U.S. sanctions Chinese, Mexicans over scheme to make fentanyl-laced counterfeit pills

The U.S. government on Tuesday imposed sanctions on 17 entities from China and Mexico for their alleged role in producing illicit fentanyl that has killed hundreds of thousands of Americans through drug overdoses.

The move by the Treasury and State Departments targets companies linked to pill production equipment used in making counterfeit drugs that are often laced with potent, often deadly synthetic opioids.

“Treasury’s sanctions target every stage of the deadly supply chain fueling the surge in fentanyl poisonings and deaths across the country,” said Brian E. Nelson, Treasury undersecretary for terrorism and financial intelligence, calling the counterfeit pills laced with fentanyl a leading cause of the deaths that have impacted thousands of American families.

The sanctions named seven companies and six people who produce and sell pill press machines, die molds and other equipment that the Biden administration says have been used to make counterfeit trade markings of legitimate pharmaceuticals on illicitly produced pills that were then smuggled into the United States.

China’s government has denied any involvement in illicit fentanyl trafficking. In April, Chinese Foreign Ministry spokeswoman Mao Ning blamed the United States for the problem.

“The root cause of overdose lies in the U.S. itself, and the problem is completely made in the U.S.,” she said.

China halted counter-narcotic talks with the United States in August to protest the visit to Taiwan by then-House Speaker Nancy Pelosi.

Former State Department official David L. Asher predicted China’s action in halting talks would lead to increased fentanyl “precursor” shipments to Mexico’s Sinaloa and Jalisco cartels.

“Based on their actions, communist China is in a covert opioid war with the U.S., and [Chinese] operatives have taken over money laundering across the U.S. and Canada,” said Mr. Asher, now with the Hudson Institute’s China Center.

Former White House drug czar James Carroll said direct fentanyl shipments from China declined sharply in the Trump administration, but the supplies were then re-routed through Mexico to American markets. The shift shows the Beijing government can control the flow of the drug and the chemicals used to make it, he said.

The Treasury sanctions were imposed on Chinese pill press supplier Youli Technology Development Co., Ltd. and three Youli-affiliated Chinese nationals: Guo Chunyan, Guo Yunnian, and Guo Ruiguang, from Huizhou, China.

The Chinese company sent pill press machines to people in the United States that were involved in illicit pill manufacturing, the Treasury Department said in a statement.

“Guo Chunyan and Guo Yunnian have supplied pill presses and dies to drug traffickers operating in the United States, including those involved with fentanyl-laced pills production,” the statement said.

Other companies linked to the illicit fentanyl pills that were sanctioned include Yason General Machinery Co., Ltd, Yason Electronics Technology Co., Ltd, Yason General Machinery Co., Ltd. A Yason official identified Fei Yiren, a Chinese national, also was hit with sanctions. The sanctions prohibit the entities and people from doing business with any U.S. company or using the U.S. banking system for transactions.

According to the statement, the Chinese companies worked with a Mexico-based pill equipment supplier and contact that U.S. authorities say has provided equipment to a person linked to Mexico’s Sinaloa drug cartel.

“This individual used the machines to create superlabs in Mexico with the capacity to produce millions of fentanyl-laced pills weekly,” the statement said.

The Mexican company Mexpacking Solutions sells pill presses and other gear and is controlled by the Sinaloa cartel, the statement said. The Mexicans also were sanctioned as part of the pill press operations by the cartel.

A Chinese online business called Tdpmolds and three of its employees, along with Yantai Yixun International Trade Co., Ltd. and Yantai Mei Xun Trade Co., Ltd. were sanctioned in the action. Tdpmolds was accused of selling counterfeit Xanax and Oxycodone dies for the production of counterfeit fentanyl-laced pills.

The Drug Enforcement Administration in 2021 issued a notice warning Americans that fake prescription pills were being laced with fentanyl which can kill in very small doses.

Secretary of State Antony Blinken said the sanctions are part of a U.S.-led effort to halt the manufacture and trafficking of illicit fentanyl and other synthetic drugs, and were imposed in consultation with the Mexican government.

Border officials and investigators told Congress earlier this month that China and Mexico have been supplying goods used in making fentanyl-laced pills.

“We just seized over 200 pill presses at a warehouse in Los Angeles that came directly from China,” Matthew Millhollin, assistant director for countering transnational organized crime at Homeland Security Investigations, told a Senate hearing May 3.

More than 100,000 overdose deaths in the U.S. have been linked to fentanyl annually. Mr. Blinken said the Biden administration is working to disrupt and dismantle crime networks involved in fentanyl trafficking and has offered over 30 rewards totaling $75 million as part of its anti-fentanyl effort.

— Staff writer Tom Howell Jr. contributed to this report.