The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) sounded the alarm Wednesday on Chinese money laundering networks that help Mexican drug cartels wash billions in fentanyl profits through America’s financial system.
The agency released both an advisory and a detailed financial analysis exposing how these networks have laundered approximately $312 billion in suspicious transactions over the past five years.
The revelations underscore a growing threat where Chinese nationals — sometimes unknowingly — facilitate a sophisticated financial pipeline that enables cartels to poison American communities while evading both countries’ currency controls.
“Money laundering networks linked to individual passport holders from the People’s Republic of China enable cartels to poison Americans with fentanyl, conduct human trafficking, and wreak havoc among communities across our great nation,” said Under Secretary for Terrorism and Financial Intelligence John K. Hurley. “The United States will not stand by and allow nefarious actors to launder illicit proceeds through our financial system.”
FinCEN Director Andrea Gacki described the networks as “global and pervasive,” emphasizing that they “must be dismantled.”
The agency analyzed 137,153 Bank Secrecy Act reports filed between January 2020 and December 2024. The data revealed that Chinese money laundering networks serve as professional financial cleaners for Mexico-based cartels, including several designated as Foreign Terrorist Organizations.
This unlikely partnership emerged from regulatory restrictions in both countries. Mexico’s currency laws prevent large U.S. dollar deposits in its banks, while China limits citizens to transferring $50,000 abroad annually.
The result: Cartels sell their drug dollars to Chinese networks, who resell them to wealthy Chinese citizens seeking to bypass their government’s capital controls. It’s a win-win for criminals on both sides.
But drug money represents just one revenue stream. FinCEN identified 1,675 reports involving potential human trafficking or smuggling operations.
The analysis also uncovered suspicious activity at 83 adult and senior day care centers in New York, involving approximately $766 million in questionable transactions. Another 108 reports pointed to healthcare fraud, elder abuse, and suspicious gaming activity.
Real estate emerged as a major vehicle for laundering. Financial institutions filed 17,389 reports tied to over $53.7 billion in suspicious property transactions.
Chinese networks utilize shell companies and money mules to acquire high-value U.S. real estate, particularly in markets that are attractive to Chinese investors. These properties serve as both investments and washing machines for dirty money.
The networks employ sophisticated tactics to avoid detection. They recruit bank employees as inside accomplices and provide counterfeit Chinese passports to money mules opening accounts.
Red flags include accounts opened by individuals claiming occupations such as “student,” “housewife,” or “laborer” who suddenly transfer millions through their accounts. The networks also utilize trade-based laundering schemes and mirror transactions to obscure money trails.
Wednesday’s advisory urged financial institutions to scrutinize accounts showing these warning signs. The comprehensive analysis represents the Treasury’s latest effort to disrupt transnational criminal organizations that exploit America’s financial system.
As fentanyl deaths continue ravaging American communities, the exposé reveals how international money flows fuel the crisis. Breaking this financial pipeline has become critical to stemming the drug epidemic’s devastating toll.