Chinese nationals, limited in how much money they can transfer abroad, are allegedly using a complex network to launder funds earned from selling fentanyl to Mexican cartels. These funds then allegedly flow back to China to pay for students’ education and support wealthy individuals living abroad. This intricate system, detailed by financial experts and law enforcement officials, highlights how drug profits fuel international money laundering schemes, complicating efforts to combat the deadly opioid epidemic in the US.

It’s worth mentioning that 100,000 Americans die each year as a result of drug overdoses, the great majority of which are caused by pills laced with fentanyl, an opioid analog 50 times stronger than heroin. Every six months, the US drug death epidemic outperforms the Vietnam War.

Chinese money launderers working with foreign drug traffickers, such as Mexican cartels, are fueling the fentanyl plandemic in the United States. Capital flight from China is not a new occurrence, but in recent years, the size of these transfers, which are channeled through the drug trade, has grown quite concerning.

Paul Murphy of the Financial Times has presented the most direct explanation yet of the emerging Chinese money laundering network feeding America’s fentanyl crisis:

First, understand that Chinese nationals are barred from transferring more than $50,000 out of China each year. And yet, as you are surely aware, there are many many Chinese nationals living very comfortable lives in the west, as students perhaps, or tourists, or simply not working.

Now understand that Mexican drug cartels are harvesting untold billions of dollars, in cash, selling drugs in North America — and that the pill of the moment is fentanyl, which kills about 70,000 people a year in the US.

The chemicals to make fentanyl come from China. These are shipped to Mexico by otherwise legit Chinese chemical manufacturers.

In Mexico, the cartels turn the chemicals into pills and smuggle these north across the border, where they are sold for cash — dollar bills that then need to be cleaned.

Murphy continued:

Meanwhile, in New York for instance, there will be a Chinese student attending an educational establishment, where the fees will be circa $66,000 a year, books and extras another $10,000, food and lodging costs of maybe $5,000 a month, or a lot more.

The $50,000 Chinese transfer cap doesn’t cover these things, so she will go on WeChat and broadcast a message to her network of friends saying: “I need dollars in New York to meet my outgoings. Can anyone help?”

In due course, someone associated with what is a very efficient Chinese underground banking system will get in touch and tell the student to meet a courier at a preordained time and place, typically a park in Brooklyn. There, the student will be handed a bundle of cash.

Back in China, the parents of the student will then be asked to transfer the same amount of money (plus commission) to an account that will eventually make its way to the chemical company that produced the precursor ingredients for fentanyl, settling the outstanding bill for the Mexican drug cartel.

Murphy clarified: “Drug addicts in the US are facilitating the Western education of Chinese youth, as well as helping to fund the lifestyles of other Chinese nations living outside China.”

He supplied a flow chart that depicted how the complicated laundering system operates.

In a second article last week, FT’s Joe Miller and James Kynge published an in-depth analysis of the Chinese-Mexico laundering network in a paper headlined “The new money laundering network fuelling the fentanyl crisis.”

The research sheds light on a lesser-known aspect of the money laundering operation: the desire for dollars from wealthy Chinese individuals. While cash flight from China is not new, the tactics used have become more sophisticated, incorporating pharmaceutical businesses, which have fueled America’s opioid crisis.

“The levels of capital flight in the past three years have been quite alarming,” one senior Chinese official told FT, adding, “Some wealthy private entrepreneurs are losing confidence in China’s future. They feel unsafe, so they find ways to get their money out.”

According to Brad Setser, a former US Treasury official, and global capital flow expert at the Council on Foreign Relations, capital flight from China is occurring at an annualized rate of approximately $516 billion as of 1Q24. This sum rose even higher in 3Q22, hitting over $738 billion.

“The whole system of drug trafficking is being sustained by a network of clandestine [Chinese] money brokers,” said Giovanni Melillo, the chief prosecutor for Italy’s National Anti-Mafia and Terrorism Directorate. Over the last year, his bureau has coordinated laundering investigations throughout Italy.

Previous examples of money laundering in the United States involving Chinese nationals have raised major concerns about how much Beijing understands about these dark money networks. According to a recent Wall Street Journal story, Chinese crime gangs and drug traffickers utilized the Toronto-Dominion Bank to launder money from fentanyl sales in the United States.

In mid-April, the House Select Committee on China reported that the Chinese Communist Party exploited tax breaks to support the production and export of fentanyl compounds to foreign markets.

The biggest surprise here is why the Biden administration hasn’t taken a harsher stance on China, even though America’s fentanyl crisis kills more people each year than the two Vietnam Wars.

Recently, GreatGameIndia reported that the House Select Committee on the Chinese Communist Party (CCP) announced the formation of a bipartisan Fentanyl Policy Working Group, led by Rep. John Moolenaar and Rep. Raja Krishnamoorthi, to tackle China’s involvement in America’s fentanyl epidemic.