Mica with information translated from Radio Formula.
In a never-before-seen global collaboration, the Sinaloa Cartel, helmed by ‘El Chapo’ Guzmán’s sons—collectively known as ‘Los Chapitos’—has started joining forces with other national and international crime syndicates, including the notorious Chinese mafia.
Mexican and U.S. authorities have found that since 2018, the Sinaloa Cartel has shifted its money laundering strategies away from the Black Market Peso Exchange (BMPE) due to its costly and time-consuming nature. Instead, they’ve turned to Asian money laundering networks, which are efficient, prompt, disciplined, and “trustworthy.”
Christopher Urben, a former chief of the DEA’s Special Operations, divulged that Chinese-led networks charge the Sinaloa Cartel a mere 1-2% of the laundered money, proving highly cost-effective for the cartel.
The Chinese Mafia’s Role in Aiding ‘Los Chapitos’
Over the past five years, several Chinese businessmen have been arrested, shedding light on how they’ve been laundering money for the Sinaloa Cartel. One notable figure is Gan Xianbing, an “honorable” Chinese entrepreneur who moved to Guadalajara in 2011 and started a successful seafood export business. Unbeknownst to many, Gan, also known as “Old Gan,” was involved in a money laundering organization run by Haiping Pan, which also had support from key players like Seok Pheng Lim and Sui Yuet Kong.
Besides Haiping Pan’s network, DEA has identified at least nine other Chinese organizations involved in money laundering for Mexican cartels.
The arrested Chinese operatives disclosed their modus operandi, which involves the use of shell companies, casinos, and both domestic and international bank accounts. Their strategy mainly revolves around currency conversion, product purchase in China, imports, and sales in Mexico and other Latin American countries. The profits are then funneled back to the Sinaloa Cartel and other criminal organizations.
The Chinese Mafia’s Money Laundering Strategy
1. Chinese money brokers collect drug proceeds from sales of fentanyl, cocaine, methamphetamines, and heroin in Mexico and the U.S.
2. These brokers then sell the U.S. dollars to Chinese clients who need immediate cash.
3. Instead of settling debts in the U.S., payments are made in China, speeding up the process. This money is used for property acquisition, betting, and university tuition fees in China.
4. Finally, the “clean” money is sent back to Mexico or other South American countries, where it’s sold to other Chinese brokers, completing the laundering cycle.
For secure and quick communication throughout these transactions, these Chinese networks rely on the messaging app WeChat, which remains unmonitored by U.S. authorities.
In an exclusive interview with Univision News, Ray Donovan, DEA’s New York Director, added that Chinese companies in import, sales, and money exchange sectors are also doing business with drug cartels. Moreover, some Chinese entrepreneurs even supply ‘Los Chapitos’ with precursor chemicals needed for manufacturing fentanyl.
Sources: Univisión, Milenio