Chinese Money Laundering Enables Mexican Drug Cartels' U.S. Opioid Supply Chain, Officials Testify

Chinese money laundering groups have become the "professional money launderers of choice" for Mexican drug cartels, enabling them to finance the opioid supply chain in the United States, according to testimony from Drug Enforcement Administration (DEA) and Treasury Department officials to Congress on Tuesday.

The officials cautioned that Chinese money laundering operations have grown significantly in recent years, allowing drug cartels to quickly wash their illicit proceeds. "Chinese money laundering groups have emerged as the professional money launderers of choice for Mexican drug traffickers," the officials stated in their testimony.

A recent Department of Justice bust uncovered a Chinese money laundering cell with nearly $100 million in drug proceeds for a Mexican drug trafficking group. Treasury Secretary Janet Yellen has raised the issue of money laundering with Chinese officials and is working with U.S. agencies to combat the problem.

Why this matters: The testimony highlights the growing threat posed by the convergence of Chinese money laundering and Mexican drug cartels in fueling the deadly opioid crisis in the United States. Combating this illicit financial network is crucial to disrupting the supply of fentanyl and other synthetic opioids that have devastated communities across the country.

Senator Sherrod Brown (D-OH) hosted a press conference with law enforcement leaders to call for the immediate implementation of his recently enacted legislation, the FEND Off Fentanyl Act. The bill aims to combat the fentanyl crisis by targeting the illegal supply chain, from chemical suppliers in China to cartels transporting the drug from Mexico. It is intended to disrupt illicit opioid networks and penalize those facilitating fentanyl trafficking.

The surge in fentanyl overdoses is acutely felt on college campuses and in communities nationwide. U.S. Customs and Border Protection has seized large amounts of fentanyl being smuggled in novel ways. Cartel-linked drug operations have been disrupted in Texas, while significant cocaine seizures have been made by federal authorities. Fentanyl seizures have increased dramatically in states like Montana and California.

In their testimony, the DEA and Treasury officials stressed the urgent need to crack down on Chinese money laundering groups that have become integral to the Mexican cartels' illicit financial operations. They called for enhanced cooperation between U.S. and Chinese authorities to disrupt these networks and stem the flow of deadly opioids into American communities. "Stronger action is needed to dismantle these money laundering cells and cut off the financial lifeline of the cartels," the officials stated.

Key Takeaways

• Chinese money laundering groups have become the "professional money launderers of choice" for Mexican drug cartels.
• A recent DOJ bust uncovered a Chinese money laundering cell with $100M in drug proceeds for a Mexican cartel.
• The convergence of Chinese money laundering and Mexican drug cartels fuels the deadly opioid crisis in the U.S.
• The FEND Off Fentanyl Act aims to combat the fentanyl crisis by targeting the illegal supply chain.
• U.S. and Chinese authorities need to cooperate to disrupt these money laundering networks and stem the flow of opioids.