DOJ: Cartel Allegedly Laundering Drug Money via Chinese 'Underground Banking'

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Facts

  • The US Dept. of Justice (DOJ) claimed on Tuesday that members of Mexico's Sinaloa drug cartel partnered with Chinese nationals operating underground money exchanges in Southern California to launder money from drug proceeds.1
  • Dubbed 'Operation Fortune Runner,' the multi-year investigation found that the alleged network collected and processed over $50M in drug proceeds generated in the US to make them accessible to cartel members abroad.2
  • This comes as Chinese nationals have frequently resorted to informal banking channels to move funds out of the PRC and exchange renminbi for dollars amid a ban on annual transfers above $50K.3
  • Federal prosecutors charged 24 individuals with offenses ranging from money laundering to distributing drugs — most of whom are scheduled to appear in a Los Angeles court soon.4
  • US law enforcement officials, in tandem with Chinese and Mexican counterparts, seized around $5M in drugs, including cocaine and methamphetamine, and several firearms.5
  • The alleged leaders of the money laundering ring — Edgar Joel Martínez-Reyes and a Chinese national surnamed Tong — are said to have traveled to Mexico to establish a partnership with the Sinaloa Cartel.6

Sources: 1USA Today, 2United States Department of Justice, 3Al Jazeera, 4BBC News, 5Associated Press and 6Global Times.

Narratives

  • Anti-China narrative, as provided by Brookings. China is deeply embedded in the deadly drug trade that costs the lives of countless Americans every year. Internal corruption and an antipathy to US cooperation have made the PRC a major source of synthetic opioid drugs, and it should come as no surprise that there are connections to money laundering for violent cartels. Beijing needs to clean house and crack down on this dangerous black market.
  • Pro-China narrative, as provided by Chinadaily. This massive case could not have come together without the cooperation of Chinese authorities, which led to this impressive indictment. China is not the reason America has such a great demand for illicit drugs, but it will always step up to ensure its citizens are not involved in crime anywhere in the world. The world always benefits when the US ceases its provocations and cooperates in good faith with China.

Predictions