Chinese National Sentenced to 14 Years for Laundering Drug Money for Mexican Cartels

A federal judge in Illinois on Tuesday sentenced a Chinese national to 14 years behind bars for laundering the proceeds of illegal narcotics on behalf of Mexican drug traffickers, according to the Department of Justice (DOJ).

U.S. District Judge Thomas M. Durkin imposed the sentence on April 27 after a hearing in federal court in Chicago, the U.S. Attorney’s Office for the Northern District of Illinois said in a press release.

Xianbing Gan, a 51-year-old Chinese national, arranged for over $500,000 in illicit drug proceeds to be picked up in Chicago in 2018, prosecutors said. The money was supposed to be transferred to drug traffickers in Mexico through various bank accounts in China.

“Unbeknownst to Gan, a purported money courier who picked up the drug proceeds in Chicago was an undercover law enforcement agent,” according to the release.

Gan, who prosecutors said facilitated the money transfers while living in Guadalajara, Mexico, was arrested in November 2018 at an airport in Los Angeles during a layover on a flight from Hong Kong to Mexico, and has remained in U.S. custody since his arrest.

“The defendant was part of a recent phenomenon in which a relatively small network of Chinese money brokers based in Mexico have come to dominate international money laundering markets,” Assistant U.S. Attorneys Sean J.B. Franzblau and Richard M. Rothblatt argued in a sentencing memorandum.

“Many of these brokers are also engaged in legitimate business, and use that business as cover for and to further money laundering activity. It does not matter that defendant never personally distributed narcotics—drug distribution and money laundering are two sides of the same malignant coin,” they added.

Gan was convicted by a federal jury in Chicago last year on three counts of money laundering and one count of operating an unlicensed money transmitting business.

The insidious Chinese presence in the drug trafficking arena has been growing for years and now dominates the global money-laundering business and chemical production—both critical services to cartel operations in Mexico, Colombia, and beyond.

“Clearly the Chinese are way more dangerous, way more sophisticated, way more complex, and way more of a national security threat to America—it’s not even a comparison [with Mexican cartels],” Derek Maltz, former head of the Drug Enforcement Administration’s (DEA) special operations division, told The Epoch Times in an interview last summer.

Agreements between cartel leaders and the heads of Chinese money laundering operations based in Mexico have cemented the relationships and provided fertile ground for rapid expansion, according to the DEA.

Maltz said traditional money laundering organizations charged around 8 percent for laundering bulk cash, but Chinese networks overtook the industry by undercutting the competition and charging commissions as low as 1 percent, or even nothing.

“It’s a brilliant business idea,” Maltz said. “They set up very sophisticated, complex, trade-based money laundering schemes where hundreds of millions of dollars are picked up and used to buy consumer goods in China. And then the consumer goods are shipped into Central America, South America, all over the region in Latin America, to launder the proceeds for the drug traffickers in Mexico as well.”

Charlotte Cuthbertson contributed to this report.

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Tom Ozimek
Author: Tom Ozimek

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