China quietly uses cartel drug trade to upend American harmony at home

China’s ongoing shadow war with the U.S. involves cleaning drug money for Mexican cartels so the gangs can fuel the deadly overdose epidemic and sow discord in American institutions, said an analyst who spoke to The Washington Times.

Beijing’s suspected silent partnership with the Sinaloa Cartel came into focus last week when federal prosecutors said a California-based money laundering scheme had wealthy Chinese nationals exchanging currency to conceal the Mexican criminal organization’s drug profits.

Prosecutors said they had no evidence that the Chinese nationals knew they were cleaning dirty money, but a former federal agent questioned how Beijing could be in the dark about the tens of millions of dollars moved by the operation. China aggressively surveils its citizens at home and abroad.

Beijing tacitly approves of the relationship with the cartels, the official said, because it erodes America from within.

“The Chinese basically are stirring the pot to keep America addicted … keep them divided,” Michael Brown, a former special agent with the Drug Enforcement Administration and now the global director for counternarcotics technology at Rigaku Analytical Devices, told The Times.

“It’s part of a larger strategy, I believe, on the part of China, to weaken American ethics, morality and their ability to push back,” he said.

Mr. Brown called China’s support for the cartel one of its “nonaggressive attacks” on the U.S.

Spying on military bases, stealing intellectual property and encouraging cyberattacks are pseudo-offensives intended to chip away at U.S. sovereignty, the former agent said.

Few of those have been as corrosive to Americans’ peace of mind as the Sinaloa Cartel’s expansive fentanyl trade.

Fentanyl, a synthetic opioid about 50 times more potent than heroin, is pegged as the main culprit in overdose deaths that spiked in the U.S. during the COVID-19 pandemic lockdowns.

Data from the Centers for Disease Control and Prevention shows drug overdoses soared from about 75,000 per year in the spring of 2020 and stabilized at more than 100,000 per year by the summer of 2021.

The Biden administration’s lax border policies with Mexico have lowered barriers to the drug trade. U.S. Customs and Border Protection said 27,000 pounds of fentanyl were seized during fiscal 2023, more than the previous two fiscal years combined.

The Sinaloa Cartel buys the chemicals it needs to make fentanyl from China, with state-level support for providing the drug’s ingredients to other countries.

A congressional report released this spring accused the Chinese Communist Party of offering tax rebates to companies that manufacture the chemicals as long as the companies sell those chemicals outside China.

Federal prosecutors said the Los Angeles-based money laundering ring used some of the more than $50 million in cartel cash it processed to buy those precursor chemicals.

Martin Estrada, the U.S. attorney for the Central District of California, told the Los Angeles Times that American brokers would instruct the Chinese nationals to send money to Chinese companies that made clothing, electronics or the chemicals needed to manufacture the powerful opioids.

The consumer goods were shipped and sold in Mexico, where Sinaloa representatives collected their now legitimized drug money in pesos.

Mr. Estrada said the chemicals shipped to Mexico went right to the cartel, allowing it to make more fentanyl and methamphetamine and strengthen its drug empire on American soil.

Prosecutors said the Chinese nationals involved were working around the CCP’s restrictions on foreign investments.

China doesn’t allow its citizens to invest more than $50,000 annually overseas, so they hire brokers to help make investments and finance real estate purchases. Mr. Estrada told the newspaper that the large amount of cash the brokers had on hand should have raised suspicion.

The U.S. attorney’s office said two dozen people were charged in the money laundering ring from 2019 through 2023.

Mr. Brown, the former DEA agent, said cooperation with other agencies, such as the IRS and the Treasury Department, could help root out illicit cash flows from American-based businesses with ties to China.

He said federal partners also are “working in silos” and law enforcement is especially wary about sharing intelligence-gathering methods that could come up during the discovery phase of a trial.

As higher levels of government figure out how to stop the fentanyl crisis, local communities are left to deal with its wreckage.

Cartel influence has spread to the Mountain West in recent years as the gangs and their surrogates realize there are big profits in the less-populated states of Montana and the Dakotas.

“They can make the most money selling pills here,” Chip White, the head of drug enforcement for the Mandan, Hidatsa and Arikara Nation in central North Dakota, told The Times. “Pills will sell anywhere from $80 to $100 a pill, when they can get them where they’re from for a couple bucks.”

The DEA said this spring that nearly all fentanyl in the U.S. comes from the Sinaloa Cartel or its rival, the Jalisco New Generation Cartel.