Joshua Fruth is a military intelligence officer, police captain, financial crime expert, and Director of Anti-Money Laundering Advisory Services at Matrix-IFS who joins us to discuss the war on money laundering and why it matters.
What We Discuss with Joshua Fruth:
- What money laundering is and how it works.
- Who benefits and who loses from money laundering.
- How an investigator learns to think like the people he or she is investigating.
- What needs to happen before intelligence gathering can even begin.
- Why tracking the money trail is so valuable in the fight against criminals and terrorists.
- And much more…
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If you’re not a criminal involved in terrorism financing, drug cartels, human sex trafficking, organized fraud rings, stealing money from churches, misappropriation of funds from businesses and non-profits, tax evasion, auto chop shops, counterfeiting goods, or sanctions evasion, you’ve probably never had to worry about money laundering.
But Joshua Fruth, Director of Anti-Money Laundering Advisory Services at Matrix-IFS explains what money laundering is, how tracking it puts a finger on the pulse of global terrorism and international crime, and why even the law-abiding among us should be paying attention to how money laundering is at the root of nearly everything nefarious witnessed in current events. Listen, learn, and enjoy!
Please Scroll down for Full Show Notes and Featured Resources!
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More About This Show
When Matrix-IFS Anti-Money Laundering Advisory Services Director Joshua Fruth was just eight years old, he knew what he wanted to be when he grew up.
“When I first enlisted in the army, I said, ‘Hey, Dad, I’m going. I want to go fight terrorists and I really want to get into intelligence,'” says Joshua. “And he said, ‘I knew when you were eight years old that you would do this…we were sitting watching an old Sean Connery James Bond movie and you came out and said, ‘I know that this is not real. I know this is a movie, but I know that the intelligence field is real and it’s important, and when I grow up I’m going to find out what it’s all about.'”
Between age eight and that point, Joshua studied foreign cultures and languages and soaked up news from worldwide sources to prepare. He enlisted as an infantryman and went through ROTC; by the time he was asked which branch he wanted to pursue, he was a shoe-in as an intelligence officer.
From there, he came to understand the central role that money laundering plays in every nefarious enterprise under the sun — terrorism financing, drug cartels, human sex trafficking, organized fraud rings, pastors stealing money from churches, misappropriation of funds from businesses and non-profits, tax evasion, auto chop shops, counterfeiting goods, and sanctions evasion to name a few.
“Human intelligence isn’t always reliable,” says Joshua. “But the thing about money and money laundering and tracking the money trail: numbers don’t lie.”
This set Joshua’s course. He may not be the tuxedo-wearing epitome of spy-tech operations, but he knows how to sniff down dirty money no matter how thoroughly it’s been laundered.
Money Laundering and The Root of All Evil
“Every corrupt act in the world — drugs, human trafficking, organ trafficking, terrorism — it all revolves around money,” says Joshua. “It’s the things you do to get money that makes money the root of all evil.”
So what’s so “evil” about money laundering, and what purpose does it serve?
“The thing about money laundering is it’s never the initial criminal act,” says Joshua. “It’s unlike other financial crimes. Fraud is basically stealing. Money laundering means that you’ve already done something to attain illicit wealth. It may have been fraud. It may have been selling drugs. It may have been that you’re coming from a sanctioned country or you’re part of a terrorist group — you’re on a watch list. But you’ve done something bad to attain that illicit money and now you have to clean it.”
According to Joshua, the top three sources of money laundering globally are:
- State-level sanction evaders (e.g., Iran and North Korea)
- Transnational criminal organizations
At first glance it might seem as if terrorist financing has been errantly left off the list, but Joshua considers this a hybrid of all three. A terrorist operation like ISIS, for instance, operates with the cooperation of all of these sources.
Listen to this episode in its entirety to learn more about the common patterns Joshua looks out for when he’s trying to determine if someone is laundering money, why the way big banks red flag suspicious transactions often makes real transgressions harder to detect (and what Joshua is doing to separate the signal from the noise), why the effects of money laundering should concern all of us, how cryptocurrency is used in money laundering, and lots more.
THANKS, JOSHUA FRUTH!
And if you want us to answer your questions on one of our upcoming weekly Feedback Friday episodes, drop us a line at [email protected].
Resources from This Episode:
- Joshua Fruth’s columns at Reuters
- 5 Things to Know about Money Laundering by Aimee Picchi, CBS Moneywatch
- Blue Pill or Red Pill — The Matrix
- Breaking Bad Money Laundering
- Office Space Money Laundering
- Debra Geister
- TJHS 3: Bill Browder | Hunted by Putin
- Manafort’s Russia Connection: What You Need to Know about Oleg Deripaska by Andrew Roth, The Washington Post
- 6 Degrees of Kevin Bacon
- Pablo Escobar Will Never Die by Jesse Katz