Going after the money

Our new fentanyl fight

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.

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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: