FinCEN Financial Trend Analysis
In August 2025, FinCEN published a Financial Trend Analysis (FTA) assessing SAR filings related to suspected CMLN activity between 2020 and 2024. The majority of the filings were submitted by financial institutions, with others filed by Money Service Businesses (MSBs), casinos, security firms, insurance companies, and other entities, totaling approximately $312 billion in suspicious activity. The analysis identified or confirmed the following activity:
- CMLNs use U.S.-based Chinese nationals to perform cash deposits, often with an unknown source of funds. The funds are generally debited through same-day transfers to internal or external accounts.
- CMLNs use TBML to facilitate funds movement. Funds are deposited from various entities using different methods (e.g., cash, wire transfers, P2P), and they are used to purchase high-end luxury goods or to pay down large credit card balances.
- CMLNs recruit Daigou Buyers. Daigou means “buying on behalf of” and refers to an arrangement in which buyers use messaging platforms to connect Chinese consumers with products. The products are then sold for a profit to replenish accounts.
- Human Trafficking and Human Smuggling activity was linked to CMLN networks. The activity involved funds movement to businesses typically associated with labor or sex trafficking, such as massage parlors, spas, escort services, and restaurants and bars.
- CMLNs possibly use adult daycare centers and may also be associated with healthcare fraud, elder abuse, and illicit gaming activity. These filings identified activity involving senior facilities in New York that allegedly defrauded Medicaid, Medicare, and private insurance companies. In addition, the filings noted excessive or unnecessary movements unrelated to typical operational activity.
- CMLNs facilitate real estate transactions using illicit proceeds. The purchases are often intended to benefit individuals in the PRC who wish to move wealth to the U.S.
- CMLNs use Chinese students to facilitate financial activities.
Key red flags for financial institutions
No single red flag confirms illicit activity, but multiple risk indicators, when combined, should prompt enhanced due diligence. Institutions asking what Chinese money laundering networks are and how to detect them should consider the following red flags:
- Inconsistent wealth: Chinese nationals depositing large amounts of cash without employment history that supports the volume.
- Unexplained transfers: Incoming international wires from like-named accounts, inconsistent with the customer’s profile.
- Unusual real estate purchases: High-value purchases with unclear or unverifiable sources of funds.
- Suspicious business activity: Business accounts operated by Chinese nationals with little to no expected activity (e.g., no inventory purchases).
- Geographic mismatches: Rental income or business transactions originating from locations inconsistent with the customer’s operations.
- Healthcare business risks: Adult day care and home healthcare providers receiving significant Medicare/Medicaid reimbursements and quickly withdrawing funds or transferring them to personal accounts.
AML/CFT programs should also track businesses in the electronics, telecommunications, or luxury goods industries, as these sectors are known to be exploited by CMLNs.
