HomeNewsChinese Broker Laundered Latin American Drug Money Around the World
NEWS

Chinese Broker Laundered Latin American Drug Money Around the World

BELIZE / 10 AUG 2021 BY KATIE JONES EN

A Chinese businessman laundered tens of millions of dollars in drug money through a Guatemalan casino, a US seafood export company, Miami banks, and Chinese bank accounts, in a case that reveals the wide reach of such money laundering networks.

Xizhi Li, a Chinese national with US citizenship, pleaded guilty to conspiracy to launder money in early August, according to a news release from the US Department of Justice (DOJ). Between 2008 and 2019, Li laundered some $30 million in drug proceeds for traffickers in Mexico, Colombia, and Guatemala.

Prosecutors said Li "forged close ties" with these groups while living in Mexico, obtaining contracts to conduct financial transactions with their US-based proceeds, according to an indictment against him and other conspirators. He used fake identities such as “Francisco Ley Tan” to open Miami bank accounts and purchase a casino in Guatemala used in the scheme.

The scheme used "a foreign casino, foreign and domestic front companies, foreign and domestic bank accounts, false passports and other false identification documents” to launder the drug money, the Justice Department said in its news release.

According to prosecutors, bulk cash made from US cocaine sales was moved among different states to cover up its origins. It was later sent to Chinese bank accounts to purchase Chinese goods. Goods were also bought in the United States and sent to China. Merchants in Latin America looking to import these goods then used their local currency to pay Li and others for the items.

SEE ALSO: How Chinese Criminals Secretly Move Millions for Mexico Cartels

One of Li's co-conspirators Tao Liu, of Hong Kong, was sentenced to seven years in prison on August 3rd for his role in the network. Prosecutors said Liu accepted drug money on behalf of Li, which he later deposited into bank accounts.

Between April and June of this year, three other conspirators pleaded guilty, according to the Justice Department. Another suspect was charged and is pending extradition after he was arrested in Peru.

InSight Crime Analysis

Drug money is not only increasingly being laundered through Chinese bank accounts but brokers are setting up throughout the Americas and beyond to serve trafficking clientele and move cash.

Prosecutors said nodes of the money laundering group were based in the United States, Mexico, Guatemala, Belize, China and elsewhere. One suspect made trips to New York and Los Angeles, as well as to the Mexican city of Cancún and Guatemala City to facilitate the network's activities. The Guatemalan casino owned by Li served as a meeting point for the network.

The group also used a US seafood import and export business to purchase seafood products using cocaine money. The products were later exported for sale in China and Hong Kong.

Messaging platforms, including WhatsApp and WeChat, were used by associates to communicate.

Li and his co-conspirators sought to obtain as many “contracts” as possible from drug trafficking organizations. They then received commissions on the transactions, or a percentage of the funds involved, prosecutors said.

SEE ALSO: Coverage of China and Crime

What's more, Chinese players in the money laundering trade have a wide range of schemes open to them. In one, the US and Mexican financial systems were bypassed altogether. Chinese-owned businesses simply received drug cash and then transferred a corresponding amount through a Chinese banking application.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

GUATEMALA / 26 OCT 2012

Between two and three private security guards are arrested for possession of illegal arms each week in Guatemala City, according…

COCAINE / 29 APR 2019

The discovery that two cocaine-laden ships were bound for South Korea from Honduras in 2016 suggests that the rising demand…

COLOMBIA / 14 JUL 2020

Authorities in Colombia have captured several Venezuelan gang members, alarming officials who say that the groups are playing out rivalries…

About InSight Crime

THE ORGANIZATION

Unraveling the Web of Elites Connected to Organized Crime

27 JUL 2021

InSight Crime published Elites and Organized Crime in Nicaragua, a deep dive into the relationships between criminal actors and elites in that Central American nation.

THE ORGANIZATION

InSight Crime’s Greater Focus on US-Mexico Border

20 JUL 2021

InSight Crime has decided to turn many of its investigative resources towards understanding and chronicling the criminal dynamics along the US-Mexico border.

THE ORGANIZATION

Key Arrests and Police Budget Increases Due to InSight Crime Investigations

8 JUL 2021

With Memo Fantasma’s arrest, InSight Crime has proven that our investigations can and will uncover major criminal threats in the Americas.

THE ORGANIZATION

Organized Crime’s Influence on Gender-Based Violence

30 JUN 2021

InSight Crime investigator Laura N. Ávila spoke on organized crime and gender-based violence at the launch of a research project by the United Nations Development Programme.

THE ORGANIZATION

Conversation with Paraguay Judicial Operators on PCC

24 JUN 2021

InSight Crime Co-director Steven Dudley formed part of a panel attended by over 500 students, all of whom work in Paraguay's judicial system.