The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of the Treasury, has issued an advisory and a financial trend analysis (FTA) warning about Chinese money laundering networks (CMLNs) that are affecting the U.S. financial system. The documents urge financial institutions to increase vigilance in detecting CMLN activity, particularly their use by Mexico-based drug cartels, some of which have been designated as Foreign Terrorist Organizations.
Under Secretary for Terrorism and Financial Intelligence John K. Hurley stated, “Money laundering networks linked to individual passport holders from the People’s Republic of China enable cartels to poison Americans with fentanyl, conduct human trafficking, and wreak havoc among communities across our great nation. The United States will not stand by and allow nefarious actors to launder illicit proceeds through our financial system. Today’s publication of FinCEN’s Advisory and Financial Trend Analysis reinforce Treasury’s and law enforcement’s ongoing work to combat Chinese money laundering networks, and will help financial institutions better identify signs of illicit activity.”
FinCEN Director Andrea Gacki said, “Chinese money laundering networks are global and pervasive, and they must be dismantled. These networks launder proceeds for Mexico-based drug cartels and are involved in other significant, underground money movement schemes within the United States and around the world. FinCEN’s Advisory and Financial Trend Analysis support Treasury’s continuing efforts, alongside our law enforcement and international partners, to bankrupt transnational criminal organizations and their enablers.”
According to FinCEN's FTA, 137,153 Bank Secrecy Act (BSA) reports were filed by financial institutions between January 2020 and December 2024 related to suspected CMLN activity. These reports accounted for approximately $312 billion in suspicious transactions.
The analysis found that CMLNs play a major role in moving funds generated from drug trafficking but also facilitate other illegal activities such as fraud, human trafficking, human smuggling, healthcare fraud, elder abuse, suspicious gaming activity, and potentially real estate purchases using illicit funds.
The relationship between CMLNs and Mexico-based cartels is shaped by currency restrictions in both countries—Mexico limits deposits of U.S. dollars into its banks while China restricts how much money citizens can transfer abroad each year. This situation leads cartels to sell their U.S.-dollar proceeds to CMLNs who then provide those dollars to Chinese citizens seeking ways around these controls.
FinCEN reported that private individuals holding passports from the People’s Republic of China often participate in these operations knowingly or unknowingly. The organization also warned that CMLNs may recruit employees inside financial institutions or place their members within them to aid in laundering operations.
Methods used by these groups include trade-based money laundering schemes as well as using shell companies or third parties for complex real estate transactions aimed at integrating illegal funds into legitimate assets.
To help counteract these threats, FinCEN has released a list of red flags intended for use by banks when identifying suspicious accounts or activities associated with CMLNs. For example, accounts opened by individuals listing occupations unlikely to involve large sums—such as “student,” “housewife,” or “retired”—but showing significant unexplained wealth may warrant further scrutiny.
Further details can be found in FinCEN's full advisory at https://www.fincen.gov/sites/default/files/advisory/2025-08-28/FinCEN-Advisory-CMLN-508.pdf
The complete FTA is available at https://www.fincen.gov/sites/default/files/shared/4000-10-INV-144549-S3F6L-FTA-CMLN-508.pdf
Questions regarding this release should be directed to FinCEN via www.fincen.gov/contact.
