Federal authorities recently revealed that a five-year investigation exposed a sophisticated operation involving one of Mexico’s most infamous drug cartels and Chinese individuals in the U.S. who were responsible for laundering millions of dollars obtained from illegal drug sales. The Justice Department announced a 10-count superseding indictment on Tuesday, charging associates of Mexico’s Sinaloa drug cartel based in Los Angeles with collaborating with money-laundering groups associated with Chinese underground banking to launder proceeds from drug trafficking activities.
According to officials, over $50 million in drug profits were transferred between the Sinaloa Cartel associates and Chinese underground money exchanges during the course of the conspiracy. The investigation, known as “Operation Fortune Runner,” uncovered this intricate scheme and led to a 10-count indictment against 24 individuals allegedly involved in the money laundering operation.
The charges listed in the indictment include conspiracy to aid and abet the distribution of cocaine and methamphetamine, conspiracy to launder monetary instruments, and conspiracy to operate an unlicensed money transmitting business. The indictment alleges that the money laundering network linked to the Sinaloa Cartel collected significant amounts of drug proceeds and processed them with the assistance of a money transmitting group based in San Gabriel Valley, California, which had connections to Chinese underground banking. The group allegedly concealed the drug profits and made them accessible to cartel members in Mexico and other locations.
Lead defendant Edgar Joel Martinez-Reyes, along with other individuals, employed various methods to disguise the origin of the money, such as trade-based money laundering, asset structuring to avoid financial reporting requirements, and the purchase of cryptocurrency. U.S. Attorney Martin Estrada emphasized the destructive impact of dangerous drugs like fentanyl and methamphetamine on communities, highlighting the importance of targeting international criminal syndicates that engage in money laundering activities to protect society from harm.
As a result of the investigation, law enforcement seized approximately $5 million in narcotics proceeds, including 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 Ecstasy pills, 44 pounds of psilocybin (magic mushrooms), various ounces of ketamine, three semi-automatic rifles with high-capacity magazines, and eight semi-automatic handguns. Twenty of the individuals charged in the indictment are expected to appear in court in downtown Los Angeles for arraignment in the near future.
DEA Administrator Anne Milgram underscored the relentless pursuit of wealth by Mexican drug cartels, which has fueled the devastating drug crisis in the United States. The partnership between Sinaloa Cartel associates and a Chinese criminal syndicate in Los Angeles and China to launder drug money enables the cartel to produce and distribute lethal substances in the country. The DEA’s primary objective is to safeguard American lives by dismantling drug cartels and their support networks, as demonstrated by this investigation and future endeavors to combat drug-related crimes.