U.S. Department of Justice announces charges against 4 China-based companies and arrests of 8 executives in fentanyl manufacturing

(WASHINGTON, D.C.) Four China-based chemical manufacturing companies and eight executives and employees were indicted by the U.S. Department of Justice over allegations of illegal fentanyl production, distribution, and sales resulting from precursor chemicals. Two of the defendants who are citizens of China were arrested in Hawaii.

U.S. Attorney General Merrick B. Garland announced on June 23 in Washington, D.C. the arrest of two individuals and the unsealing of three indictments in the Southern and Eastern District Federal Courts of New York charging China-based companies and their employees with crimes in connection to fentanyl trafficking.

The indictments represented the first prosecutions to charge China-based chemical manufacturing companies and nationals of China for trafficking fentanyl precursor chemicals into the United States in violation of federal law.

China's foreign ministry on June 24 urged the U.S. to stop using fentanyl-related pretexts to sanction and prosecute Chinese companies and citizens, and demanded the immediate release of those who were "illegally arrested", according to Reuters' news report. "China urges the U.S. side to stop dumping blame and to stop smear attacks on China," the ministry said in a statement.

Fentanyl is a highly addictive painkiller that has fueled the opioid crisis in the United States. The Drug Enforcement Administration (DEA) is the lead agency on the investigation.

During the investigation, DEA seized more than 200 kilograms of fentanyl-related precursor chemicals, a quantity that could contain enough deadly doses to kill 25 million Americans, according to Garland.

In the Southern District Federal Court of New York, the China-based chemical company Hubei Amarvel Biotech Co. Ltd., as well as three of its executives and employees, Qingzhou Wang, 35, Yiyi Chen, 31, and Fnu Lnu, were indicted with fentanyl trafficking, precursor chemical importation, and money laundering offenses.

The U.S. Justice Department said undercover DEA sources posing as fentanyl manufacturers met with Wang and Chen earlier this year and agreed to buy 210 kilograms of fentanyl precursors in exchange for payment in cryptocurrency. The DEA retrieved the chemicals from a Los Angeles warehouse in May.

Wang and Chen of China were expelled from Fiji on June 8 and arrested by the DEA. They made their first court appearance in Honolulu Federal Court on June 9 and were ordered detained waiting to appear in Manhattan Federal Court.

Two indictments were unsealed in the Eastern District Federal Court of New York. The first indictment charges Anhui Rencheng Technology Co. (Rencheng) Ltd., Anhui Moker New Material Technology Co., Shutong Wang, and Shifang Ruan with conspiracy to manufacture and distribute fentanyl, illegally concealing their activities, including through customs fraud and introducing misbranded drugs into the U.S. marketplace.

Another two individuals, Xinyu Zhao and Yue Gao, were also charged in the first indictment at the Eastern District Federal Court with illegally concealing their activities, including through customs fraud and introducing misbranded drugs into the U.S. marketplace.

The second indictment in Eastern District Federal Court of New York charges Hefei GSK Trade Co. Ltd., Hebei Sinaloa Trading Co. Ltd., and Ruiqing Li with conspiracy to manufacture and distribute fentanyl, customs fraud conspiracy, and introducing misbranded drugs into interstate commerce.

Garland said three indictments detailed the criminal activities of 4 companies and 8 of their employees based in China to manufacture and distribute fentanyl in the United States.

“Today’s announcement is a considerable step forward in our unrelenting fight against fentanyl, targeting the threat where it starts. These companies and individuals are alleged to have knowingly supplied drug traffickers, in the United States and Mexico, with the ingredients and scientific know-how needed to make fentanyl – a drug that continues to devastate families and communities across the United States, killing Americans from all walks of life," DEA Administrator Anne Milgram said.

"Targeting entire criminal drug networks, from the source of supply to the last mile of distribution, is critical to saving American lives. DEA will not stop until this crisis ends,” Milgram added.

According to the DEA, Fentanyl is a highly addictive synthetic opioid that is 50 times more potent than heroin and 100 times more potent than morphine. Fentanyl and its analogues have devastated communities across the United States and are fueling the ongoing overdose epidemic, which the Centers for Disease Control and Prevention (CDC) recently estimated killed approximately 110,000 Americans in 2022.

Fentanyl is now the leading cause of death for Americans ages 18 to 49. Fentanyl analogues, similar in chemical makeup and effect to fentanyl, can be even more potent and lethal than fentanyl.

In San Francisco, drug overdose deaths have been on record high this year. 74 people died of drug overdose in May 2023, for a total of 346 deaths this year. That’s nearly a 40% increase from 2022, and puts San Francisco on track to have its deadliest year ever.