On August 28, 2025, FinCEN issued an Advisory to urge financial institutions to be vigilant in detecting the use of Chinese money laundering networks (CMLNs) by Mexico-based drug cartels, including several designated as Foreign Terrorist Organizations. It also published a Financial Trend Analysis (FTA) highlighting the scope and breadth of CMLN activity in the United States.
In a statement, FinCEN Director Andrea Gacki explained that CMLNs launder proceeds for Mexico-based drug cartels and are involved in other significant, underground money movement schemes within the United States and around the world. According to the Advisory, CMLNs may use money mules to deposit the illicit USD into accounts they are directed to open at U.S. depository institutions, or at accounts held by U.S.-based Chinese nationals or businesses. CMLNs may also recruit financial institution employees to act as complicit insiders or infiltrate and place CMLN members within a financial institution to assist in CMLN operations.
FinCEN’s Financial Trend Analysis revealed certain trends in CMLN activity, including:
Banks filed the majority of potentially CMLN-related BSA reports in the dataset.
CMLNs reportedly rely on U.S.-based Chinese nationals to deposit cash—often unknown sources of funds—into the U.S. financial system.
CMLNs’ access to USD potentially facilitates trade-based money laundering schemes.
CMLNs potentially work with U.S.-based daigou buyers to launder illicit proceeds.
Potential human trafficking- and smuggling-related activity involves U.S.-based Chinese passport holders.
CMLNs potentially use adult daycare centers located in New York to further laundering activities; they are also linked to healthcare fraud, elder abuse, and illicit gaming activity.
CMLNs potentially facilitate real estate purchases funded by illicit proceeds from a variety of financial crimes.
CMLNs may use Chinese students to engage in a variety of suspicious financial activities and schemes.
To help financial institutions detect, prevent, and report suspicious activity connected to CMLNs laundering illicit proceeds, FinCEN has identified two sets of red flags in the Advisory: Red Flags Potentially Indicative of CMLN-Affiliated Money Mules and Red Flags Potentially Indicative of CMLN-Affiliated TBML Schemes.
Read FinCEN’s press release here.
The full Advisory and red flag indicators can be found here.
The FTA can be found here.
