A Chinese national found guilty of a money-laundering scheme to move tens of millions in drug proceeds was sentenced to seven years in prison on Aug. 3, while his Chinese co-conspirator pleaded guilty a day earlier, the U.S. Department of Justice (DOJ) announced.
“Law enforcement reporting indicates an increase in Chinese money laundering groups and Mexican TCOs [transnational criminal organizations] collaborating to move/launder money,” the DEA report states.
“Money laundering tactics employed by Asian TCOs generally involve the transfer of funds between China and Hong Kong, using front companies to facilitate international money movement.”
To facilitate the laundering of drug proceeds, Li purchased a casino in Guatemala and registered it under the alias “Francisco Ley Tan.” The casino was then used by Li and his co-conspirators in part to hold meetings with drug traffickers.
The money-laundering scheme involved the use of bank accounts—some opened under false identities—in countries including the United States and China. According to the indictment, Li used his alias to obtain bank accounts in Miami. The scheme also involved the use of accounts in China’s state-owned financial institutions, including the Agricultural Bank of China and the Industrial and Commercial Bank of China.
“These [Chinese] accounts were used to receive and transact money derived from drug sales, including the sale of cocaine, in the United States,” the indictment states.
The laundering scheme included the transportation and smuggling of cash in bulk.
One of the six Chinese nationals, Li Jingyuan, 49, of San Gabriel, California, was involved in gathering cash “generated by illegal activities in the United States, including the unlawful sale of drugs,” according to the indictment. He also pleaded guilty in April.
Liu also picked up bulk drug cash, which he then deposited into bank accounts provided by Li Xizhi.
Liu’s bribery charge was connected to his attempt to obtain fraudulent U.S. passports for himself and other individuals. According to the indictment, he bribed an undercover DEA agent for about $10,000. The agent, who posed as a corrupt U.S. State Department official, told Liu that U.S. passports could be bought for $150,000 each.
Liu agreed to that amount and transferred about $10,000, including $5,000 in cryptocurrency, as a down payment to buy a passport for himself.
“The defendants laundered millions of dollars on behalf of drug traffickers through the global financial system in a manner that concealed the source and nature of the illicit funds,” said Assistant Attorney General Kenneth A. Polite Jr. of the DOJ’s Criminal Division in the statement.
“Global money-laundering networks enable drug cartels to profit from their deadly trade.”
Li and his co-conspirators used encrypted platforms such as WhatsApp and China’s WeChat to “discuss their illegal activities,” the indictment states.
According to the DOJ, co-conspirator Chen Jiayu, 46, of Brooklyn, New York, was sentenced to 60 months in prison over money laundering on July 20. Chen was also ordered to forfeit $2.8 million.
