FinCEN Warns Banks About Chinese Money Laundering Risks

The Financial Crimes Enforcement Network warned this week about the risks posed to the American financial system by Chinese money laundering networks, urging banks to be “vigilant” in looking out for sanctioned Mexican drug cartels and other designated terrorist groups that may be using those networks.

Those Chinese-led networks are involved in “significant, underground money movement schemes within the United States and around the world,” FinCEN Director Andrea Gacki said. The agency published a new advisory and financial trend analysis outlining red flags that banks should monitor and trends in suspicious activity reports submitted to FinCEN.

The agency said it analyzed 137,153 Bank Secrecy Act reports filed by financial institutions between January 2020 and December 2024 that were linked to “suspected” Chinese money laundering, totaling about $312 billion in suspicious transactions. It specifically said those launderers are “heavily utilized” by Mexico-based cartels to launder drug money in the U.S.

FinCEN said several red flags may indicate a transaction is tied to Chinese money laundering, including:

• A customer with a Chinese passport regularly receives funds that are “not commensurate with the reported occupation or income,” and the source of the funds can’t be explained.
• A customer, especially a Chinese national, creates an account at a bank, reports their job as a student during the onboarding process and regularly deposits cash or receives wire transfers notated as “tuition” or “living expenses” that are “not commensurate with the reported information.”
• A customer, especially a Chinese national, reports their job during customer onboarding as a student, retiree, housewife or other low-income occupation but has unexplained wealth.
• A customer regularly deposits large volumes of cash or cashier’s checks or receives multiple wire transfers for no business or “apparent lawful purpose.”
• A customer is “reluctant or refuses to provide information regarding the source of funds deposited or transferred into their account or acts evasive when questioned about the purpose of a transaction or may explain it as repayment of a loan.”

FinCEN is asking financial institutions to submit suspicious activity reports with the key term “CMLN-2025-A003” if they believe a transaction is tied to Chinese money laundering.