The white gift bag with a happy “Happy Birthday” printed on the side did not contain any gifts. Authorities said he had $226,000 in cash that the Sinaloa drug cartel needed to launder.
The US Department of Justice on Tuesday announced multi-count indictment that accused more than a dozen members of Mexico’s Sinaloa drug cartel and Chinese currency brokers of conspiring to launder drug money for years. The main defendant, Edgar Joel Martinez-Reyes, 45, resides in East Los Angeles. The investigation has so far uncovered $5 million in cash, more than 300 pounds of cocaine, 92 pounds of methamphetamine, 3,000 ecstasy pills and 44 pounds of magic mushrooms. According to the indictment, the list of defendants includes Peiji “Dr. P” Tong, Sai “Tommy” Zhang, Chengwu “Ocean” He, Raul “Batman” Contreras, Jiaxuan “Edward” He, Diego Acosta Ovalle and d ‘others.
The first 20 defendants will be brought to trial in the coming weeks and if convicted on all counts, each faces a minimum of 10 years in prison or a maximum sentence of life in prison.
“Relentless greed and the quest for money are what drives the Mexican drug cartels, responsible for the worst drug crisis in American history,” said DEA Administrator Anne Milgram. in a report. “This DEA investigation revealed a partnership between associates of the Sinaloa Cartel and a Chinese criminal syndicate operating in Los Angeles and China to launder drug money.”
The DOJ said the cartel, based in Mexico’s Sinaloa state, was behind the growing injection of fentanyl into the United States over the past eight years, raking in hordes of money. To funnel the money to Mexico, cartel members turned to Chinese money changers in the United States, authorities said. To set it up, Martinez-Reyes and “Dr. P” Tong allegedly traveled to Mexico about four years ago to sign contracts to launder the cartel’s drug profits in exchange for a commission.
Once the deal was made, drug traffickers laden with cash delivered it to currency brokers for laundering purposes. To hide the money, the defendants used gift bags, reusable shopping bags, backpacks, a box of Fruity Pebbles and other items to conceal the money, authorities said.
Prosecutors said the couriers bought cryptocurrencies or deposited the money into bank accounts in small, structured doses. The indictment says the cryptocurrency could easily be transferred to accounts held by the Sinaloa cartel. Other methods of laundering the winnings included purchasing precious metals and gemstones and transporting them to Mexico for sale.
The indictment describes a complex scheme involving Chinese currency exchanges. Currency exchanges that work with the cartels also help wealthy Chinese nationals who invest in China and want to move their money to the United States but are banned by the Chinese government, the DOJ said. Rules in China prohibit people from taking more than $50,000 a year out of the country.
To get around the restrictions, Chinese residents use brokers who sell U.S. dollars, authorities said. Brokers give China-based residents their China bank account details with instructions for depositing Chinese currency into an account. Once the account holder confirms the deposit, an equivalent amount in US dollars is given to the US broker. The brokers take money from the cartels and charge a percentage-based commission of about 0.5 to 2 percent of the total amount to hide the drug money. (Traditional money launderers charge much higher rates than Chinese launderers, authorities say, ranging from 5% to 10% or more.)
“Drug traffickers are increasingly partnering with Chinese underground money exchanges to take advantage of the high demand for U.S. dollars from Chinese nationals,” the DOJ said.
The brokers delivered the U.S. dollars directly to clients or purchased properties, luxury goods and cars that they shipped to China, the indictment says. The money transferred to China was used to buy items for Mexican companies, such as consumer goods or chemicals used to make more narcotics, authorities said.
“This case is a prime example of Chinese money launderers working hand in hand with drug traffickers to try to legitimize the profits generated by drug activities,” said Guy Ficco, head of the criminal investigation. of the IRS.
