March 2, 2026

FinCEN, OFAC intensify efforts targeting Mexican cartel money laundering

Melissa G.R. Goldstein, Kyle B. Hendrix, Howard Kleinman, Sagar Ravi, Betty Santangelo, Mathew R. Swan McDermott Will & Schulte + Follow Contact LinkedIn Facebook X Send Embed

Through the provisions of the Bank Secrecy Act and various Office of Foreign Assets Control (OFAC) sanctions programs, the US Department of the Treasury (Treasury) has imposed certain compliance obligations on financial institutions, including money services businesses (MSBs). Among other things, financial institutions must block the property of sanctioned persons, take required “special measures” to guard against the financial risks posed by jurisdictions, financial institutions, transactions, or accounts identified as “primary money laundering concerns” pursuant to Section 311 of the USA PATRIOT Act (Section 311) and monitor transactions for suspicious activity. Financial institutions with potential exposure to Mexican cartels should be particularly cognizant of these requirements given Treasury’s apparent focus on cartel-related money laundering, reflected by recent enforcement actions.

On December 22, 2025, Treasury’s Financial Crimes Enforcement Network (FinCEN) “ announced a multitiered operation targeting more than 100 US MSBs along [the nation’s] southwest border,” aimed at identifying noncompliance with anti-money-laundering regulations. This followed an announcement on November 13, 2025, regarding coordinated actions between FinCEN and OFAC that target the Hysa Organized Crime Group (HOCG) and various Mexican-based gambling establishments allegedly involved in cartel-related money laundering and criminal activities. In conjunction with the Mexican government, OFAC sanctioned 27 individuals and entities connected to HOCG, and FinCEN issued a finding and notice of proposed rulemaking (NPRM) that would identify transactions involving 10 Mexican gambling establishments as being of primary money laundering concern pursuant to Section 311. These November sanctions and designations came two days after the Mexican government suspended the operations of 13 Mexican casinos with potential connections to organized crime that were allegedly used to launder money overseas. Together, Treasury’s recent actions highlight the Trump administration’s continued focus on dismantling drug cartels and reflect an overall trend of increased enforcement in locations and industries with cartel exposure.

FinCEN’s data-driven southwest border operation

In an effort to eliminate Mexican-cartel-related money laundering from the US financial system, FinCEN is engaged in an ongoing operation examining more than 100 US MSBs operating along the US’s southwestern border with Mexico for possible noncompliance with the Bank Secrecy Act. FinCEN is employing a data-driven approach involving high-performance data processing to carry this out, with its actions being guided by a review of more than 1 million Currency Transaction Reports (CTRs) and 87,000 Suspicious Activity Reports (SARs).

As of December 22, 2025, FinCEN’s operation has involved the issuance of six notices of investigation, dozens of examination referrals to the Internal Revenue Service, and more than 50 compliance outreach letters. In addition, FinCEN has warned that it continues to closely coordinate with law enforcement and regulatory partners at the federal and state levels and will pursue enforcement actions or make criminal referrals when necessary.

OFAC sanctions on HOCG-related persons

Reflecting its focus on addressing cartel-related illicit activities, as well as the compliance risks for financial institutions with exposure to cartels, on November 13, 2025, Treasury designated HOCG as a foreign person constituting a significant transnational criminal organization pursuant to Executive Order (EO) 13581 based on its use of Mexico-based businesses, including gambling establishments, to launder the proceeds of narcotics trafficking reportedly with the consent of the Sinaloa Cartel. With this designation, 7 individuals and 20 entities were added to the list of Specially Designated Nationals and Blocked Persons under EO 13581 for their connections to HOCG. As a result, any property or interests in property of these 27 persons that comes within the United States or within the possession or control of a US person is blocked. This includes the property and interests in property of any entity owned, directly or indirectly, individually or in aggregate, 50% or more, by one or more of these blocked persons.

Transactions involving HOCG-related gambling institutions are a primary concern

Concurrently with the above sanctions, FinCEN issued the NPRM pursuant to Section 311 identifying transactions involving 10 Mexican gambling establishments ( Gambling Establishments) operated by HOCG as being of primary money-laundering concern. According to FinCEN, the Gambling Establishments and their leadership facilitated money laundering for the benefit of the Sinaloa Cartel for more than six years.

With this determination, the NPRM would prohibit covered financial institutions (as defined in 31 CFR § 1010.605(e)(1)) from opening or maintaining correspondent accounts for a foreign banking institution if such correspondent accounts are used to process transactions involving any Gambling Establishment and prevent the access of correspondent accounts by Gambling Establishments. Further, covered financial institutions would be required to apply special due diligence measures to foreign correspondent accounts that are reasonably designed to prevent such accounts from being used to process transactions involving any Gambling Establishment. Such special due diligence must include:

• Notifying foreign correspondent account holders that such correspondents cannot provide the Gambling Establishments access to any correspondent account maintained at the covered financial institution if the covered financial institution knows or has reason to believe such correspondents provide services to a Gambling Establishment
• Taking reasonable steps to identify the use of its foreign correspondent accounts by a Gambling Establishment, to the extent that this may be identified through transactional records kept in the normal course of the covered financial institution’s business Covered financial institutions would also be required to take a risk-based approach to determining whether additional due diligence measures are required and to take all appropriate steps to investigate and prevent the access of correspondent accounts by the Gambling Establishments.

While the period for submitting written comments on the NPRM closed on December 17, 2025, the NPRM highlights Treasury’s determination of the increased risks of money laundering presented by the Gambling Establishments, and, as a result, financial institutions should assess their exposure to the Gambling Establishments and implement appropriate risk-based procedures in their anti-money-laundering programs.

Compliance takeaways

FinCEN’s ongoing operation targeting MSBs that appear to be noncompliant with the Bank Secrecy Act highlights the need for financial institutions to maintain adequate risk-based compliance programs that include processes for verifying customer identities, monitoring transactions for suspicious activity, filing timely SARs and CTRs, and overseeing agents, branches, and third-party service providers. This is especially true for MSBs along the US-Mexico border, which can face increased exposure to illicit activity, including the laundering of proceedings from drug and human trafficking.

Additionally, OFAC’s designation of the HOCG-related individuals and entities creates compliance risks for US and non-US persons. Beyond imposing civil or criminal penalties for sanctions violations, OFAC may also independently designate any person that has “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of [blocked persons].” As a result, US persons must assess whether they are in possession or control of property that must be blocked, and non-US persons should evaluate whether they have business dealings with the sanctioned HOCG-related persons that should be discontinued.

Further, as noted above, FinCEN’s NPRM would impose additional compliance obligations on covered financial institutions, including banks and broker-dealers. If the NPRM is finalized as proposed, such financial institutions will need to incorporate the required special due diligence measures and assess whether further safeguards are required. Additionally, while the NPRM would not change SAR obligations, FinCEN has requested that for any filed SAR involving the identified gambling establishments, reporters should enter “FIN-311-Gambling-Establishments” in Field 2 and in the SAR narrative.

Finally, financial institutions should note that the coordinated nature of these actions reflects Treasury’s unified approach to combating money laundering and financial crimes. While this strategy includes OFAC and FinCEN acting jointly against criminal actors, it also involves Treasury working with international partners, as it did with Mexican government in these actions. Further, as indicated by FinCEN’s ongoing operation targeting MSBs in connection with cartel-related money laundering, Treasury is likely to increase enforcement going forward, strengthening the need for comprehensive anti-money-laundering and sanctions programs.

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