Prosecutors Say Sinaloa Cartel Laundered $50 Million Via China-Linked LA Network

Confiscated drug money. U.S. District Attorney via AP

The Department of Justice (DOJ) alleged Tuesday that Mexico’s Sinaloa drug cartel, blamed for the influx of fentanyl into the United States, has conspired with groups linked to “Chinese underground banking” to launder more than $50 million in drug proceeds.

A multi-year investigation dubbed “Operation Fortune Runner” has resulted in the superseding indictment of 24 defendants, identified as Sinaloa associates in Los Angeles, the DOJ said.

The department alleged that a money laundering network linked to the cartel collected and processed “large amounts of drug proceeds in U.S. currency in the Los Angeles area” with help from a California-based money transmitting group with ties to Chinese underground banking.

“This DEA investigation uncovered a partnership between Sinaloa Cartel associates and a Chinese criminal syndicate operating in Los Angeles and China to launder drug money,” Drug Enforcement Administration (DEA) administrator Anne Milgram said in a press release.

“DEA’s top operational priority is to save American lives by defeating the cartels and those that support their operations. This investigation is the latest example, and there is more to come,” she added.

The defendants were charged with conspiracy to aid and abet the distribution of cocaine and methamphetamines, conspiracy to launder monetary instruments, and conspiracy to operate an unlicensed money-transmitting business.

Mexican and Chinese law enforcement cooperated with U.S. authorities to apprehend fugitives who fled the United States after being charged last year, according to the department.

The DOJ said 20 of those named in the indictment will be arraigned in the district court in Los Angeles “in the coming weeks.”

The investigation also resulted in the seizure of as well as the seizure of $5 million in narcotics proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 ecstasy pills, 44 pounds of psilocybin, and “numerous ounces” of ketamine, as well as the confiscation of three semi-automatic rifles and eight handguns, according to the DOJ.

Confiscated drugs piled up in a truck bed. U.S. District Attorney via AP

Chinese Underground Banks Help Move Drug Profits to Mexico

The U.S. government has described the Sinaloa cartel as “one of the most notorious and pervasive drug trafficking organizations in the world,” and blamed it for the influx of fentanyl into the United States.

The Sinaloa cartel generated “enormous sums” of U.S. currency in the United States, and proceeds from the drug trade would be repatriated to Mexico for the cartel’s use.

The DOJ said that Chinese underground money exchanges help cartels move profits from the United States to Mexico by providing a ready market for U.S. currency.

“Drug traffickers increasingly have partnered with Chinese underground money exchanges to take advantage of the large demand for U.S. dollars from Chinese nationals,” the department said.

“The funds that are transferred in China are then used to pay for goods purchased by businesses and organizations in Mexico or elsewhere such as consumer goods or items needed to aid the drug trafficking organization to manufacture illegal drugs, such as precursor chemicals, including fentanyl,” it added.

The Treasury Department in March sanctioned 15 Sinaloa Cartel members and six Mexico-based entities for a “multi-million dollar Black Market Scheme” to launder illicit fentanyl proceeds.

Fentanyl is a synthetic opioid up to 50 times stronger than heroin, and it’s a significant contributor to drug overdoses in the United States, according to the U.S. Centers for Disease Control and Prevention (CDC).