A California man charged with handling tens of millions of dollars in a Chinese money-laundering operation supporting Mexican drug cartels is being held in federal detention in Ohio, the Justice Department said Thursday.
Yan Lin, 41, appeared in federal court in Cincinnati and was described by prosecutors as a key member of a major Chinese network involved in laundering cash from drug proceeds, the department said in a statement.
Mr. Lin was indicted in November for what authorities say was his work with Mexican-based drug traffickers, including the Sinaloa Cartel, between 2022 and 2024.
He is accused of returning tens of millions of dollars to Mexico from sales of fentanyl, cocaine and methamphetamine in a cash-cleaning plot spread through numerous U.S. cities.
According to the indictment, Mr. Lin arranged through associates to deliver bulk cash that was used to buy electronics – cell phones, laptop computers and tablets – in the U.S. that were shipped to China, Hong Kong and elsewhere.
After receipt of bulk cash in public places like parking lots near shopping malls and restaurants was confirmed using photos of bills, Mexico-based drug traffickers would receive payment in Mexico in pesos or dollars, minus a commission, through what authorities say were “mirror transactions.”
One transaction in 2024 involved $27.4 million in bulk cash moved across the U.S., the statement said.
Mirror transactions are an illicit method used in money-laundering operations involving two related bank accounts, often in different countries, that carry out offsetting transactions. The activity moves value and disguises the origin with a physical transfer of cash between the parties.
The technique is used to create the appearance of a legitimate business activity and complicating efforts to trace the flow of illicit funds.
“Dismantling Chinese money laundering networks that support drug trafficking organizations is critical to achieve the total elimination of cartels and transnational criminal organizations,” said Assistant Attorney General A. Tysen Duva with the Justice Department’s Criminal Division.
Mr. Lin laundered tens of millions of dollars through China “enabling a continuous flow of dangerous drugs into our country from Mexico,” he said.
Money launderers are used by drug cartels to clean cash and without the networks the cartels are “stuck with dirty money they can’t use,” said Dominick S. Gerace II, U.S. Attorney for the Southern District of Ohio.
“These profiteers help facilitate the distribution of deadly drugs into our communities and will be held accountable as if they trafficked the drugs themselves,” he said.
Mr. Lin, who used several aliases including DiDi, Marria, Vitoria, Victoria, Monica and Vivian, is charged with conspiracy to commit money laundering and concealment of money laundering. If convicted, he faces 20 years in prison.
A detention hearing in the case is scheduled for federal court in Cincinnati, on Friday before Magistrate Judge Stephanie K. Bowman.
A lawyer for Mr. Lin did not respond to a request for comment.
Mr. Lin’s nationality was not disclosed in court papers.
The use of electronic device purchases is one method used by money-laundering networks.
In August, the Treasury Department disclosed that Chinese nationals engaged in extensive money-laundering operations have moved an estimated $312 billion in illicit cash over the past five years.
The Financial Crimes Enforcement Network, known as FinCen, stated in a 22-page report on the threat that the Chinese networks use Chinese students and Beijing-linked real estate transactions to launder cash for drug cartels and other criminal organizations.
Human trafficking by Chinese nationals is also used by money launderers in the United States, the report said.
According to the report, Chinese money laundering was boosted in part by the communist system in China that restricts the movement of dollars from the country to $50,000.
“Over the past five years, FinCen has seen an increase in complex money laundering schemes controlled by [Chinese networks] that also launder illicit proceeds from otherwise unrelated criminal networks involved in a range of illicit activities, including fraud schemes; human trafficking and smuggling; marijuana grow house operations; and tax evasion, by facilitating the exchange of cash proceeds,” the report said.
The most common Chinese method for laundering cash involved the use of Chinese nationals in the United States who were found to have made over $33 billion in suspected money-laundering bank deposits since 2020.
Chinese networks also used real estate purchases to launder more than $53.7 billion, the report said.
The case of Mr. Yan is one of several money-laundering cases that appear to be increasing under the Trump administration.
In May, two Chinese nationals and a California man, all members of a prolific Chinese money laundering organization (CMLO), pleaded guilty to money laundering charges involving drug trafficking proceeds.
The three men were linked to the laundering of over $92 million in drug proceeds funneled into the U.S., mainly from Mexico.
That case is part of what the Justice Department calls Operation Take Back America, a nationwide drive to stem the flow of illegal immigration and eliminate drug cartels and transnational criminal organizations.
