Chinese “money brokers” in the United States are helping Latin American drug cartels move cash by routing it through channels that US authorities can’t access. It’s the ultimate “F*** you” to America as the relationship between the US and China continues to decline.
These “money brokers” also provide services for wealthy Chinese citizens who want to move more money abroad annually than Chinese law allows. These individuals pay steep fees of up to 10%, which allows the brokers to offer very low rates to the cartels.
“When there is need by the cartels for cash to be laundered, and there is demand for cash from the Chinese, you have a perfect marriage made in heaven,” explains DEA agent Donald Im. “The Chinese brokers are very important to the Mexican and Colombian cartels.”
Chinese expatriates living in the US and Mexico have the “systems and infrastructure” in place to launder drug proceeds so cheaply that the cartels receive “almost 100%” of their money, says Im. Even more surprising, China seems to be offering its services to all cartels without preference. And the cartels aren’t fighting over it.
In February, a Chinese businessman named Gan Xianbing was convicted of money laundering after he was caught running an unlicensed money-transfer business. His arrest was made possible with help from Lim Seok Pheng, a Singapore national and former member of his money laundering ring who decided to cooperate with officials after she was arrested in May 2018.
Lim wore a recording device to help gather evidence against Gan and brought DHS agents into the operation as money couriers during cash pick-ups in Chicago. Gan was arrested in November 2018 at the Los Angeles International Airport while traveling from Mexico to Hong Kong. Authorities have accused him of moving up to $65 million in cartel cash from 2016 until his arrest.
As explained by prosecutors during Gan’s trial, the illicit transfers were conducted using code words, burner phones, and Chinese banking apps. The exchanges were made without help from American financial institutions and didn’t require the movement of physical cash across borders.
“It’s the most sophisticated form of money laundering that’s ever existed,” said a source close to the investigation.
China’s growing cooperation with drug cartels presents a real challenge to the DEA and its anti-narcotics efforts in Mexico. Agents typically locate their targets by following the money, but China isn’t going to lift a finger to help the DEA track money flowing into China.
“I can’t emphasize this enough, the involvement of the Chinese has really complicated all of these schemes,” said a senior DEA official.
Among the latest signs that drug cartels are growing in power is a recent proposal from the Mexican President to strip DEA agents of diplomatic immunity and force them to share all information they obtain with the Mexican government (read more here).
Authorities in the US have brought charges against suspected members of Chinese money laundering rings in Virginia and Oregon. Both cases are pending.
Author’s Note: We can expect Chinese authorities to look the other way and allow this to continue.
Burner phones and banking apps: Meet the Chinese ‘brokers’ laundering Mexican drug money
Special Report: Burner phones and banking apps: Meet the Chinese ‘brokers’ laundering Mexican drug money
Factbox: Step by step – How Chinese ‘money brokers’ launder cash for Mexican drug cartels