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Tags: (NEWSNATION) — Mexican drug cartels are now partnering with China to launder money — a major shift for the cartels that saves them hundreds of millions of dollars.
“These new networks coming out of the People’s Republic of China started charging 1%, at the lowest rate,” said Walter Rivera, retired Homeland Security special agent.
Chinese crime organizations are keeping just 1% from all the illegal drug money they launder for Mexican cartels, Rivera said, finding clever ways to funnel the money back to Mexico, rather than risking hauling massive amounts of cash over the border.
The partnership is saving the cartels millions of dollars, and the money is being put to use.
“They’re flush with cash, they’re taking all that additional money and investing it in technology for their organizations,” said Rep. Ashley Hinson, R-Iowa. “In some cases, they are outmanning, outgunning our (Customs and Border Protection) agents.”
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Hinson, who serves on the House Select Committee on China, says it would be naïve to think the Chinese government isn’t at least aware. if not complicit, in what’s happening.
In a hearing, experts in money laundering through cartels and China explained how the systems take advantage of encrypted communication channels and underground banking systems in mainland China.
Because money passes through brokers in different countries, money deposited in U.S. banks is disconnected from the initial drug trafficking, making it more difficult for law enforcement and financial regulators to track.
Another complication is the Chinese government’s unwillingness to seriously crack down on money-laundering activity in mainland China and the reluctance to share information or cooperate on investigations into those illegal activities.
The panel repeatedly noted that most of the information they have on the money-laundering process comes from investigations done outside China, and there is limited insight into the Chinese government’s efforts to combat the problem.