Chinese Money Launderers Are Moving Billions Through U.S. Banks

 By Tobias Mutunga

The Common Pulse | August 2025

A Treasury Department report reveals that from 2020 to 2024, Chinese money laundering networks (CMLNs) have facilitated approximately $312 billion in suspicious transactions through U.S. banks, with much of it supporting Mexican drug cartels such as Sinaloa and Jalisco New Generation.

How It Works

• Structure of the Scheme: CMLNs exploit currency control policies in China and Mexico. Chinese citizens, limited to about $50,000 in foreign currency conversions per year, turn to underground brokers in the U.S. who can trade dollars on the black market. Mexican drug cartels, possessing large amounts of illicit dollars, use these networks to launder money into renminbi and pesos.

• Money Mules and Deceptive Methods: Individuals, including students, retirees, and housewives, are recruited as "money mules," opening accounts to deposit large cash sums that don’t match declared income or occupation. These activities are flagged through suspicious activity reports (SARs).

• Real-World Cases:

• • One laundering operation processed around $50 million through cash deposits and shell accounts tied to the Sinaloa Cartel.

  • Detailed patterns include structuring deposits just under the legal $10,000 threshold or hiding cash in everyday items like cereal boxes, illustrating a primitive yet effective approach that current systems fail to catch.

Government & Institutional Response

• FinCEN Advisory: The Financial Crimes Enforcement Network issued an advisory urging financial institutions to stay vigilant for CMLN red flags and to strengthen detection and reporting protocols.

• FinCEN Analysis: A deep dive into Bank Secrecy Act reports revealed that 137,153 SARs submitted from 2020 to 2024 were associated with suspected CMLN activity, representing the staggering total of $312 billion.

• Enforcement & Penalties: TD Bank previously paid a $3 billion fine for enabling a $470 million laundering operation. Further efforts are underway to balance enforcement with reduced compliance burdens.

Broader Implications

• Criminal Ecosystems: These laundering networks are deeply intertwined with other criminal activities, fentanyl trafficking, human trafficking, healthcare fraud, and even illicit adult day-care scams.

• Regulatory Weak Spots: Despite the laws such as the Bank Secrecy Act (BSA) requiring monitoring and SAR filings, systemic weaknesses and inconsistent oversight in banks continue to hinder meaningful enforcement.