Rep. Gallego introduces bill targeting funds linked to fentanyl smugglers

U.S. Treasury officials could begin targeting foreign bank accounts used to support fentanyl smuggling if a bill introduced by U.S. Rep. Ruben Gallego last week makes it way through Congress.

On May 11, Gallego introduced the Buck Stops Here Act, which requires U.S. banks to begin tracking financial transactions likely linked to the illicit trafficking of fentanyl. The bill authorizes the U.S. Treasury Department’s Financial Crimes Enforcement Network to designate financial institutions, transaction classes, or accounts as primary money laundering concerns in connection to illicit fentanyl trafficking.

The proposed law, which has not yet attracted a cosponsor in the House, would add accounts associated with fentanyl trafficking to those covered by a set of Patriot Act banking regulations.

Gallego, a Democrat, has represented Arizona's 7th Congressional District since 2015. Earlier this year, he announced he would run for Arizona's U.S. Senate seat challenging former Democrat turned independent Krysten Sinema.

The act is an "anti-money laundering bill that targets fentanyl trafficking networks," Gallego's office said. Among the provisions, the bill would allow the Treasury secretary to impose sanctions on foreign financial institutions and changes current laws so government agencies can "more effectively penalize those facilitating the trafficking of illicit fentanyl." 

Gallego's bill would modify a part of federal legislation that guides how Treasury officials can track and sanction certain accounts. The law was created in the wake of 9/11 as part of the USA Patriot Act to target funding for terrorism. In 2021, Congress updated the the law to target accounts linked to Russian criminal groups.

Earlier this year, Treasury officials used the Section 9714 authority to file charges against a Hong Kong-based virtual currency exchange. Named Bitzlato Ltd., the company managed by a Russian national based in Miami helped moved money for Russian-linked ransomware groups. Under Section 9714, U.S. banks are now prohibited from moving money for Bitzlato, or from any account or CVC address administered by or on behalf of Bitzlato.

"Curbing the impact of the fentanyl epidemic will require a multi-pronged approach," said Gallego's office."These tools would allow federal officials to disrupt the funding schemes used by traffickers, a critical step to stopping fentanyl from coming into the United States." The legislation would disrupt the supply chain for fentanyl by "specifically targeting the finances that fund this crisis."

"While thousands of Arizonans die each year from fentanyl overdoses, traffickers and financial institutions make billions," Gallego said. "Fentanyl is cheaper and deadlier than any drug we have ever seen and countering it will require a multi-pronged approach. My bill would target the financial institutions that support fentanyl traffickers—hitting their pockets and leaving them without a place to launder their dirty money."

Fentanyl has rapidly become a public health priority across the state as the drug has been linked to an epidemic of overdoses over the last three years. In March, the CDC said overdoses have risen five-fold over the past two decades, killing 107,622 people in 2021—including 71,238 due to illegal fentanyl.

While fentanyl is regularly used as a powerful painkiller in clinical settings, illegal forms of the drug have killed thousands and the drug has been at the center of state and congressional efforts, including bills designed to crackdown on the drug's production and punish dealers for deaths linked to illegal heroin. Fentanyl is 50 times stronger than heroin and 100 times stronger than morphine, and smugglers have often disguised fentanyl as legal painkillers like Oxycontin, or other illicit drugs like ecstasy.

In 2013, U.S. Customs and Border Protection intercepted just two pounds of fentanyl, but by 2017 seizures grew to 1,131 pounds. Through the Trump administration, fentanyl seizures continued to accelerate and by the fiscal year of 2020, CBP seized 4,800 pounds. So far, CBP officials have intercepted nearly 14,000 pounds of fentanyl during the first six months of the 2023 fiscal year.

"The unbelievably small lethal dosage, coupled with easy production, has created an incredibly complex problem for our communities, especially for first responders," said Gallego. "We must use a multi-prong approach to end the crisis, including disrupting the supply chain." 

During a presentation in April to the Pima County Board of Supervisors, Dr. Francisco Garcia, the county's chief medical officer, said that in recent years 50 to 60 percent of overdoses are linked with fentanyl.

"What is particularly troubling about fentanyl is the fact that it is so ubiquitous, so affordable, and so readily accessible," he said. "So it has become in many ways the drug of choice for abuse."

More than 2,000 people Arizonans died from opioid overdoses in 2021, according to the Arizona Department of Health Services. This year, 340 people in the state died from opioids—including heroin and fentanyl—and there were 1,301 "non-fatal overdose events" in Arizona. 

Pima County's Medical Examiner tracks overdoses for four other counties, including Santa Cruz, Cochise, La Paz and Graham counties.

According to their data, since 2017 there were 2,842 overdose deaths across the five counties, and opiates like fentanyl were involved in two-thirds of cases. So far, in the five counties, fentanyl leads the pack among overdoses with 98 cases, almost all believed to be accidental overdoses. However, methamphetamine remains a close second and lead to overdoses in 77 cases. Further 23 people died from alcohol, and 24 died from cocaine, according to PCOME data.

"This is exactly what the nation needs at the right moment in time," said Pima County Attorney Laura Conover. "Easy fixes that seek to sweep the streets are shortsighted, unsafe, and expensive. What Congressman Gallego seeks to do here is to focus precious taxpayer dollars on real, solution-oriented investigations to hit the bad actors where they are most vulnerable. I encourage a bipartisan support to join Rep. Gallego."