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Two Dozen Arrested In Sinaloa Cartel Money Scheme With Chinese

A five-year U.S. investigation has uncovered a complex partnership between one of Mexico’s most notorious drug cartels and Chinese underground banking groups in the U.S. that laundered money from the sale of fentanyl, cocaine and other drugs, federal prosecutors said Tuesday, the Associated Press reports. Associates of the powerful Sinaloa Cartel conspired with the Chinese groups to cover up more than $50 million in drug profits, much of which was processed in the Los Angeles area, the prosecutors said. Two dozen people have been charged. Chinese and Mexican law enforcement helped arrest fugitives who fled the U.S. after they were initially charged last year. “This investigation shows that the Sinaloa Cartel has entered into a new criminal partnership with Chinese nationals who launder money for the cartels,” said Drug Enforcement Administration official Anne Milgram.

The lead defendant is Edgar Joel Martinez-Reyes, 45, of East Los Angeles, who prosecutors said had managed couriers who picked up drug cash in the Los Angeles area. Martinez-Reyes partnered with the leader of the Chinese money launderers, and traveled with him to Mexico to negotiate contracts with the cartel, authorities said. Prosecutors said the scheme relied on the huge demand for U.S. currency from wealthy Chinese nationals, who are prohibited by their government’s capital flight restrictions from transferring more than $50,000 per year out of China. According to the authorities, a person in China would move money into the seller’s Chinese bank account and receive the dollar equivalent in the U.S. for use in purchasing real estate, luxury items, and paying tuition. They said cryptocurrency transactions were also used to move the drug money, adding the funds in China are used to buy such goods such as chemicals for making fentanyl and methamphetamine that are then sent to the drug cartels in Mexico.


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