By Matthew Holloway |
An Arizona congressman is warning constituents about the Chinese Communist Party’s close ties with Mexican drug cartels.
Congressman Abe Hamadeh, who sits on the House Armed Services Committee, shared an article on X about the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) discovery of Chinese networks laundering billions of dollars for Mexican drug cartels through American financial institutions.
In his post, Hamadeh explained, “The Treasury’s FinCEN discovered that Chinese networks have been using our country to launder billions of dollars for the Mexican cartels. This is only part of a continued & concerted effort from a hostile CCP regime to undermine America’s public safety.”
According to The Center Square, in a report from FinCEN, the Treasury Department analyzed 137,153 Bank Secrecy Act (BSA) reports totaling approximately $312 billion in suspicious activity from 2020 to 2024 that “sheds light on how [Chinese money laundering networks (CMLN),] launder illicit proceeds from criminal activities, including drug trafficking, and how CMLNs launder money on a global scale.”
The report revealed several alarming findings regarding CMLNs, describing a complex web of dirty money connecting ubiquitous real estate transactions throughout the United States to human trafficking over the Mexican border, and even assisted living facilities in New York.
“Ultimately, Chinese citizens’ demand for large quantities of U.S. dollars and the cartels’ need to launder their illicit U.S. dollar proceeds has resulted in a mutualistic relationship wherein the cartels sell off their illicitly obtained U.S. dollars to CMLNs who, in turn, sell the U.S. dollars to Chinese citizens seeking to evade China’s currency control laws,” the report explained.
According to the report, “The PRC maintains strict currency controls, also known as capital flight restrictions, which limit the amount of money Chinese citizens can transfer abroad each year to 50,000 USD for investment and financial purposes.”
To bypass these restrictions, many Chinese nationals turn to this underground banking system or ‘CUBS.’ Under Secretary for Terrorism and Financial Intelligence John Hurley told The Center Square, “Money laundering networks linked to individual passport holders from the People’s Republic of China enable cartels to poison Americans with fentanyl, conduct human trafficking, and wreak havoc among communities across our great nation.”
The report found, “Many Chinese citizens have turned to alternative methods, like the Chinese underground banking system (CUBS), to bypass these restrictions. The CUBS consists of various individuals and businesses from different industries who collaborate through ‘mirror transfers’ to move money across borders, as part of informal value transfer system schemes. The CUBS, in turn, depend on CMLNs to secure foreign currency.”
FinCEN summarized that in just the past five years, it has recorded a significant increase in the money laundering schemes at play between CMLNs and Mexican Drug Cartels, with the agents “gain(ing) prominence among global money laundering groups due to their reliability, low fees, organizational structure, worldwide presence, and access to the U.S. financial system.” It also shared that that this massive financial windfall for bad actors in China are directly to tied to operations that “launder illicit proceeds from otherwise unrelated criminal networks involved in a range of illicit activities, including fraud schemes; human trafficking and smuggling; marijuana grow house operations; and tax evasion, by facilitating the exchange of cash proceeds.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
