Investing in Animals: Illegal Trade Takes Off

Killing animals for profit. It smacks of a National Geographic documentary from the 1970s. Elephants gunned down by poachers in a sad story of exploitation. But in 2012, it's still happening.

These two small primates, called pygmy lorises, were smuggled into the U.S. in a small cloth pouch, concealed in a man's pants.
U.S. Fish and Wildlife Service
These two small primates, called pygmy lorises, were smuggled into the U.S. in a small cloth pouch, concealed in a man's pants.

In fact, not only does the practice still exist, it might be more common now than it was 40 years ago. There's an easy answer to the question of why: MONEY.

"It's big. It's massive. It's growing. It's lucrative," said Crawford Allan, director of traffic, North America, a regional office of the the wildlife trade arm of World Wildlife Fund. "It's high profit and low risk."

He estimates that the illegal trade is a $10 billion to $20 billion global business. The margins on things like elephant ivory or rhinoceros horn can be as profitable as illegal weapons or narcotics.

"If you are involved in criminal activity, and your business is to make money illegally, wildlife trade is a great business for you to get into," Allan told CNBC. "The penalties — largely around the world — if you're caught trading wildlife, are miniscule compared to the penalties for say, trading in drugs."

Take rhino horn, for example. A 5 pound to 7 pound horn can be worth well over $200,000 dollars. And it's made out of the same material that makes up your fingernails.

But to some cultures in Asia, it can cure cancer. There's no scientific proof, but the belief has created an incredible market. The horn is crushed, put mainly in pill form and then sold ... for a huge profit.

The trade is so lucrative that even wall-mounted hunting trophies have been stolen. Museums that have real rhino heads have increased security to protect the displays.

There are even reports of crime syndicates stockpiling rhino horn. The thinking is that, if the animal becomes extinct, the value will skyrocket. With a massive supply stockpiled, a person or group could dominate the pricing environment.

Ivory tusks might not have quite the same price point these days, but the concept is similar. Elephant populations continue to decline, yet the demand for ivory products remains extremely high.

"The ivory is the white gold that people are investing in because they know that it's a dwindling resource," Allan said.

While researching "Dangerous Trade: Exotic Animals", we came across some incredible items that are available in the black market. There were scarves from a rare Asian antelope. One scarf comes from five illegally killed antelope, and can cost as much as $10,000 ... for one scarf!

The U.S. Fish and Wildlife has a repository outside of Denver, Colo., where all the contraband goes for storage. They had a small drawer full of the scarves with a total retail value of $1 million.

We saw tiger bone in pills and other forms that could be added to drinks. Tigers are worth more dead than alive.

"The composite parts of the tiger could all fetch up to potentially $75,000 to $100,000, yet to buy a live tiger in some cases you could pay $2,500 to $5,000 because they're so difficult to keep and maintain," Crawford Allan said.

The oddest thing we saw? Boxes of seal penis pills. Yes, that's right ... seal penis.

"They say that the pill gives you energy and vigor," said Bernadette Atencio, with an uncomfortable, yet amused pause. She manages the massive facility that houses hundreds of millions worth of confiscated illegal animal parts. "I've seen prices on them from $200 to $500 or $600 a box."

The trade extends well into the living realm as well. Birds and reptiles are the most common items, and they are smuggled into the country by plane, ship and car ... every day.

"Sometimes it's just a sock. Simple as that," Allan said. "They'll strap it to their body, under their clothing. And they will go on their way and travel and just hope that they don't get detected."

So, if the guy next to you on the plane is a little smelly, it might not be personal hygiene. He may well have a bird or a lizard in his pants.

Follow Brian Shactman on Twitter @bshactman