(PatriotWise.com) — The US Justice Department announced last Tuesday a superseding indictment in a five-year, multi-agency investigation into a money laundering scheme between Mexico’s most powerful drug cartel and a group of underground bankers in China.
According to a June 18 press release from the Department of Justice, the Sinaloa drug cartel conspired with money laundering groups with links to China’s underground banking to launder over $50 million in drug trafficking proceeds.
The key defendant in the case, Los Angeles resident Edgar Joel Martinez-Reyes, 45, managed the couriers who collected the drug money in the Los Angeles area. He also coordinated with the leader of the underground bankers, who traveled to Mexico with Martinez-Reyes to meet with members of the Sinaloa cartel to negotiate the partnership.
Under the scheme, the Chinese underground bankers exploited a “ready market” for US currency in the United States among wealthy Chinese nationals who live, invest, or work in China.
Many of these wealthy nationals want to transfer assets to the United States but are barred by China’s capital flight restrictions from transferring more than $50,000 out of China in a given year.
To get around the restriction, these wealthy Chinese seek alternative banking.
Under the scheme arranged between the Sinaloa cartel and the Chinese underground bankers, a wealthy national looking to purchase US dollars would contact a broker in China. The broker would then provide the Chinese national with banking information on an account in China and instruct the buyer to deposit Chinese currency into the account. Once deposited, the wealthy national would receive an equivalent amount in US dollars in the United States.
The network of underground bankers charged far less in commission fees than the more traditional money launderers, which enabled the Sinaloa cartel to boost its profits.
US law enforcement began working with China’s Ministry of Public Security after President Joe Biden met in California with Chinese President Xi Jinping in November 2023.
The Justice Department said law enforcement in Mexico and China helped apprehend the fugitives who left the US after being charged last year. In total, at least 22 of the 24 defendants have been arrested.
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