WASHINGTON (Reuters) - The U.S. Justice Department alleged on Tuesday that Mexico's Sinaloa Cartel conspired with groups based in California and tied to Chinese underground banking to launder drug-trafficking proceeds of over $50 million.

The Justice Department said it closely coordinated with law enforcement in Mexico and China and that those countries recently arrested fugitives named in a superseding indictment, which was unsealed on Monday, who fled the U.S. after they were initially charged last year.

WHY IT IS IMPORTANT

The United States has been seeking increased cooperation from both Mexico and China in curbing the flow of illegal drugs, which result in a large number of U.S. overdose deaths each year. Washington and Beijing have sought cooperation amid otherwise tense bilateral ties.

The Sinaloa Cartel, one of Mexico's most powerful criminal organizations, has also been the target of U.S. sanctions.

KEY QUOTES

The Justice Department announced a 10-count superseding indictment charging Los Angeles-based associates of the Sinaloa Cartel, following a "multi-year investigation."

"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. Laundering drug money gives the Sinaloa Cartel the means to produce and import their deadly poison into the United States," Martin Estrada, U.S. attorney for the Central District of California, said in a statement.

The superseding indictment charged a total of 24 defendants with "one count of conspiracy to aid and abet the distribution of cocaine and methamphetamine, one count of conspiracy to launder monetary instruments, and one count of conspiracy to operate an unlicensed money transmitting business."

CONTEXT

The Justice Department alleged that a Sinaloa Cartel-linked money laundering network collected and processed - with help from a California-based money transmitting group with links to Chinese underground banking - 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 U.S. accessible to cartel members in Mexico and elsewhere, according to the Justice Department.

Law enforcement also seized $5 million in narcotics proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 ecstasy pills, three semi-automatic rifles with high-capacity magazines, and eight semi-automatic handguns.

WHAT'S NEXT

Twenty of the individuals charged in the superseding indictment are expected to be arraigned in the U.S. District Court in Los Angeles in the coming weeks. One was arraigned on Monday.

(Reporting by Kanishka Singh in Washington; Editing by Leslie Adler)

By Kanishka Singh