US financial institutions flagged over $1.4 billion in suspicious transactions linked to fentanyl in 2024, according to a new report by the Financial Crimes Enforcement Network (FinCEN).

In its latest Financial Trend Analysis, FinCEN focused on patterns and trends identified in Bank Secrecy Act (BSA) data linked to fentanyl-related illicit finance. 

Between January and December 2024, financial institutions filed 1,246 BSA reports that identified suspected fentanyl-related activity amounting to approximately $1.4 billion in suspicious transactions, the report noted.

The reported financial activity highlighted various aspects of the illicit fentanyl supply chain – including precursor chemical procurement, fentanyl trafficking, and fentanyl-linked money laundering – that have touchpoints across the US financial sector.

China and Mexico

Illicit fentanyl is primarily synthesized, trafficked, and smuggled into the United States by Mexican cartels, the report said.

The Sinaloa Cartel and the Cartel Jalisco Nueva Generacion, which are known as Foreign Terrorist Organizations (FTOs), Specially Designated Global Terrorists, and Drug Trafficking Organizations, largely control the fentanyl supply chain from Mexico and use precursor chemicals and manufacturing equipment primarily sourced from the People’s Republic of China (PRC) to synthesize illicit fentanyl in clandestine laboratories.

FinCEN analysis identified Mexico and the PRC as the top two foreign countries listed in subject address fields of fentanyl-related BSA reports filed in 2024.

More specific findings within FinCEN’s analysis include:

• The cartels and associated chemical brokers use front companies, money mules, and US-based intermediaries to procure fentanyl precursor chemicals from PRC-based suppliers.
• PRC-based chemical suppliers accept a wide range of payment methods and often leverage public advertisements, including e-commerce platforms, to market fentanyl precursor chemicals.
• Fentanyl-related financial activity in the United States primarily involved subjects in populous states with large urban areas that have established drug distribution networks and serve as collection points for illicit proceeds, including a substantial number of subjects in southwest border counties in California and Arizona.
• Domestic sales of fentanyl appeared to be conducted primarily in cash and peer-to-peer transfers, which were referenced in 54% and 51% of BSA reports, respectively.
• Methods to launder suspected fentanyl proceeds varied in sophistication. BSA filers identified complex schemes, including the use of suspected Chinese money laundering organizations potentially facilitating the movement of illicit fentanyl proceeds on behalf of the cartels.

Thoughts for businesses

FinCEN said it encouraged financial institutions to carefully review its August 2019 and June 2024 advisories on the trafficking of fentanyl, fentanyl analogues, and other synthetic opioids and the precursor chemicals and associated manufacturing equipment needed to synthesize these deadly drugs.

Combating drug cartels and stopping the flow of deadly drugs into the United States is a clearly stated top priority for the Trump Administration across a variety of federal agencies, incuding FinCEN (as part of the Treasury Department) and the Department of Justice.

One of the executive orders President Trump issued on his first day in office directs the secretary of state to identify “certain international cartels and other organizations” that should be designated as foreign terrorist organizations or specially designated global terrorists. Unlike this FinCEN analysis document, the executive order was vague on who would be covered.

Another reason why it is important to know who is being targeted is because it is illegal to provide “material support or resources” to a designated foreign terrorist organization, if the person knows that the recipient is an FTO. Assistance includes providing “training, financial services, expert advice or assistance, and personnel.”