In 2021, Mexican authorities arrested a businessman with dual Asian-Mexican citizenship at a Mexican port and confiscated 23 tons of drugs. The shipping list stated that the businessman was bringing in “calcium chloride,” but later tests revealed that part of the cargo was fentanyl, a deadly synthetic opioid responsible for tens of thousands of overdoses per year in North America.
Officials also discovered cocaine, marijuana, and methamphetamine, as well as other unspecified items. They did not reveal the exact amount of each drug they seized, but investigators from Mexico’s Financial Intelligence Unit (Unidad de Inteligencia Financiera – UIF) stated that the businessman, his wife, his daughter, and a group of associates spread across a wide geographic area were involved in the network.
The businessman was a part-owner of a women’s handbag company, as well as two other companies, simply referred to as company X and company Y by the UIF. Concerns were raised because the handbag company had no employees on its payroll, and between 2015 and 2016, it recorded close to $140,000 in deposits, with 98% of them linked to currency exchange operations.
*This article is part of a two-year investigation that tracked the supply chain of precursor chemicals that aid in the production of methamphetamine and fentanyl in Mexico. Read the other articles of the investigation here and the full report here.
Intrigued, the UIF delved deeper and discovered that the handbag company had also facilitated the transportation of 16 tons of precursor chemicals to an “agro-industrial company.” The agro-industrial company, they found, had three owners who the UIF believed were front-people working directly with the Asian-Mexican businessman.
Overall, the UIF traced numerous check and cash deposits, as well as multiple withdrawals and transfers among these different companies, which authorities believed was an attempt to conceal their illegal imports and launder their profits.
Subsequently, they pressed charges against the trafficker, his wife, his daughter, and the three third-party owners of the agro-industrial company. They also closed down the companies and seized the assets of 51 bank accounts associated with them.
This was meant to be a significant case in Mexico. However, the issue was that the case was not real. It was actually part of a case-study, or “typology,” that the UIF was using to illustrate money laundering linked to the synthetic drug industry.
Ironically, while this case seems to be based, at least in part, on a genuine investigation, Mexican authorities have never uncovered any money laundering cases related to synthetic drugs or precursors in Mexico, as per our public records requests and interviews with officials. Nor were there any cases that resulted in asset seizures or forfeitures.
“I checked everything,” a source from the Attorney General’s Office informed InSight Crime in a text message. “There is not a single case.”
On one level, the scarcity of cases is remarkable. The United States has been urging Mexico to concentrate more on slowing down the influx of illegal synthetic drugs, particularly fentanyl. Targeting the flow of money for precursors, as well as the profits generated by synthetic drugs, would seem to be a crucial focus for US investigators, especially in light of the drug flows coming from China, the world’s leading chemical supplier. Since 2008, the United States has expended more than $3 billion in providing training and equipment to Mexican authorities, including assisting in the establishment of the UIF.
However, the current Mexican government has made it usual to downplay the impact of synthetic drugs within the country and globally. Although the Attorney General’s Office has publicly acknowledged the issue, President Andrés Manuel López Obrador and the head of the Ministry of Public Security have continuously denied stated that fentanyl is produced secretly in Mexico, despite abundant evidence evidence to suggest otherwise. The government has also minimized the increasing use of synthetic drugs in Mexico, particularly methamphetamine, as well as fentanyl.
This mindset appears to have influenced other institutions. In its most recent annual risk report — released in November 2023— the Finance Ministry did not express any concern about the flow of money for precursors, fentanyl, or methamphetamine, or the profits generated from them.
It was as if the problem did not exist.
Don't Follow the Money
It is a commonly used saying that authorities should follow the money. However, the amount of money associated with precursor chemicals is relatively small.
InSight Crime estimates reported that manufacturers of synthetic drugs in Mexico produce a maximum of 4.5 tons of pure fentanyl each year, and a maximum of 434 tons of methamphetamine to meet the demand of the US market. Based on our interviews with fentanyl and methamphetamine producers in Sinaloa and Michoacán, we estimate that the costs of the chemical substances needed to produce these quantities range between $9 million and $22.5 million for fentanyl, and between $83.3 million and $126.5 million for methamphetamine.
The net profits from synthetic drug sales are also relatively small. InSight Crime estimates the wholesale market for fentanyl in Mexico is between $15.7 million and $40.5 million; the wholesale market for methamphetamine in Mexico is closer to $330 million. Once these drugs cross the border, the prices increase significantly— between $27 million and $67.5 million for the US wholesale fentanyl market; and up to $1 billion for the US methamphetamine wholesale market— but not in relative terms compared to other criminal markets. For example, Mexico’s National Institute of Statistics and Geography (Sistema Nacional de Información Estadística y Geográfica — INEGI) estimates indicates that corruption in Mexico is worth about $700 million. And Global Financial Integrity says estimates that overall criminal activity in Mexico could be worth as much as $62 billion, of which $44 billion may be laundered in Mexico.
Even if Mexico intended to pursue that $44 billion, it would be challenging. Few governments have the capability, resources, and endurance to actually conduct these types of investigations. Even in the United States, where the concept of following the money has been overused, money laundering is not frequently prosecuted and when it is, only a few of these cases are related to drug trafficking.
In 2022, the last year for which data is available, the US Sentencing Commission said said the US federal courts had prosecuted 1,001 individuals for money laundering. However, just 17% of these individuals were charged with laundering proceeds earned from “controlled substances, violence, weapons, national security, or the sexual exploitation of a minor.”
Even large cases that are prosecuted seem to lose momentum. In March 2010, Wachovia Bank, recently acquired by Wells Fargo, paid was fined $160 million by the federal government for potentially laundering $420 billion in drug trafficking proceeds from Mexico through currency exchange centers between 2003 and 2008. However, no one from the bank was charged with a crime. In 2012, the US government
levied over $2 billion in fines and penalties against HSBC, a London-based bank, for failing to monitor over $670 billion in wire transfers to and from Mexico between 2006 and 2010. And while the company took back bonuses given to its top AML and compliance officers, no one was prosecuted. levied In total, despite US agents identifying over $1 trillion in potentially laundered funds during that eight-year period, no one ended up in prison.
This issue also arises in the investigation of precursor chemical flows. A former DEA investigator for Diversion Control, who spoke to InSight Crime anonymously because they were not authorized to speak, said that financial analysis was almost always done in a reactive manner. When it came to investigating Chinese companies using the dark web or cryptocurrencies, which are key elements of the precursor chemical and synthetic drug market as a whole, US authorities had little to no visibility.
“It’s like hitting a dead end,” the investigator said.
In Mexico, the situation is arguably even worse. A
Corruption, Crypto Test LatAm Money Laundering Laws
2018 assessment by the Financial Action Task Force (FATF), an international inter-governmental watchdog, found that, while the government has a strong AML regime and a good understanding of the threats of money laundering, it is still faced with significant risk of money laundering, mainly stemming from organized crime-related activities. In particular, the FATF observed that the UIF — the intelligence agency responsible for identifying anomalies in earnings statements, financial transactions, company registries, and other means of concealing illicit activities — was not providing a sufficient amount of information to the Attorney General’s Office, the governmental body in charge of conducting the judicial inquiries.
The Attorney General’s Office also fell short. According to the FATF, money laundering “is not investigated in a proactive and systematic manner, but rather, on a reactive, case-by-case basis.”
The outcome is the aforementioned lack of investigations. Between 2013 and 2016, the FATF documented 339 cases, and out of these, only 103 led to the conviction of 53 individuals.
“The numbers raise doubts about the effectiveness of investigations,” the FAFT wrote, perhaps downplaying Mexico’s obvious deficiency in its efforts to follow the money.
Money Flows to China: The Prevalence of Cryptocurrencies
One positive point highlighted by the FATF in its 2018 report was the UIF’s collaboration with foreign governments in their investigations. At least one of these investigations, a US-led prosecution of a China-based clan, offers a glimpse of how complex synthetic drug networks purchase precursor chemicals from China.
In 2018, the US government submitted a lengthy accusation
accusation against Fujing Zheng and his father, Guanghua Zheng, who are at the top of what it called the “Zheng drug trafficking organization” (DTO), explaining the network’s activities across the world. The network offered “custom synthesis” of chemicals and synthetic drugs, and regularly exported at least 36 synthetic drugs and precursor chemicals, including fentanyl, fentanyl analogues, and other synthetic opioids. While the accusation did not mention Mexico, Mexican newspaper El Heraldo, referring to a leaked intelligence document, revealed that the UIF had also looked into the Zheng network.
that the UIF had also investigated the Zheng network. reported Through our own research, we found numerous connections between Zheng-owned companies and Mexico. Specifically — via an analysis of supply-chain data using Altana, a company that provides a dynamic map of global supply chains — we tracked one company listed on the accusation, Global United Holdings, that registered small shipments of textiles to two companies in Mexico and one in the United States.
Another, Shanghai Pharmaceutical Company, which the US accusation identified as the “legitimate face” of the DTO, shipped lab equipment and medical instruments to five different Mexico-based companies, research using Altana shows. This included a vial-pressing machine, a “powder-mixing machine,” pill presses, and chemical mixers.
Altana’s platform also registered small transactions from another company, Cambridge Chemicals, of bentonite, phosphorous acid, sodium laureth sulfate, and sugar — substances that can be used as essential chemicals or mixers in the production of fentanyl pills — to four Mexico-based companies.
The accusation briefly mentions the methods the network used to receive money. Initially, payments for the chemical substances and synthetic drugs were made via regular bank transfers, but increased surveillance from the Chinese government over its financial institutions allegedly forced the Zheng clan to switch to cryptocurrencies, such as Bitcoin.
In and of themselves, cryptocurrency transactions are not illegal, but some of what the Zheng DTO did could be illegal. For example, the accusation claimed it “misrepresented fund transfers and directed customers to misrepresent fund transfers”; it used “structured transactions,” so it would not trip the wires that require institutional and record-keeping safeguards; and it “bypassed Chinese restrictions and reporting requirements on fiat currency entering and leaving” China.
Our research corroborated some of these patterns, especially those related to the use of cryptocurrency to pay Chinese vendors. Several independent, Mexico-based fentanyl and methamphetamine producers told InSight Crime that chemical vendors in China seemed to prefer cryptocurrency for small-level transactions; the second option was bank transfers. And in our
interactions with chemical purveyors on the Clearnet and dark web regarding fentanyl precursors, we found they leaned towards cryptocurrencies, specifically Bitcoin. These methods were also evident in a recent series of accusations
in June 2023 by the US Justice Department. In one of the charging documents, prosecutors released a China-based chemical company receiving payments via “cryptocurrency” before sending fentanyl precursor chemicals to Mexico and the United States. described The June 2023 indictment does not specify which cryptocurrency was used or how the transactions were made, but investigators and prosecutors contacted by InSight Crime said the use of cryptocurrency by criminal networks is evolving. While the Zheng network used Bitcoin and did little to hide these transactions, according to one investigator who worked on that case, more recently criminal networks have trended towards the use of Tether and may be employing applications such as “blenders” or “mixers,” which mix transactions to muddy the crypto trail.
With a market cap of $1 billion, Tether is one of the most-traded cryptocurrencies in the world and the most-traded “stablecoin” — i.e., pegged to the US dollar. It is appealing to traffickers for various reasons. In a report published in January, the United Nations
that Tether had become “a preferred choice for crypto money launderers in East and Southeast Asia due to its stability and the ease, anonymity, and low fees of its transactions.” noted The cryptocurrency is traded in such large amounts, it may also be servicing industrial-sized customers. In April, Reuters
that Venezuela’s state oil company, PDVSA, was using Tether to sidestep US sanctions. And one investigator, who monitors large-scale illegal drug transactions in the millions of dollars, told InSight Crime that he had noted trading of large amounts of Tether. reported The trading platform may also matter. The investigator cited above said the traffickers were using Tron, a decentralized blockchain-based operating system. It was founded in Singapore and has operational nodes across the globe, with its greatest concentration of nodes in China,
to Messari, a market-research firm. And the investigator said it is an attractive platform for criminal organizations because Tron is mostly based outside the United States and can help them avoid scrutiny by US investigators. according Another investigator we contacted who had examined the synthetic drug supply chain emanating from China noted that, in addition to Tron, traffickers were using Ethereum, a different blockchain-based operating system. The investigator surmised that this was because the criminal networks would “pay less of a fee” to China-affiliated exchanges such as Binance for these transactions.
At least one application on Ethereum has faced scrutiny. In August 2022, the US Treasury Department
Tornado Cash, a blender that was operating on the Ethereum platform. The blender, according to the Treasury Department, facilitated “anonymous transactions by obfuscating their origin, destination, and counterparties.” And in August 2023, the US Justice Department sanctioned Tornado Cash’s creator, claiming he had facilitated the laundering of up to $1 billion in criminal proceeds. indicted This was the
major effort to crackdown on blenders. But the proverbial game of whack-a-mole is difficult, in part because of the decentralized nature of the crypto business. For its part, Tether responded to the UN report, second it was disappointed in the agency’s evaluation and that its monitoring systems were much better than those of traditional banks. It also said it had frozen $300 million in recent months, and in May, the company saying a partnership with the blockchain analysis firm, Chainalysis, to create a “customized solution” for tracking illegal money flows. announced Right Hand Not Talking to the Left
There are many reasons that Mexico has no cases related to financing precursor chemicals or laundering synthetic drug proceeds. It starts with poor data. There are no good estimates, for example, as to the size and scope of money laundering in Mexico. As the UIF itself
in its National Money Laundering and Terrorism Financing Assessment 2023, “The Mexican State does not have an established methodology or guidelines that allow it to accurately measure the volume of illicit resources generated in the country because producing a document of this nature could contain unreliable variables.” points out The UIF does provide
regarding criminal complaints — 166 in 2023 — and individuals and entities whose accounts have been included in the “blocked list” — 6,969 individuals or entities and 45,342 frozen accounts, totaling $4.45 billion pesos (around $262 million) in blocked funds as of February 2024. However, it is not possible to know how many of the criminal complaints have resulted in a prosecution nor, per its own admission, what the importance of the frozen funds is relative to the total illegal proceeds that are laundered in Mexico. statistics The government’s lack of transparency in these matters has been noted in public forums. The UIF’s opacity has spawned recurrent accusations of political bias, including
in Mexico’s Congress . In the same vein, the Attorney General’s Office does not provide money laundering prosecution statistics and does not provide any context for the confiscation of proceeds from judiciary processes in which it is involved — other than asserting that the estimated total value in play for the most recent year it has statistics, 2022, was $1.5 billion pesos (or about $88 million), about a third of what the UIF has blocked.But the core of the problem appears to be a conflict between these two key agencies and a discrepancy about how and whether to prosecute money laundering cases at all. While money laundering can be prosecuted on its own, most money laundering cases come with what is known as a “predicate offense.” In other words, there is an underlying criminal act — drug trafficking, human trafficking, corruption, etc. — which leads to the need to launder illicit proceeds.
In the case of Mexico, these prosecutions are subject to different investigative processes with widely differing objectives and institutional capabilities. While both Mexico’s Anti-Money Laundering Law (AML) and the federal penal code grant significant supervisory and investigative powers to the UIF, it is, in the end, an intelligence-gathering agency. The evidence it has is often raw and related to patterns of misbehavior, which it then passes to the Attorney General’s Office, the entity responsible for prosecuting the cases.
The Attorney General’s Office has many special departments for these investigations, but the prosecutors need strong evidence that can hold up in court. This often requires more investigation work, which they may not be ready to do because of lack of preparation, time, corrupt influence, or belief that it's not necessary since their cases already involve offenses that could lead to long prison sentences.
Mexico’s Laws to Regulate Chemicals Work on Paper But Not in Practice
As a result, very few money laundering cases are prosecuted, and none appear to be connected to precursor chemicals or synthetic drug distribution and sales. In its 2018 report, the FATF solemnly noted that financial intelligence doesn't often lead to money laundering investigations, highlighting a significant difference in priorities between the UIF and prosecuting authorities.
The FATF wrote that due to the serious threat posed by the main offenses, authorities prioritize investigating these offenses and pay little attention to money laundering.
In 2020, the current Attorney General Alejandro Gertz expressed frustration that the Attorney General’s Office failed in prosecuting cases because the UIF didn't provide all the necessary proof.
The failure of the Attorney General’s Office in prosecuting cases, according to current Attorney General Alejandro Gertz, was due to the UIF not providing all the necessary proof. told It seemed as though the attorney general viewed the UIF as a secondary prosecutorial unit.
Money Movement from Mexico
Another US investigation the UIF took part in targeted the Zamudio Lerma network. In February 2023, the US Treasury Department sanctioned the network for supplying precursor chemicals to the Sinaloa Cartel.
involved In February 2023, the US Treasury Department imposed sanctions on the Zamudio Lerma network for its role in supplying precursor chemicals to the Sinaloa Cartel. The Treasury Department identified various members of the Zamudio Lerma family and their associates, as well as several companies that supported them in laundering the precursor chemicals and the proceeds of their sales. These included an import/export company, a pharmacy, a hardware company, and a real estate company. In addition, in July 2023, the Treasury Department added another family member who had been the director of Culiacán’s General Hospital and imposed sanctions on an import/export company called REI Companía Interacional, which we investigated using Altana.
Shipping records accessed via Altana showed that REI had connections with at least three chemical companies based in Hong Kong and China. One of these, Tai’an Herris Chemical Co., Ltd., shipped 192 tons of n-methylformamide, a regulated substance used to produce methamphetamine, and other substances to REI between April and October 2020. Another company, Shandong Tai’an Construction Engineering Group, sent several shipments of various substances to REI between May and November 2020, which can be used to produce methamphetamine. released Despite the involvement of many law enforcement agencies like the FBI, the DEA, and Mexican government entities, as of now, no formal charges have been made against any members of the network in the United States or Mexico.
However, the shipments seem to show a significant trend related to methamphetamine precursors and payments for them: Methamphetamine producers bring in less regulated pre-precursors and important chemical substances, and in these instances, there is little need to hide the chemicals or the payment methods.
Furthermore, payments for methamphetamine pre-precursors and essential chemicals can be disguised within large purchase orders that often include many other chemicals that do not have illegal uses.
In fact, using Altana, we discovered numerous companies in Mexico that follow a similar pattern. For instance, one Monterrey-based company, which we do not identify because it has not been sanctioned or criminally charged, frequently does business with Chinese companies that sell controlled substances. It reported importing 950 tons of methyl chloride in twelve different shipments and receiving a shipment of 26 tons of acetic acid. The first substance is an important chemical for methamphetamine production and is not regulated in Mexico. The second is a pre-precursor for methamphetamine and fentanyl that is regulated in Mexico. Apart from these chemicals, the company imported hundreds of tons of other products, including cleaning products, industrial solvents, plastics, and soaps.
Based on our interpretation, the payments for these chemicals were likely made through bank transfers, reported to financial institutions, and did not raise any suspicions given the wide range of chemical transactions included in the purchase orders. In summary, when it comes to methamphetamine precursors, neither the shipments nor the payments are likely to trigger investigative action.
However, in the case of fentanyl precursors, we observed a different trend. According to Altana data, starting in 2020, REI received a series of unexpected shipments that did not seem to align with their regular business practices.
In one of these cases, Cameron Sino Technology Limited sent at least 40 shipments of what it claimed to be “lithium batteries” and “lithium battery chargers” to REI between August 2020 and March 2023, with the assistance of a Mexico City-based broker. Other companies listed motorcycle locks, paintings, pet toys, and security locks on the shipping manifests to REI.
Beyond China: How Other Countries Provide Precursor Chemicals to Mexico
Government investigators informed InSight Crime that these random shipments raised concerns because they might have mislabeled the items on the shipping manifests and bills of lading. The changes often coincided with changes in regulations in China. While the stated amounts and weights of the shipped goods remained the same, the descriptions of what was being shipped changed.
This pattern was especially true in the case of fentanyl precursors, and it is a common practice that authorities have identified in other cases, according to InSight Crime interviews with the Mexican navy and retired port officials, as well as from our undercover interactions with chemical suppliers in China.
This happens because the amount of initial substances needed is much less than what is needed to make methamphetamine. So, hiding the movement of the chemicals in small shipments of random products becomes a simple process.
Investigations also say the payments for fentanyl initial substances are easily hidden among many random transactions. Except for cryptocurrencies, as in the case of the Zheng network, the payments move via wire transfers and services like Western Union.
In some situations, criminal networks may also be trading goods for initial substances. For example, José Alfredo Ortega, the minister for Public Security in Michoacán, told InSight Crime in December 2022 that brokers and buyers in the state were exchanging iron extracted from illegal mines on the state’s coast for initial chemicals.
“We have identified that iron was sold irregularly to Chinese buyers and, in exchange, they brought in initial chemicals,” Ortega said.
Two members of an armed group in the town of Aquila, which is located close to the mining region, corroborated this account.
Similarly, a 2022 Brookings Institution
concluded illegal trade in wildlife was being used by Mexican criminal groups as a means to buy initial chemicals from China, and launder the money in the process. More recently, the Associated Press
a Mexican attorney who said that methamphetamine is exchanged in China for initial chemicals. report However, InSight Crime did not find any judicial cases in the United States or Mexico that document these types of payments. To be sure, the transactions, especially for fentanyl initial substances, are so small that they are difficult to track and may not be worth the effort. These small economic transactions are even more obscure in Mexico itself, where cash remains king. quoted Cash: Still King in Mexico
On a recent hot, sunny morning in Culiacán, Sinaloa, we traveled downtown to an area near one of the city’s main markets. There we saw dozens of young adults sitting beneath umbrellas on the street, just outside the dark-tinted windows of currency exchange houses. In all, we counted 30 on one street alone. As cars passed, they yelled, “Dollars! Do you want some dollars?”
Curious, we approached one to inquire about an exchange. The attendant did not request any form of identification or ask us to sign any documents, as is legally required. Had we proceeded with the transaction, we could have exchanged large sums of cash without any record of it in the banking system. And when we checked the government’s
to see who of these had an active license to change currency, none of them appeared.
The street is a reflection of another reality that also makes money laundering and illicit financing difficult to fight in Mexico: the country’s reliance on cash. Cash dominates the financial landscape of Mexico, and its importance continues to grow, rather than decrease. registry to Mexico’s Central Bank, as of February 2024, there were about 2.788 billion pesos (around $164 million) in bills and coins circulating in Mexico, a 9.9% increase from February 2023.
The increase outpaced inflation and also illustrated the continued importance of remittances, which a recent Reuters report According was also becoming a key part of money laundering operations for the Sinaloa Cartel. Remittances reached a record $63.1 billion pesos in 2023 ($3.7 billion), a 7.6% rise from the previous year, and an 89.5% increase from 2018, according to
from Mexico’s Central Bank. said Furthermore, data According to the 2021 Financial Inclusion National Survey, 90.1% of Mexicans used cash for purchases under $500 pesos (or $30) and 78.7% for purchases over that amount, with similar trends seen across all regions of the country. Also, about half of the population did not have any savings in a bank account or debit cards.
The laws also support cash and non-digital payment methods that are not recorded by the banking system. In Mexico, it is possible to carry out substantial financial transactions using cash or precious metals without violating article 32 of the AML law. Although there is a threshold for certain types of transactions, such as real estate, it is relatively high. Moreover, the list does not cover transactions for chemicals, effectively meaning there is no limit for the use of cash in making these purchases. according Even if it is assumed that there is a high level of compliance and enforcement for article 32 of the country’s AML law — which is unlikely, given the low number of prosecutions — it is evident that the widespread use of cash and the relatively high legal thresholds for cash transactions may significantly lessen the need to reintegrate the money into the system.
The implications of this cash flow in the precursor market are evident, especially when considering the decentralized nature of the marketplace. There are numerous independent fentanyl and methamphetamine producers who import or buy chemicals at the local level.
These are relatively small transactions in terms of dollars. For instance, four fentanyl producers informed InSight Crime that the investment to establish a production operation was close to a million pesos, or $58,000. Smaller labs could be set up with as little as $11,600, as per another independent producer.
Once a lab was operating, the cost of purchasing the necessary chemical substances to produce one kilogram of fentanyl was also relatively low: The producers stated it would range between $2,000 and $5,000, which could also be paid in cash in Mexico. The cost of 1-BOC-4-Piperidone, the preferred pre-precursor to manufacture fentanyl, for example, could vary between $1,000 to $4,000, according to our interviews with both local producers and our
interactions
with Chinese sellers — another transaction that could be satisfied via fiat once the chemicals were in Mexico. The production of methamphetamine involves more expenses, particularly when setting up a lab, as the quantities are greater and more specialized equipment is needed. According to methamphetamine producers interviewed in Michoacán, this can go as high as $157,000. The prices of the required pre-precursors and essential chemicals fluctuate constantly, according to our sources. Nevertheless, over the past year, the necessary substances to produce 120 kilograms of methamphetamine were valued between $23,000 and $35,000. As mentioned earlier, something close to these amounts could be paid in cash without triggering any investigative algorithms. The small amounts that move using traditional currency also prevent authorities from tracking and prosecuting such crimes. Two former UIF officials who spoke to InSight Crime anonymously, said these transactions were simply too small.
“These numbers are not significant enough to cause concern in the financial system. They go unnoticed,” one of the officials said.
The UIF-Typology’s Real Life Twin
On August 27, 2019, Mexico’s Marines (SEMAR) seized over 23 tons of precursor chemicals in the Lázaro Cárdenas port of Michoacán, on the Pacific coast of Mexico. The chemicals arrived on a Dutch cargo ship at the request of Culiacán-based company, Distribuidora Agroindustrial Ocher.
In its account of the case, Proceso
SEMAR alerted the UIF, which began an investigation. What it turned up looked remarkably similar to the case study — or the “typology,” as they had called it — cited at the onset of this report.
Like the case study, Ocher was a front company, which was linked to another Sinaloa-based company called Mi Pao, S.A. de C.V., which was also importing precursor chemicals. Both companies were receiving chemicals and machinery from a Hong Kong-based company, according to Altana. said And like the case study, the prime suspect had Asian ties. Proceso said the owner of Mi Pao was Taiwanese national, Chiang Li Chun. As it was in the case study, Chun had been arrested in May. In Chun’s case, he was connected to a fentanyl laboratory where authorities found 40,000 counterfeit pills and 14 kilograms of powdered fentanyl.
A person with knowledge of the investigation told InSight Crime that the UIF eventually froze Ocher’s account. But no other public information is available about any prosecution of those implicated in the case.
*Jorge Lara, Jaime López-Aranda, Victoria Dittmar, and 穆小姐 contributed reporting to this article. Fact-checked by Peter Appleby.
supports InSight Crime’s research into precursor chemical flows by providing access to the Atlas, a dynamic, AI-Powered map of global supply chains, as well as to its Counternarcotics Dashboard, an AI-driven model to flag narcotics trafficking risk within global shipment and business ownership data.
Mexican authorities have never identified any money laundering cases related to synthetic drugs or precursors in Mexico, according to our public records requests and interviews with officials. Nor were there any cases that had led to asset seizures or forfeitures.
Altana It has become common for the current Mexican government to downplay the impact of synthetic drugs at home and abroad. …