US Charges Chinese Companies & Employees for Conspiracy to Manufacture Fentanyl with CJNG & Sinaloa Cartels

"Socalj" for Borderland Beat

The defendants allegedly imported fentanyl precursors into the United States and worked with Mexican Cartels to manufacture and distribute fentanyl in the United States.

At the federal courthouse in Brooklyn, two indictments were unsealed that detail criminal conspiracies by companies and employees based in China to manufacture and distribute fentanyl in the United States. This prosecution is among the first ever in the United States to charge Chinese chemical manufacturing companies with supplying precursor chemicals used to make fentanyl to the United States.

As alleged in the indictments, the defendant companies supplied precursor chemicals to the United States and Mexico, among other places, knowing they would be used to manufacture fentanyl. The defendant companies openly advertised their products all over the world, including to the United States and Mexico, on social media platforms including WhatsApp and Wickr. They also sent their chemical products to the United States and Mexico by boat and by air, using public and private international mail and package carriers. 

Blatant Online Sales

According to the indictments, the Chinese companies advertised the fentanyl precursor chemicals in the same manner as their other products. The company AMARVEL BIOTECH (AmarvelBio) had the controlled chemicals often labeled as "Hot Product" or "Mexican Hot Sale" and provided "100% Stealth Shipping." They also advertised shipping to Culiacan, Sinaloa, Mexico on their site. The products would then be disguised in packaging for dog food, motor oil, or nuts to ensure "safe delivery."

A Product News article on their website posted on April 3, 2023, featured several fentanyl precursors being available, featuring their chemical compounds and CAS registry number specifically identifying them as the controlled precursors. The posting further stated that their factory is in China and they offer shipping via a Mexico-based shipping company.

Following the April 2023 indictments against "Los Chapitos" the company internally communicated to better conceal their identities and avoided shipping chemicals to New York. This included their marketing manager cautioning employees to take additional steps to avoid being detected and acknowledging that one of their competitors had been "exposed by the American government." 

They further advertised that chemicals would be mislabeled so as to not be detected and offered customized packaging used for legal products and promised "100% customs clearance." AmarvelBio. according to the indictment, has never shipped regulated chemicals to any properly registered company in the US.

Masked Precursor Chemicals

To prevent the detection and interception of chemical products at the borders, the defendant companies employed deceptive and fraudulent practices, such as mislabeling packages, falsifying customs forms, and making false declarations at border crossings. The chemicals distributed by the defendants included all the materials necessary to manufacture fentanyl via the most common pathways.

The defendant companies attempted to obfuscate their distribution of fentanyl precursors by adding “masking” molecules, which slightly alter the chemical signature of the underlying precursor chemicals. By changing the chemical signature, an altered substance could evade testing protocols and relevant regulations by appearing to be a new substance. Such masking molecules are easily removed, thus enabling the purchaser to return the substance to its original form as a fentanyl precursor.

The defendant companies not only produced and distributed masked precursors, but also provided instructions about how to remove the masking molecules upon receipt, thus helping their customers to effectively obtain banned precursors and produce fentanyl. The defendants also gave instructions on how to improve fentanyl yield and advice on which chemicals to buy to replace banned precursor products.

Mexican drug trafficking organizations, including but not limited to the Sinaloa Cartel and the Jalisco New Generation Cartel, have increasingly availed themselves of the fentanyl precursors and masked fentanyl precursors developed and distributed by the defendant companies and companies like them.

The chemicals provided by the defendant companies have enabled such cartels and other drug trafficking organizations to produce fentanyl in clandestine laboratories in Mexico on a massive scale, for subsequent distribution in the United States and elsewhere. The materials and instructions provided by the defendant companies and companies like them have directly caused and contributed to the influx of deadly fentanyl into the United States.

Undercover DEA Operation

AmarvelBio had specifically also shipped over 200 kilos of the precursors to New York, according to an undercover law enforcement investigation by the DEA. The company had knowledge the chemicals would be used to provide fentanyl and its analogs and referenced the illegality of what they were doing.

For example, on or about November 17, 2022, CS-1 wrote to Wn Yang, "You know I making fentanyl," and "Is not safe." Yang replied, "I know." On or about December 1, 2022, Yang wrote to CS-1, promising that CS-1 would be "happy with our product" and noting that CS-1 would "be able to synthesize fentanyl."

As part of the sales negotiation with the undercover DEA source CS-1, Yang sent messages regarding tracking information for a "Sinaloa client" and indicated it was the fentanyl precursor they had shipped to Sinaloa, Mexico. The company then shipped to Manhattan, New York, 1 kilogram each of two different fentanyl precursor chemicals as well as 1 kilogram of a methamphetamine precursor. After the delivery, discussions continued regarding future ton-quantities of chemicals and how they could help them refine the manufacturing process as 'three Americans had died after consuming the fentanyl made from their precursor chemicals that month.'

During an undercover meeting in Bangkok, Thailand, owners of the company offered to put them in touch with their 'clients in Mexico' if they needed help with using a different formula for the finished product. The company also provided a list of the chemicals needed for each drug. Two executives Qingzhou Weng and Yiyi Chen were arrested following another undercover meeting in Fiji and extradited to the US.

Statement from the Chinese Embassy

Chinese Embassy spokesperson Liu Pengyu condemned the move as "a well-planned entrapment operation by the U.S. side, which seriously infringed upon the legitimate rights of relevant enterprises and individuals." He said having such "long-arm jurisdiction" would create more obstacles for China-U.S. counter-narcotics cooperation.

The move came after Antony Blinken made the first visit to China by a U.S. Secretary of State in five years and said he had made clear that Washington needs much greater Chinese cooperation to stem the flow of fentanyl.

Statements from Law Enforcement Officials

“As alleged, the defendants knowingly distributed the chemical building blocks of fentanyl to the United States and Mexico, even providing advice on how they should be used to manufacture this dangerous drug which inflicts untold tragedy in New York City, Long Island, and across the nation,” stated United States Attorney Peace. “This prosecution shows that the companies and individuals who fuel our nation’s deadly opioid epidemic, wherever they are located, will be found and prosecuted to the full extent of the law.”

“When I announced in April that the Justice Department had taken significant enforcement actions against the Sinaloa Cartel, I promised that the Justice Department would never forget the victims of the fentanyl epidemic,” said Attorney General Merrick B. Garland. “I also promised that we would never stop working to hold accountable those who bear responsibility for it. That includes not only going after the leaders of the Cartels, their drug and gun traffickers, their money launderers, security forces, and clandestine lab operators. It also includes stopping the Chinese chemical companies that are supplying the cartels with the building blocks they need to manufacture deadly fentanyl.”

“Today’s announcement is a down payment on our pledge to use every tool in the government’s arsenal, in every corner of the globe, to protect American communities,” said Deputy Attorney General Lisa O. Monaco. “The Justice Department will not rest or relent in investigating and prosecuting every link of the fentanyl supply chain, including the PRC companies and executives who produce and export vast quantities of the precursor chemicals the drug cartels need to peddle their poison. There can be no safe haven.”

“Today’s announcement is a considerable step forward in our unrelenting fight against fentanyl, targeting the threat where it starts,” said DEA Administrator Anne Milgram. “These companies and individuals are alleged to have knowingly supplied drug traffickers, in the United States and Mexico, with the ingredients and scientific know-how needed to make fentanyl – a drug that continues to devastate families and communities across the United States, killing Americans from all walks of life. Targeting entire criminal drug networks, from the source of supply to the last mile of distribution, is critical to saving American lives. DEA will not stop until this crisis ends.”

“Today’s charges are further proof of the unceasing, wide-ranging efforts the New York City Police Department will undergo to rid our city of illegal drugs,” stated NYPD Commissioner Sewell. “No matter where or how this poison is manufactured and distributed, we are united with our local, state, federal, and international law enforcement partners in the fight against drug traffickers. To that end, I thank and commend the U.S. Department of Justice, the Office of the U.S. Attorney for the Eastern District of New York, the U.S. Drug Enforcement Administration, the New York State Police, and everyone else involved in this case for their exceptional work.”

“The prosecution of these criminals reinforces that we will continue to be vigilant in stopping the flow of dangerous, illegal drugs into our country. The manufacturing and distribution of these highly addictive drugs perpetuate a cycle of substance abuse which poses a significant threat to safety and quality of life within our communities. Drug trafficking organizations of any kind will not be tolerated." New York State Police Acting Superintendent Nigrelli stated. "I thank the U.S. Attorney’s Office for the Eastern District of New York and our law enforcement partners for their continuing commitment to identify, arrest and prosecute anyone who attempts to infiltrate these dangerous drugs into our nation.”

The cases are United States v. Hubei Amarvel Biotech Co. Ltd., S.D.N.Y., No. 1:23-cr-00302, unsealed indictment 6/23/23, United States v. Anhui Moker New Material Tech. Co., E.D.N.Y., No. 1:23-cr-00263, unsealed indictment 6/23/23, United States v. Hefei GSK Trade Co., Ltd., E.D.N.Y., No. 1:23-cr-00264, unsealed indictment 6/23/23.

Companies

P2NP is a chemical used to manufacture meth/Adderall.

ANHUI RENCHENG TECHNOLOGY CO., LTD.

Hefei City, Anhui Province, China

ANHUI MOKER NEW MATERIAL TECHNOLOGY CO. (MKE)
Luyang District, Hefei City, Anhui Province, China

Hefei GSK Trade Co., Ltd, also known as “Hebei Gesuke Trading Co. Ltd.” and “Hebei Sinaloa Trading Co., Ltd.” (GSK)
Shushan Economic Development Zone, Hefei City, Anhui Province, China

PMK is a common name for a precursor used to produce MDMA.

Hubei Amarvel Biotech Co., Ltd., (“Amarvel Biotech”)
Wuhan in Hubei Province, China

Sources DOJ, DEA, DOJ, DOJ