A Chinese businessman laundered tens of millions of dollars in drug money through a Guatemalan casino, a US fish export company, banks in Miami and Chinese bank accounts, a case that shows the wide reach of such money laundering networks.
Xizhi Li, a Chinese citizen with US citizenship, pleaded guilty to the money laundering conspiracy in early August, according to a press release from the US Department of Justice (DOJ). Between 2008 and 2019, Li laundered approximately $ 30 million in drug receipts for human traffickers in Mexico, Colombia, and Guatemala.
According to an indictment against him and other conspirators, Li developed “close ties” to these groups while he was living in Mexico and obtained contracts to conduct financial transactions with their US revenues. He used fake identities like “Francisco Ley Tan” to open bank accounts in Miami and buy a casino in Guatemala that was used as part of the program.
The system used “a foreign casino, foreign and domestic bogus companies, foreign and domestic bank accounts, false passports and other false identification documents” to launder the drug money, the Justice Department said in its press release.
According to prosecutors, cash from US cocaine sales has been moved between states in an attempt to cover up its origins. It was later transferred to Chinese bank accounts to buy Chinese goods. Goods were also bought in the USA and sent to China. Traders in Latin America who wanted 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, from Hong Kong, was sentenced to seven years in prison on August 3 for his role in the network. Prosecutors said Liu accepted drug money on Liâs behalf that he later deposited into bank accounts.
According to the Ministry of Justice, three other conspirators pleaded guilty between April and June of this year. Another suspect has been charged and is due to be extradited after his arrest in Peru.
InSight crime analysis
Not only are drug funds increasingly being laundered through Chinese bank accounts, but brokers are being set up across America and beyond to service human trafficking customers and move cash.
Prosecutors said the money laundering group’s nodes were located in the United States, Mexico, Guatemala, Belize, China and elsewhere. A suspect made trips to New York and Los Angeles, as well as Cancun, Mexico, and Guatemala City to facilitate the network’s activities. Li’s Guatemalan casino served as the meeting point for the network.
Messaging platforms, including WhatsApp and WeChat, were used by employees to communicate.
Li and his co-conspirators tried to get 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.
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In addition, a large number of systems are open to Chinese players in the money laundering business. In one, the US and Mexican financial systems were completely bypassed. Chinese-owned companies simply received drug cash and then sent the equivalent amount through a Chinese banking application.
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