Corporate Counsel Daily, FinCEN releases report identifying patterns and trends linked to fentanyl-related financial activity, (Apr 9, 2025)

By Kathleen Bianco, J.D.

Nearly $1.4 billion in suspicious transactions were identified in 2024 according to a Financial Trend Analysis released by the agency.

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis (FTA) highlighting patterns and trends seen in suspected fentanyl-related financial activities. The reported financial activity focused on various aspects of the illicit fentanyl supply chain, including the procurement of chemicals for the production of fentanyl, the movement of the drug, and money laundering activities, which have touchpoints across the U.S. financial sector. The FTA is based on a dataset of 1,246 Bank Secrecy Act (BSA) reports submitted between January and December 2024, which contained keywords identifying possible fentanyl-related activities. These BSA reports accounted for approximately $1.4 billion in suspicious transactions, according to a press release.

In August of 2019 FinCEN issued an advisory aimed at helping financial institutions recognize potentially illicit activities. The advisory highlighted financial typologies and red flag indicators associated with suspected fentanyl-related transactions (see Banking and Finance Law Daily, Aug. 22, 2019). In June of 2024, FinCEN issued a supplemental advisory addressing new trends and urging vigilance in the identification and reporting of suspicious activities (see Banking and Finance Law Daily, Jun. 21, 2024). The key terms highlighted in these advisories were among the key words used in establishing the dataset for the FTA.

In the FTA, FinCEN reports that 57 and 32 percent of fentanyl-related BSA reports were filed by depository institutions and money services businesses (MSBs), respectively. The report also identified Mexico and the People’s Republic of China (PRC) as the top two foreign countries identified in subject address fields in the analyzed BSA reports, highlighting the key role both play in the production of fentanyl and subsequent money laundering activity. The report further asserts that e-commerce plays a significant role in Chinese precursor chemical sales, fentanyl traffickers primarily deal in cash or peer-to-peer transfers, and money laundering schemes involving fentanyl range from simple to complex.

The report points out that drug cartels and associated chemical brokers use front companies, money mules, and U.S.-based intermediaries to purchase chemical used in the production of fentanyl from PRC-based suppliers. The Chinese suppliers accept a wide range of payment methods and often utilize public advertising, including e-commerce platforms to market their chemicals. Domestic fentanyl-related financial activities are primarily centered in populous states with large urban areas with established drug distribution networks and can serve as collection points for illicit proceeds. Finally, the report opines that the laundering of suspected fentanyl proceeds varies in sophistication. A number of BSA filers identified complex schemes, including the use of suspected Chinese money laundering organizations. Additionally, the report highlights potential cartel-linked trade-based money laundering (TBML) schemes leveraging strong consumer demand for electronics, including cell phones and vaping/e-cigarette devices and Black Market Peso Exchange (BMPE)-related activity. While suspected TBML/BMPE are only referenced by BSA filers in two percent of the reports in the dataset, these reports accounted for nearly 42 percent of the aggregate reported amount.

“As Treasury continues to prioritize combating the illegal production and trafficking of fentanyl, our public-private partnerships are vital,” said Secretary of the Treasury, Scott Bessent. “As today’s analysis shows, the information we receive from financial institutions is a critical element in our ability to more effectively investigate and disrupt the malicious actors that profit off this unprecedented epidemic, and ultimately aids in the effort to save American lives.”

In an effort to disrupt these criminal activities, FinCEN urges financial institutions to familiarize themselves with the information contained in the August 2019 and June 2024 advisories and continuing reporting suspicious activities.

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