‘Let this case be a warning to foreign money launderers and drug traffickers,’ Russ Ferguson, U.S. attorney for the Western District of North Carolina, said.
Two Chinese nationals and a California man pleaded guilty to money laundering charges involving drug trafficking proceeds, the U.S. Attorney’s Office for the Western District of North Carolina announced on May 1.
Xia Maoxuan, 29, of China, Lin Shao Neng, 58, of Baldwin Park, California, and Yu Zhou, 42, of China, were members of a Chinese money laundering organization (CMLO) that laundered more than $92 million in illicit drug proceeds primarily through Mexico.
According to the indictment, the trio’s scheme started in May 2022 and continued until March 2024.
Xia, who was highly active in the organization, traveled across the United States to collect drug trafficking proceeds from traffickers, according to prosecutors. Xia then deposited the money into shell company bank accounts registered by other organization members, including Lin and Yu.
As part of his plea agreement, Xi admitted that he was responsible for laundering more than $30 million of illicit funds and was aware that the money included drug trafficking proceeds or funds that were going to be used for promoting drug trafficking.
Lin and Yu stated in their plea agreements that they each had received about $20 million in illicit funds, including drug proceeds, and they had created and operated the shell bank accounts on behalf of the organization.
“Let this case be a warning to foreign money launderers and drug traffickers,” Russ Ferguson, U.S. attorney for the Western District of North Carolina, said in a statement.
“We will work day and night to dismantle criminal operations that exploit our robust financial system to fund criminal networks, fuel addiction in our communities, and spread violence in our streets.”
The case underscores that Chinese entities play a significant role in the fentanyl supply chain. According to a 2024 report from the Drug Enforcement Administration (DEA), the Sinaloa and Jalisco cartels are dependent on chemical companies and pill press companies in China for the manufacture of fentanyl. And the two cartels use CMLOs to move their profits from the United States back to Mexico.
Xia, Yu, and Lin each pleaded guilty to several money laundering-related charges.
“Xia and Yu each pleaded guilty to one count of money laundering conspiracy, one count of money laundering to conceal the nature, location, source, ownership, and control of the illicit proceeds, and one count of monetary transactions involving criminally derived property greater than $10,000,” prosecutors said.
The defendants could face up to 20 years in prison for each conspiracy and money laundering count, and up to 10 years for each monetary transaction count, according to the U.S. Attorney’s Office for the Western District of North Carolina.
“DEA strives every day to keep the American public safe from criminal organizations who threaten our communities,” DEA Acting Special Agent in Charge Jae W. Chung said in a statement.
“This case demonstrates our ability to leverage every tool to attack and dismantle dangerous drug trafficking and money laundering organizations.”
The Epoch Times contacted the lawyers of Xia, Lin, and Yu for comment but did not receive a response by publication time.
Last month, Li Pei Tan, 47, of Buford, Georgia, was sentenced to 6.5 years in prison for his role in a scheme to launder millions of dollars in illicit drug proceeds for Mexican cartels.
Tan’s coconspirator, Chaojie Chen, a Chinese national living in Chicago, was sentenced to 7.5 years in December 2024.