Deadly Merchant: The little known Mexican Cartel-Chinese Connections

Executive Summary

The analysis of available information reveals a strong indication of collaboration between drug cartels, particularly the Sinaloa Cartel, and Chinese actors in the broader fentanyl supply chain. This collaboration manifests in several ways, including the supply of precursor chemicals from China used by cartels to manufacture fentanyl, the historical direct manufacturing of fentanyl in China for the US market, and the involvement of Chinese underground banking in laundering drug proceeds for cartels. While the direct evidence of this collaboration within the specific cases of Operation Deadly Merchant might be nuanced, the broader context provided by related operations and investigations strongly suggests this connection is a significant factor in the fentanyl crisis targeted by these law enforcement efforts.

1. Introduction

1.1 The Fentanyl Crisis in the United States

The United States is currently grappling with a severe fentanyl crisis, characterized by a dramatic surge in overdose deaths. Fentanyl, a highly potent synthetic opioid, has become a leading cause of mortality for Americans between the ages of 18 and 45. In 2023, over 69% of the more than 107,000 drug-related deaths involved fentanyl, translating to over 200 American lives lost each day. This crisis is exacerbated by the fact that fentanyl is approximately 50 times more potent than heroin and 100 times more potent than morphine, with a mere two milligrams considered a potentially lethal dose. Counterfeit prescription pills, often manufactured to resemble legitimate medications like OxyContin, Percocet, and Xanax, are frequently laced with fentanyl, further increasing the risk of accidental overdose. Law enforcement laboratory testing has revealed a disturbing trend: in 2022, six out of ten fentanyl-laced fake prescription pills contained a potentially lethal dose, a significant increase from the four out of ten reported in 2021.

1.2 The Role of Drug Cartels in Fentanyl Trafficking

The primary drivers behind the influx of fentanyl into the United States are Mexican drug cartels, most notably the Sinaloa Cartel and the Cartel Jalisco Nueva Generación (CJNG). These organizations operate as global criminal enterprises, relying on intricate international supply chains to produce and distribute illicit drugs. They are heavily involved in the manufacturing of counterfeit prescription pills containing fentanyl, which are then trafficked across the border and distributed throughout American communities. The DEA has actively targeted these cartels, recognizing them as the main entities responsible for the fentanyl smuggled into the country.

1.3 The Emergence of Chinese Actors in the Fentanyl Supply Chain

While Mexican cartels control the final stages of fentanyl production and distribution within the US, China has emerged as a principal source for both illicit fentanyl and the precursor chemicals required for its manufacture. This role evolved after China implemented a ban on the production of fentanyl in 2019. Consequently, Chinese trafficking networks shifted their focus from supplying finished fentanyl to providing precursor chemicals, the essential ingredients used by cartels to synthesize the drug. Furthermore, Chinese nationals and criminal organizations are increasingly implicated in money laundering operations that benefit Mexican cartels, facilitating the flow of drug proceeds.

1.4 Introduction to Operation Deadly Merchant

Operation Deadly Merchant was a significant multi-agency law enforcement initiative designed to combat international fentanyl trafficking. It played a crucial role in supporting and aiding “Operation Denial,” an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation. Operation Deadly Merchant provided national and international coordination, led by the multi-agency Special Operations Division (S.O.D.) near Washington, D.C.. The initial impetus for Operation Denial, and consequently for Deadly Merchant’s support, was the overdose death of Bailey Henke in Grand Forks, North Dakota, on January 3, 2015. The overarching objective of these operations was to disrupt and dismantle international networks involved in the trafficking of fentanyl and its analogues.

2. Operation Deadly Merchant: Scope and Context

2.1 Operational Framework

Operation Deadly Merchant operated as a collaborative effort involving multiple law enforcement agencies, including Homeland Security Investigations (HSI) and the Drug Enforcement Administration (DEA). The national and international coordination provided by the Special Operations Division (S.O.D.) was central to its framework, enabling a unified approach to tackling complex transnational criminal activities. These types of operations often employ an intelligence-driven strategy, utilizing gathered information to identify key targets and disrupt the flow of illicit substances and associated criminal proceeds.

2.2 Timeline and Key Phases

The operational timeline of Operation Deadly Merchant is closely intertwined with that of Operation Denial, which commenced in January 2015 following the overdose death in North Dakota. While specific phases solely for Operation Deadly Merchant are not detailed in the provided information, its support for Operation Denial spanned several years, contributing to various arrests, indictments, and convictions throughout the investigation’s duration.

2.3 Relationship with Operation Denial and Other Related Operations

A key aspect to understanding Operation Deadly Merchant is its role as a significant supporter of Operation Denial. The coordination and resources provided by Deadly Merchant were instrumental in the progress and outcomes of Operation Denial, which focused on an international fentanyl trafficking conspiracy. It is also important to note that the broader effort to combat the fentanyl crisis involves numerous other operations. For instance, “Operation Fortune Runner” specifically targeted the financial networks linking the Sinaloa Cartel to Chinese underground banking , while “Operation OD Justice” focuses on investigating drug poisoning and overdose deaths. These operations, though distinct, often share the common goal of disrupting different facets of the fentanyl supply chain and holding those involved accountable.

3. Arrests and Convictions Resulting from Operation Deadly Merchant

3.1 Individuals Arrested and Convicted Under Operation Denial (Supported by Deadly Merchant)

Several significant arrests and convictions were achieved under Operation Denial, which directly benefited from the support of Operation Deadly Merchant. Steven Barros Pinto, a Rhode Island man, was sentenced to 33 years in federal prison for his leadership role in a large-scale international drug trafficking organization that received fentanyl and fentanyl analogues from Canada and China. His partner in this criminal conspiracy, Anthony Santos Gomes, also from Rhode Island, received a 30-year sentence.

 

Three Canadian nationals from Quebec, Canada—Jason Joey Berry, Xuan Cahn Nguyen, and Marie Um—were extradited to the United States to face charges related to the enterprise. Marie Um was subsequently sentenced to 23 years in federal prison for her role in fentanyl overdoses across several states. Daniel Vivas Ceron, a Colombian national, was sentenced to 27 years of imprisonment for operating a fentanyl distribution operation originating in a Canadian prison, which also sourced fentanyl and its analogues from China. These cases highlight the international scope of the trafficking network targeted by Operation Denial and the crucial role of Operation Deadly Merchant in facilitating the investigation and prosecution of these individuals.

In Montana, Juan Felipe Vidrio Fuentes was convicted of trafficking methamphetamine and fentanyl as part of a larger conspiracy and sentenced to 30 years in prison. While this case is not explicitly linked to Operation Deadly Merchant, it demonstrates the broader law enforcement efforts against fentanyl trafficking. Co-defendants in this conspiracy, James Andrew Stringari and Janet Dean White, were also convicted and are awaiting sentencing.

3.2 Other Arrests and Convictions Potentially Related (Further Investigation Needed)

Several other arrests and convictions related to fentanyl trafficking are mentioned in the provided information, although their direct connection to Operation Deadly Merchant is not explicitly stated. Dennis Carrol was convicted in Queens, New York, for possessing two kilograms of fentanyl, with the investigation involving the DEA. In Massachusetts, Leury Then Rosario, a Dominican national, was arrested for his alleged involvement in a drug trafficking organization supplied by the Sinaloa Cartel. A significant operation in Imperial Valley, California, led to the indictment of 47 alleged members of a Sinaloa Cartel-linked fentanyl and methamphetamine distribution network. In Washington state, 17 people were arrested in connection with a multi-state drug trafficking conspiracy linked to a fatal fentanyl overdose.

 

Furthermore, Junior Gafatasi Tulali in California was sentenced to life in prison for his role in a fentanyl overdose death in Alaska , and Deontae’ Tre’Von Overall in Illinois was found guilty of selling fatal fentanyl pills. These cases underscore the widespread nature of fentanyl trafficking and the ongoing efforts by law enforcement agencies across the country to combat it. However, the sources do not confirm whether these specific arrests and convictions were directly part of Operation Deadly Merchant.

3.3 Summary Table of Arrests and Convictions

The following table summarizes the key arrests and convictions explicitly linked to Operation Denial, which was significantly aided by Operation Deadly Merchant.

Name	Location	Sentence (if applicable)	Connection to Operation Denial/Deadly Merchant	Involvement of Chinese Entities
Steven Barros Pinto	Rhode Island	33 years	Leader of an organization receiving fentanyl from Canada and China	Fentanyl sourced from China
Anthony Santos Gomes	Rhode Island	30 years	Partner in the same organization as Pinto	Fentanyl sourced from China
Jason Joey Berry	Quebec, Canada	Awaiting trial	Alleged member of an international fentanyl trafficking organization	Likely involved in sourcing fentanyl from China
Xuan Cahn Nguyen	Quebec, Canada	Awaiting trial	Alleged member of an international fentanyl trafficking organization	Likely involved in sourcing fentanyl from China
Marie Um	Quebec, Canada	23 years	Member of an organization receiving fentanyl from China and importing it into the US	Fentanyl sourced from China
Daniel Vivas Ceron	Colombia	27 years	Operated a prison-based fentanyl enterprise sourcing fentanyl and analogues from China	Fentanyl and analogues sourced from China
Janet Dean White	Montana	Pending sentencing	Convicted as part of a conspiracy involving fentanyl and methamphetamine	Not explicitly mentioned in the context of Chinese involvement
James Andrew Stringari	Montana	Pending sentencing	Convicted as part of a conspiracy involving fentanyl and methamphetamine	Not explicitly mentioned in the context of Chinese involvement

4. Evidence of Cartel Involvement

4.1 Cartel Links in Operation Denial

While Operation Denial focused on an international fentanyl trafficking conspiracy, the involvement of Mexican drug cartels is implied through the sourcing of fentanyl and its analogues from China. The Rhode Island-based organization targeted by the operation was receiving these substances from both Canada and China, indicating a connection to the global supply chain that is often utilized by cartels to obtain precursor chemicals and finished drugs. Similarly, Daniel Vivas Ceron’s enterprise, which was part of Operation Denial, also sourced fentanyl from China. This reliance on Chinese sources for key ingredients strongly suggests an indirect link to the broader cartel operations, as these organizations have established networks for acquiring and distributing fentanyl precursors.

4.2 Cartel Involvement in Other Related Operations

Evidence from related operations provides a clearer picture of the direct involvement of Mexican cartels with Chinese entities in the fentanyl trade. “Operation Fortune Runner” explicitly uncovered an alliance between associates of the Sinaloa Cartel and money launderers connected to Chinese underground banking. This operation revealed a sophisticated scheme where drug proceeds were laundered through Chinese financial networks. Furthermore, the indictment of 47 individuals in Imperial Valley directly linked them to the Sinaloa Cartel’s fentanyl distribution network. The arrest of Leury Then Rosario in Massachusetts also involved a drug trafficking organization supplied by the Sinaloa Cartel. These instances demonstrate that Mexican cartels are actively engaged in various aspects of the fentanyl supply chain involving Chinese actors, from sourcing materials to laundering profits.

5. Cartel-Chinese Collaboration: Factual Findings

5.1 Supply of Precursor Chemicals from China

A significant aspect of the collaboration between drug cartels and Chinese entities is the supply of fentanyl precursor chemicals from China. China is identified as the primary source country for these essential ingredients, which are then used by cartels in Mexico to manufacture fentanyl. Chinese chemical companies often advertise and sell these precursors online, utilizing deceptive packaging and methods to ship them to destinations including the United States and Mexico. The DEA has taken action against this supply chain by indicting numerous China-based companies and their employees for their alleged involvement in manufacturing and distributing these precursor chemicals.

5.2 Fentanyl Manufacturing in China (Historical and Precursor Focus)

Historically, China was a major source of finished fentanyl entering the US illicit market. Organizations like that of Jian Zhang manufactured fentanyl and its analogues in labs in China and shipped them to the United States, contributing to overdose deaths. Following China’s ban on fentanyl production in 2019, the focus shifted towards the production and export of precursor chemicals. While direct manufacturing of finished fentanyl for the US market may have decreased, the continued supply of precursors ensures that Chinese entities remain a critical link in the cartel’s ability to produce this deadly drug.

5.3 Money Laundering Connections

The collaboration extends beyond the supply of chemicals to include the laundering of drug proceeds. “Operation Fortune Runner” highlighted an alleged partnership between the Sinaloa Cartel and Chinese underground banking networks operating in Los Angeles and China. These underground exchanges are attractive to drug traffickers due to the high demand for US dollars among Chinese nationals seeking to move assets out of China. This financial link provides cartels with a means to conceal and transfer their illicit profits, further enabling their drug trafficking activities.

5.4 Specific Individuals and Organizations

Several individuals and organizations exemplify the connection between Chinese actors and fentanyl trafficking. Jian Zhang’s transnational criminal organization manufactured and distributed fentanyl and its analogues from China, leading to overdose deaths and prompting a reward for his capture. This case is directly linked to Operation Denial, which Operation Deadly Merchant supported. The Zheng Drug Trafficking Organization (DTO), led by Fujing Zheng, is another example of a Chinese entity involved in manufacturing and shipping fentanyl analogues and other illicit drugs to the United States. While not explicitly tied to Operation Deadly Merchant by sources, the Zheng DTO’s activities underscore the broader involvement of Chinese criminal elements in the fentanyl trade.

6. Case Studies Illustrating Cartel-Chinese Links

6.1 Operation Fortune Runner

Operation Fortune Runner provides a compelling case study of the intricate collaboration between the Sinaloa Cartel and Chinese entities. This multi-year investigation revealed an alleged alliance where Los Angeles-based associates of the Sinaloa Cartel conspired with money-laundering groups linked to Chinese underground banking to launder over $50 million in drug trafficking proceeds. The money laundering network collected US currency from drug sales and, with the help of a San Gabriel Valley-based group with ties to Chinese underground banking, processed these funds. Various methods were allegedly used to conceal the source of the money, including trade-based money laundering and structuring deposits to avoid reporting requirements. The laundered proceeds were then made accessible to cartel members in Mexico and elsewhere. This operation highlights the critical role of Chinese financial networks in enabling the Sinaloa Cartel’s drug trafficking activities.

6.2 Operation Denial and the Jian Zhang Case

The case of Jian Zhang, connected to Operation Denial, further illustrates the direct supply of deadly fentanyl from China to the US market. Zhang’s organization manufactured fentanyl and fentanyl analogues in at least four known labs in China and advertised and sold these substances to US customers over the internet. The controlled substances distributed by Zhang’s network resulted in multiple overdose deaths and serious injuries in the United States. The investigation, supported by Operation Deadly Merchant’s coordination, led to indictments against Zhang and several of his associates. A reward of up to $5 million has been offered by the US Department of State for information leading to Zhang’s arrest and/or conviction, underscoring the significance of his role in the international fentanyl trafficking conspiracy targeted by Operation Denial.

7. Analysis and Implications

7.1 Significance of the Cartel-Chinese Nexus

The partnership between drug cartels and Chinese entities is a critical factor in the ongoing fentanyl crisis. This collaboration leverages China’s extensive chemical manufacturing capabilities, providing cartels with a consistent and large-scale source of precursor chemicals needed for fentanyl production. Additionally, the involvement of Chinese underground banking offers a sophisticated mechanism for cartels to launder their vast profits generated from drug sales in the United States. This symbiotic relationship strengthens the ability of cartels to produce and distribute fentanyl, posing a significant challenge to law enforcement efforts.

7.2 Evolving Dynamics of International Drug Trafficking

The fentanyl crisis represents a significant shift in the landscape of international drug trafficking. Unlike traditional plant-based drugs, fentanyl and other synthetic opioids rely on chemical precursors, making the supply chain more complex and geographically diverse. This has led to increased reliance on international collaborations between criminal organizations, such as the partnerships between Mexican cartels and Chinese entities. Combating these transnational criminal networks requires a coordinated global effort, targeting all aspects of the supply chain, from precursor production to distribution and financial operations.

7.3 Challenges in Combating These Networks

Law enforcement agencies face numerous challenges in their efforts to disrupt these cartel-Chinese networks. Jurisdictional limitations complicate investigations that span multiple countries. Traffickers often utilize encrypted communication platforms and cryptocurrencies to evade detection. Furthermore, the evolving tactics of these criminal organizations require constant adaptation by law enforcement. Securing cooperation from countries like China can also be difficult due to geopolitical complexities. These challenges underscore the need for sustained international cooperation and innovative strategies to effectively combat the fentanyl crisis.

8. Conclusion

8.1 Summary of Key Findings

Operation Denial, significantly supported by Operation Deadly Merchant, resulted in the arrests and convictions of several individuals involved in an international fentanyl trafficking conspiracy that sourced fentanyl and its analogues from Canada and China. While direct attribution of every arrest and conviction to Operation Deadly Merchant is not possible based on the provided information, its crucial role in coordination is evident. The broader context reveals a clear collaboration between drug cartels, particularly the Sinaloa Cartel, and Chinese entities in the fentanyl supply chain. This collaboration includes the supply of precursor chemicals from China, the historical manufacturing of finished fentanyl in China, and the use of Chinese underground banking for money laundering.

8.2 Effectiveness of Operation Deadly Merchant

Based on the available information, Operation Deadly Merchant appears to have been an effective initiative in supporting the disruption of international fentanyl trafficking networks through its aid to Operation Denial. The convictions obtained under Operation Denial, involving individuals who sourced fentanyl from China, demonstrate the impact of this collaborative effort. 

8.3 Concluding Remarks

The fight against fentanyl trafficking is an ongoing and complex challenge that requires sustained international cooperation. The nexus between Mexican drug cartels and Chinese entities in the production, distribution, and financial aspects of the fentanyl trade highlights the transnational nature of this crisis. Operations like Deadly Merchant and Denial represent critical efforts to dismantle these networks and hold those responsible accountable. Continued focus on international collaboration, intelligence sharing, and targeting all facets of the fentanyl supply chain will be essential in addressing this devastating epidemic.

Works Cited

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