Last
week, South
Carolina’s Attorney
General, Alan
Wilson, joined me
for a press
conference.
He
had accepted my
invitation to make
an announcement
together.
That’s two different
states - and two
different parties -
standing together
for one reason.
Folks,
it’s time to tell
you about something
I’ve been working on.
Fentanyl is the
leading cause of
death for people my
age and younger. In
North Carolina, we
lose about six
people a day.
It’s
really the third
wave of the opioid
crisis that began
with OxyContin in
the 1990s. That was
the prescription
pill crisis, which
became the heroin
crisis, which became
the synthetic heroin
crisis, and that’s
fentanyl.
As AG,
I’ve met a lot of
families who have
lost loved ones.
It’s crushing. And I
have a
responsibility to
attack this problem
on every front I can.
One
of those fronts is
illegal money
laundering - the
engine that makes
the fentanyl trade
so profitable. And
I’m starting with a
very big target.
How the
Fentanyl Trade Works
Here’s a quick
outline:
Step
1: Drug cartels in
Mexico buy the
chemical ingredients
for fentanyl from
China. Those
ingredients are
shipped to Mexico,
mostly in large
cargo ships but
sometimes as regular
air parcels via
commercial carriers,
like FedEx.
Step
2: The cartels mix
those chemicals and
produce fentanyl.
Step
3: The fentanyl is
smuggled into the
U.S., taken to
various cities that
serve as
distribution hubs (often
where highways
intersect), then
sold to dealers, who
sell to users.
Step
4 (this
is the money
laundering part):
The cash from the
drug sales doesn’t
go back to Mexico -
not directly.
Instead, it’s
laundered through an
underground banking
network run by money
brokers, often in
China.
It’s
important to know
that China limits
how much money its
citizens can move
out of the country -
no more than $50,000
a year. But many
wealthy Chinese
nationals want to
move more.
So
brokers in China
connect the two
markets: the
cartel’s drug
traffickers in the
U.S. and Chinese
nationals who want
to move their money
out of the country
and into U.S.
dollars.
The
broker accepts the
cartel’s drug money,
finds someone who
wants to get money
out of China, and
makes a match.
Then
the broker
essentially says,
“Ok, Mr. Cartel Guy
- this Chinese
currency is now
yours. You can now
buy anything you
want that is made in
China and we’ll ship
it to you.”
And
once those goods (often
cars and farm
equipment) are
shipped from China
to Mexico, the
cartels arrange for
them to be sold into
the domestic market
for pesos, at which
point they collect
their profit.
How
much money are we
talking about here?
Billions.
The WeChat connection
The
evidence strongly
suggests that the
main platform used
to facilitate that
money laundering is
an app called WeChat.
You’ve probably
heard of WhatsApp.
It’s the largest
text messaging app
in the world.
Well,
the second-largest
text messaging app
is WeChat. It’s
owned by a Chinese
company and has over
a billion users.
And
when it comes to
fentanyl money
laundering, as one
DEA agent said,
“It’s all happening
on WeChat.”
So I
spent months digging
into it. Talking
with agents. Reading
reports. When I felt
like I had the full
picture, I called
five other attorneys
general - two
Democrats, three
Republicans. I asked
them to join me in
stopping WeChat from
being a safe harbor
for money laundering.
They
all agreed.
So we
worked on our plan
and last week we
took the first step,
which AG Wilson and
I announced at our
press conference (the
other AGs were
invited but live too
far away to attend).
The
first step is a
public letter to
WeChat summarizing
some of the evidence
about their
complicity in a vast
amount of money
laundering and
giving them 30 days
to respond with a
detailed account of
steps they will now
take to stop this.
If
they fail to respond,
we have a range of
options for
escalation.
But
as I said at our
press conference:
“Evidence suggests
that WeChat has
allowed itself to
become an enormous
digital pipeline for
money laundering
that fuels the
fentanyl trade. By
allowing that to
continue, WeChat is
essentially helping
to bankroll the
fentanyl epidemic.
This must stop.”
I’ll
let you know what we
hear back, and that
will determine next
steps.
AmeriCorps
lawsuit
One
more quick update:
We
recently filed a
lawsuit against the
federal
administration after
it attempted to
unlawfully defund
AmeriCorps.
Congress authorized
AmeriCorps funding,
and the executive
branch cannot
unilaterally cut it.
But
beyond that, it
would have hit
western North
Carolina especially
hard as it’s
rebuilding from
Hurricane Helene.
AmeriCorps has a
strong presence
there.
We
had a hearing this
week on a request
for an injunction to
stop the government
from cutting this
vital program. We
expect to hear soon
how the first round
of that case will go.
Best,
Jeff
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P.S.
- Avery stopped by
the office the other
day. Here she is
signing some very
important papers:
