Three Indicted for International Money Laundering Scheme Pairing Mexican Drug Traffickers and Chinese Nationals
PORTLAND, Ore.—Billy J. Williams, U.S. Attorney for the District of Oregon, announced today the indictment of three people for their roles in a complex scheme to launder proceeds from the sale of illegal narcotics by facilitating the transfer of bulk cash from Mexican drug trafficking organizations to Chinese nationals residing in the U.S.
Shefeng Su, 39, Xinhua Li Yan, 39, and Xiancong Su, 46, are each charged with conspiracy to commit money laundering. Shefeng Su and Li Yan were residents of Portland during the timeframe alleged in the indictment.
According to the indictment, the defendants’ money laundering scheme was designed to remedy two separate problems: drug trafficking organizations’ inability to repatriate drug proceeds into the Mexican banking system and wealthy Chinese nationals restricted by China’s capital flight laws from transferring large sums of money held in Chinese bank accounts for use abroad.
The first group, drug traffickers, are challenged by their inability to transport U.S. currency acquired from the sale of illegal narcotics in the U.S. to Mexico while avoiding detection by law enforcement and Mexican banking regulators. Mexico’s anti-money laundering regulations limit the amount of cash deposits of U.S. dollars that Mexican financial institutions can receive. As a result, drug trafficking organizations work with professional money launderers to bundle and sell bulk U.S. dollars in order to convert them to pesos, a more readily depositable currency in Mexico.
The second group, Chinese nationals living outside China, are challenged by China’s limit on the amount of personal funds that can be transferred out of Chinese bank accounts for use in a foreign country. Currently, China limits these transfers to $50,000 per year. As a result, some Chinese nationals have a need to acquire large quantities of U.S. dollars via other means.
The defendants’ scheme facilitated the transfer of cash between these two groups. Their money laundering organization would facilitate the transfer of funds from the buyer’s Chinese bank account to another Chinese bank account held by the money laundering organization. Once the Chinese renminbi (RMB) were transferred between these bank accounts, the funds were repatriated back to Mexico and converted to pesos to complete the money laundering cycle. This scheme has been described by some as the “Chinese Underground Banking System.”
All three defendants are at-large and believed to be outside the U.S.This case was investigated by the Drug Enforcement Administration (DEA) and IRS-Criminal Investigation (IRS-CI) and is being prosecuted by the U.S. Attorney’s Office for the District of Oregon.
An indictment is only an accusation of a crime, and defendants are presumed innocent unless and until proven guilty.