On the latest episode of Recode Decode, journalist and Pop-Up Magazine co-founder Evan Ratliff spoke with Recode’s Kara Swisher about his new book, The Mastermind: Drugs, Empire, Murder, Betrayal. It traces the rise and fall of Paul Le Roux, a programmer-turned-drug kingpin who used his tech savvy to avoid capture for many years. Early in his illegal exploits from his base in the Philippines, he created a network of “rogue pharmacies” for distributing painkillers to buyers, all purchased online as easily as an Amazon transaction.
“He created his own domain registrar, like GoDaddy or Network Solutions, got it approved by ICANN as the only domain registrar in the Philippines, and then used it exclusively to generate thousands and thousands of domains for himself,” Ratliff said. “So if you took them down, he could just make a thousand more that day. ... He was like a vertically integrated criminal business.”
Le Roux’s digital hustle isn’t the only similarity between him and more legitimate online entrepreneurs like Facebook CEO Mark Zuckerberg or Tesla CEO Elon Musk.
“Paul Le Roux as a person embodied the entrepreneurial spirit in a way that you just don’t see in these large-scale criminal organizations in the same way,” Ratliff said. “The technological, the modern startup founder, he was that guy. He was a teenager who was interested in computers and fell into a world of technology in the same way you read about Zuckerberg, in the same way you read about Elon Musk. If you read about their childhoods, it matched up so perfectly.”
You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast.
Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Evan.
Kara Swisher: Hi. I’m Kara Swisher, editor-at-large of Recode. You may know me as DB Cooper — oh damn, I shouldn’t have said that — but in my spare time, I talk tech and you’re listening to Recode Decode from the Vox Media Podcast Network.
Today in the red chair is Evan Ratliff, someone I’m a huge admirer of. He’s an award-winning journalist and he’s the founder of Atavist Magazine. He’s also the author of a new book called The Mastermind about the leader of a ruthless drug cartel who couldn’t have gotten as far as he did without the internet. Of course, once again, the internet is screwing with us. The subtitle of the book is Drugs. Empire. Murder. Betrayal. Oh, my goodness. Evan, welcome to Recode Decode.
Evan Ratliff: Thank you.
Wow. It sounds like yesterday on Twitter for me. I want to talk about this book, but first I want to talk a little bit about you. You have a fascinating history and do a lot of things. Give us the quick how did Evan get here to this drugs, empire, murder, and betrayal situation?
I worked as a freelance magazine journalist for many years. I had worked on staff at Wired in the late ’90s and early 2000s.
So the heyday, right?
The heyday. The dot-com heyday. In fact, I credit my career to the fact that the magazine was so fat at that time.
They just needed to fill it. And so I got opportunities.
They did. That, Industry Standard, there’s a whole bunch of them.
Industry Standard, Red Herring, Business 2.0.
You know, I have all the Industry Standards. They start off skinny and then they get fat and then they go skinny. I call it the history of the early internet. I took a picture of it, but go ahead.
That’s how I first got into journalism was at Wired. Worked as a fact-checker, became a writer, left the staff. Then I was basically a freelancer for 10 years. Then I started starting up various journalistic-type organizations with friends. One of them is Pop-Up Magazine, which I was involved with early on.
Yes, you were.
That’s now Pop-Up.
Explain Pop-Up Magazine, which is now owned by Laurene Jobs, correct?
Correct. Yeah, by Emerson. Pop-Up Magazine is a live magazine presented onstage. It’s nonfiction like a magazine. A lot of it is journalistic except that it is multimedia in the truest sense. It’s film, it’s audio, it’s written pieces, sometimes combining all of the above.
You started with Doug McGray who’s running California Magazine and other things too, which again was bought by the Emerson Collective. I want to talk a little bit ... because how did you think of that? One of the things you were doing was anti- ... you didn’t tape it. It just happened. It was live, it was analog. Not that you’re this guy in a bow tie and a Lincoln beard. You know what I mean? That’s what you imagine something that would come from, but it’s a very alive event, which is really kind of interesting.
Doug was really the driving founder of it. It started from this place of, I think, disliking book readings a little bit or just going to book readings and saying, someone stands up and reads a book for a little while, or you go to a photography exhibit. And there was this idea that really originated with Doug which was, why couldn’t we put these things together? Then we thought, why couldn’t we do it in a little theater? Originally, not taping it, I think, was really an accident.
Because we just didn’t have the money to be able to do it right, where it would look good. Then after the first couple of shows we discovered that was the appeal. A place where you come, you turn off your phones, it’s not taped. It’s made just for you.
You incorporate technology and you talk a lot about technology in the show quite a bit.
Yeah, it was pieces about technology.
There was some actually very high-tech pieces, especially now. Now they’re touring the country. They do some very sophisticated stories. It’s still the same. It’s not taped. You can’t find it anywhere on the internet. If you don’t go, you can’t see the magazine.
I do bootleg one secretly under the name ...
You’re not supposed to say that.
No, I don’t do that. I never. Well, I could start doing it. You started doing that and then moved on.
Then I moved to New York and I had done this story for Wired magazine which typically goes under the name “Vanish,” which was about my attempt to disappear for a month. They held a contest for people to find me. It became a big national story.
“Disappear” meaning “going off ...”
Meaning not go off the grid, but adopt a new identity and shed my old identity. Then try to keep from using aspects of my old identity and my new one and leave everyone behind and start a new life. People were able to use my information to try and catch me, which they eventually did, and win a $5,000 prize.
Where were you? In Omaha?
I was in New Orleans.
That’s a nice place to book...
I was living in a shabby apartment.
How’d they catch you?
They caught me using ... there’s two layers to how they caught me. They used my IP address. I was masking my IP address but then I got overconfident and I had unmasked it for a few things. At the time, you could build apps on Facebook that would collect all the IPs of everyone who visited the page.
Someone did that. This guy in Seattle. He managed to sort through and figure out which one was mine and they honed it down to New Orleans.
Wow. The idea is, why did you want to do this?
I was interested in ... this is comical now because this was 10 years ago. The amount of information that was collected by, even at the time, by not just social media but all the databases. Who could get access to them, how they could be used, and then I was also ...
I assume I’m being followed every moment of my life.
Now, I think it’s generally understood. Well, maybe not generally understood.
No, it’s not generally understood.
It’s understood in certain quarters how much of that data and where it’s going. I was just intrigued with people who fake their own deaths. That’s where it started.
I just thought it’s a version of faking my own death without the severe consequences.
Then you started Atavist Magazine. Talk about that.
Coming off of that, I was living in New York and interested in doing those types of stories, like long narrative stories and finding the traditional magazines where you could do them. The New Yorker or Wired or places that I was writing for. But there were not online outlets that were willing to do that. It was very much in the vein of the timeframe of attention spans are getting shorter. You’re starting to get into aggregation and just shorter and shorter pieces.
We wanted to create a publication to allow you to do narrative journalism and design it specifically for the web. Use all of the tools of the web to make it very web-centric. That was me and Nicholas Thompson, who’s now the editor-in-chief of Wired and a guy named Jeff Rab who is our designer and programmer. We basically set out to create a longform magazine, so to speak.
Then you created Longform, right?
Longform I didn’t create. The two founders, Max Linsky and Aaron Lammer, created Longform as a recommendation engine for long stories. Then together we created a podcast that’s called The Longform Podcast.
Yes, I was on it. It was quite fun. We had a good time.
It was fun. That was a great show.
That was good, wasn’t it? I think ... I wasn’t drunk, but I acted drunk. It was weird.
So many people bring up that show.
I do. I just was like, “Fuck you, fuck this.”
It was great fun.
I don’t drink at all, although I just had Norwegians into the office here — they are very interested in what I have to say in Norway. They brought me Aquavit. Maybe I’ll do another one.
That’s a good place to start.
Apparently. Anyway, it was great. It was really great. Let’s get to how you got to this. I’m trying to give people an idea. This is a real left turn.
Writing the book?
I was just surprised. That’s why you’re here, because I’m like, “What? He’s doing what?” If you came to me with another journalistic effort to print journalism on salami and everybody eats it, I would’ve been like, “Oh, we’ll have him on to talk about that!” But explain this Mastermind thing. How did you get interested in this? ‘Cause you know, Nick Bilton did the same thing. He’s writing about the dark web, isn’t he? Anyway. Go ahead.
Similar to mine. I wrote this originally as a series of articles. The book was originally a series of articles for the Atavist magazine. The reason that we did them the way we did them was it was a big story that I had stumbled across about this head of this cartel.
Explain the cartel.
He was a computer programmer named Paul Le Roux. Paul Calder Le Roux, born in Zimbabwe but also raised in South Africa so people call him South African sometimes. He was actually a very, very talented technologist. He created a piece of software called Encryption for the Masses in the late ’90s, early 2000s, which was the precursor to TrueCrypt, which is one of the most famous pieces of disc encryption software. He did that, but ...
So he started from a tech angle. This is a techie.
That’s part of ...
A deep techie, too.
One of the things I would say about him is if everything he did had been done in the straight world, we would be sitting here talking about it. He would be on the cover of Fast Company magazine or Wired magazine.
He’s the billionaire founder of the best encryption software.
What he did was he gave away Encryption for the Masses for free, part of the open source movement. Then he got very frustrated that he never made any money on it.
Well, you shouldn’t have given it away for free.
He was trying to participate in the spirit of ...
I get it. I get that.
Of the times or still today of the open source software movement. What he did instead was he started a prescription pill online empire. It was incredibly clever.
How did he make that shift?
It’s not quite clear where he got the original idea, if it just popped out of his head or if he was sort of ...
“Oh, opiates. Fantastic.”
Opiates of the masses instead of Encryption for the Masses.
Opioids. Literally opioids. In about 2004, he basically started building this network and the idea was they would recruit local doctors in the United States, local pharmacists in the United States, and then a customer could go online, Google a drug like Tramadol, pain killer. They would go to a site that was controlled by Paul Le Roux or one of his affiliates.
Then their order there and their little survey that they filled out would go to a real doctor in the US who had signed on to be paid to write the prescription. That prescription would go to a small-town pharmacist who was trying to compete against big-box retailers. They would get $2 per prescription for issuing it. In doing so, the whole actual distribution of the drugs was contained within the United States. He, Paul Le Roux, was operating from the Philippines behind layers and layers of technology.
And doing so why?
And making hundreds of millions of dollars.
Doing so why? Operating from the Philippines.
Originally, I think it was because they have decent infrastructure. They have a call center culture. He needed customer service call centers for the sites. Eventually it became more that he could buy off almost anyone in the government or law enforcement and did so.
Because they were going to arrest him for drug trafficking.
Many things. First, drug trafficking, but also eventually violence, murder. He shifted. He used his proceeds from the prescription pill network to get into all manner of international crime. He’s probably the most prolific criminal, possibly in history. He got into arm sales. He sold arms to Iran. He was buying meth out of North Korea. He was shipping hundreds of kilos of cocaine in yachts across the world, across the Pacific Ocean. He was actually becoming a real kind of ...
El Chapo-style cartel, but he actually made the whole thing himself from scratch.
Out of his head.
A business that is adjacent-legal, in the way it’s done.
The pill business. It was a really tricky thing when they tried to prosecute it because, first of all, they couldn’t get to him. They chased him for many, many years. They started chasing him in 2007, 2008.
They being the DEA. Beginning with the DEA in Minneapolis. Actually this one agent — or she’s not even an agent, she’s an investigator, Kimberly Brill. She’s an almost rookie investigator who figured out that this network existed and then unraveled it almost entirely on our own. She had a partner for part of it. That part of the story is kind of incredible.
It’s tricky, the question of whether or not it was legal. It’s clearly illegal in the sense that the doctors were not writing prescriptions for their patients who were coming to see them.
Right. It was like how they used to do marijuana in California before. You just get online. “I have a headache.” “Oh, here, you need a medical marijuana thing.”
That went on forever. But then they just legalized it, and no one cares. Now you get it in the café. “Have a CBD coffee.” I’m like, “No, I don’t want that.”
You’re not enjoying the CBD revolution?
You know what? Whatever. No. It’s offered everywhere. I’m gonna take a little side drug moment. I went to an event in Portland, Oregon, their tech event there. Tech whatever, Northwest. They gave me a swag bag and in it was a bottle of wine. I didn’t look at it. I’m like, “Oh. I can’t take this on the airplane. I’m doing a carry-on.” So I left it for whoever in the hotel. I don’t drink anyway.
I take the bag and I go home and I finally get home. I pour it out and it’s full of pot stuff because it’s legal in Oregon, right? Cigarettes, food, drink, whatever. Everything had fucking CBD. CBD or TCH. Both, both. It was crazy. I was like, “What?” I was like a drug mule. I call the guy and I said, “Hey, you gave me a swag bag full of marijuana,” weed and stuff. It’s like 10 different things. He’s like, “Oh yeah, cool. Do you like it?” I’m like, “No I do not like moving it across state lines in the thing.” He’s like, “Well it’s legal in California now.” I’m like, “Yeah but it’s not legal on the plane between.” It’s like, literally ... That’s how I feel about drugs. I find them exhausting.
They should’ve just given you a warning.
I don’t even smoke.
“Don’t take this on the plane.”
I don’t like smoking. I don’t like any of this stuff. In any case, move along. It was interesting. Now it’s everywhere. Now everywhere you go, you can’t avoid it.
This morning I was offered a CBD coffee. I was like, “No thank you. My pain is not ...”
These drugs that they were distributing, they actually went the other way. Which is that they had chosen their three primary drugs, all of which were painkillers, were non-controlled. It wasn’t like Oxycontin. It was Tramadol, Fioricet, which are big-time painkillers. They are addictive. At the time, they were not controlled by the US government. By the end of the story, the US government finally does put them under the control schedule and that’s part of how they were able to roll up the network.
We’re here with Evan Ratliff. He is the author of a new book. He does a lot of things on the internet that you know him better for, including Atavist magazine and other things. He has a new book called The Mastermind: Drugs. Empire. Murder. Betrayal. The way you did get interested is through tech. Still writing about uses of tech to create all this kind of stuff.
The intersection of tech and crime is long but an interesting one.
Talk about that a little bit. I want to get more into talking about Paul, but talk about that because I think right now, there’s obviously the drug trial going on with El Chapo. What is his real name? I forget. And his 53 mistresses. Whatever. It’s a fantastic story, literally. There’s the account and there’s the techie... But there’s tech at the center of every bit of this trial, which I think is really interesting.
Oh yeah. It’s been incredible to watch the day-by-day, following people on Twitter who were at the trial.
That’s how they really caught him. They got the techie, right? It’s like a movie. they got the techie who set up his system and who then spied on him with the system he set up on. Then you get texts and everything else, the whole thing.
Encrypted phones, yes.
It’s all about tech, the whole thing. I was thinking how many innovative ways can this guy think to bring in drugs, which was really interesting. Talk a little bit about the backdrop of what’s happened in the drug trade. It seems like they’re quite entrepreneurial in their uses of tech.
Absolutely. You have a few kinds of intersections between tech and the large-scale drug criminal world. You have the dark web, which is the Silk Road. That’s really selling people drugs over the internet. Drugs, schedule drugs.
Whatever it is. Cocaine, whatever. Where there is a cryptocurrency and they’re buying their individual thing and it’s being shipped to their house or dead drop or what have you. Then you have the El Chapo situation where you have a traditional drug lord who’s come up through a cartel in Mexico.
Shooting his way to the top.
Exactly. Then is utilizing technology.
“Meet my little friend. Meet my little friend.” I’m not gonna use an accent.
Is utilizing technology to ... I’d like to hear it.
No, I will not, because it’s not a nice thing to do these days.
I mean, it is a movie.
I understand, but I’m not gonna do it.
So what he’s doing is he’s actually using technology for secrecy, for controlling his communications, and then you have Paul Le Roux, the character that I wrote about, who’s sort of ... He’s a new type of criminal who, actually, he came from being a programmer. So he’s actually bending technology to his will in all of these different ways.
Well, talk about that. What do you mean bend? Talk about how he does that.
Well, one example is, so when he set up all these pharmacy websites, he’s setting up pharmacy websites everywhere. Now, there are organizations that go ...
This is someone who’s got a bad back and they can’t get their doctor to ... I can’t believe in this country you can’t get a doctor to give you a prescription for drugs because it seems like a relatively easy thing to do. So you can’t get that, and so you go to one of these sites.
You go to one of these sites, you Google your drug, you go to one of these sites, you place an order. Now, those sites, there are organizations that try to get those sites taken down because they’re, quote-unquote, rogue pharmacies. But what Le Roux did was, so if one gets taken down, of course, you can put up another one somewhere else, but it takes some effort to do that.
What Le Roux did was he actually got his own domain registrar, he created his own domain registrar, so official, like GoDaddy or Network Solutions, got it approved by ICANN as the only domain registrar in the Philippines, and then used it exclusively to generate thousands and thousands of domains for himself. So if you took them down, he could just make a thousand more that day. So that was part of it that it took the investigators a while to understand.
Because he wasn’t working through GoDaddy or Network Solutions.
Yeah, he was like a vertically integrated criminal business. Every aspect they looked at, it was actually him behind it, including he created his own ...
Would he build his servers? Go ahead.
He built his own servers.
Oh, of course he did.
He built his own email service, so if they did a search warrant, if someone was using Gmail, you’d just go to Google ...
Right, to buy the drugs.
Or even inside the organization, like an operator inside the organization. But then what Le Roux did was he created his own email server that was encrypted that they couldn’t get to for internal communications. He just made it himself.
So he was sort of using technology both to insulate himself and to operate his business.
And these sites. And so you’d order, but he had the soup-to-nuts thing of it to protect it.
He was paying for the FedEx account, so then the pharmacist would drop your drugs into a FedEx envelope that he had paid for. He’d ship you a computer if you wanted. It was all set up, it had the software on it.
Right, that you’d use for these things.
And to communicate with these pharmacists, how did that happen?
That happened mostly over email.
So he had ... Email and phone, but he actually had call centers in Israel and the Philippines that would recruit these doctors, either over Craigslist or work at home forums, or they would just send random emails to pharmacists and say, “Do you wanna join our network?” But the pharmacists never knew anything about the network beyond the one fake-named person that they were talking to. So they were talking to Joe and all they know is they’re writing prescriptions and they’re making hundreds of thousands and sometimes millions of dollars.
The doctors or the pharmacists.
Right, right. So they would get a fee.
They would get a fee per prescription.
And then even if the investigators, let’s say, went in and raided that ...
Stopped one doctor.
Another one pops up. There were hundreds of them, and they couldn’t get to the network through the doctors, so the doctors didn’t even know who they were working with.
Right. And why not, if you’re a doctor? Like, hey, the pot guys do it. It’s sort of common, right?
Yeah. I mean, there’s one doctor character in the book, and I mean, he actually believed he was doing something of great value, that there were all these people, as you say, who couldn’t get their prescriptions for back problems, their insurance ran out, and he was simply providing them cheaper prescriptions than they would get if they had to go into the emergency room.
Never having seen these patients.
Never having seen the patients, only having seen a survey that they filled out on the website.
Right, which is astonishing. Well, they hand out drugs like candy in this country, don’t they? So it’s against a backdrop of already sort of loose standards on handing out ...
There’s a sort of paradox where both things are true. Both overprescription of painkillers, opioids, that obviously became a tremendous problem, but there is also a problem of insurance.
And getting them.
And the health care system and getting them when you need them.
Yes, and getting them properly.
They both happen to be true.
And then the pharmacist part was separated from the doctors.
Right, so the pharmacists didn’t know the doctors. They knew that they were real doctors.
So they send the scrip in.
So the scrip goes uploaded.
Right, so they could check the doctors’ scrip.
So to them, everything was real. I mean, they were issuing real prescriptions for real patients.
And then mailed them.
And then they mailed them out and they show up at your door.
Right, exactly. Paul was using this system as if he was providing Amazon or something like that.
Except highly protected, what he was doing.
In fact, one of the things ... So eventually, the system was faltering, and one of the reasons was, like Amazon or any other retailer, he was really dependent on cheap shipping, and the FedExes and UPSes started questioning whether or not this was legal, so they dropped his accounts, so they kept having to find different ways to ship the drugs. Meanwhile, he had already got ...
How did they question? Was it just a lot of pharmacy ...
The federal government set up a verification system to try to stop illegal online pharmacies, and so they basically said, “FedEx and UPS, you have to verify that these pharmacies are real.” It’s called a VIPPS system. And so they would go to Paul Le Roux’s operators and say, “Look, you have an account here. A lot of pharmacies seem to be shipping on it, hundreds of pharmacies are shipping on it. You need to provide this VIPPS certification.” So then they would try to fake the VIPPS certification. They were sort of struggling for a couple of years trying to figure out how to get around that.
But Le Roux, meanwhile, he’d gotten into a large scale of other crimes, so he had diversified by that point.
Diversified, all right, but this was the stepping-up point. So talk about the diversification. Prescription drugs are harder to do, so let’s get into an easier business.
Yeah, I mean ...
And I’ve got hundreds of millions of dollars in profit here.
That’s been laundered through Hong Kong gold purchases. So he got into doing a lot of strange operations in Africa, partly just to launder money, like timber operations and black market gold, that sort of thing. But then he got into large-scale drug buying.
So he got all this money and he had to launder it because he couldn’t ...
I mean, just because he wanted it to be untraceable back to him by, presumably, the US government, who was ... A lot of governments were paying attention to him, but the US government was really the only one that he was ever afraid of, and rightfully so.
So he started using that money to get into the cocaine business, making contact with cartels in South America. He got into the meth business, working through Chinese triads to buy meth by the ton out of North Korea, where it’s state-sponsored manufacturing of methamphetamine.
Oh, North Korea. Never disappoints, that country, does it?
And actually, he started building his own drones to deliver the drugs, so he was reverse engineering a predator drone, he was building a submarine, and he had all these sort of warehouses in the Philippines where he’d bring in ...
He’s so Bondian.
Engineers to build things for him. So that sort of was the business that he was moving into. It was really being a ...
Distributor of drugs.
Drug lord of the world. And arms, he was doing big arms deals around the world. He was working with Eastern Europe on that. He started his own militia in Somalia because he wanted to set up his own self-protected little kingdom there, where he could grow drugs. So that’s a big part of the book where he’s building this operation in Somalia.
That’s traditional though. That’s sort of drug dealer 101, right? Drug cartel head 101 is to have your own militia.
Well, yeah, and to go to a place that’s relatively lawless was his idea, where he felt like he could control the environment. I mean, it turns out Somalia is very out of control in other ways that were difficult for him to even use his money to get around. But yeah, under the guise of starting a tuna fishing operation in Somalia, he showed up there, or his men showed up there, and launched this whole operation.
So after that, he started getting into illegal drugs... What else?
Including selling missile technology to Iran.
Which is where you get in big trouble.
That is not looked upon highly.
That’s where they don’t ... You can sell all the cocaine you want, but that’s not ... I mean, you can’t, but ultimately, that’s where he gets into trouble, presumably.
Well, he partly gets into trouble because he’s been on the US radar for a long time by 2012, but he had one of the wrong people killed in the Philippines. He had a number of people murdered, but one of them happened to have connections to the president. So his protective layer was potentially fractured a little bit, so he actually left to restart his business in Brazil.
So he moved to Rio, and one of the strangest parts of the story is there he engaged in a process of trying to impregnate women who he hired to have children for him so that he could avoid extradition if he were ever arrested in Brazil. So he’s in Brazil ...
That’s a rule in Brazil? If you have Brazilian children...
Brazilian citizens are very hard to extradite. It’s not quite clear if it would’ve worked, ultimately, but it certainly might have tangled up the system. I mean, he did succeed in having a child, but he actually was not arrested in Brazil.
So then another side of the DEA than the one that had been tracking him sort of stepped in, called the 960 Group, which does a lot of big international operations, and they created a sting operation using an insider from his organization to lure him to Liberia for a big drug deal, and that’s where he was arrested.
So tell me, what got you interested? What was the thing? Was it this use of technology or what did you think was unusual about it? Because again, El Chapo’s interesting. These stories are similar and the same. Do you know what I mean? The idea of what it is. And then in the next section I wanna talk about where the international drug trade is going and the uses of technology in it. But what attracted you to this story?
I think, partly, this particular character, Paul Le Roux as a person, embodied the entrepreneurial spirit in a way that you just don’t see in these large-scale criminal organizations in the same way. The technological, the modern startup founder, he was that guy. He was a teenager who was interested in computers and fell into a world of technology in the same way you read about Zuckerberg, in the same way you read about Elon Musk. If you read about their childhoods, it matched up so perfectly.
So the thing that so fascinated me about him was that he just took that in a slightly different direction and almost succeeded. I mean, at a certain point, he was making as much money as Facebook was making at the same time. At least by one DEA estimate, they don’t really know how much money he made. So that sort of mirror image of the modern startup founder that we hail all the time, or that people were hailing up until very recently.
No, now they’re worse than ... They’re not worse than drug dealers, let me preface that, but they have a reputation that is not going so well.
Although people accuse them of addiction, they’re using terms like that around tech.
Well, sure. Yeah, I mean, now the conversation around that is much different than it was 10 years ago.
Yeah, we’ll talk about that in a minute.
So that attracted me to him. And then I think the other thing, in the book, I read about a lot of the people who were pulled into the organization and I’m just really interested in the kind of moral choices that people make when they ... Like the doctors and the pharmacists and even some of the people who worked at the call centers, why they decided to join and what it felt like to be pulled into something that was much, much bigger than themselves.
Right, right. Well, there’s bad people everywhere.
There are, but I think we tend to look at these people as good and bad, and not people who are on a spectrum of moral choices.
No, of course not, and I think you get pulled into ... I was just talking about this with someone. There’s a lot of little people involved in little pieces of things and they don’t realize they’re part of a bigger thing.
Yeah. I mean, you could say the same thing about people who work for Facebook now.
Right, or we were talking specifically about Maven at Google. Some people just didn’t wanna work on it. Now before, there were lots of companies where they made one little wing tip on a missile and they didn’t pay attention, and you’re one part of a bigger, bigger problem that you don’t notice. And the connections being made are really hard to make, but now, not so much.
Yeah. Now, those employees who have even nothing to do with that thing are speaking out.
Right, have an opinion about it.
And saying, “I don’t wanna be a party to that.”
Yeah, so it’s interesting. It’s an interesting question. But the idea of getting pulled into this is not a surprise to me at all. People do get pulled into little bits, like the pharmacists and others, especially as their businesses are getting crushed online and getting crushed in lots of ways by either bigger pharmacies or just secular changes in retail, for example. I can see why a pharmacist would seek more business, or a doctor. “Of course, I’m going online and doing these snap decision-making on people’s opiates rather than seeing people,” and stuff like that.
But you sort of start with one, just a little step, and you say, “Okay, well, I’m gonna do some,” and then it’s so easy and now you’re doing a thousand a day.
And if I was a drug dealer, why not apply entrepreneurial things to my business?
Yeah, it was a space waiting to be occupied.
Can you talk a little bit in general about what people should be looking for? Who are the big players? What are the big dangers and how law enforcement is dealing with that?
Well, I think, I mean, to a certain extent, law enforcement has started to get a little bit of a grip on the internet in terms of understanding ... I mean, Silk Road was a big thing for dark markets and the exposure of that, and now they’re very active in trying to penetrate those markets, but you can already kind of see it shifting.
I was reading this very interesting story ... I don’t know if it was written by Matthew Green, who’s at Johns Hopkins, or if he just pointed me to it, but it was the way those dark markets are now shifting to where if you went onto the dark web and bought drugs, typically, it would be shipped to your house. That’s a very easy way for it to be intercepted or to discover who’s doing it. Now they’re using dead drops where it’s left somewhere and you pick it up. The market keeps changing. The procedures keep changing, but there’s no question that every single layer now has technology. There’s no viable drug operation that’s not gonna be utilizing technology.
Well, talk about the legal drug industry, because that’s also now ... I mean, not just prescription drugs, weed and things like that.
Well, yeah. I mean, the legal drug industry in some ways has sort of shown what the alternative Paul Le Roux avenue was, to a certain extent. You’ve got pot startups in the Bay Area who are ... A lot of them will end up going away in the way that startups always go away.
There’s too many, yeah.
There’s too many of them, but at the same time, they’re applying the same principles, whether it’s the sort of “Seamless of pot delivery.” All of that sort of stuff.
Eaze, I think it’s Eaze.
Eaze, exactly. All of that is following the same footprint that any other retail operation is.
Except with 100 percent less murder, right?
Yeah, well, today. But where do you see it going, both the illegal and the legal one? Because, presumably, as things become ... Because I’ve written a lot about, they’re looking at LSD and some others that were on the schedule of drugs that they’re trying to remove them from them in microdosing and things like that.
Where is the drug trade going? I mean, obviously, you’re gonna always have the El Chapos and the boatloads of cocaine and that world, but where is it moving towards? How do you look at it going forward?
Well, in the US, it’s gotten complicated because you have legal ... If you take pot, it’s legal in some states and not in others. The federal government still doesn’t declare it legal and threatens to crack down depending on who the Attorney General is.
They’re not going to now.
Well, now they’re not.
I just heard the new one. He was like, “I don’t care.”
I’m not even sure that the old one was.
No, he cared.
I’m not sure that with everything that was going on it was gonna end up being a top priority.
No, because he was being yelled at by his boss every five minutes. But, he would have. Had he been supported in the style he thought he would be, he would have made a big deal of it. It would have been a real ... I was waiting for the fight between California and the Attorney General to go down.
Yeah, I have a friend who declined to join a startup, because when Sessions was brought in ...
Yeah, it’s like, “Uh.”
You know, it’s not worth the risk.
Right, they don’t even take credit cards either, we have to pay cash or a debit card. But, anyway.
Yeah. I was just in MadMen in Los Angeles. I was doing research. And I bought something, and I could not pay for it with my credit card still. And it was like, “Still?” But they won’t accept ... Anyway.
Yeah, they can’t get payment processors.
Whatever, it was ridiculous.
But that is part of what I was saying about the confusion around it.
Is you’ve got a whole apparatus for legal distribution, but there’s still these kinks in it because there are these questions about the broader legality of it across the United States.
So, you have that, and then you also have ... So, you’re still gonna have illegal drugs being brought into the rest of the states.
And then, alongside that, you have the opioid crisis, you have prescription drugs leading to the importation of heroin. The increased heroin usage when people are then weaned off of Oxycontin, or forced to go off Oxycontin. So, you have this ... What we have now is a crazy mix of what’s going on. It’s sort of ... To be honest, it’s difficult to see how that all gets worked out, other than that treatment feels like it’s the only answer.
Yeah, that would be the right answer.
Or maybe not making people’s lives so miserable so they need to turn to drugs. But, drugs have been with us forever, I’m not saying that. But what does the modern illegal market look like after Paul?
I think there’s probably space for many, many Paul Le Rouxes around the world. I mean, especially because one of the things I learned, they went through a lot of effort. The DEA went through a tremendous amount of effort to catch this guy. And then, to catch the people that worked for him, because he had these mercenaries, ex-military mercenaries who were working for him as hit men. So they went around and used sting operations to round them up. It was all very clever.
But, that amount of expenditure of effort is just not possible for most of the drug dealers around the world. So if you have people popping up like Le Roux, which I think you will have, who are technologically savvy and can control distribution from a place like the Philippines where they can control their environment, then it’s just very, very difficult to get to them.
You still have the same interdiction efforts of trying to keep people inside ... Drugs from coming into the United States. But, you know, it used to be that, or maybe it still is the case, where they would try to stop the drugs at the source in Peru or Colombia. And they’d spray all the plants. But now you have a sort of distributed model for drug cartels.
In which you could set up and operate somewhere from scratch, I think is what ... I think that’s what Le Roux showed, you can build it all from scratch.
Without having been in the drug business your whole life.
Exactly. I mean, if you have the money.
Because then he generated the money, also from scratch, through the prescription pill startup and then used that money. He could go anywhere in the world and basically get anything he wanted.
Right. So, what are we to do? Because presumably we’re not for this. We’re not for ... Well, some people are, right? But the idea of what ... Where does it go from there?
Well, I think it just shows that even though they did successfully catch Le Roux, that that as a model for stopping the problem is, as I think a lot of people have known for a long time, is just not sustainable. There’s no way that you can catch enough people to solve this problem.
I’m not a drug policy expert, but you know, some mix of treatment on the end of users in the United States combined with targeted interdiction efforts probably makes some sense.
Right. Right. And what about what people are selling, and the way they’re doing it, has that changed? Technology. You talked about drone delivery. You talked about lots of ways to get drugs. Is there any top trend now?
I mean, in terms of delivering bulk ...
Or still like just ... Yeah.
Bulk amounts of drugs, there’s the traditional Mexican border type of stuff, like tunnels under the border and that sort of things.
But actually, submarines is ... If there’s a trend, submarines is one of them.
That’s the trend in illegal drugs selling.
That’s the one Paul Le Roux was really getting into was ...
Explain submarines for the people. Drug submarines.
I mean, you have your own submarines. You fill them with drugs.
Either they’re sort of like one-man, small operated submarines, or drone submarines, even better, that you can fill with drugs. And then just send them ashore. Or send them to meet a boat. And they drop something off at a buoy. The idea is you don’t lose men, nobody gets caught. I mean, you could lose your big submarine if they were able to stop that. But most coast guards in the world are not gonna have that ability.
Cannot stop a submarine.
Yeah, not a big one.
And drones, airborne drones obviously are a big way to get over borders and around surveillance as well. So that’s another thing that Le Roux was spending a lot of time trying to figure out.
Figuring out big drones. Like heavy-lift drones.
Yeah. Like Predator-style drones.
He was reverse engineering a Predator drone.
To do ...
To deliver drugs.
To move drugs. To deliver drugs across the border. And what about the last-mile part?
Getting to the door of the user? I mean, that part of it ... I think when it came to the prescription drugs, Paul Le Roux was kind of a genius.
But, when it comes to ... He was relying on the apparatus that ...
The typical network.
That everyone else does, which is you know, there are drug dealers in every city. And if you can get to the top bulk importer, the wholesale importer of that area, that’s who you want to sell to. So, he was not distributing cocaine on the streets of the United States.
In fact, he studiously avoided hard drugs, selling hard drugs into the United States precisely because he knew he could get in huge trouble. Unfortunately ...
So, he sold them elsewhere.
Well, he sold them elsewhere, and then when they set up a sting operation for him, they told him that the drugs were going to New York. And that’s all they have to do under this provision, the Federal Drug Law provision called 959 Provision. All you have to do is be attempting to distribute drugs in the United States. So when he heard that they were going to New York, that’s what roped him into US charges for distribution.
Right, right. So, across the world, who are the best, I guess, stoppers of these things? The best ... How do these regulatory agencies work together?
What I discovered is that they don’t work together particularly well.
So this one woman just decided, “I’m gonna get this guy”?
She basically, she and another investigator. They’re not even agents of the DEA. They’re called diversion investigators, which means they investigate drugs that are diverted off the legal market onto the illegal market, so prescription drugs that are being sold illegally. They actually figured out that there was a pharmacy in Chicago that was shipping a lot of illegal drug prescriptions. And when they went in there they found a FedEx account, and they subpoenaed FedEx. And when FedEx sent them these spreadsheets they saw that there were hundreds of pharmacies distributing drugs on the same FedEx account.
And that kind of clued them in that there’s some ...
Which FedEx should have known, but ...
Well, FedEx was later ... They attempted to prosecute FedEx, actually.
And they ended up, the trial was a fiasco and they dropped the charges.
But, UPS agreed to I think a $40 million fine for their part in illegal pharmacy shipping.
So, to your question, they did coordinate with agencies around the world. But really, only the US has the ability to track someone who’s as international and as sophisticated as Le Roux. Australia was trying to get him but they just don’t have the resources to put into it. Particularly when he’s in a place like the Philippines where the US would show up and say, “Hey, can you put surveillance on him?” And he would just turn around and pay the authorities.
To not put surveillance on him.
Not only to not put the surveillance on him, but to tell him exactly what the US had told them.
That type of operation can only really be run by the DEA. No one has even the purview to kinda travel around the world.
And do they have the technology? Because you know, this is being brought up in this whole immigration debate. Like, this idea of what we need for border security, a lot of it is around drug interdiction. At least that what it’s supposed to be about.
They do have the technology. I mean, there is technology focused at the border. It was pretty interesting because they ... You know, the investigators that I mentioned, Kimberly Brill, they basically taught themselves. They taught themselves how this network worked and how to unravel it. Like, what’s ICANN? How do we subpoena ICANN? They learned all those things themselves. Then of course, like encryption experts that can be called upon by the DEA.
But, when they caught Paul Le Roux and they wanted to use him as an informant to then help them catch other people and they needed to get inside his encrypted email system, they had to ask him to do it. They said, “Hey, can you sit down and mirror your email into this other email, because we need to keep all this for evidence.” And he said, “Sure, I’ll do it.” So they really had to rely on the guy himself. He became sort of like the head of their ...
Technological operation on the other end.
Which is astonishing.
So, where does it go? Where do you see ... What do you imagine is next in this area? You’ve got this guy using entrepreneurial things. Where is the next phase of drug dealing going?
Next phase of drug dealing ...
Space. You can answer space and just leave it at that.
I mean, I don’t ... I’m sure there’s a kind of next revolution around the corner that you can’t quite see, but what I think is that there is clearly a market for an internet-driven cartel.
And not just ...
What does that look like?
That looks like similar to what Le Roux did. It looks like something that’s distributed around the world. Where there’s ... Yes, people are located somewhere, but there’s no sort of like central focus of it. That it’s able to adapt very quickly, so if you shut down one avenue, they just open up another one. Because they’re not entirely dependent on ... sort of like cocaine that’s grown there and brought here and then taken across the border. They’re actually operating in all corners of the world.
And that they’re able to participate in any number of illegal ventures at the same time. So, I mean, Le Roux was kind of unique in that he kept it all in his head. Like, he was just one guy. Usually, you would need a larger organization to do all of the projects that he engaged in.
And the blockchain, of course. No, I’m kidding. I’m kidding.
I mean, there is ...
There was a Davos thing about blockchain crime. I was like, “Ah, geez.”
There is, I mean, cryptocurrency ...
For all of its ups and downs, the one thing that it has proven absolutely useful for is laundering money.
100 percent, great place to launder money.
Yep. Dirty business.
Even if the value ... Because the value doesn’t really depend on that.
Does that change?
No. I don’t think that ... I don’t see how that ...
I mean, does it morph into something? Everything starts with a crime, as you know, Evan. Every great fortune starts with a crime. That’s a famous ...
A lot of things start with criminal application and then find their mainstream application.
That’s the hope of the blockchain is that the uses that we’re finding for it now are not gonna be the uses that turn out to be the most enriching for humanity. That’s the story.
But certainly the uses that are being found for it now are interesting, and a lot of them are criminal.
Right, so where does it go? Where does it go now?
Where does cryptocurrency go?
No. Where does Paul go now? What happens?
Oh, Paul. Well, Paul Le Roux is in US custody. He is actually in Brooklyn right now, I believe.
Well, with El Chapo.
Yes. I doubt they are housed right next to each other. Although, interestingly enough, I found out that Le Roux was housed with a hacker, who had been put in prison for swatting.
And that guy is now out. And why they allowed Paul Le Roux to be housed right in conjunction with a hacker is sort of surprising to me. I don’t know how that happened.
Oh no, the things they could cook up.
They discovered already — this came out at a trial last year — that Larue was already trying to rebuild his business with ...
This guy who’s out in the Philippines. He was already trying to restart his call center business.
So, Le Roux will be sentenced sometime the first half of this year. There’s what’s called a control date set for March, but I’m not sure it’s gonna hold. And he could get anything from 10 years to life, or they could throw out the guidelines and give him time served, because he cooperated. It’s really down to the judge as to whether his cooperation was valuable enough for him to get out immediately, or serve 20 years or 30 years. But he took a plea deal in which he admitted to a lot of things, but only is charged with a very small number of crimes.
Wow. What are you doing next, Evan?
I’m starting a new project.
I can’t talk about it yet.
Does it have to do with drugs?
It doesn’t have to do with drugs. It has ...
It is journalism again.
Oh, dammit Evan.
Why do you keep coming back to it?
I can’t ... I ... I can’t think of anything else I guess.
All right. Okay. How do you feel about the state of journalism right now? Just briefly, because we’ve gotta go.
Well, briefly? I think I’m a little perturbed at the state of sort of new organizations around, in journalism. I feel like when we started Atavist there was a real flurry at that time of people trying all sorts of things.
Some of the things which have become very large, like Vox. And some things which stayed small, like Atavist. A lot of things went away. But, it felt like there was a lot of ...
Experimentation happening. And it does not feel that way to me.
Not across tech, I think. I think it’s something that’s suffering all through tech.
I can’t think of ...
And that’s concerning because it’s very clear that we haven’t found the answers.
So, the idea that no one’s asking the questions anymore, or making those efforts. Or everyone feels so burned out that they can’t do that.
Well, it is exhausting.
It’s ... I don’t blame anyone for not starting it. Trust me.
I’m not out there saying people should do it.
But you’re doing it again. Back to the salt mines.
I don’t know if I’m gonna start something. I’m doing a new project. It’s more like a story than it is a business, for sure.
Well, then, I look forward to it. Evan, thank you so much for being here. Thanks for coming on the show.
This article originally appeared on Recode.net.