Eight Indictments Against China-Based Chemical Manufacturing Companies

Joe Lyons • October 3, 2023

United States Attorney General Merrick B. Garland Delivers Remarks Announcing Eight Indictments Against China-Based Chemical Manufacturing Companies and Employees

Remarks as Delivered

Good afternoon.

Fentanyl is the deadliest drug threat the United States has ever faced. It is nearly 50 times more potent than heroin and is a nearly invisible poison. Just two milligrams of fentanyl – the amount that could fit at the tip of a pencil – is a potentially lethal dose.

I am joined today by Homeland Security Secretary Alejandro Mayorkas, Deputy Attorney General Lisa Monaco, Deputy Treasury Secretary Wally Adeyemo, DEA Administrator Anne Milgram, and Chief Postal Inspector Gary Barksdale.

We are here today to announce a series of actions we are taking to target the trafficking of fentanyl at every stage and in every part of the world.

But more important, we are here today to deliver a message on behalf of the United States government:

We know who is responsible for poisoning the American people with fentanyl.

We know who is responsible for shattering families and communities across the United States with drug poisonings and overdoses.

We know that behind the deaths of hundreds of thousands of Americans is a cartel-driven fentanyl trafficking network that spans countries and continents.

We know that this network includes the cartels’ leaders, their drug traffickers, their money launderers, their clandestine lab operators, their security forces, their weapons suppliers, and their chemical suppliers.

And we know that this global fentanyl supply chain, which ends with the deaths of Americans, often starts with chemical companies in China.

Our agents and prosecutors are working every day to get fentanyl out of our communities and bring to justice those who put it there.

Recently, that work has included charging 23 Sinaloa Cartel members, associates, and leaders for their roles in running the largest, most violent, and most prolific fentanyl trafficking operation in the world.

And it has included the Department’s first-ever charges against chemical companies based in China for trafficking fentanyl precursor chemicals directly into the United States.

Today, we are announcing several more actions we are taking across the government to disrupt every single aspect of the global fentanyl trafficking network.

First, in eight separate indictments in the Middle and Southern Districts of Florida, the Justice Department charged eight companies based in China, and 12 of their executives, for crimes related to the production, distribution, and importation of fentanyl, other synthetic opioids, methamphetamines, and their precursor chemicals.

As detailed in the indictments unsealed today, the precursor chemicals used to make synthetic opioids like fentanyl are primarily manufactured and distributed by China-based chemical companies.

These companies advertise the sale of precursor chemicals online, using different websites and social media platforms.

They then ship the building blocks needed to create deadly drugs all over the world.

To evade detection by U.S. law enforcement, they use fake return addresses, include fraudulent invoices that mislabel the products, and disguise the chemicals in packaging such as dog food bags.

In just one example, one of the defendants, a pharmaceutical technology company located in China, advertised fentanyl precursor chemicals, as well as xylazine, for sale online.

Drug traffickers may combine xylazine, a horse tranquilizer also known as tranq, with drugs like fentanyl in order to enhance their effects and increase their value.

But, unlike opioids, the effects of xylazine cannot be reversed by Narcan. And people who inject drug mixtures containing xylazine can develop wounds that result in disfigurement or amputation.

As detailed in the indictment, after advertising the precursor chemicals, the pharmaceutical company then shipped them to both the United States and to Mexico, including to a drug trafficker affiliated with the Sinaloa Cartel.

In one instance, a company executive specifically asked a customer, who was asking about the purchase of fentanyl precursors, “do they need fent?” – short for fentanyl.

The executive went on to recommend a specific fentanyl precursor to the customer, saying that “all Mexico customers” buy it. The executive told the customer the company would ship the precursor under a different chemical name to ensure “safe custom clearance.”

But in fact, the purported “customer” was an undercover DEA agent.

As alleged in the indictment, the company shipped 300 grams of xylazine and 43 kilograms of fentanyl precursors to the United States, where undercover DEA agents received them.

The precursor chemicals we received from this company – in just this one case – would have been enough to manufacture more than 72 kilograms of fentanyl. That amount could be used to make more than 15 million fentanyl pills – each one potentially fatal.

As the Deputy Attorney General will highlight shortly, the cases being unsealed today are part of a whole-of-government effort to attack every aspect of the trafficking of deadly fentanyl.

That effort includes not only Justice Department prosecutors and DEA [and FBI] agents, but also our partners at the Treasury Department, the Department of Homeland Security, and the U.S. Postal Inspection Service.

In a moment, Secretary Mayorkas will discuss, among other things, additional seizures of fentanyl precursor chemicals made by the Department of Homeland Security alongside its DEA counterparts.

And Deputy Secretary Adeyemo will discuss sanctions the Treasury Department is imposing today on a set of individuals and entities involved in fentanyl trafficking. That includes all of the China-based companies and individuals being charged in the Southern District of Florida today.

Tomorrow, Secretary Mayorkas, Secretary Blinken, and I will be traveling to Mexico City to meet with our government and law enforcement counterparts to discuss the most emergent, urgent threats facing our countries. Disrupting the violent cartels manufacturing and trafficking fentanyl will be at the top of the list.

In this vein, just three weeks ago, we extradited from Mexico Ovidio Guzman Lopez, a leader of the Sinaloa Cartel, and a son of the infamous El Chapo. He is one of more than a dozen cartel leaders we have indicted and extradited to the United States. He will not be the last. The United States government is focused on breaking apart every link in the global fentanyl chain.

That includes holding accountable the chemical companies that we know are fueling the fentanyl epidemic.

It is critical that the PRC government stops the unchecked flow of precursor chemicals that are coming from China.

I want to thank the U.S. Attorneys for the Middle and Southern Districts of Florida, and their incredible teams, for their work on these cases. I want to thank the DEA and FBI for their tireless efforts in making the actions we announce today possible.

And I want to thank our terrific partners from across the government.

Finally, I want to express my continued gratitude to some of the most powerful advocates I have ever met: the families who have lost loved ones to a drug poisoning or overdose.

Last week, Administrator Milgram and I spent the morning with people from across the country, who came to Washington for DEA’s second annual family summit.

They came here because each had lost a loved one to a drug poisoning or overdose.

And they came here because they wanted to do everything in their power to prevent that from happening to another family.

They remind us why we fight, and why the battle is so urgent.

We will remember the victims of the fentanyl epidemic. We will pursue justice for them. And we will hold accountable those responsible for these tragedies.

Thank you.

Deputy Attorney General Lisa O. Monaco Delivers Remarks Announcing Eight Indictments Against China-Based Chemical Manufacturing Companies and Employees

Remarks as Prepared for Delivery

Good afternoon. Thank you, Mr. Secretary.

Last April, we announced charges and sanctions against every element of the Sinaloa Cartel’s deadly fentanyl trafficking network, led by the notorious Chapitos brothers.

At that time, we pledged to attack the global networks that fuel the fentanyl crisis, from every angle, at every stage of the supply chain, using every tool available.

Today, we are making good on that pledge – with indictments of 8 Chinese companies and 12 Chinese nationals – for trying to ship into the United States gallon after gallon of chemicals used to make fentanyl, methamphetamine, and other deadly drugs.

No community is off limits for the fentanyl traffickers who profit at the expense of American lives. And no technique is too brazen if it means access to the American market.

As alleged in today’s indictments, the defendants used a range of trafficking tactics to ply their deadly trade and cover their tracks — from blatant online advertising and encrypted messaging apps to fake shipping schemes and bitcoin payments.

As we learned from prior campaigns against terrorists and cyber criminals, we must be relentless, we must be agile and innovative, and we must use every tool of national power to disrupt the global production and trafficking of fentanyl.

That means combining traditional tools with novel approaches. And that means capitalizing on the partnerships we have built, at home and overseas.

To bring today’s cases, our agents and prosecutors combined old-school techniques like officers going undercover with cutting-edge tools like cryptocurrency tracing.

Today’s cases reflect the hard work and tenacity of dozens of agents, analysts, and prosecutors at the Department of Justice – but it also reflects teamwork from across the Federal government. For example:

Undercover DEA agents posed as drug traffickers to identify those shipping precursor poisons to our shores;

Partners at DHS surged resources to stop the lethal shipments and trace their origin;

Postal Inspectors exposed a scheme to exploit the mails to deliver the deadly ingredients;

FBI and IRS agents followed the blockchain to track crypto payments;

Partners at Treasury assembled the evidence for today’s raft of sanctions; and

Justice Department prosecutors from the Middle and Southern Districts of Florida coordinated with investigative partners to bring the criminal charges we announce today.

This was a whole-of-government effort. When we work together – sharing information, combining resources, and relentlessly pursuing justice – we can have a tremendous impact on those who would do us harm.

But even with this cross-agency team, we cannot win the battle without additional partners.

Today, we are grateful for the efforts of Mexican prosecutors and officers who worked hand-in-hand with U.S. partners to track shipments of precursor chemicals.

But we must do more.

We need every country across the globe to join with us in the fight against fentanyl.

And we need the private sector’s help as well. As in our fight against cyber criminals and terrorists, we need social media companies and marketplaces to police their platforms to avert catastrophic harm.

Our nation’s common carriers and freight forwarders must up their game to prevent traffickers from using their services to ship poison to our communities.

It must be all hands on deck.

Today, we renew the Justice Department’s pledge – a pledge to every American community and to the families of hundreds of thousands of Americans who have lost loved ones to fentanyl poisoning:

We will bring every tool of national power to the fight against fentanyl;

We will foster public-private collaboration;

We will find common cause with – and demand action from – foreign governments; and

We will not rest until we have rid our communities of this poison.

The women and men involved in these cases represent the very best of government service, and I’m proud to stand with them.

I will now turn the podium over to Deputy Secretary Adeyemo to talk more about the Treasury Department actions today.