Warren, Van Hollen, Colleagues Question Treasury for Raising Alarm About Chinese Money Laundering Networks While Gutting Landmark Law Meant to Disrupt Their Support to Drug Cartels
These networks “exploit shell and front companies to [launder drug proceeds], as seen in multiple documents the Trump Administration has published this year alone.”
“As the Trump Administration escalates its use of the U.S. military abroad, it is failing to give law enforcement a key financial tool to disrupt drug trafficking here at home.”
Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, and Chris Van Hollen (D-MD), member of the Committee, led a group of Democratic Senators in sending a letter to Treasury Secretary Scott Bessent calling for him to restore full implementation of the Corporate Transparency Act (CTA) to address the very threat about which Treasury recently “raised the alarm”: Chinese money laundering networks (CMLNs) are helping drug cartels move billions of dollars through our financial system. In just one case, the network of an individual seen as a key link between Mexican cartels and Chinese fentanyl precursor chemical companies appears to have used more than 100 shell companies to launder at least $77 million in narcotics proceeds.
The bipartisan CTA was designed to counter the ability of criminals, terrorists, and foreign adversaries to use shell companies and other opaque corporate structures to access the U.S. financial system while shielding their identities from law enforcement and national security officials.
Other signers of the letter include Senators Andy Kim (D-NJ), Ron Wyden (D-OR), Sheldon Whitehouse (D-RI), Jeanne Shaheen (D-NH), Jeff Merkley (D-OR), Ben Ray Luján (D-NM), and John Fetterman (D-PA).
“There is growing evidence that CMLNs are taking advantage of shell companies to help cartels move billions through the U.S. financial system,” wrote the Democratic Senators. “Federal agencies—including Treasury’s Financial Crimes Enforcement Network (FinCEN)—have repeatedly warned about the rapid growth in CMLNs operating in the United States… Notably, these CMLNs launder drug proceeds and other illicit funds for cartels—and they exploit shell and front companies to do so, as seen in multiple documents the Trump Administration has published this year alone.”
The Senators criticized the Administration for undermining the CTA’s ownership disclosure requirements for U.S. companies while simultaneously attempting to disrupt CMLNs: “It is especially counterproductive to take this step when money laundering networks are ‘increasingly being leveraged by cartels.’ National security, intelligence, and law enforcement agencies are now left without information about companies and accounts that they could have used to disrupt CMLNs and to build cases.”
They continued: “Treasury’s choice has undermined America’s response to the very Chinese money laundering networks about which you have warned, and in doing so, has jeopardized our national security and the integrity of the financial system. We urge you to reverse the interim final rule and restore full implementation of the CTA.”
The Senators concluded by requesting answers to their questions about CMLNs no later than December 19, 2025.
This effort builds on Ranking Member Warren’s oversight of the Trump Administration’s rollbacks on shell company transparency.
- On September 15, the Ranking Members Warren and Waters highlighted new warnings from the Financial Action Task Force, the Government Accountability Office, the National Narcotic Officers’ Associations’ Coalition, and experts across the political spectrum that rolling back CTA enforcement facilitates money laundering, federal program fraud, fentanyl trafficking, and other illicit activity.
- On April 1, the Senator led a bicameral letter to Treasury warning that terrorists, human traffickers, drug cartels, and foreign adversaries would exploit the Trump Administration’s decision not to fully enforce the law.
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