Wall Street Journal | Federal officials say Chinese money launderers have moved more than $300 billion in illicit transactions through U.S. banks and other financial institutions in recent years.

WSJ explores the rise of these highly lucrative schemes. Former federal prosecutor Julie Shemitz takes us inside the federal investigation to bring them down.

The start of the episode sounds like a movie script. A reporter is observing while law enforcement tracks a white Range Rover driving around Los Angeles County. The driver carries a backpack into the bank branch, goes to the teller, and removes stacks of cash to hand to the teller. He finishes his transaction and goes to another bank to do the same thing.

It’s not a script for a crime movie. It’s a criminal investigation called “Operation Fortune Runner,” a multi-year investigation into a group laundering money for Mexican drug cartels. The investigation resulted in indictments of 24 people.

WSJ tells the story and interviews Julie Shemitz, who spent more than 30 years working for the Department of Justice.

Key revelations

Money laundering is a window into larger organizations. Investigations gain traction when you can see how the money is getting to the people who actually own the drugs.
Chinese laws limit how much money citizens can transfer out of the country. People use a network of money brokers who have bank accounts in both China and the US. They charge people to secretly convert currency between accounts.
When a Chinese national in the United States gets money from a money broker from China, they pay a large commission which enables the underground banking organizations to charge less to the narcotics trafficking organizations — undercutting their competition.
Even when bank flag suspicious activity — such as transactions exceeding $10,000 — it rarely sparks an investigation.

Full transcript: Drug Cartels’ New Weapon: Chinese Money Launderers