United States Financial Crimes Enforcement Network issues advisory and trend analysis on Chinese money laundering networks used by Mexico-based cartels

The United States Financial Crimes Enforcement Network published an advisory and a Financial Trend Analysis warning that Chinese money laundering networks (CMLNs) are being used to launder proceeds for Mexico-based drug cartels, including several designated as Foreign Terrorist Organizations, and urging financial institutions to enhance detection and reporting. The Financial Trend Analysis examines 137,153 Bank Secrecy Act reports filed between January 2020 and December 2024 linked to suspected CMLN activity, covering approximately USD 312 billion in suspicious transactions. It describes a model in which CMLNs move cartel U.S. dollar proceeds by selling U.S. dollars to Chinese citizens and businesses seeking to evade the People’s Republic of China’s currency controls, against a backdrop of Mexico’s restrictions on depositing large volumes of U.S. dollars. The release also flags broader typologies and exposure points, including trade-based money laundering, money mule and mirror transaction methodologies, potential recruitment or placement of complicit insiders at financial institutions, use of counterfeit Chinese passports to open accounts, and suspected laundering through U.S. real estate (17,389 reports tied to more than USD 53.7 billion), alongside indicators linked to human trafficking or smuggling (1,675 reports) and other suspected activity such as healthcare fraud, elder abuse and suspicious gaming. The advisory provides red-flag indicators to help institutions identify CMLN-linked activity, including account openings where purported money mules report occupations such as “student,” “housewife,” “retired,” or “laborer” while accounts show large volumes of unexplained transactions.