: as well the names of contacts. It was like opening
Speaker 2: up an entire new window to criminality.
Speaker 1: So in twenty twenty five terms this twenty fifteen technology,
Speaker 1: where does that fall, that encryption technology? Where does what
Speaker 1: Owen Hansen was using. Where does that fall on our
Speaker 1: three levels? Is it closer to the government level these days?
Speaker 1: Or is it more the signal level.
Speaker 2: It's kind of in between two of them, in between
Speaker 2: the signal one and the sort of the government level,
Speaker 2: because yes, it's encrypted, so if it gets intercepted, you're
Speaker 2: not going to be able to read it. But where
Speaker 2: these companies selling these phones to organize criminals, they did
Speaker 2: take that extra step of removing the camera, removing the GPS,
Speaker 2: taking out the microphone as well, and you know, it's
Speaker 2: kind of debatable how beneficial those removals are. But your
Speaker 2: traffickers love it when these companies introduce bells and whistles,
Speaker 2: new gadgets, or they take features out, when really the
Speaker 2: most important thing is that it's sending encrypted text messages,
Speaker 2: but it sits somewhere in between because they're highly customized
Speaker 2: and they're really expensive as well. To get one of
Speaker 2: these phones, it's going to cost you thousands of dollars
Speaker 2: for a six or a twelve month subscription. This isn't
Speaker 2: something you just go into the T mobile store and buy.
Speaker 2: We go to Fison and his four three iPhones or whatever.
Speaker 2: It is a completely different business model. And the drug
Speaker 2: traffickers love is expensive as well, because well, if it
Speaker 2: cost me thousands of dollars, that's got to mean it's good.
Speaker 2: And I mean that literally. I've spoken to drug traffickers
Speaker 2: and the people who sell the phones, and price is
Speaker 2: a major factor of building that trust.
Speaker 1: So do you have to if we're just let's say
Speaker 1: we're just talking about Phantom Secure number one, is this
Speaker 1: an above board company in any way or do they
Speaker 1: strictly deal with criminal Back then criminal enterprise.
Speaker 2: They started legit and then when it became clear that
Speaker 2: criminals were the primary customer base, the CEO of the company,
Speaker 2: a guy called Vincent Ramos, he leaned into that essentially
Speaker 2: is very competitive space as well, and you have to
Speaker 2: think that unlike the normal phone market, where there's potentially
Speaker 2: an unlimited number of customers for AT and T to
Speaker 2: get or whoever there's a finite number of drug traffickers
Speaker 2: in the world, probably kind of want them to come
Speaker 2: over to your company. If criminals are using your phone,
Speaker 2: you start to lean into that, and that's what many
Speaker 2: of these companies did.
Speaker 1: When Owen Hanson was using this encrypted phone, did he
Speaker 1: have to message with somebody who also had a phone
Speaker 1: from phantom secure or was it? Could it be any
Speaker 1: kind of phone. What if he's calling somebody on AT
Speaker 1: and T who's not upon the latest criminal technology.
Speaker 2: Yeah, these operate generally as closed networks. So if you're
Speaker 2: a phantom secure you can only message another phantom secure phone.
Speaker 2: If you're on another phone from a different company called Sky,
Speaker 2: for example, you can only message Sky people. And that
Speaker 2: has sort of two reasons, the first being that presumably
Speaker 2: it's more secure. You know, if only the phantom phones
Speaker 2: are talking to each other, then maybe there's less chance
Speaker 2: of law enforcement infiltrating or in informant getting in or
Speaker 2: something like that. The other one is a pure business decision.
Speaker 2: It's like, well, if I'm phantom secure, I only want
Speaker 2: my customers to be able to talk to each other,
Speaker 2: because that means other people have to come to my
Speaker 2: ecosystem as well, kind of like Apple and its app store.
Speaker 2: You know, you can't really move apps between an Android
Speaker 2: phone and an Apple phone. It's the same sort of
Speaker 2: business decision for these guys as well.
Speaker 1: When the FBI talks to Owen Hanson, I'm assuming he
Speaker 1: doesn't illuminate anything about any of this. Is he at
Speaker 1: all helpful to the FBI once he has been convicted.
Speaker 2: Not At first He's put into a room and the
Speaker 2: authorities and Australian authorities which have been tracing him as well,
Speaker 2: they start telling Hanson all about the alleged crimes that
Speaker 2: he's done, and he very quickly shuts up and says,
Speaker 2: this is the moment when I'm going to bring in
Speaker 2: my lawyer. Later on. I think he does testify against
Speaker 2: other people in his organization, But of course his arrest
Speaker 2: is absolutely not the end, not just for the FBI
Speaker 2: but for his story as well, because then they start
Speaker 2: to round up more members of his criminal enterprise, because
Speaker 2: now they're in the phone which has all of their
Speaker 2: contact information as well.
Speaker 1: Oh my gosh, I wonder what his reaction was when
Speaker 1: he found out he just had never changed that password
Speaker 1: and didn't think it was necessary. In the FBI got
Speaker 1: in within you know, thirty seconds.
Speaker 2: Yeah. I mean I've spoken to Owen Hanson a couple
Speaker 2: of times. He didn't specifically talk about the password, but
Speaker 2: he did admit that to me. And I mean, it's
Speaker 2: a sloppy mistake for a drug trafficker to make. And again,
Speaker 2: I think that just shows how much confidence these people
Speaker 2: have in the technology, and technology can only go so far.
Speaker 2: You may have the fanciest quantum encryption in the world,
Speaker 2: just tons of fancy algorithms. What it doesn't matter if
Speaker 2: you make a mistake like that, like not changing the password.
Speaker 1: So the FBI is realizing that their traditional methods of
Speaker 1: monitoring these folks aren't working. What is their next step?
Speaker 1: Is it sort of taking you know, Hanson's contacts and
Speaker 1: looking through and then are they flipping these people? How
Speaker 1: do they know how many how many criminals are going
Speaker 1: to places like sky or Phantom Secure.
Speaker 2: Yeah, so they do flip people in and around Hanson's
Speaker 2: or organization, and they investigate them with sort of traditional
Speaker 2: law enforcement tactics, but a prosecutor inside the San Diego office,
Speaker 2: they start to have this really interesting idea, which is
Speaker 2: that well, we're looking at the messages inside this one phone,
Speaker 2: but presumably many other criminals are using Phantom Secure phones
Speaker 2: as well, and they get some intelligence from other agencies,
Speaker 2: the Canadians and the Australians, and they do start to
Speaker 2: build up a picture of oh, Phantom Secure is a
Speaker 2: serious player in this space with thousands and thousands of customers.
Speaker 2: If we're looking at the messages of this one phone
Speaker 2: because we got lucky with this guy's bad password, what
Speaker 2: would it be like to look at the messages of
Speaker 2: all of these customers. And that plants the seed of
Speaker 2: an idea, which is, like, we need to infiltrate one
Speaker 2: of these companies, and specifically they focus on Phantom Secure
Speaker 2: because that's the one that's right in front of them.
Speaker 1: Eventually, their plan is to build their own telecommunications company
Speaker 1: to draw these guys in, which I just think is
Speaker 1: so brilliant and I'm sure a daunting task for them,
Speaker 1: But they start with saying, we need to figure out
Speaker 1: how this company works before we replicate our own company.
Speaker 1: Is that right?
Speaker 2: Yeah, So they focus first on Phantom Secure. They investigate
Speaker 2: the CEO I mentioned, Vincent Ramos, and they do various
Speaker 2: sort of undercover exercises. The Canadians try to buy the
Speaker 2: phones while posing as drug traffickers, and Phantom Secure is like, sure,
Speaker 2: here you go. In another case, I think the Canadians
Speaker 2: also then ask Phantom to wipe one of their phones.
Speaker 2: And that's sort of another key feature of these devices,
Speaker 2: which is that for Apple iPhones, you have iCloud. You know,
Speaker 2: your phone gets stolen or you lose it, you log
Speaker 2: into iCloud and you wipe the device so nobody gets
Speaker 2: all of your personal details or your photos or whatever.
Speaker 2: Phantom Secure in these companies have that as well. But
Speaker 2: you go to the company and you say, my phone
Speaker 2: has landed in somebody else's hands, and you can say
Speaker 2: specifically law enforcement, and there's a bunch of evidence about
Speaker 2: cocaine trafficking on my phone. Can you wipe it? And
Speaker 2: they will do that. And the allegation, which was later
Speaker 2: proved in court, is that Phantom Secure knew it was
Speaker 2: obstructing justice by wiping these phones, which is again is
Speaker 2: different to Tim Cook and Apple. You know, Tim Cook
Speaker 2: is not knowingly wiping Apple iPhones of criminal evidence, but
Speaker 2: Phantom Secure absolutely was doing that. So the FBI, the Australians,
Speaker 2: and the Canadians, they get all of these little bits
Speaker 2: and bobs about Phantom Secure until crucially they trick Vincent
Speaker 2: Ramos in a Las Vegas hotel room. They're filming it
Speaker 2: with undercover agents posing as drug traffickers, who they say
Speaker 2: they're interested in buying some Phantom Secure phones, and they
Speaker 2: make it very clear that they're drug traffickers. You know,
Speaker 2: we're trying to move cocaine from South America to Europe.
Speaker 2: We want to use these phones as part of that expansion.
Speaker 2: And they even ask Vincent Ramos, what if we wanted
Speaker 2: to kill one of our associates who maybe steals money
Speaker 2: from us or something, could we use your phones to
Speaker 2: do that? And Vincent sort of dances around it until
Speaker 2: eventually admitting, Hey, you don't know me, but we made
Speaker 2: the phones for this, meaning drug trafficking. And that's the
Speaker 2: moment where he's basically sealed his fate. Even though it
Speaker 2: was like a very passing comment, he's just basically omitted
Speaker 2: to under cover officials that Phantom Secure is made or
Speaker 2: at least used for drug trafficking. So they let Vincent
Speaker 2: go for a bit while they're still investigating. They lure
Speaker 2: him back to Vegas, and this time the FBI is
Speaker 2: not undercover. They're all waiting for him in the hotel room.
Speaker 2: He comes in and the agents tell him, look, we
Speaker 2: know what you're doing, we know all about Phantom Secure.
Speaker 2: We are prepared to arrest you on the spot right now,
Speaker 2: or you do something for us, and that's put a
Speaker 2: backdoor into Phantom Secure so we can read all of
Speaker 2: your customer's messages. Again, it would be like reading Owen
Speaker 2: Hanson's messages, but not for one phone, for seven, eight, nine,
Speaker 2: ten thousand, and that would I can't stress how incredible
Speaker 2: that would be for the FBI. Vincent doesn't put the
Speaker 2: back door in. Some people I speak to say he
Speaker 2: couldn't do it. Others say that he wouldn't do it
Speaker 2: because he doesn't want to impact the privacy of his customers.
Speaker 2: I definitely think it's the former. He wasn't really a
Speaker 2: tech guy who was a business guy. But he eventually
Speaker 2: decides to cooperate somewhat with the authorities, and they spend
Speaker 2: three or four days in there, sleeping on the floor,
Speaker 2: getting takeout food, and the FBI and other agents are
Speaker 2: grilling Ramos about the company, about the industry, until Vincent decides,
Speaker 2: for some reason he gets cold feet and he leaves
Speaker 2: the hotel suite while the agents are sleeping. He tries
Speaker 2: to escape to the Canadian border, which is incredibly embarrassing
Speaker 2: for the FBI, where you have your prime criminal suspect
Speaker 2: and he basically slips out in the middle of the night.
Speaker 2: I won't spoil everything about how he's caught, but the
Speaker 2: authorities deploy every resource at their disposal to catch this guy,
Speaker 2: and they eventually do. And Andrew Young, the main prosecutor involved,
Speaker 2: who I spoke to many many times for this book,
Speaker 2: he said it was like getting to the Super Bowl
Speaker 2: and then losing. You finally track down this guy, you
Speaker 2: might be able to get a backdoor into the network,
Speaker 2: and then he does something stupid like runs away. Now
Speaker 2: we're back to square one. Now we don't have anything.
Speaker 2: We can just arrest the guy and shut down the company,
Speaker 2: but how are we even going to get our backdoor?
Speaker 1: The theme here is dumb silly mistakes. Obviously for a moment,
Speaker 1: Hanson's you know, not changing his password to the FBI,
Speaker 1: letting this guy slip away. When the FBI comes to
Speaker 1: him initially and says, hey, we're we're drug traffickers or
Speaker 1: anybody who comes to Phantom Secure and says, I want
Speaker 1: a phone. I'm a drug trafficker. Is there no criminal
Speaker 1: background check, as in, let's find out if you're really
Speaker 1: a criminal? Can somebody vouch for you? Situation happening with
Speaker 1: this company, I mean that would to me, would say,
Speaker 1: so I need Joe Shmo can come off the street
Speaker 1: and if you've got a couple of thousand dollars, you
Speaker 1: can buy one of our phones.
Speaker 2: Yes, And typically the companies do that. They do check
Speaker 2: out who their customers or their potential customers are, to
Speaker 2: know if they're legit, at least in the criminal world.
Speaker 2: It seems that the FBI and his partners had a
Speaker 2: pretty good backstory, Like it wasn't completely out of the blue.
Speaker 2: From what I've read through court documents and speaking to
Speaker 2: people involved, it was a pretty well developed undercover identity.
Speaker 2: You know what authorities call a backstop, and it has
Speaker 2: all of this context and history where this wasn't just
Speaker 2: invented entirely out of cloth. There's enough to convince somebody that, Okay,
Speaker 2: this person's a criminal, you know, and I can trust
Speaker 2: them potentially.
Speaker 1: So they get Vincent Ramos and you said that he
Speaker 1: does cooperate sort of, is that right? What happens after that.
Speaker 2: He cooperates someone and he says he's going to go
Speaker 2: to San Diego, and then of course that goes out
Speaker 2: of the window when he tries to escape, and then
Speaker 2: eventually it's just that, well, the game is over for him,
Speaker 2: you know, he tried to run away. He's now been recaptured.
Speaker 2: He's completely blown the authorities attempts of getting a backdoor
Speaker 2: into Phantom secure out of the water. But what does
Speaker 2: happen is that as news spreads of Vincent Ramos's arrest,
Speaker 2: and I actually learned of that before the FBI announced it.
Speaker 2: I had a source come to me instead that the
Speaker 2: FBI has arrest of Ramos, and I did an article
Speaker 2: around that time as well. What becomes clear is that
Speaker 2: it freaks out all of the other people who are
Speaker 2: selling in cryptophones in this industry, so much so that
Speaker 2: one of them comes forward, seeing the writing on the
Speaker 2: wall and realizes, I need to make a decision here.
Speaker 2: I either need to stay in the cryptophone industry and
Speaker 2: maybe Laura Enforcement is going to come after me as well,
Speaker 2: or how about I flip and maybe I approached the
Speaker 2: FBI with a truly amazing off. And that's how we
Speaker 2: start to get into the FBI running its own company.
Speaker 1: Okay, so who is this? Who's this person who's flipping
Speaker 1: and coming forward? Is this a Sky person?
Speaker 2: This is somebody called afgu Afgo. I'm going to use
Speaker 2: that moniker because you know, they're very much a threat
Speaker 2: to their life for cooperating with law enforcement. But they
Speaker 2: sold phantom secure phones. They sold phones for other company Sky.
Speaker 2: What they were doing was developing their own encryptive phone
Speaker 2: company almost to compete with Ramos and the other ones.
Speaker 2: And that was going to be called a non anom.
Speaker 2: And this person thinks, well, if the FBI is investigating
Speaker 2: these companies, I need to play the ace at my sleeve.
Speaker 2: And his lawyers contact the FBI and the prosecutors and
Speaker 2: they say, my client has this encryptophone company they've just started,
Speaker 2: called a non would you like to use it in
Speaker 2: your own investigations? Of course, not for free. There will
Speaker 2: be money involved, a relatively small amount of about one
Speaker 2: hundred thousand dollars. More importantly, you will not prosecute, or
Speaker 2: you will give a lighter sentence to my client for
Speaker 2: charges they may or may not face in the future.
Speaker 2: But this is an incredible deal for the FBI. Rather
Speaker 2: than investigating a company like Phantom Secure have to deal
Speaker 2: with all of the work they're trying to get a
Speaker 2: backdoor in. This opportunity basically falls into their lap, which
Speaker 2: is like, would you like this tech startup which is
Speaker 2: probably going to be trusted by criminals because it's in
Speaker 2: that world, is in that ecosystem, and you can put
Speaker 2: a backdoor in yourself. Rather than shutting money these companies down,
Speaker 2: they would become the phone of choice for criminals.
Speaker 1: And at this point you've got people scared who are
Speaker 1: running these companies anyway, right, so maybe their competition is
Speaker 1: even lighter than before because you know people are running
Speaker 1: so anam. I know it needs to still be developed,
Speaker 1: but has word gotten out that this is being developed
Speaker 1: or you're gonna have another option. We're still working through
Speaker 1: the kinks kind of thing. So there was no even
Speaker 1: real hour advertise it needed once it was ready to
Speaker 1: go by the FBI.
Speaker 2: It was still super early days, but there was absolutely
Speaker 2: a void or a vacuum in place. Because the FBI
Speaker 2: shuts down Phantom, all of the other companies are pretty spooked.
Speaker 2: You know, they're not closing down just yet, but it's
Speaker 2: pretty scary. But there is a vacuum, especially in Australia
Speaker 2: where Phantom Secure was particularly popular, and criminals need a
Speaker 2: phone obviously, and you can imagine how annoying it is
Speaker 2: for us when what sapp goes down or a message
Speaker 2: goes down. Imagine if you are a cocaine trafficker moving
Speaker 2: multiple tons of drugs week after week, you need to
Speaker 2: be online and if you don't have an encryptive phone
Speaker 2: for a week, you are going to lose a lot
Speaker 2: of money. So there is an urgent need and demand
Speaker 2: for people to find a new provider. But it does
Speaker 2: start exceptionally small. It's basically word of mouth at first. Afku,
Speaker 2: the creator of a non even gives out some of
Speaker 2: the phones for free just to get it in front
Speaker 2: of people, like here's the new phone, I'm trying. Please
Speaker 2: give it a go. And it's very very slow at
Speaker 2: the start, but eventually major gangs in Australia star getting
Speaker 2: onto it, biker gangs, members of the Italian Mafia, those
Speaker 2: sorts of people, and it's effective. It's a cool new phone,
Speaker 2: whereas Owen Hanson's BlackBerry was. I mean, we laugh because
Speaker 2: Blackberries were cool back in the day. They're not cool
Speaker 2: in this point in the timeline in twenty eighteen, twenty nineteen.
Speaker 2: You know, we all want Android now. We want to
Speaker 2: send encrypted photos, we want to send encrypted voicemails, videos,
Speaker 2: all of that sort of thing. And a Noon was
Speaker 2: promising that it was going to be the cool new
Speaker 2: sort of player on the block when it came to
Speaker 2: giving encryption to criminals.
Speaker 1: Let me ask a question. If they're moving forward, you know,
Speaker 1: the FBI is moving forward with this plan tentatively. They
Speaker 1: have all this information from Phantom Secure that they got
Speaker 1: during this time with Vincent Romo's. Do they move on
Speaker 1: any of those people, any of these messages that they've read,
Speaker 1: or do they hold off because they don't want to spook,
Speaker 1: you know, all of the potential customers they could have
Speaker 1: later on with this new company.
Speaker 2: They and especially Australian foresties do make some arrests, particularly
Speaker 2: of people who are helping sell the Phantom Secure phones.
Speaker 2: They can't just like let that go. And they also
Speaker 2: shut down servers, They seize websites and web domains used
Speaker 2: by Phantom Secure. So it is a large scale disruption effort,
Speaker 2: but absolutely the resources move pretty quickly over making no
Speaker 2: the new sexy, interesting phone that criminals are going to
Speaker 2: want to flock to.
Speaker 1: So as Afku the face of this company, how involved
Speaker 1: is he this criminal? The FBI is now saying, we're
Speaker 1: going to work with you to make this legitimate.
Speaker 2: Yeah, so Afku definitely knows people in the criminal underworld,
Speaker 2: and that's how it gets its start. It would be very,
Speaker 2: very difficult for a norm or really any encryptophone company
Speaker 2: in the criminal space to get any sort of headway
Speaker 2: if you don't have those criminal connections. And that's another
Speaker 2: crucial thing about trust is that if you're a cocaine
Speaker 2: trafficker and you buy an a cryptophone from somebody like
Speaker 2: AFGA or anyone in that space, there's a specific person
Speaker 2: you can go and blame if something goes wrong. If
Speaker 2: a criminal I don't know gets an iPhone and installs
Speaker 2: signal of it, they're not going to go and beat
Speaker 2: up Tim Cook. I mean they might do, but that
Speaker 2: would be absolutely insane obviously.
Speaker 1: Yeah.
Speaker 2: But when they buy a phone from somebody in an
Speaker 2: alley in Amsterdam or from a safe house in South America,
Speaker 2: there's a specific person you can go blame. You can
Speaker 2: go hurt, you can torture potentially, and that comes up
Speaker 2: in the book as well. So he is the face
Speaker 2: of a nom, but he starts spreading out the phones
Speaker 2: to people who then have more criminal connections, who can
Speaker 2: then directly sell them to the actual cocaine traffickers or
Speaker 2: the hit men or anybody else who wants to use
Speaker 2: the phone. It's basically a pyramid scheme where you have
Speaker 2: Afriga at the top, you have the sellers underneath, maybe
Speaker 2: even more sellers underneath them. Then you have the end users,
Speaker 2: the hit men, the traffickers, whoever. But in that pyramid scheme,
Speaker 2: there's almost a secret top layer, which is the FBI
Speaker 2: above the entire pyramid in the clouds, which is actually
Speaker 2: dictating the entire thing.
Speaker 1: Are all of the people who work for a noom
Speaker 1: like Afgu, I mean, are they all aware of what's
Speaker 1: happening and what they're doing.
Speaker 2: Afgu is the only one who knows at least is
Speaker 2: my understanding. And I've spoken to people who coded the
Speaker 2: actual phone, they developed the actual app, and these were
Speaker 2: ordinary people based around Asia and Southeast Asia. They had
Speaker 2: no idea they were building basically an FBI surveillance apparatus,
Speaker 2: and I know that might be a a little bit
Speaker 2: hard for people to believe, like, well, surely they must
Speaker 2: have figured it out. I don't know. They were getting
Speaker 2: one thousand bucks to make a chat app and they
Speaker 2: log on. One I spoke to was working from his
Speaker 2: bed with his MacBook Pro on his chest, just kind
Speaker 2: of like anybody else working remotely anywhere else around the world.
Speaker 2: It's just a paycheck. Only years later did they realize, oh,
Speaker 2: I just helped wiite up the world. It was a
Speaker 2: complete secret to of course the cocaine traffickers who are
Speaker 2: using the phones, it has to remain a secret from them,
Speaker 2: but even people inside the company itself as well.
Speaker 1: So we know the United States is the mastermind of this.
Speaker 1: Who else is involved? It's Australia and Canada and other countries.
Speaker 1: Who else is in this?
Speaker 2: Yeah, so it definitely changes over the years. The Europeans
Speaker 2: eventually become involved, but right at the start it's the
Speaker 2: Australians and specifically the Australian Federal Police AFP. And the
Speaker 2: reason for that is not just because these phones are
Speaker 2: so popular in Australia, because you can make a lot
Speaker 2: of money if you get drugs to that island. Drugs
Speaker 2: cost a hell of a lot more money inside Australia
Speaker 2: than they do in the UK or the Netherlands or
Speaker 2: the United States or whatever. But the FBI wanted the
Speaker 2: Australians to sort of test it out first, like they
Speaker 2: don't even know if this backdoor is going to work. Essentially,
Speaker 2: this is a really crazy idea that nobody inside the
Speaker 2: FBI or really any agency apart from potentially the CIA,
Speaker 2: has ever done before. So the Australians try it out,
Speaker 2: and very quickly they do realize, Wow, we're getting really
Speaker 2: good intelligence. We're getting really good messages from these criminals,
Speaker 2: and they can literally see them flash up on their
Speaker 2: computer screens in a part of their headquarters called the Bunker,
Speaker 2: and it's kept incredibly tight lipped. You know, only a
Speaker 2: few people know about this incredibly sensitive capability. But then
Speaker 2: when it starts to grow in Australia, it quickly becomes
Speaker 2: apparent that we're going to need to rope in more
Speaker 2: agencies just because of the globalized nature of organized crime.
Speaker 2: You have these traffickers in Australia who are asking AFGU
Speaker 2: and other people, well, can you start selling phones to
Speaker 2: my contacts in Europe to my contacts in South America,
Speaker 2: because of course drugs have to move. They're a physical
Speaker 2: good and it's going to be connected to the worldwide
Speaker 2: supply chain as well. So quickly as the phones go
Speaker 2: abroad and they go into Europe and South American other locations,
Speaker 2: the FBI has to bring in other law enforcement agencies
Speaker 2: as well.
Speaker 1: At its height, Do I remember this right that you said?
Speaker 1: It was they were looking into ten thousand different criminals
Speaker 1: that have joined this their company. Is that right? Really?
Speaker 1: Over how many years?
Speaker 2: Yeah? So the top number of phones sold was twelve thousand,
Speaker 2: and then at some point they had nine thousand online,
Speaker 2: all at the same time. And this stretch from twenty
Speaker 2: eighteen up to twenty twenty one. So for years and years,
Speaker 2: the FBI was reading these communications of all of these
Speaker 2: criminals all over the world. And I think just to
Speaker 2: stress sort of the safety and the danger to afgu
Speaker 2: as you know, and as your listeners will know, if
Speaker 2: you're an informant to a single criminal gang, your life
Speaker 2: might be a risk. You know, obviously depends on the
Speaker 2: crime involved. If you are the confidential human source who
Speaker 2: provided the phone company that the FBI then used to
Speaker 2: wipe up the world, which caught something like thousands of
Speaker 2: thousands of criminals and about three hundred and fifty distinct
Speaker 2: crime syndicates. You've just annoyed three hundred and three hundred
Speaker 2: and fifty different criminal groups. Every single one of those
Speaker 2: is probably going to want to kill you.
Speaker 1: Well, now I have some technical questions because you've brought
Speaker 1: that up. What I was thinking was, how do you
Speaker 1: move in these investigations? How does the FBI figure out
Speaker 1: at what pace what order that you would move, Because
Speaker 1: don't you think at some point they would all catch
Speaker 1: on and say, wait a second, The common denominator here
Speaker 1: is not the drug traffickers in Mexico or in Canada.
Speaker 1: It's this phone company that we all happen to belong to.
Speaker 2: Yeah. That is the constant tension throughout the book and
Speaker 2: throughout the FBI's investigation, is that we're getting all of
Speaker 2: this intelligence. It's incredible, but if we move too quickly
Speaker 2: and too aggressively, it's going to become obvious. There's the phones.
Speaker 2: And then they have the tension of working with maybe
Speaker 2: the Ecuadorian authorities or people in other countries as well,
Speaker 2: and they want to seize the drugs. They don't want
Speaker 2: cocaine flowing across their borders or whatever. So agencies would
Speaker 2: take decisions to sometimes interceptor shipment, sometimes raid a drug lab,
Speaker 2: but they would try to do it in such a
Speaker 2: way that they were so spread out that it would
Speaker 2: give the impression they were not connected whatsoever. Towards the end,
Speaker 2: some people did start get suspicious when there's these thousands
Speaker 2: of users all over the world and all of this
Speaker 2: stuff is being shut down. But for years nobody had
Speaker 2: any clue, and to the point where there's one particular
Speaker 2: drug trafficker in the book called Maximilian Rifkin. He is
Speaker 2: my favorite person I've ever covered. He is absolutely insane, crazy,
Speaker 2: and I had a very good time digging in to him.
Speaker 2: But he puts so much faith into a norm that
Speaker 2: he tells all of his underlings, don't use Sky, don't
Speaker 2: use these other companies all come to a norm because
Speaker 2: not only was he using the phones to traffic drugs,
Speaker 2: he was selling the phones as well, So he had
Speaker 2: this duel motivation of protecting my drug trafficking and making
Speaker 2: a lot of money by selling the phones as well.
Speaker 2: And he puts so much blind faith into it, and
Speaker 2: blind trust into these phones that it was his ultimate downfall,
Speaker 2: not just of him but basically everybody he worked with.
Speaker 1: So is he working directly for the company or is
Speaker 1: he like a scalper basically buying a lot of phones
Speaker 1: in then reselling them.
Speaker 2: Here's why I would call a major distributor where he's
Speaker 2: going to get the phones, he's going to resell them,
Speaker 2: and he's going to take a commission or a cut
Speaker 2: or try to upsell them and that sort of thing.
Speaker 2: But often what I found through reading hundreds of thousands
Speaker 2: of a non messages later that they managed to obtain
Speaker 2: from the police and sources and courts and all of
Speaker 2: that sort of thing. He would also give out the
Speaker 2: phones for free because there was basically a turf war
Speaker 2: between his company or a non incroachat and another one
Speaker 2: Sky that we mentioned, and they're all trying to fight
Speaker 2: for the same customers to the point where there's violence
Speaker 2: as well. There isn't just violence in the drug trafficking world,
Speaker 2: there's violence in the industry of selling the phones to
Speaker 2: organize crimes as well, shooting, stabbings, bombings as well. But
Speaker 2: he stood and others stood to make a lot of
Speaker 2: money if they could provide the phones to drug traffickers.
Speaker 1: Is there any kind of an ethical concern that they
Speaker 1: cannot keep up with all of these messages. They're not
Speaker 1: making all of these arrests. They are facilitating murders probably
Speaker 1: all over the world because they simply are not going
Speaker 1: to be able to go in with a big net
Speaker 1: and sweep all these people up. Yeah, I mean, I
Speaker 1: know they would have gotten phones somewhere, but still, is
Speaker 1: there any kind of did you hear anybody say that.
Speaker 2: One of the major concerns before the FBI got the
Speaker 2: approval to go ahead was that this looks a lot
Speaker 2: like Operation Fast and Furious, which is where US authorities
Speaker 2: allowed the flow of guns into Mexico. And the idea
Speaker 2: was that, well, we can follow the guns and then
Speaker 2: we can arrest the cartel members who are using them.
Speaker 2: That sort of thing that massively backfired, and those weapons
Speaker 2: were then used in the murder of at least you know,
Speaker 2: one border patrol agent and various other crimes as well.
Speaker 2: There the US authorities are basically allowed the cartels to
Speaker 2: get these weapons that were then used for horrible crimes
Speaker 2: and people inside San Diego, inside the authorities, they made
Speaker 2: that direct comparison and the counter which I find somewhat compelling,
Speaker 2: even though I understand the concern is that, look, these
Speaker 2: criminals are going to be using an encryptophone regardless, Like
Speaker 2: these are all cocaine traffickers. They all use these phones.
Speaker 2: This is standard operating procedure for drug traffickers nowadays. Wouldn't
Speaker 2: it be better if they were using a phone that
Speaker 2: we did have visibility into? And apparently that argument was
Speaker 2: convincing enough for the FBI to get approved and for
Speaker 2: the prosecutors in San Diego to go ahead as well.
Speaker 2: That being said, just when there's that tension with well,
Speaker 2: should we raid this drug lab? Should we seize all
Speaker 2: of these narcotics, there's a lot of violence happening on
Speaker 2: an arm as well. There's threats of assassination, torture as well,
Speaker 2: and I document in the book there's one case where
Speaker 2: a young man is unfortunately murdered in Sweden due to
Speaker 2: assassins who used the FBI's own app. They sourced the gun,
Speaker 2: they followed the target, they lured him to a specific location,
Speaker 2: and then they murdered him. The FBI had all of
Speaker 2: that information, but they didn't give it to the Swedish
Speaker 2: authorities in time.
Speaker 1: So are they able to monitor all of these messages
Speaker 1: that are coming through? How is that even possible?
Speaker 2: It's really really difficult. First of all, the messages come
Speaker 2: to the FBI every three days, I think every Monday, Wednesday, Friday.
Speaker 2: And the way it was prescribed to me by the
Speaker 2: San Diego FBI was that they'd have a very long
Speaker 2: week of going through all of these messages, translating them,
Speaker 2: sometimes with automated technology or linguists as well disseminating it
Speaker 2: to international partners. The weekend happens Monday, there's another batch
Speaker 2: of messages, and now we have to go again. And
Speaker 2: it absolutely became unsustainable. Towards the end, they're gathering something
Speaker 2: like twenty twenty one million messages, to the point where
Speaker 2: they're getting a million messages a day, and then every
Speaker 2: single one of those messages has to be read, has
Speaker 2: to be digested, because you don't know if you missed
Speaker 2: this one single message, well maybe somebody's gonna get shot
Speaker 2: or kidnapped or tortured or whatever. And they couldn't keep
Speaker 2: up with it any longer. It's almost like the intelligence
Speaker 2: and the capability was too good.
Speaker 1: Essentially before this is you know, revealed and arm and
Speaker 1: the origins of it. You have these people, you know,
Speaker 1: going on trial. So let's say it's a criminal syndicate
Speaker 1: that they broke up somewhere in America. They go on trial,
Speaker 1: and these criminals do their defense attorneys know how this
Speaker 1: information came to them? Is that disclosed at all? I
Speaker 1: would think you would have to write, you have to.
Speaker 2: Eventually, but especially and especially what the Australian authorities did
Speaker 2: was that they would arrest people, they would intercept drug shipments,
Speaker 2: and then they would basically publish Another reason why. One
Speaker 2: concrete example is that some drugs were hidden inside a
Speaker 2: shipment of welding machines being sent to Australia. The cops
Speaker 2: knew where they were because they're reading all of the
Speaker 2: messages on the encrypted app when they arrest somebody, and
Speaker 2: then the issue at press release a couple days later,
Speaker 2: the Australians just say, oh, well, we did an X
Speaker 2: ray and then that's how we found the drugs, which
Speaker 2: is technically true, but before that they had this gold
Speaker 2: mine of intelligence that told them to do the X
Speaker 2: ray in the first place. Now, of course, years after
Speaker 2: the fact and many of these cases are still going
Speaker 2: through the courts, especially in Australia, where Australian authorities remain
Speaker 2: very very quiet about it because I mean they're still
Speaker 2: legal proceedings and they can't discuss it basically whatsoever. But
Speaker 2: now all of that information, all of that context has
Speaker 2: come out. But at the time it just looks like
Speaker 2: the authority's got incredibly lucky. But there's only so much
Speaker 2: of that you can do. You can't get lucky again
Speaker 2: and again and again and again before people start asking questions.
Speaker 1: And is Afgu just unshakable in this role that he's in.
Speaker 1: Does the FBI ever doubt him in any way as
Speaker 1: being someone who is legitimately working with them.
Speaker 2: I haven't seen any indication that they start to doubt
Speaker 2: this person. And I think the reason for that would
Speaker 2: be just like the back door works, you know. And
Speaker 2: of course, if AFGU or anyone else is using those devices,
Speaker 2: the FBI is going to see those messages as well.
Speaker 2: So if Afgu decided to go do something silly and
Speaker 2: start sending information to criminals, at least on a non
Speaker 2: the FBI is going to see that as well. And
Speaker 2: I mean, it would just be a very unfortunate thing
Speaker 2: to do to agree to cooperate in a sort of backstab.
Speaker 2: I saw no indication of that. If anything, I think
Speaker 2: the FBI were ecstatic with the capability that this provided.
Speaker 2: You know, I even heard that some of the geekier
Speaker 2: employees inside the FBI and the AFP, they marveled at
Speaker 2: this backdoor in this technology. And I'm sure they're thinking
Speaker 2: of other ways to use it in the future as well.
Speaker 2: Now that they've done it and they've built it, maybe
Speaker 2: there's another way to build it again, at least potentially.
Speaker 1: Well, this was so recent, So how long did this
Speaker 1: go on? It started in twenty eighteen. Tell me what
Speaker 1: the different stages were. Twenty eighteen the beginning, they're building
Speaker 1: the company, they're marketing it and all of that.
Speaker 2: Yeah, twenty eighteen, it starts very quiet in Australia, word
Speaker 2: of mouth. By twenty nineteen it's moved to Europe. They
Speaker 2: start to bring in some really big drug traffickers who
Speaker 2: sort of act as brand ambassadors for the phone. The
Speaker 2: US authorities actually call them influencers. Instead of you know,
Speaker 2: selling shampoo or whatever on Instagram, it's selling phones to
Speaker 2: the cartel and that catapults it. And then when you're
Speaker 2: at twenty twenty and twenty twenty one. It's basically one
Speaker 2: of the main players in this space, and it basically
Speaker 2: becomes the same size as Phantom Secure, if not bigger
Speaker 2: in some instances, and the FBI basically became better at
Speaker 2: running a tech startup for criminals than the criminals were
Speaker 2: doing it themselves. I mean, it becomes absolutely successful, and
Speaker 2: on one hand, it's a long time to run that
Speaker 2: company over years. On the other that's a very short
Speaker 2: amount of time for a non to become as big
Speaker 2: as it was. You know, it really ramped up exponentially,
Speaker 2: and I really try to draw this parallel between this
Speaker 2: tech startup for criminals and Silicon Valley. Not that those
Speaker 2: speaking for criminals, but you will have this phenomenon in
Speaker 2: tech and business called hockey stick growth where it starts
Speaker 2: rail ray stagnant, then all of a sudden it just
Speaker 2: shoots up. And that's basically what happened with a numb.
Speaker 1: How many people total at its height knew about this
Speaker 1: around the world. I cannot believe it didn't get out
Speaker 1: at its height.
Speaker 2: Was dozens of people knew about this at the start.
Speaker 2: It's basically the organized crime squad inside San Diego FBI,
Speaker 2: which to be clear, is a small office. I mean
Speaker 2: I've been there. I walked through the rooms where they
Speaker 2: read the a non messages. They're not the fanciest or
Speaker 2: the biggest FBI field office. You know, they're not LA,
Speaker 2: they're not DC obviously, or Southern District of New York.
Speaker 2: They're very much an underdog. And I think that mentality
Speaker 2: really permeated throughout the FBI of like, well, we're going
Speaker 2: to show them that we can actually do this. And
Speaker 2: that was you know, six seven, eight people at first,
Speaker 2: and then they're superiors. And then as it starts to
Speaker 2: spread to different agencies, the Germans, the Swedes, the Dutch
Speaker 2: as well, most of which I spoke to, it was
Speaker 2: a handful of people in each agency. And I think
Speaker 2: it's a genuine miracle that this did not leak. Sort
Speaker 2: of in parallel, as I go to go into in
Speaker 2: the book, there were these other investigations into Sky, into
Speaker 2: end Chat by the Europeans. They did leak. Criminals did
Speaker 2: learn that those companies were being investigated, and we know
Speaker 2: that because they were talking about it on a non
Speaker 2: they were saying, don't use Sky, don't use Ancho Chat,
Speaker 2: they're compromised. Whoever was saying that clearly had an insider
Speaker 2: somewhere in those agencies, but they didn't know that a
Speaker 2: non was compromised. So they were still in a trap,
Speaker 2: but they didn't realize it.
Speaker 1: So run those numbers again for me. What were the
Speaker 1: total number of convictions, investigations, all of that stuff, So
Speaker 1: we can be impressed with this, with this enterprise.
Speaker 2: Yeah, nine thousand users, more than a thousand arrests, tons
Speaker 2: of drugs, hundreds of weapons, one hundred and fifty threats
Speaker 2: to life mitigated. And now I don't know whether that
Speaker 2: necessarily means, you know, somebody would stopped being killed or
Speaker 2: anything like that, but the FBI least intervened. Cocaine, heroin, methamphetamine,
Speaker 2: and fetamine, all of these different drugs taken. But really
Speaker 2: more than that was all of the smuggling techniques which
Speaker 2: were detailed in the messages. They're now burned because now
Speaker 2: the FBI knows that, oh, they do this thing to
Speaker 2: move this drug. They somehow put it into the lever
Speaker 2: of clothes or something like that in this amazing chemical
Speaker 2: reaction to then smuggle the drugs. Well, now the cops
Speaker 2: all know about that because they've read about it in
Speaker 2: the messages. And most importantly, the overriding success of this
Speaker 2: operation was that criminals don't trust these phones anymore. And
Speaker 2: that was an explicit goal of the FBI, which is like, look,
Speaker 2: it's great to see drugs, it's great to arrest people, obviously,
Speaker 2: but the underlying goal was like they wanted to shatter
Speaker 2: trust in the encryptophone industry in the hope that these
Speaker 2: criminals were moved back to other forms of communication that
Speaker 2: we were talking about earlier, maybe an ordinary phone. Maybe
Speaker 2: they'll meet each other face to face, and the FBI
Speaker 2: can use more human intelligence there. I mean, they were
Speaker 2: absolutely successful in seeding paranoia. I know that from speaking
Speaker 2: to drug traffickers and the people who sell those phones.
Speaker 1: Did the FB do I have any surprising discoveries. I
Speaker 1: don't know what that would be, like a connection to
Speaker 1: a government official in another country with a drug trafficker
Speaker 1: that they had never known about. I was just wondering
Speaker 1: if anybody got trapped in this web that they didn't
Speaker 1: expect to be there.
Speaker 2: So they were so paranoid about leaks the FBI that
Speaker 2: they did not share this secret with all countries. The
Speaker 2: FBI were quite skittish and talking to me about this,
Speaker 2: but they implied that, you know, countries in Eastern Europe, Serbia,
Speaker 2: those sorts of places which absolutely have public corruption problems.
Speaker 2: And then we've seen that through the non data later
Speaker 2: on and other investigations, that officials in those countries do
Speaker 2: collaborate directly with criminal entities. And that was absolutely the
Speaker 2: paranoia of well, if we share this with XYZ country
Speaker 2: too early, it could completely derail the operation as well.
Speaker 2: And Andrew Young, again the main prosecutor on the case,
Speaker 2: he was shocked by the amount of public corruption and
Speaker 2: going across these platforms, and I think that's something a norm,
Speaker 2: and these other investigations showed is that law enforcement often
Speaker 2: catch drug traffickers, they often catch money launders, they never
Speaker 2: get the people in public office or the insiders. Are
Speaker 2: a law enforcement agency, they just don't see that activity.
Speaker 2: And then that's what they saw on these encryptive footes.
Speaker 1: So we're talking about this, you've named the company. Clearly
Speaker 1: it has come to an end and this program has
Speaker 1: been shut down. How does that look and when did
Speaker 1: that happen?
Speaker 2: Yes, so in early twenty twenty one, it becomes apparent
Speaker 2: that the FBI cannot do this anymore. They're getting a
Speaker 2: million messages a day. They simply cannot keep tempo with
Speaker 2: the amount of intelligence coming in. So they decide on
Speaker 2: a date in early June twenty twenty one to bring
Speaker 2: an end to the operation. The European authorities don't want this.
Speaker 2: They say, this is an incredible intelligence gold mine. Let's
Speaker 2: just keep running it and we can keep arresting people quietly.
Speaker 2: All of that sort of thing. That's just not possible.
Speaker 2: This had to end at some point, and again the
Speaker 2: FBI wanted it to end to some point because they
Speaker 2: wanted to undermine criminals trust in these encryptophone companies. And
Speaker 2: they can't do that unless they pull the rug underneath
Speaker 2: and come clean on it was us the entire time
Speaker 2: reading an arm. They have to do that very theatrical
Speaker 2: sort of reveal. So it starts with a series of
Speaker 2: raids and arrests in Australia in the early morning, and
Speaker 2: then as the sun moves they start doing arrests in Europe,
Speaker 2: and it's all very very dramatic. There's a big room
Speaker 2: inside EUROPEOL, which is the European Union's law enforcement coordination body,
Speaker 2: and you have German officers talking to Dutch officers, talking
Speaker 2: to Swedish officers, and they're all coordinating. I have a
Speaker 2: warrant for this guy. He's crossed over the border into
Speaker 2: your country. Can you pick him up? They're doing all
Speaker 2: that in real time, just like the criminals are presumably
Speaker 2: as well, and they're rounding up hundreds upon hundreds of
Speaker 2: people in this one single day. It's the single largest
Speaker 2: law enforcement action ever. Something like nine thousand police officers
Speaker 2: acted in some capacity on that day, I mean a
Speaker 2: small army essentially of officers. Until eventually the sun moves
Speaker 2: to San Diego and the DOJ holds a press conference
Speaker 2: where they come clean and they say we were running
Speaker 2: a NORM the entire time. I mean, I was blown away.
Speaker 2: I found out the same time as everybody else. I
Speaker 2: was speechless and stunned that, even after I've covered the
Speaker 2: encryptophone industry for years, nearly ten years at this point,
Speaker 2: I didn't think the FBI would go that far to
Speaker 2: run their own and crypto company. And then of course
Speaker 2: I start writing about it, and I'm pinging my sources
Speaker 2: and asking them, did you know about a NORM? And
Speaker 2: it turns out many of my sources did know because
Speaker 2: they were selling the phones for the company. They just
Speaker 2: didn't want to tell me as a journalist because they
Speaker 2: thought they had a good They thought they had a
Speaker 2: good gig going, they thought they were making a lot
Speaker 2: of money, and then they got caught in the biggest
Speaker 2: trap ever in law enforcement history.
Speaker 1: What about AFGU doesn't this just put him in mortal danger?
Speaker 2: Yeah? Absolutely, And I mean I don't know, of course,
Speaker 2: specifically where this person is, but it's something they're going
Speaker 2: to have to be very very careful for the rest
Speaker 2: of their life. There was actually some potential dangers to
Speaker 2: them recently in that, in a cruel twist, the DOJ
Speaker 2: didn't just run this company, it then criminally charged the
Speaker 2: people who sold the phones, even though they were doing
Speaker 2: the FBI's dirty work for them, because technically you're selling
Speaker 2: these to criminals, were gonna arrest you as well. Very recently,
Speaker 2: some of these people were about to go to trial
Speaker 2: in San Diego and as part of that after you
Speaker 2: was going to have to testify, they were going to
Speaker 2: have to be in court, they would have to show
Speaker 2: their face, they were going to have to talk about
Speaker 2: how they created the company. And maybe this was just
Speaker 2: my naivety more as a technology journalist than an old
Speaker 2: school crime journalist. But that was staggering to me. This
Speaker 2: person's life is going to be in serious danger and
Speaker 2: you're going to have him in court speaking. I was
Speaker 2: blown away by that. But what it turned out in
Speaker 2: the end was that all of these people took guilty please,
Speaker 2: so that hadn't happened. But there are going to be
Speaker 2: more cases coming through the courts and the coming months
Speaker 2: and even years. So it's not over for that person.
Speaker 2: It's not over for the FBI, and it's not over
Speaker 2: for the Australians or the other foreign law enforcement agencies
Speaker 2: as well. They still have investigations which they are starting
Speaker 2: or continuing with this data.
Speaker 1: So ultimately, what is the lesson learned here? I'm the
Speaker 1: FBI is on the lookout for what these guys are
Speaker 1: going to next. They're not just going to give up
Speaker 1: and they're not going to start using landlines.
Speaker 2: I think the lesson here is the FBI is willing
Speaker 2: to go to extraordinary lengths to insert itself into criminal infrastructure,
Speaker 2: and that's running a phone company for criminals. They've even
Speaker 2: launched their own cryptocurrency since and they use that to
Speaker 2: sort of arrest people who are doing pump and dump schemes.
Speaker 2: There's actually an ARSK I'm working on right now which
Speaker 2: isn't published yet, but it's about how the FBI secretly
Speaker 2: ran a money laundering ring for nearly a year to
Speaker 2: move criminals so then they could identify the criminal customers
Speaker 2: as well. I think a NOM was a warning shot
Speaker 2: not just of how resourceful the FBI is when it
Speaker 2: comes to getting those criminals, but also encryption is such
Speaker 2: an issue for police and for law enforcement agencies that
Speaker 2: they're willing to spend what I think it's tens of
Speaker 2: millions of dollars on this operation to get messages that
Speaker 2: the otherwise would not be able to do.
Speaker 1: To me, this reminds me of the police officer sitting,
Speaker 1: you know, at the keyboard pretending to be a young girl,
Speaker 1: you know, approaching men on the internet. This is saving
Speaker 1: you know, the people having to go out undercover and
Speaker 1: you know, in bed with these criminal syndicates. I mean,
Speaker 1: is that another thought here? As you really are, you're
Speaker 1: able to cover so much just from a computer, rather
Speaker 1: than putting agents lives at risks by trying to get
Speaker 1: them into all of these places.
Speaker 2: I mean it would have been completely impossible to arrest
Speaker 2: all of the people the authorities did through a norm
Speaker 2: if they were doing it, for lack of a better term,
Speaker 2: manually or using more old school techniques to get a
Speaker 2: wire tap onto three hundred, three hundred and fifty different
Speaker 2: criminal syndicates, maybe get the informant in there. Like, it's
Speaker 2: completely unfathomable. You wouldn't be able to do that. What
Speaker 2: the FBI did here, they basically did global law enforcement
Speaker 2: at scale in one operation. And again I keep HARKing
Speaker 2: back to the idea of tech companies, and that was
Speaker 2: a very fun thing for me in the book when
Speaker 2: I'm my guilty pleasure is reading about corporate fraud like
Speaker 2: Farrnhose and Facebook, and they kind of married that into here,
Speaker 2: because at the end of the day, this is like
Speaker 2: a scam tech company it just happens to be is
Speaker 2: run by the FBI, and they catching criminals. They were
Speaker 2: able to enforce the law on a scale that's never
Speaker 2: been seen before, and I don't know if you'll actually
Speaker 2: ever be seen again.
Speaker 1: Well, simply a citizen spectator of all of this and
Speaker 1: a fan of your book, I have to say it
Speaker 1: gives me more confidence in the FBI. You know, you
Speaker 1: don't know what's happening. You've no idea, we don't know
Speaker 1: anything about how much they're actually trying to protect, you know,
Speaker 1: our country. And so when I read things like this,
Speaker 1: and you know, these undercover and these investigations, and you
Speaker 1: have all of these people coming forward and talking to you,
Speaker 1: I just think, well, thank god. I know that it's
Speaker 1: not perfect, but at least we know that they really
Speaker 1: are trying to pull off these big operations to protect people.
Speaker 2: Yeah, and I think people involved are very proud of that.
Speaker 2: They're very happy with the results. They're very happy with
Speaker 2: how they went about it, I think most of all.
Speaker 2: And I've spoken to many people who were in the book,
Speaker 2: and I've spoken to them since in the months and
Speaker 2: years after. They still talk about the lasting relationships between
Speaker 2: the FBI and the foreign law enforcement agencies. And you know,
Speaker 2: a lot of international collaboration happens. I cover a lot
Speaker 2: of different investigations where that's the case. This was different.
Speaker 2: These people became friends, They end up becoming drinking buddies,
Speaker 2: going to the pub after you know, they've successfully intercepted
Speaker 2: this drug shipment or whatever, and what they heard again
Speaker 2: and again and again was that this operation may not
Speaker 2: have been successful if it wasn't for those personal relationships.
Speaker 2: And specifically there are two agents at the head of it,
Speaker 2: Nicholas Chevron and Stephanie Stevens, and they were FBI agents
Speaker 2: who basically ran a noom essentially, and they built the
Speaker 2: personal relationships with the Swedish authorities, the Dutch authorities, the Australians,
Speaker 2: And if you don't have that informal but strong bond
Speaker 2: between the agencies, it's very hard again to trust we're
Speaker 2: going to give you. We're going to tell you about
Speaker 2: this secret. Hey, we're secretly running a phone company for criminals.
Speaker 2: You don't just tell any person or any law enforcement
Speaker 2: agency that. You need to know that you can trust
Speaker 2: this person and the personal relationships. I think we're a
Speaker 2: massive part of that.
Speaker 1: If you love historical true crime stories, check out the
Speaker 1: audio versions of my books The Ghost Club, All That
Speaker 1: Is Wicked and American Sherlock and Don't Forget There are
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Speaker 1: been an exactly Right Production. Our senior producer is Alexis M. Morosi.
Speaker 1: Our associate producer is Christina Chamberlain. This episode was mixed
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Speaker 2: Yeah