China already is waging war with the US, but not with guns — with poison. In his new book, “Blood Money,” Peter Schweizer explains how Communist China mass produces and distributes fentanyl, a chemical thirty to fifty times as powerful as heroin, to poison Americans. As this excerpt shows, the Chinese government actively uses fentanyl as a weapon to destabilize our society.
While we debate domestic politics to address the fentanyl crisis, the reality is that Beijing is deeply involved at every stage of the drug’s production and distribution in the United States.
It’s little wonder that in 2019, some senior officials at the US Department of Homeland Security asked for fentanyl to be classified as a “weapon of mass destruction.”
How did the most dangerous drug ever created become a household word, and scourge, in America?
Not by accident, but by deliberate design. Beijing’s hand can be found in every stage of the poison’s spread in North America.
Based on leaked US national security documents, Mexican government hacked emails or correspondence, and Chinese corporate records, we know that the fentanyl operation is under Chinese control from start to finish, including:
• Production of the basic chemicals needed to make it
Most of the pharmaceutical ingredients needed to produce the synthetic cocktail known as fentanyl are produced in China.
In the northern city of Shijiazhuang, west of Beijing, chemical companies churn out such ingredients. A highly militarized city boasting some eleven military facilities including several command schools, military hospitals, and medical facilities, it is also a government-designated national development zone. So the companies producing the fentanyl chemicals get tax credits.
Some 40% of the production of this chemical comes from this city alone. Wuhan, now synonymous with COVID-19, is another big production center of fentanyl components.
• Creation of fentanyl and counterfeit pills in both Mexico and the United States
The Chinese triads began forging relationships with the Mexican drug cartels and quickly became business partners with them. The cartels started to mix fentanyl with their heroin. Fentanyl production proved to be so lucrative that “El Chapo,” the infamous head of the Sinaloa Cartel, quickly shifted from producing heroin and cocaine to fentanyl.
From the perspective of the Chinese triads and their allies in Beijing, routing the drugs through Mexico not only made logistical sense but also provided Beijing a measure of plausible deniability. The borrowed knife. The drugs were coming from Mexico, not China, right?
A similar operation, but on a smaller scale, occurred north of the border in Canada. Chinese triads established laboratories along the US border in British Columbia to produce fentanyl in Canada, smuggle it into the United States, and ship it abroad.
Once the fentanyl is synthesized, it is pressed into pills to be smuggled across the border. The pills need to look like real prescription drugs. Who do you think provides the pill presses?
In April 2020, the DOJ sent out an alert to law enforcement agencies with a blunt headline: “Chinese Pill Presses Are Key Components for Illegally Manufactured Fentanyl.” It noted how China smuggled pill presses into the US and Mexico, often claiming they were “machine parts.”
The DOJ noted the “relatively moderate pricing” of $1,000 per pill press — essentially at cost. Why are Chinese companies not charging a huge markup to sell the pill presses to the drug cartels?
Chinese pill press manufacturers are required by US law to alert the DEA when they ship pill presses to the United States so federal authorities can track those who might be illegally producing drugs. But the Chinese companies simply ignore the law — with devastatingly lethal consequences in America. And Beijing does not punish them for doing so.
• Distribution of the deadly drug within the United States
The Zheng drug syndicate, or cartel, operated a large fentanyl distribution ring in the American Midwest and bragged to drug dealers that it could openly “synthesize nearly any” narcotic, including fentanyl. In 2018, the DOJ indicted the cartel leadership in China. But despite arrest warrants, China allowed the cartel’s leaders to continue to live freely in Shanghai.
An important player in the Zheng drug syndicate was a Chinese Canadian scientist named Bin Wang. On the surface, Wang operated as a legitimate businessman out of a nondescript warehouse in Woburn, Massachusetts, just north of Boston. Wang sold chemicals to National Institutes of Health (NIH) research projects.
But behind the legal facade, Wang was running a Zheng syndicate narcotics distribution hub. Wang’s companies received parcels from China with narcotics smuggled within bulk shipments of legitimate chemicals from Wang’s Chinese companies. The fentanyl and other drugs were then separated into individual parcels for his US distributors.
Wang advised his employees to “heat seal” the fentanyl into “foil bags”; falsely label the parcels with the name of safe, legal chemicals; then ship them across the United States.
After the Zheng network was broken up by US law enforcement, Wang was indicted and charged with nearly a dozen crimes. He received a sentence of six years in prison.
Wang’s case exemplifies the symbiosis between drug cartel members and the Chinese government. While distributing fentanyl in the United States, Wang worked for Beijing to create a computerized platform to track chemical shipments worldwide, which meant flying to China monthly, in part to meet with Chinese government officials to discuss his progress.
Wang was also the head of the Nanjing University Alumni Association for the Boston area. Although the association sounds innocent enough, it functions as if it is a United Front group and uses its US-acquired knowledge to serve Beijing’s technological needs.
Operating out of the same Woburn, Massachusetts, warehouse was another organization with interesting government ties (and name) called the Chinese Antibody Society. According to court filings, this group, which had been launched, in the words of the Chinese government, “by China and for China,” also worked to collect intellectual property to be sent back to China.
All this is to say that Wang was not your typical drug trafficker. Given his CCP connections, his drug trafficking could be seen as an extension of his duties to the state.
• Facilitation of drug cartel financial transactions, and even money laundering
Drug cartels also need to launder their money.
Some of the Mexican cartels’ most successful and proficient launderers are Chinese and use Chinese state banks to do their dirty work.
In the United States, Chinese nationals living across the United States from Virginia to Illinois to Oregon have been arrested in recent years for laundering money for drug cartels.
This pattern suggests a much larger system, especially considering the other established aspects of Chinese national alliance in the illicit drug trade.
In May 2012, law enforcement officials received early indications of the drug supply network and the role of Chinese banks when they made moves in five states as part of Operation Dark Angel.
They arrested 20 people, including the leader of a drug network based in Mexico. US federal agents noticed that he was, curiously, wiring cash overseas, including to “banks in China.”
Chinese banks are highly regulated and controlled by the government. Yet in a leaked Department of Homeland Security (DHS) report obtained by the author, the cartels shifted to Chinese money laundering because of “their low fees” and “their ability to transfer monies rapidly to many regions in the world.”
In Oregon, officials found three Chinese citizens who had transferred millions of dollars of cartel money into more than 251 Chinese bank accounts while handling more than three hundred cash deliveries across the United States from Los Angeles to Boston.
Or consider the recent case of a Chinese American gangster named Xizhi Li, a successful money launderer who moved street money into large bank accounts that cartel leaders could convert into assets such as “yachts, mansions, weapons, technology and bribes to police and politicians.”
Li grew up in a Mexican border town before migrating to southern California and becoming an associate of the 14K triad. He fathered children with a Chinese woman but married a Mexican American woman, with whom he also had kids.
He soon got into the drug business, smuggling cocaine out of Mexico. His approach to money laundering was simple and straightforward: a cartel would contract with him to launder some $350,000 — an amount that would fit comfortably into a suitcase.
He didn’t use obscure banks to move the money around; rather, he used the most politically connected banks in China: the Industrial and Commercial Bank of China and the Agricultural Bank of China, which are state controlled.
Somehow the Chinese state didn’t seem to notice — or care.
The quantity of money involved was enormous. Li had dozens of couriers operating from California to Georgia. In Chicago, two of his couriers handled more than $10 million over a seven-month period.
One method used to launder large sums of money is employing thousands of Chinese students on education visas in the United States to pick up suitcases of cash and then transfer them for money laundering, with the money then routed through WeChat and Chinese banks.
As one DEA official put it, “I can’t emphasize this enough, the involvement of the Chinese has really complicated all of these schemes.”
Admiral Craig Faller led the US Southern Command, which oversees all US military operations in Latin America, for three years. He testified before Congress in 2021 that Chinese money launderers are “the ‘No. 1 underwriter’ of drug trafficking in the Western Hemisphere.”
• Facilitation of communications networks used by the cartels to operate without detection in the United States.
Mass production, distribution, and sales of fentanyl in the United States require a secure means of communication to circumvent surveillance by US law enforcement.
Enter a Canadian company called Phantom Secure, which advertised a completely secure communication technology. A cartel favorite for years, Phantom Secure offered custom modified mobile devices such as BlackBerrys and smartphones, plus a service to delete all data in the event of a user’s arrest.
According to federal authorities, “Phantom Secure’s devices were specifically designed, marketed and distributed for use by transnational criminal organizations, specifically those involved in drug trafficking.”
What made these devices especially secure was that the servers that stored client communications were in China-controlled Hong Kong or Panama. Phantom Secure chose those locations knowing that officials in neither country would cooperate with international law enforcement.
Eventually, in 2018, the FBI and its Canadian and Australian counterparts shut down Phantom Secure, arresting its senior executives for helping drug cartels.
Chinese organized crime figures involved in the drug trade also speak openly on WeChat, a Chinese messaging app. WeChat is operated and owned by Tencent, a Chinese tech firm with close ties to the Chinese military and intelligence service.
The Chinese government regularly monitors the app to suppress political dissent. But when it comes to drug trade chatter, it looks the other way.
“It is all happening on WeChat,” said Thomas Cindric, a retired DEA agent from the elite Special Operations Division. “The Chinese government is clearly aware of it. The launderers are not concealing themselves on WeChat.”
In the mid-19th century, the British Empire used opium to destabilize China and win a trade war. The Chinese know their history, and have turned the tables. They are using fentanyl to undermine America and win the next global conflict.
Excerpted with permission from “Blood Money: Why the Powerful Turn a Blind Eye While China Kills Americans” by Peter Schweizer, out Tuesday from Harper.
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