An East Los Angeles man who allegedly helped Mexico’s Sinaloa cartel launder millions of dollars in drug trafficking proceeds by working with members of illegal money exchanges, including some with links to Chinese banking, is expected to plead guilty Wednesday to a federal charge.
Edgar Joel Martinez-Reyes, 46, has agreed to plead guilty in Los Angeles federal court to one count of conspiracy to launder money. He is the lead defendant in an indictment charging two dozen alleged Los Angeles-based cartel associates with participating in a scheme to hide the source of millions in drug proceeds.
Federal prosecutors contend the defendants used a variety of methods to launder cash, including structuring assets to avoid financial reporting requirements and the purchase of cryptocurrency, according to the 10-count superseding indictment. The goal was to make cash generated in the United States accessible to cartel members in Mexico and elsewhere, prosecutors say.
A multi-year investigation — dubbed Operation Fortune Runner by law enforcement — resulted in charges of conspiracy to aid and abet the distribution of cocaine and methamphetamine, conspiracy to launder monetary instruments, and conspiracy to operate an unlicensed money transmitting business.
Federal prosecutors allege that from October 2019 to October 2023, members and associates of the cartel imported large quantities of narcotics, including fentanyl, cocaine, and methamphetamine, into the United States, generating huge sums in U.S. dollars.
In January 2021, Martinez-Reyes allegedly traveled to Mexico to meet with cartel members to strike a deal with money remitters with links to Chinese underground banking to launder drug trafficking proceeds in the United States.
After the deal was struck, the cartel, through its connections and associates, distributed cocaine, methamphetamine, and other narcotics, generating U.S. dollars from drug proceeds, according to the indictment.
Martinez-Reyes and other conspirators allegedly then delivered hundreds of thousands of dollars in cash to members of a Chinese money exchange and associated organizations to be laundered for a fee. The remitting organizations possessed large amounts of U.S. currency and could help wealthy Chinese nationals evade China’s currency controls, prosecutors said.
According to the U.S. Department of Justice, the investigation has resulted in the seizure of about $5 million in narcotics proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 Ecstasy pills, 44 pounds of psilocybin (magic mushrooms), numerous ounces of ketamine, three semi-automatic rifles with high-capacity magazines, and eight semi-automatic handguns.