Beyond The Horizon

China Syndrome: The Indictment Of The Sinaloa Cartel And Their Chinese Money Bundlers (Part 2) (6/22/24)

A recent federal indictment unsealed in June 2024 details a sophisticated scheme involving the Sinaloa Cartel and Chinese money launderers in Los Angeles. The indictment charges 24 individuals, including key figures such as Edgar Joel Martinez-Reyes, with conspiracy to distribute drugs, launder money, and operate an unlicensed money-transmitting business.

This investigation, dubbed "Operation Fortune Runner," revealed that over $50 million in drug proceeds were laundered through an underground banking system linked to Chinese nationals. The money laundering network, based in the San Gabriel Valley of California, processed and concealed large amounts of drug trafficking proceeds, making them accessible to cartel members in Mexico and elsewhere. Methods used included trade-based money laundering, asset structuring, and the purchase of cryptocurrency.

The collaboration between U.S., Chinese, and Mexican law enforcement led to the arrest of several fugitives involved in this scheme. This case underscores the growing partnership between Mexican drug cartels and Chinese organized crime groups to launder drug money, which funds the production and distribution of dangerous drugs like fentanyl and methamphetamine in the United States.

In this episode we take a look at that indictment.

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Duration:: 12m
Broadcast on:: 22 Jun 2024
Audio Format:: mp3

It is Ryan Seacrest here. There was a recent social media trend, which consisted of flying on a plane with no music, no movies, no entertainment. But a better trend would be going to Chumbakacino.com. It's like having a mini social casino in your pocket. Chumbakacino has over 100 online casino style games, all absolutely free. It's the most fun you can have online and on a plane. So grab your free welcome bonus now at Chumbakacino.com. Sponsored by Chumbakacino. No purchase necessary. VGW Group. Voidware prohibited by law. 18+ terms and conditions apply. What's up everyone and welcome back to the program. In this episode, we're going to continue on with the indictment of the Sinaloa cartel and their Chinese compatriots. C. Federal reporting requirements and structuring. NINE. Under relevant federal law of financial institution. As that term is defined in Title 31, United States Code, Section 5312A2 and R. includes a business operating as an informal money transfer system to facilitate the transfer of money domestically or internationally outside of the conventional financial institution system. 10. Under federal law, whenever financial institutions, including a bank, receives over $10,000 in currency in one transaction or two or more related transactions that occurred within one year, the financial institution is required to file a CTR note later than 15 days after that transaction exceeding $10,000. 11. If the person who deposits or withdraws a currency does not want a CTR to be filed, they might try to evade that filing by either purchasing cashier's checks with the currency under the mistaken belief that such purchases need not be reported or structuring. There are deposits by making repeated deposits into the account under the $10,000 reporting threshold. Or be making multiple deposits each blow $10,000 in value at different times, at different bank locations, or into different accounts. D. Licensing requirements for any person who engages in transmitting funds as a business by any means, including by courier. 12. Under a federal law, Title 31, United States Code, Section 5330 requires the registration as a money transmitting business by any person who engages as a business in an informal money transfer system or any network of people who engages as a business in facilitating the transfer of money domestically or internationally outside of the conventional financial institution system with FinCEN. 13. Under federal law, Title 31, Code of Federal Regulations, Section 1010.100FF5i, a money transmitter is one, a person, who provides money transmission services by accepting currency, funds, or other items of value that substitute for currency from one person and transmitting that currency, funds, or other items of value that substitute for currency to another location or person by any means, including through a financial institution, an electronic funds transfer network or an informal value transfer system, or to any other person engaged in the transfer of funds. A money transmitter is required to be licensed by both federal and state law, and failure to register under either federal or state law is a federal offense under Title 18, United States Code, Section 1960. 14. Title 18, United States Code, Section 1960A and B, prohibit the operation of an unlicensed money transmitting business, 15. Title 18, United States Code, Section 1960B, one in C, prohibits the transportation or transmission of funds that are known to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity. 16. None of the defendants, Edgar Joel Martinez Reyes, Peje Tong, also known as PJ, AKA Dr. P, AKA PO, Sizong, AKA Tommy, Chengwoo He, AKA Ocean, Bernardo Mulberis, Pan Yu Zao, Raul Contreras, AKA Batman, Guillermo Zabrano, Lewis Belladrea, Contreras, Hangsu, Je Young Yu, AKA Horan Fang. Yo, these Chinese names, I can't really pronounce them. Sorry, folks. Jai Li Ye, Zhanyi Mu, Sho Yang, AKA Choming Cheng, Oscar Eduardo Mayorga, Diego Acosta Ovali, Victor Rodriguez Trujillo, Jixan He, AKA Edward, Badal Licon Robles, Leopoldo Bernal, Daniel Gonzalez, AKA Rafael Aracho, Julio Alexander Cabrata, Jose Antonio Pardo, and Giande Zao, nor any business owned by them, is licensed under state or of federal law and regulations as a lawful money transmitter, 17. These introductory allegations are incorporated into each count of this first superseding indictment. Count one, all defendants. 21 U.S. Code, Section 846. A, the object of the conspiracy. Beginning in or about October 2019 and continuing until on or about October 26, 2023, in Los Angeles, Ventura, and San Bernardino counties within the Central District of California and elsewhere, defendants Edgar Joel Martinez Reyes, Peje Tong, also known as AKA PJ, and all of these other defendants, we're not gonna go through all the names again. And others, known and unknown to the grand jury, conspired and agreed with each other to commit an offense against the United States, namely to knowingly and intentionally aid and abet the distribution of a controlled substance or substances in violation of Title 21, U.S. Code, Section 846, and 841, A1, B1A, and Title 18, U.S. Code, Section 2A, B. Means by which the object of the conspiracy was to be accomplished. One, means by which defendants assisted Sinaloa cartel drug traffickers to conceal drug proceeds. A, members and operatives of the Sinaloa cartel, a drug trafficking organization based in Mexico, would import large quantities of cocaine, methamphetamine, heroin, fentanyl, and marijuana into the United States and distribute those controlled substances through co-conspirators to cities across the country, where they would be sold in large and small quantities. The sales of these controlled substances would yield huge sums of money for drug trafficking proceeds in U.S. currency. Concealment of the drug trafficking proceeds from scrutiny by government or banking authorities was crucial to the drug traffickers' ability to profit from their drug importation and distribution scheme and maintain the viability of the scheme itself. B, the defendants and co-conspirators would serve Sinaloa cartel associates by assisting them in concealing their drug trafficking proceeds and making the proceeds generated in the United States accessible to the Sinaloa cartel, owners in Mexico, Colombia, and elsewhere. C, defendants Martinez Reyes and Tong would travel to Mexico to meet with members of the Sinaloa cartel in order to obtain contracts to launder drug trafficking proceeds in the United States in exchange for a commission fee that was a percentage of the amount laundered. A photograph of Martinez Reyes and Tong entering the United States together from Mexico on January 10th, 2021 is below. D, defendants Licon Robles, Bernal Gonzalez, and Zhao would distribute illegal drugs, including cocaine, methamphetamine obtained from associates of the Sinaloa cartel and collect the proceeds from those transactions in order to pay back their suppliers. E, defendants Martinez Reyes, Contreras, Zombrano, Belangeria Contreras, Mayorga, Ovali, Rodriguez Trujillo, Gonzalez, Cabrera, and Pardo and co-conspirators would receive the drug trafficking proceeds belonging to the Sinaloa cartel in the United States in the form of U.S. currency, count and package them, and deliver the U.S. currency to members of illegal money exchanges and remitting organizations, including defendants Tong, Sizong, Cheng Wu, Hei, Panyu Zao, Su Yu, Yae, Mu, Yang, and Zhashan Hei, and others known and unknown to the grand jury to be laundered for a fee. F, Sinaloa cartel operatives would notify the defendants of the approximate amount of drug trafficking proceeds to be picked up and the location where the proceeds were to be picked up and supply a telephone number and/or code to be used to identify the couriers to one another. G, defendants would either deliver the U.S. currency to locations or individuals specified by members of the Sinaloa cartel or make other arrangements to launder the drug trafficking proceeds by a variety of methods described herein. H, defendants and co-conspirators would establish and maintain bank accounts in their own names, including aliases and the names of businesses or other individuals in the United States for the purposes of integrating the drug trafficking proceeds into legitimate banking system in the United States. I, defendants and co-conspirators would either deliver the drug trafficking proceeds in cash to individuals who, needing U.S. currency, purchase those proceeds in exchange for deposits into bank accounts designated by the Sinaloa cartel members who were owners of the drug trafficking proceeds, purchase cryptocurrency, or arrange for the proceeds to be deposited into bank accounts established for that purpose. Two, means by which the defendants assisted Sinaloa cartel members to integrate the drug proceeds into the legitimate banking system. A, in order to conceal the nature, source, location, and ownership of the drug trafficking proceeds generated in the United States, as well as to conceal the illegal drug trafficking scheme itself and to move the drug proceeds beyond the reach of law enforcement, defendant, Martinez Reyes, Tong, say Zong and Zao and co-conspirators would arrange to purchase cryptocurrency that could easily and rapidly be transferred to accounts held by the Sinaloa cartel. B, defendant Martinez Reyes, Contreras, Zombrano, Bellandria, Contreras, and Mayorga and co-conspirators would deliver the drug trafficking proceeds to operators of an underground banking system, including defendants Tong, Zong, Zao, and Cheng Wu Yi and co-conspirators for the purpose of supplying U.S. currency to Chinese underground banking customers in the U.S. C, defendant Zombrano and Bellandria Contreras and co-conspirators would structure deposits of U.S. currency that represented drug trafficking proceeds into bank accounts to avoid the federal reporting requirement. D, defendant, Mobris would collect drug trafficking proceeds from Sinaloa cartel operatives in the U.S., use them to purchase precious metals and gems on the black market in the U.S., take them to Mexico and sell those items to legitimate businesses in Mexico for a profit that he would use to reimburse the true owners of the drug trafficking proceeds. That is, the Sinaloa cartel members for the drug trafficking proceeds in U.S. currency that he had been given to purchase material in the United States, less a commission of 0.5% to 1.5% of the amount he had received. All right, we're gonna wrap this episode up right here. And in the next episode, we're gonna pick up with C. overt acts. All of the information that goes with this episode can be found in the description box. - Lucky Land Slots asking people, what's the weirdest place you've gotten lucky? - Lucky? In line at the deli, I guess? - Uh-huh, in my dentist's office. More than once, actually. - Do I have to say? - Yes, you do. - In the car, before my kids' PTA meeting? - Really? - Yes. - Excuse me, what's the weirdest place you've gotten lucky? - I never win and tell. - Well, there you have it. You could get lucky anywhere, playing at luckylandslots.com. Play for free right now. Are you feeling lucky? - No purchase necessary. 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