In the first part of this interview, Leland Lazarus, a leading expert on China-Latin America relations and transnational crime and founder and CEO of Lazarus Consulting firm, discussed the expansion of Chinese organized crime networks across Latin America and the Caribbean. In this second part, he delves deeper into this growing threat, exploring how Beijing may be pursuing broader strategic objectives through these illicit operations. As China’s influence in the region grows, Lazarus raises urgent concerns about sovereignty, security, and the blurred lines between crime and statecraft.
Diálogo: What strategic objectives do these overseas Chinese criminal networks help the Chinese Communist Party (CCP) achieve?
Leland Lazarus, founder and CEO of Lazarus Consulting: There’s well-documented evidence of China’s objective of elite capture. One way is through the use of, or leverage over, illegal Chinese gangs or unscrupulous Chinese businessmen who are engaged in illicit activities. This becomes yet another tool the Chinese state can potentially use to pay off a local politician, influence a local leader, or expand contacts and influence in ways that the state itself wouldn’t necessarily be able to achieve directly.
The use of illegal Chinese gangs or unscrupulous Chinese businessmen engaged in illicit activities is yet another way the Chinese state may attempt to pay off local politicians, influence local leaders, or expand networks of contact and influence. These are things the Chinese state might not be able to achieve through official or formal diplomatic channels.
There was a case in Chile involving a prominent Chinese businessperson who was also engaged in illicit activities and was implicated in bribing a local politician. We see similar situations in some Caribbean countries, where the head of a local Chinese business association is also reportedly involved in illegal gambling or suspected human smuggling operations.
Diálogo: What role have Chinese state-owned financial institutions played in facilitating transnational money laundering as well as the significant use of state-controlled communication platforms like WeChat in coordinating illicit activities, given that these platforms are monitored by the Chinese government?
Lazarus: What we’ve consistently seen in our research is that the main method by which these Chinese illegal groups communicate, whether with each other or with local gangs in Latin America and the Caribbean, is through WeChat. They receive payments through WeChat, and they use it to coordinate logistics.
As we mentioned before, China is the world’s largest techno-authoritarian state. They have the capability to easily monitor this kind of activity. We know they are monitoring WeChat and other social media platforms. So, in theory, they could do much more to shut down these criminal networks and stop the financial flows. But that hasn’t happened, and I think that’s a major concern.
One more thing I want to mention is the role of financial institutions. There’s a very sophisticated Chinese system known as Fei Qian, or the “Flying Money” system. Another term for it is shadow banking. It’s an innovative method of laundering money without having it ever cross borders. This makes it extremely difficult for law enforcement to track these illicit flows, because the money never actually crosses borders. And on top of that, Chinese authorities are not as cooperative as they should be in helping investigate or dismantle these systems.
Diálogo: How are Chinese organized crime groups involved in supporting the Chinese state’s efforts at transnational repression, particularly through clandestine overseas police stations?
Lazarus: The work of an NGO called Safeguard Defenders revealed, a couple of years ago, that there were allegedly 110 Chinese overseas police stations operating in countries around the world; 14 of them were in Latin America and the Caribbean.
Now, from China’s perspective, they offer one of two explanations. One is that these so-called “stations” are not actually police stations at all, they’re consular service centers.
The second is that they need these overseas police stations to go after legitimate criminals, fugitives who’ve fled China. This is part of what they call Operation Fox Hunt, an effort to pursue and repatriate Chinese fugitives abroad. So this kind of thing is happening and especially across Latin America and the Caribbean.
And the big concern here is: To what extent does this represent a violation of sovereignty? If the host country is not informed that these law enforcement actions are happening within their jurisdiction, without any coordination or approval, that’s a serious issue.
Diálogo: Cyberattacks have been widely linked to actors supported or sponsored by Beijing, particularly its military and intelligence services. How does the Chinese state sponsor or support these cyberattacks, and how have their targets, tactics, and strategic objectives evolved over the past decade?
Lazarus: Some researchers, especially Dr. Martin Thorley, from the Global Initiative Against Transnational Organized Crime (GI-TOC), have introduced the concept of “geo-criminality.” And I really like that term, because I think it encapsulates what we’re seeing: the extent to which state actors, like China, Russia, and Iran, are leveraging criminal networks to advance their national interests.
One way we’ve seen the Chinese government do this is by enabling China-based hackers. These hackers may or may not be directly employed by the Chinese state, but they are often empowered by it, or at the very least, the state turns a blind eye to their activities and then benefits from the data and intelligence they steal.
Diálogo: Given China’s expanding influence in Latin America’s energy sector, how likely are cyberattacks or manipulation of energy infrastructure, and could China’s involvement, even if indirectly, facilitate such activities?
Lazarus: For sure. And this isn’t hypothetical. In 2021, Microsoft released a report identifying a China-based hacking group called Nickel that had carried out cyberattacks in various countries around the world,16 of them in Latin America and the Caribbean. They were targeting sensitive data: trade information, government communications, details about prominent officials, and more.
There was another report, either from Google or Mandiant, which is now part of Google, that found a trend of cyberattacks focused on commercial data. In particular, data that would benefit Chinese state-owned enterprises bidding on major infrastructure projects. So, it’s very interesting. When you look at the targets of these cyberattacks, it seems clear that the goal is to give Chinese state-owned companies an economic advantage.
To your point: yes, Chinese companies have significantly expanded their presence in sectors like electricity and infrastructure. But the deeper question is: To what extent does China’s control over critical infrastructure impact the sovereignty of a country?
Diálogo: How have advancements in technology, including digital currencies, encrypted communications, and online marketplaces, facilitated the operations of these criminal groups?
Lazarus: One of the main tools they now use to move illicit funds is cryptocurrency, particularly Tether. Tether is particularly useful because it’s a stablecoin, meaning one Tether equals one U.S. dollar. While Bitcoin is still used, Tether’s price stability makes it more attractive for laundering.
These networks are also employing increasingly sophisticated techniques to obscure the origins of their transactions. One such method is known as chain hopping, for instance, receiving payment in Bitcoin, then converting it to Tether, Ether, or other cryptocurrencies. The goal is to complicate traceability and further mask the source and destination of the funds.
Another major element of this is digital scamming. While this hasn’t yet reached a critical scale in Latin America and the Caribbean, the region could very well be targeted in the near future.
We’re already seeing this trend in Southeast Asia, in countries like Myanmar, parts of Vietnam, and the Philippines, where Chinese criminal groups have set up digital scam farms. These organized operations make fraudulent calls convincing them to invest in bogus cryptocurrency schemes. Once the victim transfers the money, sometimes tens or even hundreds of thousands of dollars, the scammers disappear with the funds. It’s a global operation, truly massive in scale.
Diálogo: How is China’s growing political and economic influence in Latin America linked to the rise of Chinese criminal activity in the region?
Lazarus: I think that past is prologue when it comes to Chinese economic engagement in a region and the illicit activities that tend to follow. Earlier this year, I had the privilege of traveling to Vietnam, Taiwan, and the Philippines. What really struck me was how deeply these Chinese illegal networks have embedded themselves into the legitimate economic engagement China is conducting, particularly through the Belt and Road Initiative. These networks have essentially grafted themselves onto those efforts, and it’s becoming a huge issue. Local authorities in places like the Philippines, Vietnam, and certainly Myanmar, which is amid civil war, are struggling to get a handle on it.
That’s why I believe it’s critical for our partners in Latin America and the Caribbean to look beyond their region, to examine what’s happening in other parts of the world that have had a longer, more sustained engagement with China. When you see these trends playing out elsewhere, it can serve as a preview of what might come to your own neighborhood. It may not happen today or tomorrow, but in five, 10, or 20 years, those same patterns could emerge.
Diálogo: What are the main challenges security forces in Latin America and the Caribbean face when trying to dismantle these Chinese criminal networks?
Lazarus: The concern I’ve heard consistently is the lack of cultural understanding and language skills. Wherever you go, Chinese diaspora communities tend to be insular. That could be due to cultural barriers, language differences, or both. But it’s a consistent pattern. These communities are often closed off, and that creates a real challenge. Criminal activity may be occurring, but local law enforcement often doesn’t have a window into it. The second issue is one of priorities. And I want to circle back to this point: The fact is, this is a threat. The question is, how big a threat is it compared to other local or regional transnational criminal organizations? That’s the million-dollar question.
I was in Trinidad and Tobago in March [2025], discussing the rise of Chinese organized crime. Authorities there have noticed a rise in Chinese money laundering organizations, but they assumed it was something unique to their country. My job was to help them understand that it’s a microcosm of a much larger global trend. And I think that’s where a potential solution lies. Imagine if a law enforcement agent in Trinidad and Tobago could regularly communicate with their counterparts in Vietnam, the Philippines, the U.K., or Canada, places that are also confronting similar challenges. They could compare notes: “We’re seeing this, have you seen it too?” Or “What are your best practices? What worked? What didn’t?” Building a transnational network to take on these transnational networks that’s the kind of collaboration we need going forward.
Diálogo: Are there any emerging trends in Chinese criminal activity that governments, researchers, and policymakers should be monitoring more closely?
Lazarus: One thing I’ve been surprised by is how much of the public conversation, and the headlines, focus on fentanyl, but very rarely do we talk about the money laundering piece. I’m not a law enforcement officer, and I don’t work in financial services, but I do know the old adage: follow the money, follow the money, follow the money. And if you follow the money, you can often dismantle these networks much faster, because you’re cutting off their main source of funding.
