Feds Bust Cartel Money Laundering Scheme

(RightWing.org) – Drug traffickers rake in a lot of money, millions of dollars a year, in their criminal operations. They need a way to move this money, and since they can’t use traditional banking methods without raising alarms and drawing suspicion, they resort to underground methods. A federal probe has revealed ties between the Sinaloa Cartel and Chinese underground money exchanges.

Case Background

The Sinaloa Cartel is one of the major drug traffickers in the world. In moving significant amounts of drugs, including fentanyl, to the United States. In return, they’re paid enormous sums of money in US currency, but they need a way to move that money back to Mexico. That’s where the federal government says Chinese underground money networks come into play.

Chinese investors — who are forbidden by their national government from moving more than $50,000 out of the country per year — seek out people in the US who have dollars to sell to transfer money to the country. The Chinese national then receives banking information to deposit Chinese currency in a bank account. Once the US currency seller receives notification of the deposit, they release the US dollars to the buyer in the states.

The Superseding Indictment

On Tuesday, June 18, the Department of Justice’s Office of Public Affairs issued a press release announcing a superseding indictment charging associates of the Sinaloa cartel based in Los Angeles with conspiracy. It’s accusing the cartel of working with the underground money exchanges. The method also helped “wealthy Chinese nationals evade China’s currency controls.”

The lead defendant in the case is 45-year-old Edgar Joel Martinez-Reyes, who federal prosecutors say is the one who partnered with the Chinese money launderers and managed the couriers who were responsible for picking up the money exchanges.

A total of 24 defendants were charged in the indictment. The announcement included a variety of offenses, including

  • Conspiracy to aid and abet the distribution of cocaine and meth
  • Possession with intent to distribute the drugs
  • Conspiracy to launder monetary instruments
  • Conspiracy to operate an unlicensed money-transmitting business
  • Structuring transactions to avoid a reporting requirement
  • Assaulting a federal officer with a deadly weapon
  • Criminal forfeiture

Authorities in Mexico and China worked to detain suspects who fled the United States when the initial charges were filed in 2023. The majority of the offenders charged, 22 of them, have been arrested. Twenty are expected to be arraigned in the US District Court in Los Angeles in the coming weeks. If convicted, they will face a minimum of 10 years and a maximum of life in prison.

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