Chinese money launderers appear to have moved some $312 billion in illicit transactions through U.S. banks and other financial institutions in recent years to aid Mexican drug cartels and other criminals, the Treasury Department has said

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a warning Thursday about Chinese money laundering networks (CMLNs), calling them a growing threat to the American financial system. The agency released both an Advisory, urging banks and other institutions to be alert to how Mexico-based drug cartels are using these networks, and a Financial Trend Analysis (FTA) mapping out the scale of CMLN activity in the U.S.

“Chinese money laundering operations tied to passport holders from the PRC are enabling cartels to flood America with fentanyl, fuel human trafficking, and spread devastation in communities nationwide,” said John K. Hurley, Under Secretary for Terrorism and Financial Intelligence. “The U.S. won’t allow illicit funds to move unchecked through our system. Today’s advisory and analysis strengthen our work with financial institutions to spot red flags and shut down these networks.”

FinCEN Director Andrea Gacki added: “These networks are deeply entrenched across borders, laundering drug proceeds for Mexican cartels and funneling money through underground pipelines. By sharing these findings, we’re helping banks and our partners globally cut off criminal organizations from the money they rely on.”

Key Findings from the Financial Trend Analysis

• FinCEN reviewed 137,153 Bank Secrecy Act reports filed between January 2020 and December 2024, tied to suspected CMLN activity. The reports flagged roughly $312 billion in suspicious transactions.
• CMLNs are not limited to drug proceeds. They are also tied to fraud schemes, human trafficking, and smuggling operations.
• Individuals with Chinese passports often play central roles in these networks — some knowingly, others unknowingly — as intermediaries or brokers moving funds globally.

How the Cartels and CMLNs Work Together

• Mexican cartels face roadblocks laundering U.S. dollars because of Mexico’s currency restrictions, which cap deposits of American cash into local banks.
• Chinese citizens, meanwhile, are constrained by Beijing’s limits on outbound transfers, creating demand for dollar access abroad.
• This mismatch has fueled a partnership: cartels offload illicit U.S. cash to CMLNs, which in turn sell those dollars to Chinese citizens and businesses looking to bypass currency laws.
• Transactions often take place through private social networks or informal advertisements online, outside the reach of regulators.

This mutual relationship has made CMLNs one of the most important channels for laundering cartel money in the U.S., while also helping Chinese nationals sidestep their country’s strict currency rules.