The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, has released an advisory and financial trend analysis focused on Chinese money laundering networks (CMLNs). These networks are considered a significant threat to the U.S. financial system.
According to FinCEN, CMLNs are used by Mexico-based drug cartels, including some designated as Foreign Terrorist Organizations, to launder illicit proceeds in the United States. The newly issued advisory urges financial institutions to remain vigilant for signs of such activity.
“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,” said Under Secretary for Terrorism and Financial Intelligence John K. Hurley. “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 added: “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.”
Between January 2020 and December 2024, FinCEN analyzed more than 137,000 Bank Secrecy Act (BSA) reports tied to suspected CMLN-related activity in the United States. The suspicious transactions totaled approximately $312 billion.
These networks play a major role in moving funds from drug trafficking but also facilitate fraud, human trafficking, human smuggling, healthcare fraud, elder abuse, suspicious gaming activity, as well as large-scale real estate purchases that may be funded by illegal proceeds.
FinCEN's findings show that private individuals holding passports from China often participate in these operations either knowingly or unknowingly. CMLNs use various methods such as trade-based money laundering schemes or recruiting employees within banks as insiders who can assist their activities.
Regulations imposed by both Mexico—limiting large cash deposits—and China—restricting outbound currency transfers—have contributed to a mutual relationship between Mexican cartels seeking ways to move dollars out of the country and Chinese citizens looking for U.S. dollars outside legal channels.
In addition to moving cash via traditional methods or social media advertisements targeting Chinese buyers evading currency controls in China, CMLNs have been connected with suspicious real estate transactions worth over $53 billion during this period.
To help banks recognize potential risks related to these activities—including cases where account holders list occupations unlikely associated with high-value transactions—FinCEN has published red flag indicators online alongside its full advisory document.
For more information about FinCEN's actions regarding these threats:
- Read about Bank Secrecy Act reporting at https://www.fincen.gov/resources/statutes-regulations/bank-secrecy-act
Questions regarding this release can be directed through www.fincen.gov/contact.
