U.S. officials are sounding a new alarm about how Chinese underground bankers are enabling fentanyl profits to flow through North America’s financial system, with Canadian choke points increasingly in the frame.
In an August 28 release, the Financial Crimes Enforcement Network said it reviewed 137,153 Bank Secrecy Act reports filed between January 2020 and December 2024 that together flagged roughly $312 billion in suspicious transactions linked to Chinese money-laundering networks used by Mexico-based cartels.
FinCEN emphasized that the figures come from suspicious activity reports, not confirmed criminal proceeds, but said the patterns are pervasive and rising.
FinCEN’s advisory describes a fast, low-cost “mirror” system that swaps cartel dollars inside the United States for pesos in Mexico, while Chinese brokers sell those dollars at a markup to clients seeking to evade Beijing’s capital controls.
The network leans on informal value transfer systems, trade-based schemes, and a steady supply of money mules.
Red flags cited by FinCEN include account holders who report occupations such as student, housewife, or retired while moving large volumes with unclear sources of funds.
Andrea Gacki, FinCEN’s director, said in the release: “Chinese money laundering networks are global and pervasive, and they must be dismantled.”
On January 23, the Financial Transactions and Reports Analysis Centre of Canada issued an operational alert warning that organized crime groups are importing precursor chemicals and equipment from China and other Asian countries, running illicit labs in Canada, and using underground banking and trade-based laundering to move profits.
FINTRAC analyzed about 5,000 suspicious transaction reports tied to fentanyl and other synthetic opioids from 2020 to 2023 and found activity concentrated around Vancouver and Toronto, with exports moving by marine, air cargo, and land routes.
The cross-border picture tightened further in September when FinCEN and FINTRAC convened their second annual anti-money-laundering symposium in Washington.
The readout noted a shared focus on dismantling Chinese money-laundering networks that enable fentanyl trafficking, human trafficking, and other crimes.
In a 2024 indictment unsealed in Los Angeles, the Justice Department alleged that Sinaloa Cartel associates worked with a California-based group tied to Chinese underground banking to move more than $50 million, using trade-based laundering, structuring, and crypto. U.S., Mexican, and Chinese authorities coordinated arrests in the case, which prosecutors described as a template for how cartel dollars are recycled into the formal economy.
Depository institutions filed 85% of the CMLN-related reports in FinCEN’s dataset. Real estate is a recurring channel, with more than $53.7 billion in suspicious activity noted across 17,389 reports.
FinCEN said networks may use shell companies or nominees to purchase property and to integrate funds, while also recruiting insiders at financial institutions.
The advisory asks filers to tag relevant suspicious activity reports with the key term specified in the notice to aid investigations.
