How do Mexican and Colombian banks route cartel funds through US financial systems to reach political donors?
This fact-check may be outdated. Consider refreshing it to get the most current information.
Executive summary
U.S. authorities say Mexican banks and other intermediaries have moved “millions of dollars” for cartels and facilitated payments for precursor chemicals used to make fentanyl; FinCEN identified three Mexico-based firms (CIBanco, Intercam and Vector) as “of primary money laundering concern” on June 25, 2025 [1] [2]. U.S. enforcement and court cases show a mix of techniques—bulk cash pickups and deposits in U.S. accounts, use of shell companies and brokerage channels, Chinese underground banking links, and cryptocurrency conversion—while prosecutions and fines (including a $1.3bn U.S. bank penalty cited by reporting) illustrate both scale and vulnerability in the U.S. financial system [3] [4] [5].
1. How U.S. authorities describe the routing: official portrait
FinCEN and Treasury describe a pipeline in which cartel proceeds are moved through Mexico-based banks and related brokerage houses, then transmitted into or through the U.S. financial system—sometimes to pay for chemicals and sometimes to repatriate proceeds—leading Treasury to impose special measures that block certain transfers with those Mexican firms because they are “of primary money laundering concern” [1] [6] [2].
2. Known mechanics: cash, correspondent accounts, shell companies and brokerage vehicles
Court filings and DOJ press releases document familiar laundering techniques: bulk cash collected in the U.S. is deposited into U.S. bank accounts registered to third parties or shell companies and then wired or otherwise routed back to Colombia or Mexico; attorneys and money-laundering organizations have pleaded guilty to such schemes involving U.S. accounts and San Diego-based shell company networks [4] [7]. Brokerage firms and house accounts—like the Vector allegation—have also been accused of processing payments that mask origin and beneficiary [2].
3. Cross-border triangulation: Chinese underground banking and international partners
The Justice Department and FinCEN reporting describe triangulation between cartels and Chinese Money Laundering Networks (CMLNs), which has included moving dollar proceeds to satisfy demand in China and using underground exchange networks to obscure flows. Indictments alleged tens of millions flowed between Sinaloa associates and Chinese underground money exchanges [5] [8].
4. Cryptocurrency and conversion as an adjunct channel
Prosecutors and reporting point to conversion into crypto as a complement to traditional channels: in one alleged scheme former federal-affiliated actors sought to convert cash into cryptocurrency for cartels; DOJ materials also note money launderers’ use of crypto to move value across borders [9] [4]. FinCEN advisories referenced cryptocurrency alongside other laundering modalities [8].
5. How U.S. banks become the conduit (and enforcement’s levers)
FinCEN’s orders and legal actions show that U.S. correspondent banks become conduits when they clear or accept transfers linked to flagged Mexican institutions or fail to detect suspicious activity. The Treasury’s use of the Fentanyl Sanctions Act and FEND Off Fentanyl Act allows regulators to require U.S. banks to “reject” prohibited transactions and update screening and KYC lists—an enforcement lever intended to sever these rails [1] [10].
6. Political donations: what the sources do and don’t show
Available sources document cartel proceeds routed through financial institutions, shell companies, and international networks; however, the provided reporting does not directly document systematic funneling of cartel funds specifically into U.S. political donors or campaign contributions. DOJ and Treasury descriptions cite bribery and payments (for example, alleged bribes routed through Vector connected to a former Mexican security official), but direct, proven linkages from cartel-laundered funds to named U.S. political donors are not described in these sources [2] [5]. Not found in current reporting: explicit examples of cartel money successfully reaching U.S. political campaigns via the described banking routes.
7. Scale, penalties and consequences already seen
U.S. enforcement has produced large penalties and criminal cases that illustrate scale and systemic risk: reporting cites a U.S. bank admission and a FinCEN-driven $1.3bn penalty tied to Colombian laundering allegations, and prosecutions have led to guilty pleas and sentences in multimillion-dollar laundering schemes [3] [4] [7]. FinCEN’s identification of Mexican institutions as “primary money laundering concern” is itself an intervention intended to disrupt flow and reverberates through correspondent banking relationships [1] [11].
8. Competing narratives and political context to weigh
Mexican officials have publicly demanded evidence after U.S. accusations, and at least one targeted firm (Vector) has denied Treasury’s claims, framing some U.S. steps as overreach or politically driven [3] [6]. U.S. action also follows new U.S. statutes and a policy push that elevates cartel targeting; observers should note potential geopolitical and domestic political incentives shaping timing and public messaging [1] [10].
9. Limitations, open questions and what to watch next
Available sources map techniques and enforcement actions but leave gaps: they do not provide a transparent, line-by-line accounting from illicit origin to any U.S. political beneficiary, nor do they detail every intermediary’s internal controls or specific transactional corridors. Key items to watch are FinCEN and DOJ case filings for transactional evidence, bank penalty decisions for compliance failures, and any campaign finance investigations that would confirm political donation linkages [1] [4] [3].