Law enforcement officials have warned that the drug war in the United States has now expanded to cyberspace, with Chinese money laundering outfits serving as the main facilitators for transnational criminal organizations (TCOs). According to Steven Cagen, assistant director of the Countering Transnational Organized Crime Division at Homeland Security Investigations, the ability of Mexican cartels to traffic deadly fentanyl into the United States is greatly enhanced by Chinese money laundering operations. These TCOs have a vast global infrastructure to clean proceeds for criminal organizations, mostly Mexican cartels, Cagen said during a testimony before the House Homeland Security Subcommittee on Border Security and Enforcement.
Kemp Chester, senior advisor to the Director of National Drug Control Policy, emphasized that China plays a significant role in fentanyl production due to its status as a major producer of precursor chemicals. However, Chester expressed concerns that the Chinese government is failing to take necessary actions to stop the production of these chemicals used in the manufacturing of the synthetic opioid. Chester further highlighted that Chinese money laundering operations are enriching drug dealers at an unprecedented pace. While the traditional methods of money laundering, such as mingling cash with legitimate business proceeds or bartering for illicit goods, are still prevalent, the witnesses testified that the use of cryptocurrency and electronic banking on the dark web has become increasingly common.
Channing Mavrellis, director of the illicit trade program at think tank Global Financial Integrity, presented evidence to a separate House subcommittee, revealing that Chinese money laundering operations take advantage of China-specific exchanges and manufacturing centers. According to Mavrellis, drug proceeds are given to Chinese brokers in the United States, who then sell the dollars to Chinese nationals in China. The Chinese nationals purchase the equivalent sum in local currency, which is subsequently used to buy goods. These goods are then sent to Latin America, where they are sold for local currency that ultimately ends up in the hands of the cartels.
The lucrative nature of this system, as described by Ms. Mavrellis, is a cause for serious concern. Interestingly, Chester noted that the Chinese Communist Party (CCP) had previously cooperated in the fight against drugs, even taking steps to designate fentanyl as a dangerous drug for better regulation. However, relations between the CCP and the United States soured about a year ago, and since then, the Chinese have been hesitant to collaborate on the issue.
In a recent announcement, George Papadopoulos, principal deputy administrator for the Drug Enforcement Administration (DEA), shed light on a major operation that exposed Chinese involvement in fentanyl production. Named Operation Killer Chemicals, the investigation led to the arrest and charging of eight Chinese citizens and four Chinese companies with conspiracy to manufacture and import fentanyl into the United States. Papadopoulos highlighted that these individuals and companies had sold enough precursor chemicals to produce millions of potentially lethal doses.
Tyrone Durham, director of the Nation States Threat Center for the Department of Homeland Security, explained that China provides ideal conditions for engaging in the drug trade due to its unregulated chemical manufacturing infrastructure and porous borders. The ease with which Chinese criminals can manufacture and smuggle the chemicals out of the country, often mixed with legitimate products, allows for diversion to Mexican cartels and other drug operations outside of China.
Mexican cartels are strategically utilizing various means to maximize the volume of illicit drugs smuggled into the United States. Papadopoulos emphasized that the cartels are producing fentanyl on an industrial scale and are not limited to selling it alone. They also mix it with other drugs and counterfeit medications to enhance their effects. The Sinaloa and Jalisco cartels are identified as the two major cartels responsible for most of the fentanyl entering the United States. These cartels have established manufacturing and distribution operations based on legitimate business models, employing unmanned drones for surveillance and delivery, and utilizing social media and the dark web to sell their drugs discreetly.
Papadopoulos concluded by stating that the drug poisoning epidemic currently witnessed in the United States is unprecedented, and many individuals who fell victim to fentanyl were unaware that they were consuming the deadly substance.
In conclusion, the United States’ drug war has entered the realm of cyberspace, with Chinese money laundering operations serving as crucial enablers for transnational criminal organizations, particularly Mexican cartels. The role of China in fentanyl production as a major producer of precursor chemicals cannot be ignored. Efforts to address this crisis have been hindered by strained relations between the United States and China. However, recent operations have exposed Chinese involvement in fentanyl production, leading to arrests and charges. The need for international cooperation to combat this issue is evident, as the drug poisoning epidemic in the United States continues to claim countless lives.
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