Federal prosecutors said on Tuesday that two dozen Sinaloa cartel members stationed in Los Angeles, Mexico, were accused of participating in a complex plot to launder over $50 million in drug money via an underground banking system controlled by Chinese people in the US.
According to prosecutors, the case—which is described in a 10-count superseding indictment—highlights the intricate network Mexican cartels have established to fund drug operations and launder the money, as well as the growing relationship between them and Chinese citizens living in the United States.
“This inquiry demonstrates that the Sinaloa cartel has formed a fresh criminal alliance with Chinese nationals residing in the United States who transfer funds for the cartels,” Drug Enforcement Administration Administrator Anne Milgram stated during a press briefing.
Drug Enforcement Administration Administrator Anne Milgram stated at a press conference, “This investigation demonstrates that the Sinaloa cartel has entered into a new criminal partnership with Chinese nationals living in the U.S. who launder money for the cartels.”
Edgar Joel Martinez-Reyes, 45, of East Los Angeles, was in charge of the money laundering scheme. According to the prosecution, he went to Mexico in January 2021 to meet with members of the Sinaloa cartel and make a deal with individuals who had connections to the Chinese financial system operating underground.
Regarding the Mexican cartels and the Chinese money launderers, U.S. Attorney Martin Estrada stated, “These two groups have discovered that they have mutual interests.”
According to him, the cartels are in a desperate attempt to return drug money to Mexico as cheaply and safely as possible. The rich Chinese individuals who are able to evade the $50,000 annual limit on their amount of money that can be transferred out of China are the target market for Chinese money laundering firms.
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“Together these groups have created an organization in which millions and millions of dollars are moved in proceeds from the drug sales in the United States back down to Mexico,” Estrada stated, “and wealthy Chinese nationals in this country are given access to virtually limitless supplies of cash.”
“Operation Front Runner” was the name of the four-year investigation, which ran from October 2019 to October 2023. Federal drug officers started the investigation by following suspects, some of whom were Chinese, as they amassed money bags from cartel accomplices in and around the Los Angeles region.
According to the indictment, one of the defendants, Daniel Gonzalez, purposefully crashed his automobile into a DEA agent’s vehicle during a May 2021 law enforcement operation in an attempt to hinder the investigation and hurt the officer.
The accusation states that Gonzalez possessed 46 separately wrapped packages of cash worth $598,110.
Authorities stated that at least 22 of the defendants had been detained or arrested. In May, one was imprisoned in China. Last week, two fugitives were apprehended in Mexico.
Sai “Tommy” Zhang, who was first accused in May 2023 on allegations of money laundering connected to heroin trafficking, is one of the individuals named in the indictment.
