24 people charged in money laundering scheme involving Mexico's Sinaloa cartel, prosecutors say

LOS ANGELES (AP) — A five-year investigation by U.S. officials has uncovered a complex partnership between one of Mexico’s most notorious drug cartels and Chinese underground banking groups in the U.S. that laundered money from the sale of fentanyl, cocaine and other drugs, federal prosecutors said Tuesday.

Associates of the powerful Sinaloa Cartel conspired with the Chinese groups to cover up more than $50 million in drug profits, much of which was processed in the Los Angeles area, the prosecutors said in a news release.

Two dozen people have been charged. Chinese and Mexican law enforcement helped arrest fugitives who fled the United States after they were initially charged last year.

“This investigation shows that the Sinaloa Cartel has entered into a new criminal partnership with Chinese nationals who launder money for the cartels,” Drug Enforcement Administration official Anne Milgram said at a news conference.

The lead defendant is Edgar Joel Martinez-Reyes, 45, of East Los Angeles, who prosecutors said had managed couriers who picked up drug cash in the Los Angeles area. Martinez-Reyes partnered with the leader of the Chinese money launderers, and traveled with him to Mexico to negotiate contracts with the cartel, authorities said.

Martinez-Reyes' attorney did not immediately respond to an email and call seeking comment.

Prosecutors said the scheme relied on the huge demand for U.S. currency from wealthy Chinese nationals, who are prohibited by their government's capital flight restrictions from transferring more than $50,000 per year out of China.

According to the authorities, a person in China would move money into the seller's Chinese bank account and receive the dollar equivalent in the U.S. for use in purchasing real estate, luxury items, and paying tuition. They said cryptocurrency transactions were also used to move the drug money, adding the funds in China are used to buy such goods such as chemicals for making fentanyl and methamphetamine that are then sent to the drug cartels in Mexico.

The Chinese money brokers charged a much smaller percentage commission fee than traditional money launderers and provided overall cheaper methods than previous ways of moving money, such as smuggling truckloads of cash across the U.S.-Mexico border or going through banks and businesses, according to the officials.

“When I talk about a cycle of destruction, the drugs being sold here in the United States are then being used to fund precursor chemicals which will be used to make even more drugs that are sent into our country,” Estrada said.

Federal law enforcement has worked closely with the Ministry of Public Security in China since the meeting last November between President Joe Biden and Chinese leader Xi Jinping in Woodside, California, according to Estrada.

At least 22 of the 24 defendants have been arrested, Estrada said. Their charges include one count of conspiracy to aid and abet the distribution of cocaine and methamphetamine, one count of conspiracy to launder monetary instruments, and one count of conspiracy to operate an unlicensed money-transmitting business.

Most of those in custody will be arraigned in the U.S. District Court in Los Angeles in the coming weeks, the news release said.

Authorities said law enforcement also seized about $5 million in drugs, including just over 300 pounds (135 kilograms) of cocaine and 92 pounds (41 kilograms) of methamphetamine as well as other drugs and several firearms.

United States Attorney Martin Estrada, right looks on as Drug Enforcement Administrator Anne Milgram talks during a news conference in Los Angeles on Tuesday, June 18, 2024. The Justice Department today announced a 10-count superseding indictment charging Los Angeles-based associates of Mexico's Sinaloa drug cartel with conspiring with money-laundering groups linked to Chinese underground banking to launder drug trafficking proceeds. (AP Photo/Jamie Ding)

This undated photo provided by the U.S. District Attorney shows confiscated drug money. The Justice Department today announced a 10-count superseding indictment charging Los Angeles-based associates of Mexico's Sinaloa drug cartel with conspiring with money-laundering groups linked to Chinese underground banking to launder drug trafficking proceeds. (U.S. District Attorney via AP)

United States Attorney Martin Estrada backed by other law enforcement officials talks during a news conference in Los Angeles on Tuesday, June 18, 2024. The Justice Department today announced a 10-count superseding indictment charging Los Angeles-based associates of Mexico's Sinaloa drug cartel with conspiring with money-laundering groups linked to Chinese underground banking to launder drug trafficking proceeds. (AP Photo/Jamie Ding)

This undated photo provided by the U.S. District Attorney shows confiscated drugs piled up in a truck bed. The Justice Department today announced a 10-count superseding indictment charging Los Angeles-based associates of Mexico's Sinaloa drug cartel with conspiring with money-laundering groups linked to Chinese underground banking to launder drug trafficking proceeds. (U.S. District Attorney via AP)

The president of Bolivia, who was the target of an attempted coup on Wednesday night, is a 60-year-old leftist whom many see as an opponent of Washington-backed free-market and neoliberal policies.

Luis Arce, who studied economics in London, was economy minister under President Evo Morales, whose time in office from 2006 to 2019 made him an icon of the Latin American left.

After Morales left office, Arce became president in November 2020, following Jeanine Añez's short time in office.

Bolivian television showed Arce confronting the apparent leader of the rebellion — the general commander of the Army — in the hallway of the government palace Wednesday night.

“I am your captain, and I order you to withdraw your soldiers, and I will not allow this insubordination,” Arce said.

Arce's career has mirrored Bolivia's economic trajectory from boom to bust. He worked in the Central Bank from 1987 to 2006 and worked for Morales administering a bonanza in metals and hydrocarbons prices that came to be known as the “Bolivian Miracle.”

But by the time Arce took office, Bolivia was hard-hit by the COVID-19 pandemic and social tensions set off by Morales' 2019 departure after street protests and extreme pressure from the military.

Neoliberal reforms in the 1990s helped Bolivia become a significant energy producer, and it moved from a low-income to a middle-income nation, according to the World Bank. The percentage of people in extreme poverty fell to 15%, the state built highways and cable cars, and cities grew.

But incomes began to fall in 2014.

Assuming the presidency, Arce described his country’s recession as the worst in 40 years.

He recently said gasoline and diesel production no longer covered national consumption, and that the country had to import 86% of its diesel and 56% of its gasoline because of a lack of exploration and production.

Households also have been forced to grapple with high food prices.

Meanwhile, tensions between Morales and his party continued to rise.

In November, Arce criticized his opponents and said they “dreamed of new coups d’état.”

FILE - Bolivian President Luis Arce attends an Indigenous ritual before delivering his annual state of the nation address at the presidential palace in La Paz, Bolivia, Jan. 22, 2024. Armored vehicles rammed into the doors of Bolivia's government palace Wednesday, June 26, 2024, as a top government official warned of a coup attempt. (AP Photo/Juan Karita, File)