By Jeffrey A. Newman Esq.
The Treasury Department issued an Advisory which revealed that Chinese money launderers appear to have moved over $312 Billion in illegal transactions through U.S. banks and other financial institutions to help . Here is a copy of the Advisory:https://www.fincen.gov/sites/default/files/advisory/2025-08-28/FinCEN-Advisory-CMLN-508.pdf
According to press reports the Chinese operators may be assisting drug cartels. Banks that do not do enough to detect and report illicit money flows may face big fines and last year TD Bank agreed to pay $3 billion as the bank had been used by a Chinese money laundering network in new York and New Jersey landering more than $470 million. U.S. government advisories and Department of Treasury analyses specifically highlight that the CMLNs are often run by private individuals who are Chinese nationals or passport holders, and that these entities enable and facilitate the laundering of vast sums for cartels, particularly the Sinaloa organization.
National security officials and Chinese dissidents suggest that Chinese intelligence services have quietly expanded their ties with Chinese mafias and triads for mutual benefit. There are reported parallels to Russian practices, where organized crime is co-opted by state security services. U.S. military leadership (Adm. Craig Faller) testified to Congress that China’s government is “at least tacitly supporting” money laundering activities, hinting at a level of complicity if not direct orchestration.A Washington Post investigation found that China has selectively used criminal actors for geopolitical purposes, provided they show loyalty to the Communist Party, further supporting the claim of interconnectivity between state and organized crime networks.
With billions of illicit funds passing through U.S. banks by Chinese launerers, how could the banks not know? Banks must monitor transactions, file Suspicious Activity Reports (SARs) for anything appearing to involve illicit proceeds (over $5,000), and conduct due diligence on clients and transactions. TD Bank received a record $1.3 billion penalty in 2024 for “chronic failures” that allowed money laundering for narcotics and other criminal proceeds to go undetected and unreported. U.S. Bank paid $528 million for failing to report suspicious activity and maintain proper controls—highlighting the critical liability placed upon banks for non-compliance. U.S. banks are held liable for failing to prevent large-scale money laundering by several specific federal laws, including the Bank Secrecy Act, the Money Laundering Control Act, and the USA PATRIOT Act. Bank Secrecy Act (BSA) of 1970
The BSA requires banks to monitor, report, and keep records of certain financial transactions to help detect and prevent money laundering. Violations can result in both criminal and civil penalties ranging from fines to imprisonment.
Jeffrey Newman is a whistleblower lawyer representing whistleblowers revealing money laundering in US banks ; export tariff controls, healthcare fraud cases and other whistleblower cases. His website is www.JeffNewmanLaw.com . He can be reached at Jeff@Jeffnewmanlaw.com or at 617.823.3217
