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Watch Live: Hearing on China and cartel money laundering

(NewsNation) — Mexican drug cartels are now partnering with China to launder money — a major shift for the cartels that saves them hundreds of millions of dollars.

“These new networks coming out of the People’s Republic of China started charging one percent, at the lowest rate,” said Walter Rivera, retired Homeland Security special agent.

Chinese crime organizations are keeping just one percent from all the illegal drug money they launder for Mexican cartels, finding clever ways to funnel the money back to Mexico, rather than risk hauling massive amounts of cash over the border.

The partnership is saving the cartels millions of dollars, and the money is being put to use.

“They’re flush with cash, they’re taking all that additional money and investing it in technology for their organizations,” said Iowa Rep. Ashley Hinson (R). “In some cases they are outmanning, outgunning our CBP [Customs and Border Protection] agents.”

Hinson, who serves on the House Select Committee on China, says it would be naïve to think the Chinese communist government isn’t at least aware. if not complicit, in what’s happening.

“CCP [Chinese Communist Party] is behind everything that happens with these Chinese Communist Party organizations, right? And they’re directly tied to the government of China.”

The money laundering itself is done a couple different ways. In some cases, money will go through a series of fraudulent bank transfers in the U.S., Latin America and China.

In other instances, Chinese crime operations in the U.S. transfer large sums of money in cryptocurrency, getting back to the Mexican cartels in a matter of hours.

Up until about five years ago, Colombian crime organizations laundered the cartels’ money for up to 10 percent of the cut, according to Rivera.

At the time, the U.S., Colombian and Mexican law enforcement still had a fighting chance at tracing the cartel money.

Now, there is virtually no cooperation from Chinese law enforcement once the money enters the Chinese system.

“That partnership does not exist, or is very limited. When we have leads … across the waters to China, it goes stale. And it goes dead. Because they hit a wall,” Rivera told NewsNation.

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