A key player in a most sophisticated trade-based money laundering (TBML) ring, Xianbing Gan, has been sentenced to 14 years in prison for laundering illegal narcotics proceeds on behalf of drug traffickers in Mexico.
The TBML ring laundered hundreds of millions of dollars via US merchants and traders who wired money to China where it was used to buy consumer goods that were then shipped to Latin America and sold. The proceeds of those sales were then delivered to Mexican drug cartel clients via another accomplice in the TBML ring.
Merchants and traders
Gan, a Chinese national, schemed in 2018 to have approximately US$534,206 in narcotics proceeds picked up in Chicago and transferred by US-based merchants and traders to various bank accounts in China, with the money ultimately intended for drug traffickers in Mexico (Trade-based Financial Crime, 26 January 2021).
Unbeknownst to Gan, a purported money courier who picked up the drug proceeds in Chicago was an undercover law enforcement agent.
Gan facilitated the money transfers while residing in Guadalajara, Mexico. US authorities arrested him in November 2018 at Los Angeles International Airport during a layover on a flight from Hong Kong to Mexico. He has remained in US custody since then.
A federal jury in Chicago last year convicted Gan on three counts of money laundering and one count of operating an unlicensed money transmitting business.
“The defendant was part of a recent phenomenon in which a relatively small network of Chinese money brokers based in Mexico have come to dominate international money laundering markets,” US attorneys argued in the government’s sentencing memorandum.
“Many of these brokers are also engaged in legitimate business, and use that business as cover for and to further money laundering activity. It does not matter that defendant never personally distributed narcotics – drug distribution and money laundering are two-sides of the same malignant coin,” they concluded.
Categories: Trade Based Financial crimes News