NBC News: A multi-year DEA investigation has focused on how Mexican and Latin American drug cartels launder their money.
— Tom Winter (@Tom_Winter) October 15, 2020
Six Chinese nationals have been indicted, 5 are in custody, for their alleged role in those money laundering efforts.
STORY: https://t.co/BzaaIRslei
NBC News
written by Tom Winter
Thursday October 15, 2020
Six Chinese nationals have been charged with conspiring to distribute cocaine and laundering the illicit funds for Mexican drug cartels, according to court documents filed Thursday.
The suspects made at least $30 million in an alleged scheme that continued from 2008 to late last month and involved funneling illicit drug money to traffickers in Latin America, including the feared Sinaloa cartel, according to court documents.
Federal prosecutors allege that the men laundered their drug proceeds by purchasing products in the U.S. and shipping them to China. The products were then sold through “black market merchants” in China, the indictment says, with the money sent back to drug traffickers in Latin America, “often Mexicans,” through Chinese currency.
The effort, the indictment says, “required special care and skill” in money laundering.
One of the suspects, Tao Liu, was also charged with trying to bribe two men, who turned out to be undercover Drug Enforcement Administration agents, in order to get fraudulent passports.
The other five men were identified in court documents as Xizhi Li, Jianxing Chen, Jingyan Li, Eric Yong Woo, Jiayu Chen. The men were all born in China but now reside in New York, California and several Latin American countries, according to the indictment.
All of the suspects except for Jiayu Chen have been taken into custody, authorities said. It was not immediately clear if they had hired lawyers.
“These individuals went to great lengths to conceal their alleged criminal activities and further schemes that enabled drug cartels to push their poisons on our communities and launder their illicit proceeds," said Wendy Woolcock, special agent in charge of the DEA’s Special Operations Division.
In a statement, the Justice Department said the indictment was the result of "a nearly four-year investigation into the relationship between foreign drug trafficking organizations and Asian money laundering networks in the United States, China, and elsewhere.”
Federal prosecutors allege that Xizhi Li, who went by the aliases Juan Lee and had a WeChat name of “JL 007” and “SUPERKING 99,” developed close ties with drug traffickers and cartels in Mexico, Colombia, Guatemala, and elsewhere to obtain contracts to move drug proceeds for the dealers.
The other five men are accused of working with Xizhi Li to help launder the drug money in a scheme that began in 2008 and lasted up until late last month, the indictment says.
Xizhi Li allegedly had bank accounts with BBVA Compass in Miami, Florida, which he used as part of the conspiracy.
In a 2019 DEA seizure application for BBVA accounts in Tennessee, investigators told the court that in the course of investigating a local drug gang they determined that the cocaine in the greater Memphis area was being supplied by the Sinaloa cartel and the money laundering efforts for those transactions were allegedly directed by Xizhi Li.
BBVA Compass did not respond to a request for comment.
The indictment also says Xizhi Li owned and operated a casino in Guatemala City, Guatemala, which he used to launder money and provided him a place to meet drug traffickers.
Tao is accused of trying to fraudulently obtain passports for multiple people in April. He allegedly struck a deal with undercover agents who told him they knew someone at the State Department who could illegally provide passports at a cost of $150,000 each.
The indictment says that Tao agreed to deposit about $5,000 in cryptocurrency and $5,000 in cash into what turned out to be a DEA-controlled account in order to start the process of getting the passports.
Tao was also hit with a separate money laundering charge for allegedly moving some of the funds through cryptocurrency.
BREAKING: AP source says Ex-Mexico defense minister arrested in Los Angeles on warrant for drug trafficking, money laundering charges. https://t.co/8Vz7D3Q8a8
— The Associated Press (@AP) October 16, 2020
The Associated Press
written by E. Eduardo Castillo and Stafanie Dazio
Friday October 16, 2020
MEXICO CITY (AP) — Former Mexican defense secretary Gen. Salvador Cienfuegos, who led the country’s army for six years under ex-President Enrique Peña Nieto, has been arrested on drug trafficking and money laundering charges at Los Angeles International Airport, U.S. and Mexican sources said Thursday.
Two people with knowledge of the arrest said Cienfuegos was taken into custody on a U.S. Drug Enforcement Administration warrant. One of the people said the warrant was for drug trafficking and money laundering charges. Both spoke on the condition of anonymity because they were not authorized to discuss the case publicly.
The DEA declined to comment Thursday night.
Mexico’s Foreign Minister, Marcelo Ebrard, wrote on his Twitter account that U.S. Ambassador Christopher Landau had informed him of the retired general’s arrest and that Cienfuegos had a right to receive consular assistance.
A senior Mexican official, who also spoke on the condition of anonymity because he wasn’t authorized to give details of the case, said Cienfuegos was arrested when he arrived at the Los Angeles airport with his family. His family members were released and he was taken to the Metropolitan Detention Center.
Cienfuegos served from 2012 to 2018 as secretary of defense under Peña Nieto. He is the highest-ranking former Cabinet official arrested since the top Mexican security official Genaro Garcia Luna was arrested in Texas in 2019. Garcia Luna, who served under former President Felipe Calderón, has pleaded not guilty to drug trafficking charges.
Cienfuegos is 72 years old and has retired from active duty. Mexico’s Defense Department had no immediate reaction to the arrest.
Mike Vigil, the DEA’s former chief of international operations, said when he was in Mexico in 2012 he heard corruption allegations about Cienfuegos.
“There were always allegations of corruption, nothing we could sink our teeth into. That was kind of unheard of because Mexico has always put the military on a pedestal,” said Vigil, author of the book “The Land of Enchantment Cartel.”
“The corruption is just coming to roost, because individuals who were once untouchable are now getting arrested,” Vigil said. “If they cooperate (with U.S. prosecutors) there are others who are going to be falling, noting U.S. officials “usually don’t want to trade down, they usually trade up,” seeking evidence against equal or higher-ranking officials. “It’s really a precarious situation for Mexico to have two Cabinet-level officials arrested in the U.S.”
Whatever the charges, it will be a tough blow for Mexico, where the army and navy are some of the few remaining respected public institutions.
While current President Andrés Manuel López Obrador has vowed to go after corruption and lawbreaking under past administrations, he has also relied more heavily on the army — and charged it with more tasks, ranging from building infrastructure projects to distributing medical supplies — than any other president in recent history.
Under Cienfuegos, the Mexican army was accused of frequent human rights abuses, but that was true of both his predecessors and his successor in the post.
The worst scandal in Cienfuegos’ tenure involved the 2014 army killings of suspects in a grain warehouse.
The June 2014 massacre involved soldiers who killed 22 suspects at the warehouse in the town of Tlatlaya. While some died in an initial shootout with the army patrol — in which one soldier was wounded — a human rights investigation later showed that at least eight and perhaps as many as a dozen suspects were executed after they surrendered.
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