Justice Department steps up pressure on cartels’ financial networks as launderers turn to crypto

U.S. Justice Department Targets Cartel Money Laundering Networks Using Cryptocurrency

The Justice Department has intensified efforts to disrupt the financial infrastructure of Mexico’s most violent drug cartels by targeting money brokers who facilitate the movement of drug profits across borders. Recent prosecutions reveal how these criminal organizations have evolved their money laundering tactics, increasingly turning to cryptocurrency to transfer funds from American cities back to cartel leaders in Mexico.

Four defendants recently extradited from Mexico to the United States illustrate the sophisticated financial networks supporting groups like the Jalisco New Generation Cartel. These cases highlight the Biden administration’s strategic shift toward attacking the economic foundations that allow cartels to sustain their operations amid increased law enforcement scrutiny of traditional drug trafficking routes.

“If you cut off the money, you hurt the cartels, and that’s what we’re trying to do,” said A. Tysen Duva, assistant attorney general in charge of the Justice Department’s criminal division, in an interview with The Associated Press.

Since President Trump returned to office, the Mexican government has transferred more than 90 high-level defendants with cartel connections to U.S. custody in three separate operations. These individuals face U.S. charges for crimes ranging from drug trafficking and human smuggling to money laundering.

Justice Department officials explain that these extraditions serve multiple purposes beyond deterrence. Defendants who cooperate with prosecutors can provide valuable intelligence leading to indictments against higher-ranking cartel leaders. The department has restructured its Criminal Division to better integrate narcotics prosecutors with anti-money laundering experts, reflecting a strategic pivot toward dismantling the financial mechanisms sustaining cartel operations.

The recently transferred suspects include alleged Mexico-based money brokers who oversee the movement of drug proceeds and collect commissions on funds returned to cartel leadership. According to court documents, these brokers coordinate cash pickups across U.S. cities and develop sophisticated methods to move money across borders, increasingly utilizing digital assets as traditional channels face greater scrutiny.

“Prosecutors want to hear on the distribution side how it works, who is involved, and seek additional indictments, and on the money laundering side, exactly the methods that they are using to get the money out of the United States through the U.S. banks,” Duva explained. “There’s bulk cash smuggling that has been going on since the beginning of time, and then also sort of the newer trend of taking the cash, buying cryptocurrency, and then trading that cryptocurrency.”

Among those facing money laundering conspiracy charges in Kentucky’s federal court are Eduardo Rigoberto Velasco Calderon, Eliomar Segura Torres, Manuel Ignacio Correa, and Cesar Linares-Orozco. An attorney for Linares-Orozco declined to comment when contacted by the AP, while court records did not list legal representation for the other defendants.

The January transfer of 37 defendants was the third such operation since Trump resumed office. Analysts suggest these transfers represent an effort by Mexican authorities to appease the administration amid Trump’s threats to take military action against cartels operating within Mexico.

The extraditions have sparked legal controversy within Mexico. A coalition of lawyers and family members of the transferred suspects has accused the Mexican government of circumventing proper extradition procedures. Mexican officials maintain the transfers were conducted legally under national security provisions.

These prosecutions come as U.S. law enforcement continues to adapt to the evolving tactics of transnational criminal organizations. By targeting the financial intermediaries who facilitate the movement of cartel profits, rather than focusing solely on street-level drug distributors, the Justice Department aims to strike at a critical vulnerability in cartel operations.

The shift toward cryptocurrency represents the latest evolution in money laundering techniques, as cartels seek new methods to evade increasing scrutiny of traditional cash movements across borders.