On Wednesday, November 19th, the U.S. Department of Justice announced that 38-year-old Chinese citizen Zhidong Zhang had appeared in front of U.S. Magistrate Judge Clay H. Kaminsky at the Eastern District Federal Court in New York.
Zhang is facing international drug trafficking and money laundering charges in both New York and Georgia. He stands accused of leading a large-scale transnational drug trafficking and money laundering organization, smuggling thousands of kilograms of cocaine, methamphetamine, and fentanyl into the United States and laundering nearly $100 million through hundreds of shell companies.
In an official announcement on the Department of Justice website, Deputy Attorney General Todd W. Blanche stated that the global enterprises and companies operated by Zhang had transported significant amounts of drugs to American communities and laundered substantial drug proceeds. His extradition to the U.S. is seen as a crucial step in dismantling this criminal network.
Prosecutors in the Eastern District of New York and Northern District of Georgia vowed to hold Zhang accountable for the significant harm he caused to American communities. If convicted, he could face a maximum sentence of life imprisonment.
This case is part of the Trump administration’s “Operation Take Back America,” aimed at combating illegal immigration, eliminating drug cartels, and safeguarding community safety.
Zhidong Zhang, also known as the “Fentanyl Drug Kingpin of Mexico,” has used various aliases including “Brother Wang” and “Chinese Guy.” Born in Beijing in 1987, he attended a high school affiliated with Peking University where he excelled academically.
Despite his stellar academic record, Zhang was admitted to Peking University under special circumstances during the college entrance examination in 2006, choosing a Spanish major which he believed would lead to good job prospects.
After graduating from Peking University in 2010, he traveled to Mexico and worked as a translator for a Chinese-owned company. Subsequently, Zhang established an iron ore trading company and in 2015, he met a Mexican drug trafficker, leveraging his language skills, communication abilities, and savvy mindset to gradually build his own drug manufacturing, trafficking, and money laundering network.
During this time, he married the daughter of a drug trafficking group leader in Mexico, becoming a Mexican citizen. His familiarity with both Chinese and Mexican cultures enabled him to operate seamlessly in the underground worlds of China and Mexico in trafficking fentanyl chemicals and money laundering.
The dramatic downfall of Zhang unfolded like a Hollywood movie. He was arrested by Mexican authorities last year. In July this year, while imprisoned in Mexico City, he escaped through a tunnel he dug into the adjacent property, eluding guards. He then fled to Cuba on a private plane.
Concerned about potential extradition to the U.S. due to improving Cuba-U.S. relations, he used a forged passport to flee to Russia. However, Russian customs authorities discovered the fake passport and refused him entry, detaining him at the airport for some time before deporting him back to Cuba.
The Cuban government later verified his identity and, in late October, announced the arrest of Zhidong Zhang, subsequently returning him to Mexico. He was then extradited directly to the United States.
Prior to this, the U.S. Department of Justice had designated Zhang as a “High-Value Organized Crime Target” (CPOT), a title bestowed upon the most significant and threatening drug traffickers globally.
According to the indictment, since June 2016, Zhang operated a drug trafficking and money laundering organization in Mexico and the U.S., mainly smuggling and manufacturing fentanyl precursors for the notorious Sinaloa and Jalisco New Generation drug trafficking groups in Mexico. Law enforcement agencies seized 46 kilograms of cocaine, 58 kilograms of methamphetamine, and nearly 7 kilograms of fentanyl linked to his organization.
Regarding money laundering, Zhang’s organization utilized false social security numbers and fraudulent documents to establish over 100 shell companies and 170 bank accounts in the United States. The organization recruited local Chinese individuals, students, etc., to withdraw money, deposit it into accounts, and wire it overseas from various locations within the U.S.
U.S. law enforcement confirmed that the drug proceeds laundered through these shell companies by Zhang amounted to at least $77 million, with a total value nearing $100 million across two indictments.
Experts highlighted that the Zhang case underscores the increasingly close relationship between Chinese criminal groups and Mexican drug trafficking organizations. Vanda Felbab-Brown, an organized crime expert at the Brookings Institution, stated that this signifies the crucial role of Chinese networks in the core operations of Mexican criminal groups.
The arrest of Zhang Zhang has sparked interest in the relationship between Chinese criminal groups and Mexican drug trafficking organizations. Over the past decade, this relationship has grown exponentially as Chinese criminal groups have become the primary money launderers for cash from drug sales in the U.S.
Investigator Eben revealed: Chinese criminal groups offer a unique service for money laundering because many Chinese individuals wish to transfer money abroad but are restricted by capital controls, limiting them to around $50,000 per year.
The money laundering process is simple and discreet: after selling drugs in the U.S., Mexican drug traffickers hand over cash to a Chinese citizen residing in the U.S. Once confirmed, their accomplices in Mexico pay the drug trafficking group in pesos. The Chinese money launderer then gives the drug sales proceeds to Chinese individuals looking to purchase properties in the U.S., receiving equivalent Chinese yuan payments within China.
Eben stated that all of this can happen almost instantly, with no need for funds to cross borders, making tracking increasingly challenging.
Since money launderers can impose costs on the “most restricted” Chinese customers wishing to remit money overseas, they can charge commissions as low as 1% to 2% to the drug trafficking group.
Eben added: “I’ve had an undercover team investigating (previous money laundering techniques) for years. In the past, it took drug trafficking groups about 10 days to receive the money from drug sales, with costs ranging from 7% to 10%. But the Chinese changed the whole game.”