The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has released a Financial Trend Analysis detailing patterns in fentanyl-related illicit finance, based on Bank Secrecy Act (BSA) data from January to December 2024. The analysis reveals that financial institutions filed 1,246 BSA reports identifying approximately $1.4 billion in suspicious transactions linked to the fentanyl supply chain, encompassing precursor chemical procurement, trafficking, and money laundering activities.
Key Findings:
- Exploitation of the U.S. Financial System: Depository institutions and money services businesses (MSBs) accounted for 57% and 32% of the fentanyl-related BSA reports, respectively. These entities were instrumental in identifying illicit activities that leveraged the U.S. financial infrastructure to facilitate global money movement.
- International Involvement: Mexico and the People’s Republic of China (PRC) were the top foreign countries identified in the subject address fields of the analyzed BSA reports. Mexican cartels, particularly the Sinaloa Cartel and the Cartel Jalisco Nueva Generacion (CJNG), were noted for their roles in fentanyl production and distribution, utilizing precursor chemicals and equipment primarily sourced from the PRC.
- Use of Front Companies and E-Commerce: The analysis highlighted the use of front companies, money mules, and U.S.-based intermediaries by cartels and associated chemical brokers to procure fentanyl precursor chemicals. PRC-based chemical suppliers were found to accept various payment methods, including convertible virtual currency, and often used public advertisements and e-commerce platforms to market these chemicals.
- Geographic Concentration in the U.S.: Fentanyl-related financial activity was primarily concentrated in populous states with established drug distribution networks, notably California, Florida, and New York. Specific counties such as Los Angeles, Miami-Dade, and Cook County (Chicago) were frequently mentioned in the reports.
- Diverse Money Laundering Techniques: The methods to launder suspected fentanyl proceeds varied in sophistication. Some BSA filers identified complex schemes, including the involvement of suspected Chinese money laundering organizations potentially facilitating the movement of illicit fentanyl proceeds on behalf of the cartels.
- Role of Cash-Intensive Businesses: Suspicious cash transactions potentially linked to fentanyl trafficking-related activities were primarily reported by depository institutions. Casino filers also reported cash activity that may have been tied to illicit drug activity, based on the identification of negative media associated with their patrons.
FinCEN encourages financial institutions to review its previous advisories from August 2019 and June 2024, which provide further guidance on identifying and reporting suspicious activities related to fentanyl trafficking and associated financial schemes.
Read the full report here: Financial Trend Analysis 2024