On 13 November 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Center (FinCEN) and Office of Foreign Assets Control (OFAC), in a coordinated joint operation with the Government of Mexico, targeted numerous Mexican gambling establishments and other related entities and individuals involved in money laundering activities for the Cartel de Sinaloa (Sinaloa Cartel).[1] The FinCEN and OFAC actions occurred a day after the Mexican government blocked the financial transactions of 13 casinos due to their links to organized crime.[2]
The U.S. and Mexico actions signal continuing heightened compliance risks for both U.S. and non-U.S. financial institutions (FIs) stemming from money laundering associated with cartel activity and the sale and transport of illicit fentanyl precursors. U.S. FIs and foreign financial institutions (FFIs) should assess their exposure to customers and transactions linked to cartel activity and the illicit trade in fentanyl precursors, particularly in areas known to have a concentrated cartel presence, and document effective risk mitigation practices and procedures.
In order to address the FinCEN action, and to mitigate potential supervisory or enforcement risk, U.S. FIs and FFIs operating in Mexico should work together to share information and assess whether correspondent relationships are being used to process transactions for the identified gaming establishments.[3]
FinCEN Section 311 Notice of Proposed Rulemaking
FinCEN issued a notice of proposed rulemaking (NPRM), pursuant to section 311 of the USA PATRIOT Act (section 311),[4] finding transactions involving 10 Mexico-based casinos (the Gambling Establishments)[5] to be a class of transactions of primary money laundering concern. In order to “restrict[] the ability of the Gambling Establishments to access the U.S. financial system,”[6] the NPRM proposes the imposition of a special measure that would:
- Prohibit covered FIs from opening or maintaining a correspondent account for any FFI if such account is used to process transactions involving any of the Gambling Establishments;[7] and
- Require covered FIs to apply special due diligence to their correspondent accounts that is reasonably designed to guard against the use of such accounts to process transactions involving any of the Gambling Establishments.[8] The proposed measure would require covered FIs to send a prescribed notice to all foreign correspondent account holders that the covered FIs know or have reason to believe provide services to the Gambling Establishments. Covered FIs must document their compliance with this notification requirement.[9]
It is worth noting that the NPRM does not require FIs to obtain certification from any of its correspondent account holders that access will not be provided to the Gambling Establishments.
FinCEN assessed that the Gambling Establishments are ultimately controlled by the Hysa Organized Crime Group (HOCG), which has used its influence through its investments in, or control over, various Mexico-based businesses—including the Gambling Establishments and restaurants—to launder the proceeds of narcotics trafficking. All subsidiaries, branches, and offices of those Gambling Establishments that are operating in any jurisdiction outside of the United States are also subject to the prohibition and due diligence requirements under FinCEN’s NPRM.
OFAC Hysa Organized Crime Group Designations
Concurrently, OFAC designated 27 entities and individuals as Specially Designated Nationals and Blocked Persons (SDNs), including the HOCG, members of the HOCG, and related entities into which cartel payments were structured. The HOCG was designated under E.O. 13581, as amended, as a Transnational Criminal Organization (TCO) for being a foreign person that constitutes a significant transnational criminal organization. Additional individuals and entities were added to the SDN List pursuant to E.O. 13581, as amended, for being owned or controlled by or having acted or purported to act for or on behalf of, directly or indirectly, the HOCG or individuals or entities affiliated with the HOCG.
Unless otherwise authorized or exempt, U.S. persons are prohibited from engaging with any entity or individual added to the SDN List. The property and interests in property of an entity that is 50 percent or more owned, whether individually or in the aggregate, directly or indirectly, by one or more persons on the SDN List are also blocked, regardless of whether the entity itself is listed.
Mexican Government Actions
On 11 November 2025, two days before FinCEN and OFAC took their actions, the Mexican Financial Intelligence Unit (UIF), in coordination with Mexico’s Security Cabinet, included 13 Mexico-based casinos in its blocked persons list, which requires Mexican FIs “to immediately suspend carrying out the [actions], transactions, or services” with the listed parties, due to their potential use by organized crime for money laundering. The names of the 13 casinos were not identified in the press release.[10]
On 13 November 2025, the UIF added seven individuals and 24 entities to its blocked persons list. All seven individuals and 19 of the entities added to the blocked persons list were also sanctioned by OFAC for their links to the Sinaloa cartel.[11] Additionally, the UIF filed criminal complaints with the Attorney General’s Office for all the listed persons.
Mexican President Claudia Sheinbaum has also signaled that her administration is working on an updated legal framework for regulating casinos that will close loopholes, ramp up surveillance, and deal with the runaway growth in digital betting.[12]
Key Compliance Considerations for the NPRM
While FinCEN has a varying practice with respect to finalizing proposed rules involving Section 311, U.S. and foreign financial institutions should consider the risk implications identified in the NPRM and take steps toward implementation of the proposed rule.
Who must comply with this rule?
- Covered FIs has the meaning defined in 31 CFR 1010.605(e)(1) and includes (1) banks, (2) brokers or dealers in securities, (3) futures commission merchants or introducing brokers in commodities, and (4) mutual funds.
What should covered financial institutions do?
- Assess and evaluate their direct or indirect exposure to the Gambling Establishments, specifically potential exposure through correspondent relationships with FFIs operating in Mexico that could be at a higher risk of processing transactions for the Gambling Establishments. Covered FIs should prepare to send the prescribed notice to any foreign correspondent account holders known to provide or suspected of providing services to the Gambling Establishments.
- As part of the special due diligence requirement, ensure that proper risk-based transaction monitoring is in place to effectively screen funds transfer orders to identify (i.e., alert on) direct and indirect exposure to the Gambling Establishments. FinCEN anticipates that “the use of commercially available software programs that are already being used to comply with the economic sanction programs administered by OFAC” would constitute an “appropriate screening mechanism.”[13] Covered FIs should include the names of the Gambling Establishments (and their subsidiaries) on lists used for screening transactions and enhance transaction monitoring models and scenarios to enable them to detect potential unusual behavior related to the Gambling Establishments, including structuring typologies such as the ones described in the NPRM. [14]
- Concurrent with the transmittal of the required notice, engage with respondent banks with elevated risk to understand controls designed to prevent the Gambling Establishments’ use of their accounts.
- Update the corresponding banking due diligence requirements to account for the increasing money laundering and enforcement risks associated with TCOs and the sale of illicit fentanyl precursors and other drugs.
- Reassess the risks associated with casinos operating in Mexico to include typologies shared in the NPRM and other publications by the U.S. government.
What should FFIs do?
- Collaborate with U.S. correspondent banks to respond to information requests in a timely manner and reinforce due diligence measures in response to the NPRM.
- Terminate relationships with the Gambling Establishments to minimize both money laundering and enforcement risk and reinforce relationships with U.S. correspondent banks.
- Ensure that proper transaction and sanctions screening is in place to effectively identify exposure to the Gambling Establishments.
- Perform risk reviews/targeted lookbacks to assess exposure to the Gambling Establishments and determine whether customers have engaged in transactional activity involving any of the Gambling Establishments.
- Consider reclassifying casinos as posing elevated illicit finance risk and implement enhanced due diligence for customers assessed to have higher risk of interacting with the Gambling Establishments.
Implications
FIs and businesses should continue to expect additional actions by the Treasury Department to ramp up measures associated with cartel activity and the trafficking of illicit fentanyl precursors. FinCEN has twice targeted financial institutions “operating outside of the United States”—defined in the proposed rule to mirror the definition of “financial institution” under the Bank Secrecy Act, broadly encompassing banks, money transmitters, casinos, and other businesses operating in whole or in part outside of the United States—as primary money laundering concerns and imposed special measures designed to cut off access to the U.S. financial system. It has broadened the types of activities that fall within the scope of its authority to include financial institutions and classes of transactions. FinCEN actions complement actions taken by OFAC to block the assets of individuals and entities associated with cartel activity and the production and sale of illicit drugs. As the United States and Mexico seek formal mechanisms through which to intensify collaboration and information exchange, potentially through revisions to the United States–Mexico–Canada Agreement (USMCA), financial institutions on both sides of the border will need to proactively assess and mitigate risk and identify pathways for information exchanges with respect to sanctions and money laundering risks.
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K2 Integrity supports clients at every stage of the regulatory, supervisory, and enforcement lifecycle—from urgent responses to regulatory or enforcement orders to long-term regulatory risk management and program enhancement. Our team stands ready to assist financial institutions and other affected organizations in navigating requirements related to these recent developments.
[1] Department of the Treasury, “Treasury and Government of Mexico Partners Target Transnational Criminal Organization,” 13 November 2025, available at https://home.treasury.gov/news/press-releases/sb0315.
[2] Secretaría de Hacienda y Crédito Público, “La Secretaría de Hacienda refuerza acciones institucionales para impedir el lavado de dinero a través del uso de casinos por presuntos grupos de la delincuencia organizada” (“The Ministry of Finance is strengthening institutional actions to prevent money laundering through the use of casinos by alleged organized crime groups”), 11 November 2025, available at https://www.gob.mx/shcp/prensa/comunicado-no-54.
[3] This alert builds on prior analysis from K2 Integrity, including a 28 July 2025 alert regarding the designation of Mexican financial institutions as primary money laundering concerns; a 27 February 2025 alert regarding the designation of international cartels as Foreign Terrorist Organizations (FTOs); a K2 Integrity webinar on Mexico’s evolving AML/CFT environment, with a focus on its FATF review and the FTO designations; and K2 Integrity’s synopsis of its webinar on Mexico’s evolving AML/CFT environment.
[4] Section 311 of the USA PATRIOT Act grants the Secretary of the Treasury the authority, upon finding that reasonable grounds exist for concluding that “a foreign jurisdiction, institution, class of transaction, or type of account” is of “primary money laundering concern,” to require domestic financial institutions and financial agencies to take certain “special measures” against the entity of primary money laundering concern.
[5] FinCEN refers to the Mexico-based casinos as gambling establishments to avoid possible confusion with the similar terms—casinos, gambling casinos, and gaming establishments—defined in the BSA at 31 U.S.C. 5312(a)(2)(X).
[6] FinCEN, “Proposal of Special Measure Regarding Transactions Involving Ten Mexican Gambling Establishments as a Class of Transactions of Primary Money Laundering Concern,” 17 November 2025, https://www.federalregister.gov/documents/2025/11/17/2025-19927/proposal-of-special-measure-regarding-transactions-involving-ten-mexican-gambling-establishments-as.
[7] Section 1010.665(b)(1) of the proposed rule, available at https://www.federalregister.gov/documents/2025/11/17/2025-19927/proposal-of-special-measure-regarding-transactions-involving-ten-mexican-gambling-establishments-as.
[8] Section 1010.665(b)(2) of the proposed rule, available at https://www.federalregister.gov/documents/2025/11/17/2025-19927/proposal-of-special-measure-regarding-transactions-involving-ten-mexican-gambling-establishments-as.
[9] Ibid.
[10] Secretaría de Hacienda y Crédito Público, “La Secretaría de Hacienda refuerza acciones institucionales para impedir el lavado de dinero a través del uso de casinos por presuntos grupos de la delincuencia organizada,” available at https://www.gob.mx/shcp/prensa/comunicado-no-54.
[11] Secretaría de Hacienda y Crédito Público, “La Secretaría de Hacienda y Crédito Público en coordinación con el Departamento del Tesoro de EU bloquea operaciones financieras del Cártel del Pacífico y entidades de procedencia extranjera para proteger la economía nacional” (“The Ministry of Finance and Public Credit, in coordination with the U.S. Treasury Department, is blocking financial operations of the Pacific Cartel and foreign entities to protect the national economy”), 13 November 2025, available at https://www.gob.mx/shcp/prensa/comunicado-no-55.
[12] iGamingToday, “Mexico Prepares Regulatory Overhaul for Casinos and Online Betting Platforms,” 18 November 2025, available at https://www.igamingtoday.com/mexico-prepares-regulatory-overhaul-for-casinos-and-online-betting-platforms/.
[13] FinCEN, “Proposal of Special Measure Regarding Transactions Involving Ten Mexican Gambling Establishments as a Class of Transactions of Primary Money Laundering Concern,” https://www.federalregister.gov/documents/2025/11/17/2025-19927/proposal-of-special-measure-regarding-transactions-involving-ten-mexican-gambling-establishments-as.
[14] “[T]he Gambling Establishments’ senior leadership was directed to (1) make one or two transactions into bank accounts designated by a highly influential Sinaloa Cartel affiliate; (2) allow pick up of the disbursements, in person, by a highly influential Sinaloa Cartel affiliate at Midas Casino in Mazatlán, Sinaloa; or (3) hand the disbursements to a person designated by a highly influential Sinaloa Cartel affiliate. Furthermore, the highly influential Sinaloa Cartel affiliate instructed the Gambling Establishments’ leadership to make two deposits per account, make no more than MXN 90,000 (USD 4,354) per deposit, and avoid making deposits on consecutive days to prevent the accounts from being blocked.” FinCEN, “Proposal of Special Measure Regarding Transactions Involving Ten Mexican Gambling Establishments as a Class of Transactions of Primary Money Laundering Concern,” https://www.federalregister.gov/documents/2025/11/17/2025-19927/proposal-of-special-measure-regarding-transactions-involving-ten-mexican-gambling-establishments-as.