PIIE Blog | North Korea: Witness to Transformation
The Peterson Institute for International Economics is a private, nonprofit, nonpartisan
research institution devoted to the study of international economic policy. More › ›
Subscribe to North Korea: Witness to Transformation Search
North Korea: Witness to Transformation

More Breaking Bad: The DEA Meth Indictments

by | November 21st, 2013 | 07:00 am
|

We have long had an interest in North Korea’s illicit exports, including drugs; recently, we covered an interesting paper by Andrei Lankov and Seoh-Hyan Kim on developments in North Korea’s meth market. So we were intrigued when the DEA announced the successful extradition of five men from Thailand on charges of seeking to export North Korean meth to the US.  The group included two Brits, a Chinese national, a Filipino and a resident of Thailand whose nationality is not given. The Washington Post adds some color on the US side of the operation, apparently led by former army sergeant Joseph Hunter who is accused of being a contract killer under a separate indictment.

Several parts of the indictment, which is provided in full by the DEA, are of interest. First, the Chinese and Filipino are both members of an unspecified Hong Kong-based criminal organization, confirming suspicions that North Korea’s marketing networks are dependent on criminal organizations outside the country.

However, one of the defendants claims that North Korean production has been falling because of the destruction of labs: “Because before, there were eight [other organizations]. But now only us, we have the NK product. . . . [I]t’s only us who can get from NK.” He went on to claim that the North Korean government had destroyed some methamphetamine labs “to show Americans that they [the North Korean government] are not selling it any more, they burned it. Then they transfer to another base.” Because of difficulties getting product out of the country, the organization had stockpiled a ton of North Korean meth in the Philippines

This story would seem to have a “coals to Newcastle” quality. According to the most recent World Drug Report from the UN (.pdf here), the US was responsible for 54 of the 88 tons of meth seizures worldwide in 2011; North Korea is not even mentioned in the entire 150 page report.

But something else caught our eye about the piece: the prices charged. According to the indictment, the 100 kilos was priced at $65,000 a kilo, putting the size of the deal at $6.5 million.  But a quick check at Narcotic News shows wholesale prices in New York at only $13-18,000 a pound which would price 100 kilos at between $2.85 and $4 million.

What’s going on? Apparently, quality. The indictment discusses how the gang supplied a kilo of the product as a sample and “people in New York, they went crazy . . .the places that we put it in the States, New York, all these–close to Boston, all these places, I mean, they went crazy.” When the meth was seized in Thailand and the Philippines, it tested 99% pure. We suspect that Breaking Bad helps explain this: this is not your standard makeshift US-style meth lab, but involves some serious chemists. Somewhere in North Korea, there are some Walter Whites cooking.