By Jeffrey A. Newman Esq.
With our nations focus on stopping the drug cartels from transporting drugs into the United States, banks that knowingly do business with drug cartels can face legal proceedings, as allowing the cartels to launder their money is illegal. In addition whistleblowers working in banks who see this activity and can obtain proof can use the False Claims Act (FCA) to notify the government and receive a monetary award of upto 30% of the fines imposed.
Mexican cartels frequently use Chinese money laundering networks (CMLN) which are already heavily integrated into the U.S. financial system. This involves drug money generated in the U.S. being deposited into bank accounts controlled by a CMLN broker. This money is then transferred to Chinese nationals in the U.S. seeking to bypass China’s currency controls. In return, the CMLNs receive Chinese currency (yuan) from the Chinese nationals’ accounts in China. The yuan is then used to buy precursor chemicals in China, which are shipped to Mexico to produce more drugs, continuing the cycle. A congressional investigation found that major U.S. banks have processed trillions of dollars in transactions flagged as suspicious for possible illegal activity. These transactions may be connected to drug dealers, terrorists, and corrupt officials.
Legal and regulatory action against banks
- TD Bank settlement: TD Bank was fined over $3 billion in October 2024 for failing to monitor money laundering by drug cartels and other criminal organizations. The Department of Justice noted that TD Bank had lax anti-money laundering controls.
- TD Bank employees aided launderers: Court documents revealed that TD Bank employees conspired with a money laundering network, issuing ATM cards and facilitating the laundering of approximately $39 million. Some employees were aware of illegal activity and joked about it.
- FinCEN crackdown: In June 2025, the Financial Crimes Enforcement Network (FinCEN) issued orders prohibiting U.S. banks from transacting with three Mexican financial institutions (CIBanco, Intercam, and Vector) due to their involvement in money laundering for drug cartels.
- Bank Secrecy Act: The BSA and anti-money laundering (AML) regulations require banks to establish compliance programs to detect and report suspicious activity. Banks’ failures in this area expose them to significant penalties.
Jeffrey Newman is a whistleblower lawyer. His lawfirm represents whistleblowers reporting violations of export controls, tariff evasion, money laundering, and healthcare fraud cases . It represent individuals both in the United States and from other countries. Mr. Newman and his firm also represent a growing group of physician whistleblowers nationwide in healthcare fraud qui tam cases. Whistleblower laws in the U.S. allow individuals anywhere, with valid information about fraud on federal or state governments to file claims under the False Claims act or through the Securities and Exchange Commission’s Whistleblower Program. The Firm’s website is www.JeffNewmanLaw.com . Attorney Newman may be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
