Mexico City, August 15, 2025 – The DEA has accused a Chinese national, Zhi Dong Zhang, of operating a multinational criminal drug trafficking network through various cells operating in China, Mexico, and the United States, collecting drug money from the sale of illicit narcotics, and then laundering these funds through wire transfers, shell companies, and money sent abroad through the purchase of goods.
The accusations stem from a new warrant for his arrest by U.S. authorities from the Federal Court of the Northern District of Atlanta, where Zhang is suspected of laundering at least $20 million in the United States between 2020 to 2021, through 120 different front companies and 170 different bank accounts.
The money laundering operation, U.S. authorities claim, also involved other Chinese nationals, namely Li Pei Tan and Chaojie Chen, who both pleaded guilty recently for wire fraud and money laundering.
The DOJ has evidence that these individuals collaborated with Mexican drug cartels, like the Sinaloa Cartel and Cártel de Jalisco Nueva Generación, or CJNG, to smuggle large amounts of cash concealed in motor oil and detergent shipments to China.
U.S. authorities also accuse these individuals of laundering proceeds from the sale of trafficked narcotics through the electronic purchase of legal goods.
According to authorities, these criminal drug organizations have allegedly trafficked hundreds of millions of dollars worth of drug proceeds through the sale of illicit narcotics, including fentanyl, cocaine, and methamphetamines. The DOJ estimates that these criminal entities have generated approximately $150 million in profits each year since 2016.
The investigation into Zhang and his alleged co-conspirators began after the 2021 arrest of associate Ruipeng Li , one of the organization’s moneymen, who ultimately confessed to laundering at least $8.5 million in cash in Georgia, Texas, Ohio, Illinois, and North Carolina. Law enforcement investigations and the use of covert surveillance operations revealed a larger criminal network that funneled millions of dollars in drug proceeds through various shell companies, like Mnemosyne International Trading Inc.
In October of 2024, Zhang was arrested at his home in Lomas de Santa Fe, Cuajimalpa de Morelos district in Mexico City. Zhang was being surveilled in an operation that was led by the Secretariat of Security and Citizen Protection (SSPC), the Navy, the Army, and the Attorney General’s Office (FGR) in Mexico.
Zhang was later located in a luxury property in the affluent Mexico City neighborhood and was taken into custody without incident.
Zhang was then granted house arrest by a Mexican federal judge, despite objections from the Attorney General’s Office in Mexico City, and was then placed under the supervised custody of the Mexican National Guard pending trial.
On the 11th of July, eight months after his arrest by Mexican authorities in 2024, Zhang managed to escape through a concealed tunnel in his own home that led into a property next door, which is reportedly also owned by Zhang.
Zhang’s escape, according to local Mexico City newspaper Reforma, came the same day that the U.S. Department of Justice requested Zhang’s extradition to the United States from Mexican custody, supported by the warrant from the Federal Court of the Northern District of Atlanta.
Mexican President Claudia Sheinbaum, criticized by the U.S. Trump administration as being controlled by the drug cartels, ridiculed the federal court’s decision in Mexico City to place Zhang on house arrest, “Without any argument…That decision shouldn’t have been made, she declared on July 14 during the People’s Morning Press Conference”, according to infobae Mexico.
President Sheinbaum also accused the judiciary of public corruption.
The whereabouts of Zhing Dong Zhang are unknown, one month following his escape.
