Florida Feds Charge Alleged Mexican Cartel Associate With U.S. Crypto Money-Laundering Scheme

Following a three-year investigation, the feds have brought a case against an alleged associate of one of Mexico's most violent drug cartels, claiming he conspired to use cryptocurrency to convert nearly $7 million in drug-trafficking operations stretching from Fort Lauderdale to Chicago.

A Department of Homeland Security (DHS) task force claims that Mexican citizen Francisco Asiain Bahena spearheaded dozens of bulk cash drops in eight U.S. cities and attempted to import methamphetamine into the country. He faces charges of conspiracy to commit money laundering, drug trafficking, and importing a controlled substance.

The sprawling investigation helped the feds glean information on large-scale trafficking of heroin, fentanyl, and meth, according to DHS. The agency says the probe led law enforcement to intercept $2.47 million in drug money, including cash transported in hidden compartments in "trap" vehicles.

According to the federal task force, Bahena was alleged to be affiliated with the Jalisco New Generation Cartel or Cartel de Jalisco Nueva Generación, AKA CJNG, which is known for its meth and cocaine trafficking, use of extreme violence, and reported incidents of pressuring new members into cannibalizing their enemies. The cartel operates not only in the west-central Mexican state of Jalisco and its capital city of Guadalajara but also in Guanajuato and Michoacán. The cartel is estimated to have more than 5,000 members worldwide — including in the U.S.

"The CJNG has earned a reputation for ruthlessness, piling up bodies wherever they've expanded, often by enlisting local syndicates to join their cause of trafficking enormous amounts of cocaine, meth, heroin, and fentanyl," reads a 2021 Vice News article on the cartel.

Bahena's case traces back to March 2020, when law enforcement received information from an informant facing federal drug charges. According to a DHS affidavit, agents learned that Bahena was converting millions of dollars worth of drug trafficking proceeds into bitcoin.

Since July 2020, undercover officers in Alabama, New York, Illinois, Ohio, North Carolina, Georgia, and Florida conducted 50 bulk currency pickups from Bahena's associates, at Bahena's direction, totaling $6.97 million, according to the DHS affidavit. Agents converted the money into cryptocurrencies through certified undercover accounts and "traced the funds as they were transferred to other conspirators," DHS says.

The feds bolstered their probe by deploying an undercover U.S. agent who portrayed himself as a South Florida money launderer with experience receiving drug proceeds and converting the funds to bitcoin. He developed a "social relationship" with Bahena and met with him on six occasions around the country.

In May 2021, Bahena traveled to Broward County and met with the undercover officer at a facility that, unbeknownst to Bahena, was maintained and surveilled by police. Bahena and the agent discussed having the officer build hidden compartments (AKA "traps") in a vehicle one of Bahena's associates used to smuggle drug money, the affidavit alleges. They also allegedly discussed importing drugs from Mexico into the U.S. using a tractor-trailer.

Bahena and his associates were unwittingly tracked around the U.S. by GPS devices the feds placed on two vehicles allegedly used to transport millions of dollars in drug proceeds. During the investigation, law enforcement stopped the vehicles as they entered Broward County and seized more than $500,000 in cash.

In January 2022, Bahena and several family members traveled to Chicago to meet with the undercover officer and another undercover agent. During a dinner meeting, Bahena and the undercover officer discussed various locations in Texas where Bahena could arrange drug deliveries to be transported throughout the country, according to the affidavit.

DHS alleges that late last year, on two occasions, Bahena arranged the delivery of more than 20 pounds of meth to a location provided by the undercover officer in exchange for $56,000.

Drug cartels in Mexico have increasingly turned to cryptocurrency to launder money and sell drugs, according to a report released by the United Nations Office on Drugs and Crime last year. The report specifically mentioned the Jalisco New Generation Cartel as one of the organizations that had increasingly used bitcoin purchases to avoid money-laundering controls.

According to the report, Mexican cartels are believed to launder roughly $25 billion a year.