Drug Cartel Unmasked in $50M Money Laundering Sting

Clear Facts

• A five-year investigation by federal authorities has uncovered a money laundering scheme involving associates of Mexico’s infamous Sinaloa drug cartel and Chinese individuals based in the U.S.
• The Justice Department unsealed a 10-count indictment charging the Los Angeles-based cartel associates with colluding with Chinese-connected money-laundering groups to wash drug trafficking proceeds, totaling more than $50 million.
• The investigation, known as “Operation Fortune Runner,” has led to the indictment of 24 individuals linked to the alleged money laundering scheme.

Recently, federal authorities revealed that a multi-year investigation has brought to light a complex money laundering operation. The scheme involves associates of Mexico’s notorious Sinaloa drug cartel and Chinese individuals in the U.S., and it’s alleged to have laundered millions of dollars from illicit drug sales.

On Tuesday, the Justice Department charged these Los Angeles-based cartel associates in a 10-count superseding indictment. The charges involve them conspiring with Chinese-connected money-laundering groups to clean the proceeds of drug trafficking.

During the operation, officials reported, “more than $50 million in drug proceeds flowed between the Sinaloa Cartel associates and Chinese underground money exchanges.”

The investigation, “Operation Fortune Runner,” has resulted in a 10-count indictment, naming 24 individuals associated with the alleged money laundering. The charges vary from conspiracy to aid in the distribution of cocaine and methamphetamine, to conspiracy to launder monetary instruments and conduct an unlicensed money transmitting business.

The indictment alleges that a money laundering network linked to the Sinaloa Cartel collected and, with help from a California-based money transmitting group tied to Chinese underground banks, processed considerable amounts of drug proceeds in U.S. currency in Los Angeles.

Subsequently, the group allegedly concealed their drug trafficking proceeds, making the funds generated in the U.S. available to cartel associates in Mexico and elsewhere.

The lead defendant, Edgar Joel Martinez-Reyes, 45, from East Los Angeles, is believed to have used several methods to hide the money’s origins, including trade-based money laundering, “structuring” assets to evade federal financial reporting requirements, and the purchase of cryptocurrency.

In a statement, U. S. Attorney Martin Estrada for the Central District of California said, “Dangerous drugs like fentanyl and methamphetamine are ruining people’s lives but drug traffickers only care about their profits… it is crucial that we pursue the sophisticated, international criminal syndicates that launder the drug money.”

Twenty of those charged in the superseding indictment are expected to be arraigned in the U.S. District Court in downtown Los Angeles in the upcoming weeks, with one already arraigned on Monday.

DEA Administrator Anne Milgram echoed this sentiment, stating, “Relentless greed, the pursuit of money, is what propels the Mexican drug cartels… This DEA investigation uncovered a partnership between Sinaloa Cartel associates and a Chinese criminal syndicate operating in Los Angeles and China to launder drug money.”

Significant seizures have occurred as part of this investigation, including approximately $5 million in narcotics proceeds, 302 pounds of cocaine, and a significant assortment of other narcotics and weapons.

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