US investigation discovers association between Sinaloa Cartel and Chinese groups to launder money

A five-year investigation by US officials has uncovered a complex association between one of the drug cartels well-known Mexican and Chinese clandestine banking groups in the United States that laundered money from the sale of fentanyl, cocaine and other drugs, federal prosecutors said Tuesday.

Close associates of the powerful Sinaloa Cartel partnered with Chinese groups to cover income of more than $50 million from drug sales, much of which was prosecuted in the Los Angeles metropolitan area, prosecutors said in a press release. .

More than twenty people have been charged. Security forces from China and Mexico helped arrest the fugitives who fled the United States after they were first indicted last year.

“This investigation demonstrates that the Sinaloa Cartel has entered into a new criminal association with Chinese citizens who launder money for the cartels,” said Anne Milgram, head of the Drug Enforcement Administration (DEA) at a conference. of press.

The main defendant is Edgar Joel Martinez Reyes, 45, of East Los Angeles, who prosecutors say directed couriers who picked up the cash in the greater Los Angeles area. Martínez Reyes partnered with the leader of the Chinese money launderers and traveled with him to Mexico to negotiate contracts with the cartel, according to authorities.

Martinez-Reyes’ attorney did not immediately respond to an email and phone call seeking comment.

According to prosecutors, the scheme depended on the huge demand for the US currency among wealthy Chinese citizens, who are prohibited from transferring more than $50,000 out of China each year due to their government’s capital flight restrictions.

According to authorities, a person in China transferred money to the seller’s Chinese bank account and received the equivalent in dollars in the United States to use to purchase real estate, luxury items, and pay tuition fees.

They said cryptocurrency transactions were also used to move drug money, adding that funds in China were used to purchase goods such as chemicals to make fentanyl and methamphetamine that were then sent to drug cartels in Mexico.

Chinese currency brokers charged a much lower commission rate than conventional money launderers and were generally much less expensive to service than previous methods of moving money, such as smuggling truckloads of cash through the border between the United States and Mexico or through banks and companies, according to officials.

“When I talk about a cycle of destruction, the drugs that are sold here in the United States are then used to finance precursor chemicals that will be used to make even more drugs that are sent to our country,” said federal prosecutor Martin Estrada.

Federal agents have worked closely with China’s Ministry of Public Security since President Joe Biden met with his Chinese counterpart Xi Jinping in Woodside, California, in November last year, according to Estrada.

At least 22 of the 24 defendants have been arrested, Estrada said. The charges include one count of conspiracy to aid and facilitate the distribution of cocaine and methamphetamine, one count of conspiracy to launder monetary instruments, and one count of conspiracy to operate a money transfer business without a license.

Most of those arrested will be arraigned in the coming weeks in federal district court in Los Angeles, according to the press release.

Authorities said law enforcement also seized about $5 million in drugs, including just over 136 kilograms of cocaine, 41 kilograms of methamphetamine, as well as other narcotics and several firearms.

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