U.S., Mexico Step Up Cooperation on Cartel Money Laundering

Drug traffickers cannot spend their piles of cash unless other criminals are willing to launder their money for them. Without access to clean cash, cartels can’t invest in luxury properties, buy businesses, or participate in other commercial enterprises. That’s why, on November 13, the United States and Mexico announced a combination of sanctions designations and other anti-money laundering measures aimed at combating one of the most significant fentanyl trafficking rings in the world — the Sinaloa Cartel.

The bilateral actions targeted the Hysa Organized Crime Group, an Albanian family-run criminal organization whose operations in Mexico, Canada, and Poland are used to launder money for the Sinaloa Cartel. This announcement comes as the Trump administration devotes growing attention and resources to countering drug cartels in the Western Hemisphere. It also reflects increased U.S.-Mexico cooperation in targeting the financial flows that support transnational criminal organizations, such as the Sinaloa Cartel. The United States identifies the cartel as a Foreign Terrorist Organization and Specially Designated Global Terrorists.

Targeting Casinos That Launder Drug Money

According to the U.S. Treasury Department, the Hysa family operates casinos and other gambling establishments “used to facilitate money laundering that benefits the Sinaloa Cartel.” Treasury designated several Hysa family members and related individuals and entities under an authority that targets transnational criminal organizations. It also proposed a rule pursuant to section 311 of the USA PATRIOT Act that would prohibit U.S. banks from maintaining accounts for Mexican banks that move dollars on behalf of certain Hysa-linked casinos. Meanwhile, Mexican authorities targeted the same list as Treasury, along with five additional entities, and referred them to federal prosecutors.

These are positive steps to combat illicit finance, though they come at a time when Mexico faces accusations of weaponizing counter-illicit finance tools against political opponents. Two days before the bilateral action, Mexico targeted several casinos for alleged money laundering tied to organized crime, including two owned by Grupo Salinas, a major conglomerate whose founder, Ricardo Salinas, is one of Mexico’s richest businessmen and an outspoken opponent of President Claudia Sheinbaum and Mexico’s ruling Morena party. Those firms were not targeted by the United States in the bilateral action. The Mexican government, however, denies politicizing enforcement actions.

Cooperation Follows American Shot Across Mexico’s Bow

Joint U.S.-Mexico measures include sanctions against a separate Sinaloa Cartel money laundering network and against timeshare fraud schemes run by the Jalisco New Generation Cartel. The growing cooperation follows unilateral action by the United States this year when it issued an order severing ties between three Mexican financial institutions and the U.S. financial system for laundering drug money.

By the time that order went into effect on October 20, the targeted firms had lost most of their client bases and been broken up and sold because of the sweeping nature of Treasury’s upcoming action. This was a clear shot across the bow, warning the Mexican government and Mexican financial firms that the Trump administration is willing to take an aggressive approach to combating cartel-linked illicit financial networks.

Going on Offense

Mexico’s economy is a target-rich environment for cross-border law enforcement investigations into the financial firms and businesses that make the cartel business model possible. This level of cooperation and continued public designations will deter future illicit behavior and reduce cartel resources if done at a sufficient scale. However, further action should also be taken against the source of fentanyl precursors that fuel the Mexican drug trade. That means going after the Chinese chemical manufacturers and money laundering organizations whose operations continue to threaten safety and stability in North America.

The Trump administration should also work with Canada in combating the threat posed by the Hysa family and similar groups there. The recent action did not reference cooperation with Canadian authorities. To the extent Canadian authorities did not participate in the multilateral action, more must be done to ensure that operations targeting cartel financial channels span the entire continent to include the governments of the United States, Mexico, and Canada whenever possible.

Connor Pfeiffer is senior director of government relations for FDD Action. Max Meizlish is senior research analyst for the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). For more analysis from Max and CEFP, please subscribe HERE. Follow Connor on X @connorpfeiffer. Follow Max on X @maxmeizlish. Follow FDD on X @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.