U.S. financial systems have been warned to look out for Chinese money laundering networks used by Mexico-based drug cartels, including some designated as foreign terrorist organizations.
The Treasury Department’s Financial Crimes Enforcement Network issued an advisory Thursday that money laundering networks linked to individuals holding Chinese passports have enabled drug cartels “to poison Americans with fentanyl, conduct human trafficking, and wreak havoc among communities across our great nation.”
“The United States will not stand by and allow nefarious actors to launder illicit proceeds through our financial system,” said John Hurley, Treasury’s under secretary for terrorism and financial intelligence, in a news release. “Today’s publication of FinCEN’s Advisory and Financial Trend Analysis reinforces Treasury’s and law enforcement’s ongoing work to combat Chinese money laundering networks and will help financial institutions better identify signs of illicit activity.”
FinCEN’s Financial Trend Analysis scoured 137,153 Bank Secrecy Act reports filed by financial institutions between January 2020 and December 2024 associated with suspected activity relating to Chinese money laundering, totaling approximately $312 billion in suspicious transactions.
FinCEN said Chinese money laundering networks also participates in facilitating fraud, human trafficking, and human smuggling. It also linked the money laundering networks to U.S. real estate transactions, casinos, and even laundering through adult daycare centers in New York.
The analysis added that individuals carrying Chinese passports play a significant role in such networks and might wittingly or unwittingly assist money laundering efforts on a global scale.
“Chinese money laundering networks are global and pervasive, and they must be dismantled,” FinCEN Director Andrea Gacki said. “These networks launder proceeds for Mexico-based drug cartels and are involved in other significant, underground money movement schemes within the United States and around the world.
“FinCEN’s Advisory and Financial Trend Analysis support Treasury’s continuing efforts, alongside our law enforcement and international partners, to bankrupt transnational criminal organizations and their enablers.”
The analysis blamed laws in Mexico and China for fueling the money laundering schemes in the U.S. Mexico’s currency restrictions prevent substantial amounts of U.S. dollars from being deposited into Mexican banks, and China’s currency control laws limit the amount of money Chinese citizens can transfer abroad each year.
In June 2024, the Department of Justice announced a 10-count superseding indictment charging Los Angeles-based associates of Mexico’s Sinaloa Cartel with conspiring with money-laundering groups linked to Chinese underground banking to launder drug trafficking proceeds. The Trump administration in February labeled the Sinaloa Cartel as a foreign terrorist organization and specially designated global terrorist outfit.
During the conspiracy, more than $50 million in drug proceeds flowed between the Sinaloa Cartel associates and Chinese underground money exchanges. The indictment alleged that a Sinaloa Cartel-linked money laundering network collected and, with help from a California-based money-transmitting group with links to Chinese underground banking, processed substantial amounts of drug proceeds in U.S. currency in the Los Angeles area.
The same indictment also alleged that the underground banking groups exponentially increased the profits of the Cártel de Jalisco Nueva Generación, another Mexico-based group designated in February as a foreign terrorist organization and specially designated global terrorist outfit by the Trump administration.
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