24 charged in $50M Sinaloa cartel cash laundering ring: DEA

(NewsNation) — Associates of the Sinaloa drug cartel based in Los Angeles conspired with a Chinese underground banking network to move more than $50 million in drug proceeds from the distribution of cocaine and methamphetamine, federal drug officials announced this week.

The U.S. Drug Enforcement Administration announced federal charges against 24 people following a multiyear investigation called “Operation Fortune Runner.” The indictment, which was handed down in April, was unsealed Monday.

Federal officials allege a Sinaloa cartel-connected money laundering network with ties to a California money transmitting group that is linked to Chinese underground banking collected drug trafficking funds and had the cash processed as U.S. currency.

Those working within the operation allegedly concealed the drug proceeds and made them available to cartel members in Mexico and elsewhere, prosecutors allege.

The 24 defendants were charged with one count of conspiracy to aid and abet the distribution of cocaine and methamphetamine, conspiracy to launder money and one count of conspiracy to operate an unlicensed money-transmitting business.

“Dangerous drugs like fentanyl and methamphetamine are destroying people’s lives but drug traffickers only care about their profits,” U.S. Attorney Martin Estrada said in a statement. “To protect our community, therefore, it is essential that we go after the sophisticated, international criminal syndicates that launder the drug money.”

The Cartel’s Chinese connection

NewsNation contributor Robert Almonte, a former U.S. marshal and ex-deputy chief with the El Paso Police Department, said the cartels have had established working relationships with the Chinese for years.

He said the global reach of the Sinaloa cartel has only made the organization more dangerous and profitable in moving traditional narcotics as well as synthetic drugs like fentanyl across the world.

“They’re in Mexico, the United States, Canada, Europe — you name it. They’re huge,” Almonte said.

The lead defendant in the DEA’s case, Edgar Joel Martinez-Reyes, 45, of East Los Angeles, and others allegedly used various 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, DEA officials said.

The federal probe found that Martinez-Reyes allegedly traveled to Mexico to meet with Sinaloa Cartel members to strike a deal with money remitters with links to Chinse underground banking to launder drug trafficking proceeds in the United States.

After a deal was reached, the Sinaloa cartel distributed cocaine, methamphetamine and other narcotics, generating U.S. dollars as drug proceeds.

Additionally, the investigation found Martinez-Reyes and others allegedly delivered the currency —frequently hundreds of thousands of U.S. dollars at a time — to other members of the Chinese underground money exchange and remitting organizations to be laundered for a fee.

The remitting organizations possessed large amounts of U.S. currency and could help wealthy Chinese nationals evade China’s currency controls, the DEA said.

Federal officials who were part of the organization called the operation “a prime example” of Chinese money launderers working together with drug traffickers to attempt to legitimize profits generated by drug proceeds.

“Relentless greed, the pursuit of money, is what drives the Mexican drug cartels that are responsible for the worst drug crisis in American history,” DEA Administrator Anne Milgram said in a statement released by the agency. “Laundering drug money gives the Sinaloa Cartel the means to produce and import their deadly poison into the United States.”

The deceptiveness of Cartel business

Almonte told NewsNation that each member of the money laundering group has a very specific role in ensuring the cartels’ goals are achieved.

From the trafficking of the drugs to moving drug proceeds and transferring them into U.S. currency, each link of the chain is critical in the funds ultimately being reinvested back into cartel business, according to Almonte.

Once trafficking money is laundered, funds are used to purchase more chemicals to produce fentanyl and methamphetamine. Then, people working for the cartels are paid to produce the drugs, which are then distributed to various cartel channels around Mexico for distribution around the country and the United States.

Deception is a key component of the multistep process, as members rely on codes to keep drug trafficking and money laundering moving. It makes law enforcement’s job even more difficult to disrupt the flow of cartel drugs and cash.

“It’s all deception when it comes to money laundering,” Almonte told NewsNation. “They’re making it look like a legitimate activity when the fact is, it’s not.”

During “Operation Fortune Runner,” the DEA seized more than $5 million in drug proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 ecstasy pills, 44 pounds of magic mushrooms, several ounces of ketamine, three semi-automatic weapons with high-capacity magazines and eight semi-automatic handguns, the agency said.

All of those charged by the DEA are expected to appear in court in Los Angeles in the coming weeks.