Gangs Exploiting Chinese Nationals in U.S. for Money Laundering, IRS Official Warns

Criminal organizations are increasingly using Chinese nationals based in the U.S. to launder illicit funds, often through venues like casinos, according to Guy Ficco, Chief of IRS Criminal Investigation. Speaking at the International Anti-Financial Crime Summit 2024 in London, Ficco revealed that these criminal groups are seeking new methods to circumvent financial sanctions.

“Schemes are more sophisticated than we’ve seen before, and money laundering is often the tip of the iceberg,” Ficco remarked during his keynote address. He explained that many of these operations are connected to China, as Chinese organizations are facing strict regulations that prevent them from moving money out of the country and into the U.S.

As a result, Ficco noted, U.S. officials are witnessing the rise of Chinese money laundering organizations operating "in full force." These groups are enlisting Chinese nationals in the U.S. to launder funds, often the proceeds of narcotics sales. “Those organizations are tapping Chinese nationals to launder funds, often narcotics proceeds,” Ficco explained. He detailed how these individuals sometimes use casinos, playing table games for short periods, or opening bank accounts with fraudulent identification to facilitate the laundering process. “As soon as their work is done, they’re cashing out or closing accounts to avoid detection,” he added.

Ficco also touched on the potential impact of artificial intelligence (AI) on financial crime, expressing concerns that it could enable even more sophisticated fraud schemes. “I fear there will be innocent victims who will be victimized by AI schemes,” he said.

However, Ficco acknowledged that AI could also be a powerful tool for law enforcement, helping to speed up financial crime investigations. “AI has the potential to help law enforcement comb through data quicker,” he said. He highlighted the possibility of AI facilitating cross-border collaboration among law enforcement agencies, noting, “Imagine being able to group data between law enforcement across borders. AI could make the world a much smaller place for criminals to hide.”

By fLEXI tEAM