A Chinese Prison Helped Fuel The Deadly Fentanyl Crisis In The US

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In 2010, the Hebei Prison Administration Bureau combined three detention facilities to create a high-security prison in Shijiazhuang, the capital of Hebei province. The region is a base of China's chemical industry, which is the largest in the world. It is also weakly regulated and freewheeling, according to US national security officials, private studies and other sources. Companies peddle everything from innocuous fertilizers to deadly opioids.

Liu Jianhua, a veteran Chinese Communist Party official with a master's degree in business administration from the University of Illinois Chicago, became director of the prison in 2014. By then, fentanyl was cutting a swath across America. Overdose deaths soared due to the ease with which US users and dealers could acquire fentanyl products by mail from China.

China's high-tech surveillance apparatus aggressively polices the online activities of its citizens. Yet sales of fentanyl to foreigners have thrived on popular, easily accessible websites, said Frank Montoya Jr., a former FBI agent with years of China-related experience who served as a top U.S. counterintelligence official.

“You don't have to go on the dark web,” Montoya said.“It is out in the open.”

Yafeng Biological Technology Co. Ltd., also known as Hebei Shijiazhuang Yafeng Chemical Plant, became a typical player on this frontier, the congressional inquiry found. (As part of its reporting, ProPublica mapped links between the prison, the company and the US drug market with the help of two entities that specialize in China open-source research: Sayari, a company that provides risk management and supply-chain analysis and that supported the House inquiry, and C4ADS, a nonprofit that investigates illicit global networks.)

Yafeng's websites and Chinese corporate records describe the firm as a chemical manufacturer. It has ties through other websites, phone numbers and email addresses to at least nine companies that advertised illicit drugs, causing investigators to conclude that Yafeng was a network hub, according to the report and interviews. It's common for interconnected Chinese fentanyl producers and brokers to obscure details about their enterprises and change names and platforms to elude detection, US officials said.

In some ways, Yafeng presented itself to foreign buyers as a respectable company. The English-language websites featured peppy phrases like“team spirit” and“promoting the well-being of community.” The China-based sales representatives gave themselves Western names: Diana, Monica, Jessica. A map of markets showed shipping routes from China to the United States, Mexico, Canada and other countries.

Yet the sales pitches left little doubt that the firm knew its activities were illegal. Yafeng websites utilized familiar terms assuring US and Mexican drug users and traffickers of the company's skill at smuggling illegal narcotics overseas, according to the House report and US investigators.

The company touted its use of“hidden food bags,” a method in which drugs are concealed in shipments labeled as food products. Ads promised“strong safety delivery to Mexico, USA” with“packaging made to measure” to“guarantee” that illicit chemicals would elude border inspections, documents show.

Chinese traffickers often discuss lawbreaking in such brazen terms with foreign customers, seemingly unconcerned about China's omnipresent surveillance system, court files and interviews show.

Another firm, Hubei Amarvel Biotech, explicitly explained to US and Mexican clients online - complete with photos - its methods for“100% stealth shipping” of drugs disguised as nuts, dog food and motor oil, court documents say. After undercover DEA agents lured two Amarvel executives to Fiji and arrested them, a New York jury convicted them in February on charges of importation of fentanyl precursors and money laundering. (One defendant, Yiyi Chen, has filed a motion requesting an acquittal or retrial.)

At the time of the arrests, the Chinese government issued a statement condemning the US prosecution as“a typical example of arbitrary detention and unilateral sanctions.”

Similarly, Yafeng websites displayed photos of narcotics in plastic baggies to peddle a long list of chemicals, including fentanyl precursors and U-47700, a powerful fentanyl analogue outlawed in both the US and China that has no medical use, the House report says.

One victim of U-47700 was Garrett Holman of Lynchburg, Virginia. Holman had fallen in with youths who discovered how easy it was to buy synthetic drugs online. In late 2016, Holman overdosed on U-47700, street name“pinky,” that arrived by mail from southern China. His father, Don, performed CPR before paramedics rushed Holman to the hospital. Although he survived, another overdose killed him just days before his 21st birthday in February 2017.

“My son's opioid exposure was less than two months,” Don Holman told a hearing of the House Foreign Affairs Committee the next year.“At 20 years old, I do not believe my son deserved to die for his initial bad choices.”

The father handed over evidence, including the envelope in which the drugs arrived, to federal agents, who traced about 20 shipments back to the same sender in China, he said in an interview. Don Holman blames the fentanyl crisis on the American appetite for opioids as well as the Chinese government. He has spent eight years telling anyone he can, from drug czars to fellow parents, about the experience that shattered his family.

“I've had to hit parents right between the eyes, like: 'Hey, your child is not going to be here if you don't do something,” he said.“You need to wake up.'”

No link to Yafeng surfaced in that case. The firm's sales of U-47700 and other illicit drugs occurred during a period when its sole owner and controlling shareholder was the Shijiazhuang prison, according to the House inquiry, Sayari and C4ADS.

One of Yafeng's street addresses was that of the prison, ProPublica determined through satellite photos and public records. Another Yafeng address next door also houses the offices of a clothing firm owned by the provincial prison administration. A third Yafeng address a few blocks away is a former municipal police station, records and photos show.

The director of the prison, Liu Jianhua, left his post after becoming the target of a corruption inquiry in 2021, according to Chinese media reports. It's unknown how that investigation was resolved or if his fall had anything to do with the drug activity. Liu could not be reached for comment. The prison administration did not respond to requests for comment.

Yafeng stopped doing business under that name at some point between 2018 and 2022, records show. Yet the Yafeng group continued to function through at least one of its affiliated websites, protonitazene, the congressional report said. As of last year, the site was still advertising“hot sale to Mexico” of drugs including nitazenes, which are 25 times more powerful than fentanyl.

Government incentives

Yafeng is not the only company with connections to the Chinese state and fentanyl.

Gaosheng Biotechnology in Shanghai is“wholly state-owned,” congressional investigators found. The company sold fentanyl precursors and other narcotics - some illegal in China - on 98 websites to US, Mexican and European customers, the report says . Senior provincial development officials visited Gaosheng and praised its benefits for the regional economy. Gaosheng did not respond to requests for comment.

The Chinese government owned a stake in Zhejiang Netsun , a private firm that had a Chinese Communist Party member serving on its board of directors as a deputy general manager, the congressional report says. Netsun carried out over 400 sales of illegal narcotics, the report says, and served as a billing or technical contact for over 100 similar companies - including Yafeng. Netsun did not respond to requests for comment.

And the Shanghai government gave monetary awards and export credits to Shanghai Ruizheng Chemical Technology Co., a“notorious seller of fentanyl products, which it advertises widely and openly on Chinese websites like Alibaba,” the report says . Chinese officials invited company reps to roundtable discussions about technology and business. Shanghai Ruizheng did not respond to requests for comment.

Chinese government officials who interact with the trafficking underworld are often prominent in provincial governments, where corruption is widespread, said a former senior DEA official, Donald Im, who led investigations focused on China. Not only can they make money through kickbacks or investments, but they benefit politically, rising in the Communist Party hierarchy if their local chemical industries prosper.

“Key government officials know about the fentanyl trade and they let it happen,” Im said.

China's central government also plays a vital role by providing systemic financial incentives that fuel fentanyl trafficking to the Americas, US officials say. The House inquiry discovered a national Value-Added Tax rebate program that has spurred exports of at least 17 illegal narcotics with no legitimate purpose. They include a fentanyl product that is“up to 6,000 times stronger than morphine,” the House report says.

This state subsidy program has pumped billions of dollars into the export of fentanyl products, including ones outlawed in China, according to the report and US officials. The tax rebate is 13%, the highest available rate. To qualify, companies have to document the names and quantities of chemicals and other details of transactions, the report says.

The existence of this paper trail refutes a frequent claim by Chinese leaders: that weak regulation of the chemical sector makes it impossible to identify and punish suspects.

Chinese officials did not respond to specific questions about the government financial incentives or the state-connected companies involved in drug trafficking. But the embassy spokesperson said China has targeted online sellers with a“national internet cleanup campaign.”

During that crackdown, Liu Pengyu said, Chinese authorities have cleaned“14 online platforms, canceled over 330 company accounts, shut down over 1,000 online shops, removed over 152,000 online advertisements, and closed 10 botnet websites.” He said Chinese law enforcement has determined that many illegal ads appear on foreign online platforms.

Wall of resistance

In May 2018, Cronin - then a federal prosecutor based in Cleveland - went to Beijing in pursuit of one of the biggest targets in the grim history of the fentanyl crisis: the Zheng drug trafficking organization, an international empire accused of trafficking in 37 US states.

Cronin and his team of agents hoped to persuade Chinese authorities to prosecute Guanghua and Fujing Zheng , a father and son who were the top suspects. They ran into a wall of resistance.

In an interview, Cronin recalled walking into a cavernous room in China's Ministry of Public Security where a row of senior officials and uniformed police waited at a long table. A curtain-sized Chinese flag covered a wall.

Cronin took a breath, opened a stack of binders he had lugged from Cleveland and presented his case. The prosecutor laid out evidence connecting the Zhengs, who were chemical company executives based in Shanghai, to two overdoses in Ohio. The US distribution hub was a warehouse near Boston run by a Chinese chemist, Bin Wang. Later, Wang said he simultaneously worked for the Chinese government“tracking chemicals produced in China” and traveled home monthly from Boston“to consult with Chinese officials,” a memo by his lawyer said.

The response of the Chinese counterdrug chiefs was a brush-off, Cronin recalled in the interview. Essentially, he said, they told him:“You are right that the Zhengs are exporting these drugs that are killing Americans. But unfortunately, technically what they are doing is not a violation of Chinese law.”

Cronin pulled out another binder. He went over evidence and an expert analysis showing that the Zhengs had committed Chinese felonies, including money laundering, manufacturing of counterfeit drugs and mislabeling of packages.

Tensions rose when the Chinese officials responded that, unfortunately, the police unit that handled such offenses was not available; they rebuffed Cronin's offer to delay his return flight in order to meet with that unit, he said.