Fentanyl Warfare: Beijing, Cartels and the New Narco Order:

4th in a series of six articles

In 2011, two pivotal developments quietly signaled a new phase in the global narcotics landscape. Xi Jinping emerged as China’s anointed successor, and Tse Chi Lop (Sam Gor)—a key underworld figure with known links to Chinese authorities—was brought back to China and Hong Kong to construct what would become the world's most expansive synthetic drug network. These events marked the beginning of a systematic, state-tolerated (and state-directed) campaign that weaponized narcotics as part of a broader strategic agenda: the Chinese Communist Party's (CCP) global drug war against the West (the Reverse Opium War).

This fourth article in a six-article series will present conclusive information about the scope and depth of the CCP’s covert Reverse Opium War beginning with Zhenli Ye Hon, the transplanted Chinese in Mexico who paved the way for the Chinese-Mexican cartel alliance to conduct new synthetic drug warfare across North America. The illegal cannabis operations of the Chinese across North America demonstrate a well-planned and executed strategy to use cannabis business to finance the narcotics operations and possibly United Front activities and to serve as a ‘minor league’ to train new recruits. Article 4 also includes evidence of Chinese participation in a US-based drug war through DOJ indictments of fentanyl manufacturers in China and money laundering operations. Finally, a definitive report from a US congressional committee provides ample evidence of Chinese control over fentanyl production and marketing.

Zhenli Ye Gon: Cartel Partnership, CCP-Enabled:

Zhenli Ye Gon, a Chinese-born Mexican businessman, was extradited from the United States to Mexico in October 2016 after a nine-year legal battle. He faces charges including drug trafficking, money laundering, illegal arms possession, and organized crime. In 2007, Mexican authorities seized over $205 million in cash from his Mexico City mansion—the largest drug-related cash seizure in history.

Ye Gon supplied massive quantities of pseudoephedrine, a methamphetamine precursor, to the Sinaloa Cartel. Utilizing his pharmaceutical company, Unimed Pharm Chem Mexico, and connections in China, he imported chemicals through countries like Argentina to Mexico. Investigations suggest he moved approximately $90 million through HSBC and other Mexican banks.

Ye Gon played a key role in the Chinese Communist Party’s (CCP) global drug war against the West by creating the critical linkage between Chinese synthetic precursors and the Mexican cartels that distributed finished product throughout North America. His operation became a model for transnational cooperation between Chinese chemical suppliers and cartel networks, helping fuel the synthetic drug crisis across the U.S. and Canada.

In the U.S., Ye Gon was arrested in 2007 but had charges dismissed in 2009 due to witness issues and lack of cooperation from China, which refused to provide key documents. The fact that U.S. charges were dropped due to "witness issues" is yet another example of the American legal system failing to address major Chinese criminals—key actors in the CCP's global drug war—with the urgency and legal force required. Such failures allow enemies of the United States to avoid the full extent of justice and escape the harshest sentences they deserve.

Despite his claims of innocence and assertions that the seized funds were political slush money, Mexican officials linked him to the Sinaloa Cartel. Upon extradition, Ye Gon was detained at Mexico's high-security Altiplano prison. His case underscores the challenges of international drug enforcement, highlighting the complexities of cross-border legal cooperation and the deepening ties between Chinese chemical suppliers and Mexican drug cartels.

Triad Weed Business

Recent investigations by The Maine Wire and Canadian journalist Sam Cooper have exposed a vast, coordinated Chinese-led network of illegal cannabis operations spanning from British Columbia to rural Maine. These operations, generating an estimated $4 billion annually in the U.S. alone, appear to be part of a centrally directed strategy that uses the marijuana trade as a foundation for more dangerous and covert Chinese narcotics activity in North America.

In British Columbia, Chinese Triads and Chinese Communist Party (CCP)-aligned networks—particularly those linked to the United Front Work Department (UFWD)—exploited Canada’s 2018 legalization of cannabis to dominate the production and export of high-quality marijuana, notably “B.C. Bud.” The product is trafficked across borders to the U.S. and Asia via transient brokerage houses operated out of VRBO and other short-term rentals. These hubs collect cannabis from rural farms, move it internationally, and launder proceeds through drug cash brokers in New York and Tokyo before routing funds back to Canada via real estate, casinos, and Chinese-controlled financial platforms.

The model closely mirrors Canada’s notorious “Vancouver Model” exposed in prior investigations, involving drug money couriers, underground banking, and laundering through Silver International and other firms linked to the Sam Gor syndicate. In this new cannabis iteration, many of the same laundering and distribution tactics are in play, including cryptocurrency ATMs, modified consumer products for smuggling, and CCP-affiliated figures like Paul King Jin.

Chinese criminal syndicates have spent two decades quietly acquiring cannabis licenses in British Columbia, using illegal migrant labor and remote farmland to avoid scrutiny. These cannabis operations serve as more than just a profit engine—they function as a support system for China’s broader strategic infiltration into North America. Proceeds help fund CCP-linked influence operations, while the network itself provides hands-on training for new arrivals from China in trafficking, laundering, and organized criminal tactics. This workforce and infrastructure directly support what is increasingly being described as China’s “Reverse Opium War”: a sustained campaign to destabilize Western societies through narcotics and financial subversion.

In the U.S., The Maine Wire uncovered at least 100 illegal grow operations across rural counties like Somerset, Oxford, and Penobscot. A leaked DHS memo suggests there are over 270 illicit Chinese-run grow sites in Maine alone, contributing to a nationwide total nearing 750. These sites are commonly purchased in cash by Chinese nationals, some of whom are in the U.S. illegally or under asylum status. They exploit legalization loopholes, low property prices, and lax enforcement. Signs include blacked-out windows, unusual electrical upgrades, and a steady flow of out-of-state vehicles.

Industry insiders have dubbed the product “Triad weed” due to its role in funding broader criminal endeavors and destabilizing the legal cannabis market. DHS assessments also link these operations to narcotics trafficking, money laundering, and human smuggling. Despite mounting bipartisan concern and requests from local officials and Maine’s congressional delegation, federal law enforcement has done little to disrupt the network.

Ultimately, the illegal Chinese cannabis trade is not just about marijuana. It is a low-risk, high-reward enterprise that underwrites CCP-aligned influence operations, trains new operatives, and embeds illicit Chinese infrastructure into the heart of Western nations. This narco-economic ecosystem represents a new front in asymmetric warfare—weaponizing the West’s own laws, markets, and institutions against it.

DOJ’s Indictments Exposes Beijing's Narco Proxy Strategy

In October 2023, the U.S. Department of Justice announced eight federal indictments against China-based chemical manufacturers and their employees for trafficking in fentanyl, methamphetamine, and precursor chemicals. These charges reveal an alarming and direct role by Chinese companies and nationals in fueling the deadliest drug crisis in American history. This marks the second wave of indictments against Chinese entities, highlighting a deliberate and organized effort to produce, export, and launder proceeds from the synthetic opioid trade.

The indictments accuse five Chinese corporations and eight individuals in the Middle District of Florida of openly advertising their ability to evade U.S. Customs and ship fentanyl precursors to the U.S. and Mexico. These companies used fake shipping labels, counterfeit postage, fraudulent invoices, and cryptocurrency transactions to obscure the illicit nature of their shipments and launder profits. One company, Hebei Shenghao, and its employees were found to have consistently supplied precursors to Mexican clients—primarily drug cartels—who then synthesized and distributed fentanyl throughout the U.S.

Simultaneously, three indictments in the Southern District of Florida charged additional Chinese firms and individuals with fentanyl trafficking, international money laundering, and postal fraud. Hanhong Medicine Technology, for example, sent precursors and additives like xylazine—a veterinary sedative increasingly linked to fatal human overdoses—to drug traffickers in Pennsylvania and Mexico’s Sinaloa cartel. One of its executives, Changgen Du, was listed as a top transnational threat on the U.S. Attorney General’s Consolidated Priority Organization Target (CPOT) list.

These prosecutions confirm what U.S. officials—including the DEA and Homeland Security—have long asserted: the global fentanyl supply chain often begins in China. Chinese chemical companies not only produce and export dangerous synthetic drugs and their precursors, but also launder the resulting profits using advanced financial concealment techniques. The Justice Department emphasized its “whole-of-government” response, aiming to dismantle this global network through coordinated law enforcement, sanctions, and regulatory actions.

In sum, this operation exposes China's central role as the primary source of precursors in the fentanyl crisis, linking state-based industries to the Sinaloa and Jalisco cartels and revealing a transnational system of chemical export and money laundering that underpins a public health catastrophe in the United States.

Financial Laundering and the Role of Chinese Brokers

Chinese nationals and criminal networks operating in Canada and the United States play a growing and crucial role in facilitating North America's ongoing drug war—not by directly trafficking drugs, but by laundering the massive cash proceeds generated by drug sales, particularly from fentanyl, methamphetamine, and cocaine. Drug trafficking organizations (DTOs), such as the Sinaloa Cartel, rely on Chinese money laundering organizations (MLOs) to repatriate billions in U.S. drug profits back to Mexico and other source countries without detection by law enforcement.

Chinese MLOs exploit a loophole created by China's strict capital controls, which limit citizens to moving only $50,000 annually out of the country. Many wealthy Chinese seek to bypass this rule by purchasing U.S. dollars on the black market. To meet this demand, Chinese underground bankers in the U.S. and Canada accept bulk drug cash from cartels at a discounted fee. In exchange, they provide equivalent funds—held or delivered in China—to their Chinese clients.

These operations involve sophisticated informal value transfer systems (IVTS), often linked to trade-based money laundering. Chinese brokers use the cash to buy goods (including precursor chemicals used in drug manufacturing) or luxury items to export to China, where resale generates local currency. Funds can also be structured into the banking system via small deposits or used to purchase real estate and assets.

By charging lower fees than traditional launderers and using complex schemes difficult to trace, Chinese MLOs offer a cost-effective, low-risk solution for DTOs. This strategic financial partnership strengthens the DTOs’ ability to flood North American streets with narcotics while undermining financial enforcement systems, creating a critical and often under-recognized front in the continent’s drug crisis.

See a WideFountain exclusive, a detailed case study of a Chinese money laundering operating in cooperation with Sinaloa Cartel figures in Southern California to be posted on Substack by June 5.

CCP Select Committee Report: The CCP’s Role in the Fentanyl Crisis

The United States House Select Committee on the CCP is a leading authority on China, and its 40-page report on the fentanyl crisis is a thoroughly researched document. Detail after detail makes clear the Chinese Communist Party’s complicity in the production and distribution of fentanyl. Everyone should read this report (see link in Notes).

The Committee Report states that the fentanyl crisis is the leading cause of death for Americans aged 18–45, killing over 200 people daily and costing the U.S. nearly $1.5 trillion in 2020. At the heart of this crisis is the People’s Republic of China (PRC), the world’s primary supplier of fentanyl precursors. These chemicals are shipped mostly to Mexican cartels, which produce and smuggle the drug into the U.S. Despite laws prohibiting this trade, the Chinese government has not meaningfully enforced them. Evidence shows the PRC has actively subsidized the export of these substances through its VAT refund system, knowingly supporting companies involved in narcotics trafficking, including state-owned firms and even a company run by a prison accused of human rights abuses.

Chinese companies openly advertise illegal drugs online, targeting U.S. and Mexican buyers. Yet the government, despite having powerful surveillance and censorship tools, fails to intervene. Thousands of vendors operate with apparent state tolerance, sometimes rewarded with grants and recognition. The PRC has also obstructed U.S. investigations and warned traffickers of pending actions.

According to congressional findings, China’s actions appear intentional, forming part of a broader strategy of asymmetric warfare—using narcotics as a tool to weaken adversaries like the U.S. The report calls for strong, coordinated international enforcement and a U.S.-led task force to hold PRC-linked traffickers accountable.

Report Recommendations Summary:

1. Establish a Joint Task Force – Counter Opioids (JTF–CO) reporting to the Attorney General and National Security Council, unifying intelligence, law enforcement, economic, and regulatory tools.

2. Expand international law enforcement cooperation, with real-time intelligence sharing and joint investigations.

3. Prioritize counternarcotics within the Intelligence Community, enhancing collection authorities and technical talent, especially in cybersecurity and data analysis.

4. Codify and expand sanctions (e.g., Executive Order 14059) against PRC chemical firms, banks, and platforms involved in the fentanyl trade.

5. Close trade loopholes, notably the $800 de minimis threshold, and penalize repeat violators in transshipment.

6. Empower CBP, DEA, and the U.S. Navy to intercept suspect shipments.

7. Regulate PRC fintech and e-commerce firms as money services businesses, enforcing compliance or applying sanctions.

Conclusion

As we examine the vast network of Chinese actors involved in the Reverse Opium War—both within China and abroad—it’s important to recognize a defining feature of Xi Jinping’s rule since 2012: the development and deployment of advanced, technology-enabled surveillance systems. These tools have been used not only to monitor the Chinese public, but also to track individuals overseas, including in the United States. China’s domestic surveillance capabilities, including facial recognition and digital monitoring, have proven so effective that nearly every White Paper protester in five major cities was reportedly identified and detained. Abroad, the CCP has leveraged platforms like Zoom and other digital tools to locate and intimidate dissidents living in places like New York City.

Given this technological reach, the claim that Beijing is somehow incapable of identifying and stopping key players in the global drug trade is not only implausible—it’s disingenuous. But WideFountain is not merely calling on China to rein in a crisis that appeared out of nowhere. We argue that Xi Jinping was aware of the Reverse Opium War from the beginning—and that his rise to power was directly tied to it (see the Ye-Xi Clique series for more).

In the final two articles of this series, WideFountain will explore the covert structure behind the CCP’s Reverse Opium War and confront the critical question: what happens next?