Two dozen alleged Los Angeles-based associates of Mexico's Sinaloa cartel are facing federal money laundering charges alleging a scheme to hide the source of more than $50 million in drug proceeds, officials announced Tuesday.

Joel Martinez-Reyes, 45, of East Los Angeles -- the lead defendant in the indictment -- and others used a variety of methods to hide the source of the cash, including structuring assets to avoid financial reporting requirements and the purchase of cryptocurrency, according to a 10-count updated indictment filed in L.A. federal court and unsealed Monday.

The multi-year investigation -- dubbed Operation Fortune Runner by law enforcement -- resulted in charges of conspiracy to aid and abet the distribution of cocaine and methamphetamine, conspiracy to launder monetary instruments, and conspiracy to operate an unlicensed money transmitting business.

The Downey Police Department assisted in the investigation although officials did not say in what capacity.

Prosecutors say a Sinaloa Cartel-linked network collected and, with help from a San Gabriel Valley-based money transmitting group with links to Chinese underground banking, processed large amounts of drug proceeds in U.S. currency in the Los Angeles area. They then allegedly concealed their drug trafficking proceeds and made the proceeds generated in the United States accessible to cartel members in Mexico and elsewhere.

Most of the defendants are expected to be arraigned in federal court in downtown Los Angeles in the coming weeks.

"Relentless greed, the pursuit of money, is what drives the Mexican drug cartels that are responsible for the worst drug crisis in American history," DEA Administrator Anne Milgram said in a statement.

"This DEA investigation uncovered a partnership between Sinaloa Cartel associates and a Chinese criminal syndicate operating in Los Angeles and China to launder drug money," the statement continued. "Laundering drug money gives the Sinaloa Cartel the means to produce and import their deadly poison into the United States. DEA's top operational priority is to save American lives by defeating the cartels and those that support their operations. This investigation is the latest example, and there is more to come."

According to the U.S. Department of Justice, the investigation has resulted in the seizure of about $5 million in narcotics proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 Ecstasy pills, 44 pounds of psilocybin (magic mushrooms), numerous ounces of ketamine, three semi-automatic rifles with high-capacity magazines, and eight semi-automatic handguns.

Federal prosecutors allege that from October 2019 to October 2023, members and associates of the cartel imported large quantities of narcotics, including fentanyl, cocaine, and methamphetamine, into the United States, generating huge sums in U.S. dollars.

In January 2021, Martinez-Reyes allegedly traveled to Mexico to meet with cartel members to strike a deal with money remitters with links to Chinese underground banking to launder drug trafficking proceeds in the United States. After the deal was struck, the cartel, through its connections and associates, distributed cocaine, methamphetamine, and other narcotics, generating U.S. dollars as drug proceeds, according to the indictment.

Martinez-Reyes and other conspirators allegedly then delivered hundreds of thousands of dollars in cash to other members of the Chinese money exchange and associated organizations to be laundered for a fee. The remitting organizations possessed large amounts of U.S. currency and could help wealthy Chinese nationals evade China's currency controls, prosecutors said.

If convicted of all charges, each defendant faces a mandatory minimum of 10 years in prison and a maximum penalty of life in prison, prosecutors noted.