Law enforcement authorities state that the drug war in America has now moved to the digital realm, with transnational criminal organizations (TCOs) utilizing Chinese money laundering operations. Steven Cagen, assistant director of the Countering Transnational Organized Crime Division at Homeland Security Investigations, explains that Mexican cartels’ ability to traffic fentanyl into the United States is greatly facilitated by Chinese money laundering networks. These organizations have global infrastructures to launder illegal proceeds for various criminal groups, primarily Mexican cartels. Cagen testified before the House Homeland Security Subcommittee on Border Security and Enforcement regarding these issues.
According to Kemp Chester, senior advisor to the Director of National Drug Control Policy, China is a major producer of precursor chemicals used in fentanyl production. However, the Chinese government refuses to take necessary action to halt the production of these chemicals. Chester emphasizes that the Chinese are either passively allowing or actively supporting TCOs in the production and distribution of this lethal drug.
Chester further explains that Chinese money laundering operations are making drug dealers wealthier at an unprecedented pace. Although these operations still use traditional methods, such as mixing illicit funds with legitimate business proceeds or bartering for illegal items, they also employ cryptocurrency and electronic banking on the dark web to disguise and transfer their profits.
Channing Mavrellis, director of the illicit trade program at the think tank Global Financial Integrity, notes that Chinese money laundering operations exploit China-specific exchanges and manufacturing centers. Drug proceeds are given to Chinese brokers in the United States, who advertise the dollars for sale to Chinese nationals in China. The Chinese nationals then purchase goods with the equivalent sum in local currency and send those goods to Latin America, where they are sold in exchange for local currency that is ultimately passed to the cartels.
The system employed by Chinese money laundering operations is highly profitable, according to Mavrellis. Previously, the Chinese Communist Party cooperated in combating drugs, even designating fentanyl as a dangerous drug. However, relations between the CCP and the United States have deteriorated in recent years.
George Papadopoulos, principal deputy administrator for the Drug Enforcement Administration (DEA), reveals that the DEA recently exposed a portion of Chinese involvement in fentanyl production through Operation Killer Chemicals. This investigation focused on precursor chemicals and resulted in charges against eight Chinese citizens and four Chinese companies for conspiracy to manufacture and import fentanyl into the United States. These individuals and companies sold enough precursor chemicals to produce potentially lethal doses of fentanyl.
Tyrone Durham, director of the Nation States Threat Center for the Department of Homeland Security, describes China as an ideal environment for engaging in the drug trade due to its vast, loosely regulated chemical manufacturing infrastructure and porous borders. Chinese criminals can easily manufacture chemicals, smuggle them out of the country, blend them with legitimate products, and finally divert them to Mexican cartels or other drug operations once they are outside China.
Notably, China is the primary source of precursor chemicals required for fentanyl production. Mexican cartels are using various methods to maximize the volume of illicit drugs entering the United States. They also incorporate fentanyl into other drugs and counterfeit medications to enhance their effects. The Sinaloa and Jalisco cartels are responsible for the majority of fentanyl entering the United States and employ legitimate business models for their manufacturing and distribution operations. They utilize unmanned drones, social media, and the dark web to sell drugs while evading the public eye and generating significant profits.
The drug poisoning epidemic caused by fentanyl is unprecedented, leading to numerous deaths of individuals unknowingly consuming the drug.