Federal authorities announced that a five-year investigation uncovered a complex scheme between one of Mexico’s most notorious drug cartels and Chinese individuals in the U.S. who laundered millions of dollars from illicit drug sales.
On Tuesday, the Justice Department announced a 10-count superseding indictment charging Los Angeles-based associates of Mexico’s Sinaloa drug cartel with conspiring with money-laundering groups linked to Chinese underground banking to launder drug trafficking proceeds.
During the conspiracy, officials said more than $50 million in drug proceeds flowed between the Sinaloa Cartel associates and Chinese underground money exchanges.
The multi-year investigation into this conspiracy, dubbed "Operation Fortune Runner," resulted in a 10-count indictment naming 24 people related to the alleged money laundering.
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The charges 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 a Sinaloa Cartel-linked money laundering network collected and, with help from a San Gabriel Valley, California-based money transmitting group with links to Chinese underground banking, processed large amounts of drug proceeds in U.S. currency in the Los Angeles area.
The group then allegedly concealed their drug trafficking proceeds and made the proceeds generated in the U.S. accessible to cartel members in Mexico and elsewhere.
Lead defendant Edgar Joel Martinez-Reyes, 45, of East Los Angeles, and others allegedly used a variety of methods to hide the money’s source, including trade-based money laundering, "structuring" assets to avoid federal financial reporting requirements, and the purchase of cryptocurrency.
"Dangerous drugs like fentanyl and methamphetamine are destroying people’s lives but drug traffickers only care about their profits," said U.S. Attorney Martin Estrada for the Central District of California. "To protect our community, therefore, it is essential that we go after the sophisticated, international criminal syndicates that launder the drug money. As this indictment and our international actions show, we will be dogged in our pursuit of all those who facilitate destruction in our country and make sure they are held accountable for their actions."
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Twenty of the individuals charged in the superseding indictment are expected to be arraigned in the U.S. District Court in downtown Los Angeles in the coming weeks, including one who was arraigned on Monday.
As part of this investigation, law enforcement has seized approximately $5 million in narcotics proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 Ecstasy pills, 44 pounds of psilocybin (magic mushrooms), numerous ounces of ketamine, three semi-automatic rifles with high-capacity magazines and eight semi-automatic handguns.
