Wed, Sep 10, 2014 at 2:09 PM
Federal raids on downtown Los Angeles Fashion District businesses and related bank accounts turned up a whopping $65 million, much of it in cash, that authorities say was drug money headed to the Sinaloa drug cartel in Mexico, the U.S. Attorney's Office in L.A. announced today.
The whopping seizure of bank funds and currency, the latter of which was put on display for the press, was part of three cases against various fashion businesses, including lingerie and maternity concerns, that investigators say took drug money and exchanged it for imported goods so that the money would seem legit as it traveled south to the narco lords of Sinaloa.
In one case, feds allege, a business laundered $140,000 paid for the to release a man held hostage because 100 kilos of cocaine he was supposed to distribute were intercepted by authorities in the United States.
The U.S. Attorney's Office says the American was taken to a ranch in Culiacan, Sinaloa and "beaten, shot, electrocuted and waterboarded" before the dirty cash set him free.
Authorities say the Fashion District schemes to funnel south millions of dollars paid on this side of the border for drug shipments eliminated the risk of backpacking bills back across the border.
Here's how the "black-market peso exchange" scheme was described in a statement:
In a BMPE scheme, a peso broker works with an individual engaged in illegal activity, such as a drug trafficker, who has currency in the United States that he needs to bring to a foreign country, such as Mexico, and convert into pesos. The peso broker finds business owners in the foreign country who buy goods from vendors in the United States and who need dollars to pay for those goods. The peso broker arranges for the illegally obtained dollars to be delivered to the United States-based vendors, such as the stores in the Fashion District, and these illegally obtained dollars are used to pay for the goods purchased by the foreign customers. Once the goods are shipped to the foreign country and sold by the foreign-based business owner in exchange for pesos, the pesos are turned over to the peso broker, who then pays the drug trafficker in the local currency of the foreign country, thus completing the laundering of the illegally obtained dollars.
Nine suspects were arrested as cash was seized and bank accounts were taken over in raids that involved 1,000 law enforcement agents and dozens of search warrants today, feds said.
One of three cases wrapped into today's announcement involved the kidnapping.
According to authorities, downtown's QT Fashion, Inc., doing business as QT Maternity and Andres Fashion, worked with Maria Ferre S.A. de C.V. in Mexico in order to funnel ransom money through 17 other Fashion District businesses.
Suspects connected to QT—56-year-old Andrew Jong Hack Park (a.k.a Andres Park) of La Canada-Flintridge, 36-year-old Sang Jun Park of La Crescenta, and 49-year-old Jose Isabel Gomez Arreoloa (a.k.a. Chabelo) of downtown—were arrested in today's raids.
They have been charged with suspicion of conspiracy to launder, conspiracy to operate an unlicensed money-transmitting business, and operating an unlicensed money-transmitting business, according to the U.S. Attorney's office.
Three suspects on the Mexican side of the scheme were still outstanding, feds said.
A second case involved members of a Temple City family—55-year-old father Xilin Chen, 24-year-old son Chuang Feng Chen (a.k.a. "Tom"), and 28-year-old daughter Aixia Chen, authorities said.
They face charges connected to suspicion of conspiring to launder monetary instruments, money laundering, and "various immigration offenses," according to the U.S. Attorney's statement.
Father and son were arrested in today's raids, but Aixia Chen remained on-the-loose, authorities said. An indictment alleges the trio's businesses, Yili Underwear and Gayima Underwear, laundered "bulk cash" for the cartel.
The third case involves four suspects connected to Pacific Eurotex, Corp.—55-year-old CFO Hersel Neman of Beverly Hills, 54-year-old brother and CEO Morad Neman of the Westwood, 45-year-old brother-in-law Mehran Khalili of Beverly Hills, and 52-year-old Alma Villalobos of Arleta, feds said
They have been charged with suspicion of "conspiracy to launder money, conspiring to illegally structure currency transactions to avoid a currency transaction reporting requirement, structuring currency transactions to avoid currency transaction reporting requirements, and failing to file reports of currency transactions over $10,000,"the U.S. Attorney's office stated.
Officials said the four accepted hundreds of thousands of dollars in bulk cash delivered by an undercover agent.
Most of the defendants in all three cases face decades behind bars if they're successfully prosecuted.
Robert E. Dugdale, an Assistant U.S. Attorney, said:
Los Angeles has become the epicenter of narco-dollar money laundering with couriers regularly bringing duffel bags and suitcases full of cash to many businesses. Because Los Angeles is at the forefront of this money laundering activity, law enforcement in Los Angeles is now at the forefront of combatting this issue.