Following a multi-year probe into the Mexican Sinaloa cartel, the DEA has found evidence of a connection between the drug trafficking organization and an off-the-radar Chinese banking group.
On Tuesday, federal prosecutors announced that two dozen Los Angeles-based associates of the cartel were charged in a sophisticated scheme to launder more than $50 million in drug money through the underground banking system run by Chinese nationals in the United States.
The money laundering operation was overseen by Edgar Joel Martinez-Reyes, 45, of East LA, who traveled to Mexico in January 2021 to meet with Sinaloa cartel members and arrange a deal that involved people with ties to the banking group, according to prosecutors.
Among those charged in the indictment is Sam “Tommy” Zhang, who was initially indicted in May 2023 on money laundering charges tied to drug trafficking.
This case, which is the result of a four-year DEA investigation dubbed “Operation Front Runner,” is outlined in a 10-count superseding indictment and highlights the growing relationship between Mexican cartels and Chinese citizens in the U.S., along with the meticulous system they have formulated to finance drug trafficking and launder the profits, officials reported.
“The investigation shows that the Sinaloa cartel has entered into a new criminal partnership with Chinese nationals living in the U.S. who launder money for cartels,” Administrator for the Drug Enforcement Administration, Anne Milgram, said at a news conference.
“Operation Front Runner” reportedly spanned from 2019 and 2023. It began with federal drug agents tracking suspects, some of whom were Chinese, as they collected bags of cash from cartel associates in and around the LA area.
The DOJ reported that law enforcement has seized approximately $5 million in narcotics proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 Ecstasy pills, 44 pounds of psilocybin (magic mushrooms), numerous ounces of ketamine, three semi-automatic rifles with high-capacity magazines, and eight semi-automatic handguns.
U.S. Attorney Martin Estrada said during the press conference that the cartels are “desperate to get money from drug sales back to Mexico as safely and cheaply as possible,” while the Chinese money laundering organizations’ objective is to help wealthy Chinese people circumvent the restrictions on how much money they can move out of China per year, which stands at the equivalent of $50,000.
At least 22 of the defendants have been arrested or taken into custody, according to authorities.
