After a thorough investigation spanning several years, the Justice Department has released a statement regarding a partnership discovered by the DEA between Mexican Sinaloa Cartel associates in Los Angeles and a Chinese criminal syndicate operating in both Los Angeles and China.
According to a report by The Center Square, the surge of fentanyl in the U.S. can be attributed mainly to the Sinaloa Cartel and Chinese operatives. These individuals acquire fentanyl precursors from China and produce the illegal drugs in Mexico. The cartel then oversees the transportation and distribution of the drugs into the U.S. Along with the drugs, the smuggling of illicit weapons, stolen vehicles, and other contraband also occurs across the Mexican border. Law enforcement officials have provided this information to The Center Square.
Federal agents have discovered that Chinese underground money exchanges operating in the United States can be used to launder significant amounts of U.S. currency.
The distribution of cocaine and methamphetamine, money laundering, and running an unlicensed money transmitting business have led to the unsealing of indictments against 24 defendants by the DOJ. The charges include aiding and abetting the aforementioned crimes.
According to a multi-agency investigation, Sinaloa Cartel operatives based in California imported a substantial amount of drugs, including fentanyl, cocaine, and methamphetamine from Mexico between October 2019 and October 2023. The operation generated $50 million in cash within the United States.
According to the indictment, in January 2021, Edgar Joel Martinez-Reyes, the main defendant and a resident of East Los Angeles, traveled to Mexico to meet with members of the Sinaloa cartel. His objective was to strike a deal with money remitters associated with a Chinese underground banking system to launder drug trafficking profits in the United States. The cartel then proceeded to distribute cocaine, methamphetamine, and other illegal drugs, generating proceeds in U.S. dollars.
According to reports, the authorities have claimed that they were able to trace drug proceeds to a San Gabriel Valley-based money transmitting group with connections to Chinese underground banking. The drug money was then allegedly converted into cash amounting to hundreds of thousands of U.S. dollars and made accessible to cartel members in Mexico and other parts of the world, after being concealed and processed in the Los Angeles region.
According to the investigation, the organizations were involved in aiding Chinese nationals to bypass China’s currency controls. At present, the Chinese government has a restriction of transferring more than $50,000 per year outside the country. However, the Chinese nationals have found a way around this law through the assistance of U.S. currency brokers and Chinese underground money exchanges. These brokers charge a fee for concealing the origin and nature of the funds, as clarified by the DOJ.
According to a statement by the DOJ, drug traffickers have formed alliances with Chinese nationals to capitalize on the high demand for U.S. dollars from Chinese citizens. The money that is transferred in China is then utilized to purchase goods by Mexican businesses and organizations. These goods are crucial in aiding drug trafficking organizations to manufacture illegal drugs, including fentanyl and precursor chemicals.
According to the indictment, the scheme for money laundering involved the acquisition of personal or real property, including luxury goods and cars, which were then shipped to China. The drug proceeds were also laundered through transactions involving cryptocurrency, purchasing cashier’s checks, or depositing small amounts into recently opened bank accounts.
Several defendants fled the United States after being indicted, but thanks to the joint efforts of Chinese and Mexican law enforcement authorities, some of them were apprehended and arrested by the DOJ. It is anticipated that about twenty defendants will be brought before the U.S. District Court in Los Angeles for arraignment in the next few weeks.
According to DEA Administrator Anne Milgram, the Mexican drug cartels responsible for the worst drug crisis in American history are driven by relentless greed and the pursuit of money. Milgram believes that the Sinaloa Cartel, in particular, uses laundered drug money to produce and import their deadly poison into the United States.
According to Guy Ficco, the Chief of IRS Criminal Investigations, money laundering is a tactic used by criminals to make their illegal activities seem legitimate. He explains that drug traffickers, for instance, generate a huge amount of cash through their illegal operations, and cases like this one demonstrate how Chinese money launderers work closely with drug traffickers to make it appear that their profits are generated from legal activities.
During the investigation, authorities were able to confiscate a total of $5 million in earnings from narcotics, along with a vast amount of illicit substances. This includes over 300 pounds of cocaine, over 90 pounds of methamphetamine, 3,000 Ecstasy tablets, 44 pounds of magic mushrooms, several ounces of ketamine, three semi-automatic rifles with high-capacity magazines, and eight semi-automatic handguns.
Should all charges stick, the defendants would be looking at a minimum of 10 years in prison with the possibility of life behind bars.
According to The Center Square, Chinese companies and executives have been charged by U.S. authorities for their involvement in illicit fentanyl trafficking in New York. Additionally, in Florida, China-based companies and their employees face charges related to the production and distribution of synthetic opioids like fentanyl and methamphetamine, as well as sales resulting from precursor chemicals.
After the Department of Justice charged 28 individuals from the Sinaloa, which included the sons of notorious drug kingpin El Chapo, indictments were unsealed in New York, Illinois, and the District of Columbia.
