The U.S. Department of Justice (DOJ) recently announced a 10-count indictment against Los Angeles-based associates of Mexico's Sinaloa drug cartel, which is run by the sons of Joaquin “El Chapo” Guzmán, who is serving a life sentence in a supermax prison in Colorado.
These associates are being charged with conspiracy to launder over $50 million in drug-trafficking proceeds through Chinese underground banking networks. The multi-year investigation, dubbed "Operation Fortune Runner," led to the indictment of 24 defendants.
The Sinaloa Cartel and Chinese operatives, according to the DEA, are involved in smuggling massive amounts of fentanyl into the U.S, with the Chinese supplying precursor chemicals to make it and cartel operatives producing it in Mexico.
"The Sinaloa Cartel is largely responsible for the massive influx of fentanyl into the United States over the past approximately eight years, and for the accompanying violence and deaths that have afflicted communities on both sides of the border," a DEA press release noted.
According to the indictment, a Sinaloa Cartel-linked money laundering network collected and processed large amounts of drug proceeds in U.S. currency in Los Angeles. This was done with the help of a California-based money transmitting group linked to Chinese underground banking. The proceeds were allegedly concealed and made accessible to cartel members in Mexico and elsewhere.
"Drug traffickers generate immense amounts of cash through their illicit operations. This case is a prime example of Chinese money launderers working hand in hand with drug traffickers to try to legitimize profits generated by drug activities," said Guy Ficco, IRS criminal investigation chief.
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The lead defendant, Edgar Joel Martinez-Reyes, 45, of East Los Angeles, and others allegedly employed various methods to hide the money's source, including trade-based money laundering, structuring assets to avoid federal financial reporting requirements and purchasing cryptocurrency.
Martin Estrada, the U.S. Attorneyfor the Central District of California, referred to the destructive impact of drugs like fentanyl and methamphetamine and the need to target international criminal syndicates laundering drug money.
"As this indictment and our international actions show, we will be dogged in our pursuit of all those who facilitate destruction in our country and make sure they are held accountable for their actions," Estrada said.
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Photo courtesy of U.S. Customs and Border Protection
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