The United States has announced an indictment against alleged money launderers based out of California who supposedly moved money for the Sinaloa Cartel via money mules, large quantities of cash, cryptocurrency purchases, and collaboration with ‘Chinese underground money exchanges.’
The Department of Justice (DoJ) alleges that this operation moved over $50 million in proceeds from the sale of cocaine, methamphetamine, and fentanyl.
A total of 24 defendants were charged as part of the investigation, dubbed ‘Operation Fortune Runner’ by authorities.
The money laundering operation was supposedly led by Edgar Joel Martinez-Reyes, who helped the Sinaloa Cartel strike a deal with the ‘brokers’ who would help facilitate the scheme.
It relied on a variety of methods to try to clean the drug trade proceeds, including the aforementioned crypto, precious metals and gems, and bank accounts set up by a variety of different co-conspirators.
Additionally, a significant portion of the funds were transferred to ‘brokers’ in China who facilitate illicit transactions outside of the relatively locked-down financial system in the country. There is significant demand for US dollars in China, and these brokers can facilitate conversion into renminbi without funds actually leaving either country.
Read more: Another Chinese money laundering scheme tied to Deltec and Tether
Dollars from the cartels are effectively sold to individuals and businesses in China who want those dollars. The funds that are then in China can be used to purchase precursor chemicals and other materials for drug synthesis and trade.
Relying on brokers who operate across borders like this helps reduce the risk of seizure and detection for these money laundering networks.
The indictment charges the defendants with aiding and abetting the distribution of controlled substances and money laundering offenses.
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