PRC narco-launderer sought influence with President Trump

He had multiple meetings with President Donald Trump. He also transferred cryptocurrency from Hong Kong while attempting to buy U.S. visas for Chinese criminals at $150,000 per document. From 2008 to 2020, as the U.S. grappled with an influx of narcotics from Mexico, he worked closely with Latin American drug cartels and transnational Chinese mafias, believed to be laundering billions in drug profits annually from cocaine, fentanyl, and methamphetamines flooding American cities.

Currently languishing in a medium-security federal prison in southern New Jersey is Tao Liu, an ailing Chinese narco-launderer who has been arguing for early release on health grounds, according to court records filed in 2024.

However, Liu’s arguments seem unlikely to succeed, given DEA agents believe he is a spy, and Liu’s case could expose the methods Chinese intelligence has used to infiltrate facets of North American politics by positioning Chinese mafia bosses, disguised as political donors, near successive U.S. leaders, from Bill Clinton to Donald Trump.

Liu, a Chinese national currently incarcerated at the Federal Correctional Institution in Fairton, New Jersey, is far from an ordinary money launderer.

The Bureau’s review of recent court documents, combined with verified reports by American journalists like Sebastian Rotella, suggests that Liu’s role within this international crime network serves as a template for understanding the nexus between organized crime and geopolitical intrigue — a cocktail of corruption, drugs, and espionage that presents a chilling glimpse into the most dangerous forces threatening U.S. democracy.

The Bureau also uncovered an unreported court document that suggests compelling links between Tao Liu and a Buddhist charity attached to the United Nations in New York City. Further investigation shows this Buddhist organization in New York linked to media entities in Canada that in turn demonstrate ties to Beijing’s foreign-interference arm, the United Front Work Department.

Since most of the court documents in Tao Liu’s U.S. government file remain sealed, it is difficult to differentiate between the drug trafficking and money laundering allegations and his suspected ties to Chinese intelligence.

As reported by Rotella, a former national security official commented on the Liu case:

“The theory is (Tao Liu) was gathering information and feeding it back to Chinese intelligence to stay in their good graces, allowing him to continue his criminal activities.”

Liu — who also faced Chinese police investigations for a massive cryptocurrency scam — fits the profile of many Chinese businessmen who evade prosecution by working for China’s United Front Work Department abroad, according to subject experts like Scott McGregor, a former RCMP intelligence analyst.

Rotella’s interview with an unidentified security official aligns with this model:

While Liu’s attempts to gain political power through bribery and influence peddling have been exposed, the broader implications of his case are still unfolding. This is what is known to date.

At the heart of the case, U.S. prosecutors allege, are two men linked to the 14K Triad: Xizhi Li, a powerful transnational figure, and Tao Liu, a Hong Kong-based money launderer who came perilously close to the highest levels of U.S. power.

Liu was arrested in Guam and indicted in September 2020 by a federal grand jury in the Eastern District of Virginia for various criminal activities, including conspiracy to distribute cocaine, money laundering, identity fraud, and bribery.

The indictment against Li and Liu reads like a textbook on modern money laundering. From at least 2008 to 2020, the duo and their associates helped launder tens of millions of dollars in drug proceeds through elaborately structured transactions spanning the globe.

Born in China, Xizhi Li operated extensively in Mexico and Guatemala, forging ties with Latin American cartels across the region, including Colombia. Li used his deep criminal connections to secure contracts for laundering the proceeds of U.S.-based drug trafficking operations, becoming a critical link in a sophisticated global network.

A Chinese Triad kingpin who relocated to Latin America, Xizhi Li’s function apparently mirrors Sinaloa cartel boss José Angel Rivera Zazueta, the second-in-command under drug lord Ismael “El Mayo” Zambada Garcia.

Like Zazueta, who primarily operates in Asia managing fentanyl precursor imports from factories such as Shanghai Fast-Fine Chemicals to Mexico, Li skillfully bridged the gap between Latin American cartels and Chinese black-market merchants. His operations facilitated not just money laundering but the seamless flow of illicit funds across continents.

Li’s methods were brazen.

He used several fictitious identities, including “Francisco Ley Tan,” to open bank accounts in Miami, Florida, and acquire a casino in Guatemala City.

The casino acted as a front for his drug trafficking and money laundering schemes, enabling a continuous cycle of illegal financial transactions. More prosaically, Li’s gambling joint was a safe place for narcos to conspire.

Li’s use of encrypted platforms like WeChat, where he communicated under aliases such as “SUPERKING 99” and “JL 007,” allowed him to operate globally with collaborators across the U.S., Latin America, and China.

The key to Tao Liu and Xizhi Li’s global money laundering was the flow of seemingly legitimate trade between China, Hong Kong, and Asian diaspora communities worldwide.

Triad brokers like Liu and Li collected drug cash proceeds from Latin American cartels and U.S. drug traffickers and moved the funds back to Mexico, often by first transferring the money through Chinese banks.

According to a federal indictment, a rising demand for U.S. dollars and merchandise in China has fueled this black-market operation.

Latin American merchants, especially in Mexico, are seeking cheap Chinese goods for resale, further driving demand.

Investigators found that these individuals and organizations took possession of drug profits in the U.S., usually from cocaine sales, and transferred the cash to produce goods in China, where they are sold to fund currency transfer payouts to cartels in Mexico.

Alternatively the goods produced with drug proceeds in China are simply shipped directly to Mexico for sale by Chinese diaspora merchants who then bank the proceeds with narco cartels.

This complex financial choreography — known as a “mirror transfer” — ensures the seamless exchange and integration of illicit profits.

The sophisticated trade-based money laundering cycle benefits criminal organizations, international traders, and Chinese factories that ship goods worldwide.

A senior U.S. source involved in the Tao Liu and Xizhi Li investigation, who asked to remain unnamed, said the U.S. government has recognized phenomenal growth in Chinese diaspora businesses in key Mexican cartel hubs since 2005.

While the Tao Liu case deals primarily with cocaine trafficking, the same Triad brokers and diaspora businesses are key conduits for blending legal and illegal trade, facilitating global fentanyl and methamphetamine production and money laundering.

“There’s a story of a guy by the name of Zhenli Ye Gon in 2007, where the Mexican army seized $207 million from him in his house in Mexico City,” the U.S. government source said. “That was the first major case involving a Chinese national chemical supplier in Mexico at that level.”

The Li and Liu case also raises sensitive concerns around the use of Chinese banks in the network’s trade-based money laundering, “including but not limited to the Agricultural Bank of China and the Industrial and Commercial Bank of China,” the indictment says.

Other key players included Li’s Guatemala casino business partner Jianxing Chen, based in Belize, and his brother-in-law Jiayu Chen, a U.S. citizen in Brooklyn, both of whom helped manage drug proceeds across borders.

“Jianxing Chen traveled to New York City, Los Angeles, Cancun, Guatemala City, and elsewhere,” the indictment says, adding he often directed “others to collect and transport drug trafficking proceeds so that they could be used in subsequent financial transactions.”

In April 2021, Tao Liu pleaded guilty to money laundering conspiracy and bribery of a public official. Court documents show he attempted to fraudulently obtain U.S. passports and made bribery payments in cryptocurrency to an undercover DEA agent posing as a State Department employee. His actions extended beyond laundering operations, as he sought fraudulent documents to aid the criminal network.

Liu’s co-defendant, Xizhi Li, was sentenced to 15 years in prison for his role in the drug and money laundering conspiracy.

Liu’s conduct, including his bribery attempts, set him apart from others, showing a broader reach of criminal intent and manipulation of U.S. systems. While their operations have been exposed, the full extent of Li and Liu’s reach via the 14K Triad and suspected Chinese state actors remains concealed in sealed documents, leaving unanswered questions about their connections to both the criminal underworld and geopolitical forces.

Tao Liu’s efforts to obtain fraudulent U.S. passports through corrupt means provide a potential window into the broader issue of PRC espionage activities.

Between April 2020 and the filing of the superseding indictment, Liu communicated with an undercover DEA agent posing as someone connected to a State Department official who could facilitate the production of U.S. passports.

Liu was willing to pay $150,000 per passport, suggesting these documents might have been intended for more than just criminal use — potentially giving “VIPs” like Tao Liu the credentials to operate politically in the United States.

The scheme unraveled when Liu initiated cryptocurrency payments to DEA-controlled accounts, with transactions on June 7 and June 11, 2020, and subsequent payments routed through Bank of America and JPMorgan Chase.

Liu believed these funds would be converted to USD and used to procure the passports. This cryptocurrency transfer, meticulously tracked by DEA undercover agents, provided critical evidence of Liu’s intent and the methods through which he operated.

In his reporting, Sebastian Rotella highlighted suspicions among U.S. authorities, including the DEA and FBI, that Tao Liu might be connected to PRC intelligence operations. Rotella’s investigation explored Liu’s access to high-level figures in the U.S., including an intimate golf club meeting with then-President Donald Trump, raising concerns about how a Triad associate managed to secure such proximity to political power.

The key seemed to be Liu’s access to influential figures and political fundraising.

“He was interested in political donations and fundraising,” Rotella cited one of Liu’s political associates. “He wanted to participate. He was willing to help politicians here. That’s for sure.”

Rotella reports that in early 2018, Liu embarked on a high-rolling quest for influence in New York, courting political figures at gatherings fueled by champagne and cigars, proudly documenting his growing profile in smug social media posts.

According to Rotella, evidence suggested that Liu may have made at least one illegal donation to the GOP. This raised further concerns among DEA agents, who questioned what Liu was doing with the president and whether he was conducting operations on behalf of Chinese intelligence.

NBC News also documented Liu’s “VIP” appearances at Trump political events and meetings with a Trump associate named Joe Cinque.

Cinque, known for his connections in elite circles, even presented Liu with an award at the kickoff event for Liu’s investment company, Blue Water Capital. While Blue Water Capital is purportedly based at the prestigious 1 Rockefeller Plaza, little information about the company is publicly available, NBC reported.

This is the same murky financial entity that surfaced in connection with a photo filed by Tao Liu in his application for early release, according to The Bureau’s investigation of Liu’s case file.

While this photo appeared intended to highlight his charitable work and wholesome connections, its relation to Blue Water Capital and an event at the United Nations in New York suggests strong ties to Chinese United Front networks.

The photo shows Liu at a ceremony for the Vajra Dharma King Peace Charity Foundation in New York in 2019. A Chinese media site that reported on the ceremony stated that Liu attended the Buddhist event at the United Nations in 2019 on behalf of his company, Blue Water Capital. Other guests included various Chinese chamber of commerce leaders and media figures, according to World Chinese Media.

Notably, this website hosts links to numerous similarly designed news platforms worldwide, including a Canadian website that hosts advertising for a Chinese international school in Greater Toronto. This school was involved in providing students who were coerced by Chinese Consulate officials to nominate a particular candidate for Prime Minister Justin Trudeau’s party in Canada’s 2019 federal election, according to an ongoing Chinese interference inquiry.

Other Canadian websites linked to World Chinese Media advertise ties to United Front groups worldwide and Beijing’s Chinese People’s Political Consultative Conference, a body the CIA calls the Chinese Communist Party’s basic unit front structure.

Meanwhile, Alex Joske, an expert on Chinese intelligence operations — and author of the book Spies and Lies — has written extensively about the Ministry of State Security’s use of Buddhist front organizations, to further its espionage goals.

Considering Tao Liu’s activities and connections, his meeting with Donald Trump echoes the case of Ng Lap Seng, a Macau real estate developer involved in multiple scandals linking Chinese criminal organizations to U.S. politics. Ng was investigated for funnelling hundreds of thousands of dollars into the Democratic National Committee, securing numerous visits to the Clinton White House from 1994 to 1996, as detailed in a U.S. Senate report.

As previously reported by The Bureau, according to a former Canadian immigration official in Hong Kong, Ng was “a suspected Triad member” linked to drug and prostitution control in the western U.S. by American investigators.

And in 2017, Ng was convicted for running a United Nations bribery scheme involving over $1 million in payments to diplomats, including former U.N. General Assembly President John Ashe.

The scheme sought to advance various projects, including a conference center in Macau, while also promoting the business interests of Chinese tycoons and security companies. As the Sydney Morning Herald aptly described it, Ng’s operations were part of “a clandestine foreign interference operation,” using “a network of middlemen, millionaires, and suspected spies.”