9/15/2014
In a major takedown in Los Angeles, nearly 1,000 federal, state, and local law enforcement officers seized approximately $100 million in cash, arrested nine subjects, and searched dozen of businesses in the city’s downtown fashion district alleged to have laundered money for Mexican drug cartels.
LOS ANGELES -- In a major takedown in Los Angeles, nearly 1,000 federal, state, and local law enforcement officers seized approximately $100 million in cash, arrested nine subjects, and searched dozen of businesses in the city’s downtown fashion district alleged to have laundered money for Mexican drug cartels.
The ongoing investigation—three indictments have been unsealed — is specifically aimed at the Sinaloa Cartel and its activities, including narcotics trafficking, hostage taking, and money laundering in Los Angeles and elsewhere in the U.S. and Mexico.
In one case, the cartel used a fashion district business to funnel ransom payments related to a kidnapped U.S. citizen who was held hostage and tortured by cartel members in Mexico.
“The victim, who worked as a distributor for the Sinaloa Cartel, was kidnapped after 100 kilograms of cocaine he was supposed to distribute were seized by U.S. law enforcement,” said Bill Lewis, assistant director in charge of our Los Angeles Field Office. The victim—who was ultimately released and safely returned to the U.S.—was kidnapped because of his drug debt.
The cartel sent demands to the victim’s family in the U.S. and instructed them to deliver the ransom money — separate payments of $100,000 and $40,000 — to a Los Angeles business known as QT Maternity. “Our investigation determined that the ransom payment was distributed to 17 other businesses located in the fashion district,” Lewis said. “These stores were used as third-party money launderers in a scheme commonly referred to as the Black Market Peso Exchange (BMPE).”
The peso exchange scheme essentially turns dollars into Mexican currency through the sale of legitimate goods. The Mexican businesses that participated used illicit drug money to purchase goods, which were then sold in Mexico for pesos. The proceeds were returned to the cartel in Mexican currency. This laundering process avoided the risk of smuggling large amounts of cash across the border.
“We have targeted money laundering activities in the fashion district based on a wealth of information that numerous businesses there are engaged in Black Market Peso Exchange schemes,” said Robert Dugdale, an assistant U.S. attorney in the Central District of California. “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,” he explained, “law enforcement in Los Angeles is now at the forefront of combating this issue.”
Wednesday’s operation was the result of a task force investigation made up of multiple federal and local law enforcement agencies, including the FBI, the Los Angeles Police Department, the Drug Enforcement Administration, the Internal Revenue Service, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. ICE-HSI efforts alone resulted in seizures of more than $65 million.
“Today’s arrests and searches should send a message to international drug cartels that the FBI and our partners won’t tolerate the exploitation of American businesses for the purposes of illicit financial transactions that fund hostage taking and the distribution of narcotics,” Lewis said Wednesday after the takedown. “In addition, today’s actions should send a warning to American businesses that turn a blind eye to the crime they facilitate while avoiding reporting requirements, transaction fees, and law enforcement scrutiny.”
In the criminal case related to the laundering of ransom money to the Sinaloa Cartel, three people were arrested for their roles in a BMPE scheme based at a Fashion District wholesaler named QT Fashion, Inc., (which did business under the names QT Maternity and Andres Fashion). The indictment in this case also alleges that a Sinaloa, Mexico-based business, Maria Ferre S.A. de C.V., was involved in the scheme to launder ransom money. Following the kidnapping of a United States Citizen by the Sinaloa Drug Cartel, QT Fashion allegedly accepted bulk cash and funneled the money through 17 other Fashion District businesses at the direction of Maria Ferre.
The indictment alleges that the Sinaloa Drug Cartel ordered the kidnapping of the victim after authorities in the United States seized more than 100 kilograms of cocaine that he was responsible for distributing. The victim was held at a ranch in Culiacan, Sinaloa, where he was beaten, shot, electrocuted and waterboarded. The hostage was released after relatives paid $140,000 in ransom, and he is currently in the United States.
Three defendants related to QT Fashion were arrested this morning—Andrew Jong Hack Park (aka Andres Park), 56, of La Canada-Flintridge; Sang Jun Park, 36, of La Crescenta; and Jose Isabel Gomez Arreoloa (aka Chabelo), 49, of downtown Los Angeles.
Three defendants linked to Maria Ferre are wanted by authorities. They are Luis Ignacio Orozco Munoz (aka Nacho), 50, of Culiacan, Sinaloa; Armando Arturo Chavez Gamboa, 43, of Culiacan, Sinaloa; and Daisy Corrales Estrada, 30, of Culiacan, Sinaloa.
The six individual defendants were charged in a three-count indictment returned under seal by a federal grand jury on June 19. The indictment, which was unsealed this morning, accuses the defendants of conspiracy to launder money, conspiracy to operate an unlicensed money transmitting business, and operating an unlicensed money transmitting business. If they are convicted of the charges in the indictment, each defendant would face a statutory maximum penalty of 30 years in federal prison.
The investigation into the money laundering scheme related to the kidnapping was conducted by the FBI, IRS—Criminal Investigation and the Drug Enforcement Administration. The case is being prosecuted by Assistant United States Attorney Angela Scott (213-894-6683).
“Today’s Fashion District takedown sends a clear message that law enforcement will not tolerate the actions of those who use the cover of legitimate business to conceal bulk cash obtained directly from drug trafficking and associated acts of violence,” said DEA Associate Special Agent in Charge Stephen G. Azzam. “These indictments and arrests deal a massive blow to complex trade-based money laundering schemes in general, and will therefore severely impair the ability of drug cartels to realize profits and further entrench themselves in our nation’s socioeconomic fabric.”
In the second case announced today, three members of a Temple City family — Xilin Chen, 55; Chuang Feng Chen (aka “Tom”), 24, who is Xilin Chen’s son; and Aixia Chen, 28, who is Xilin Chen’s daughter — have been charged with conspiring to launder monetary instruments, money laundering, and various immigration offenses for their roles in running various businesses in the Fashion District that were used in BMPE schemes. During this morning’s operation, Xilin Chen and Chuang Chen were arrested. Aixia Chen is a fugitive currently being sought by authorities.
The indictment related to the Chens’ businesses — Yili Underwear and Gayima Underwear — alleges that they received bulk cash from a narcotics trafficker in Los Angeles and from an undercover agent posing as a drug trafficker. The Chens allegedly laundered the money to drug trafficking organizations outside of the United States through use of the BMPE scheme, and “structured” the deposits of the bulk cash they received at their businesses to avoid currency reporting requirements that would have alerted law enforcement to their criminal conduct.
“Through our collective efforts, we are gaining access to more and more information on the abusive practices of individuals and businesses involved in the laundering and structuring of drug proceeds through the Los Angeles Fashion District, and you can expect us to use all of our enforcement tools to stop this abuse," said IRS—Criminal Investigation’s Special Agent in Charge Erick Martinez. "IRS—Criminal Investigation is working hard to ensure criminals do not use the United States financial system to legitimize their illegal profits.”
If they are convicted, Xilin Chen would face a statutory maximum sentence of 100 years in federal prison, Chuang Chen would face up to 40 years, and Aixia Chen could be sentenced to as much as 80 years.
The case naming the Chens was investigated by the Drug Enforcement Administration and IRS—Criminal Investigation under the auspices of the Southwest Border Initiative. The case is being prosecuted by Assistant United States Attorney John Kucera (213-894-3391) and Assistant United States Attorney Vicki Chou (213-894-8692).
In the third case announced today, a business in the Fashion District named Pacific Eurotex, Corp. and four individuals connected to that business have been charged with 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. This Indictment alleges that the defendants utilized Pacific Eurotex as a repository to receive bulk cash that they knew or believed consisted of drug money, that they later laundered those drug proceeds to foreign countries through a trade-based money laundering scheme; that they failed to report the receipt of this bulk cash, as required; and that they structured deposits of this bulk cash into bank accounts by making frequent deposits of the cash in amounts less than $10,000 to avoid a bank reporting requirement that would have drawn the scrutiny of law enforcement to their actions.
“These arrests and seizures should serve as a sobering warning to companies that seek to bolster their bottom line by doing business with drug traffickers—you will pay a high price for your complicity,” said Claude Arnold, special agent in charge for Homeland Security Investigations in Los Angeles. “Unscrupulous companies that help cartels cover their financial tracks by laundering their illicit funds are contributing to the devastation wrought by the international drug trade.”
The four individual defendants named in the Pacific Eurotex indictment were arrested this morning. Those taken into custody are: Hersel Neman, 55 of Beverly Hills, the chief financial officer of Pacific Eurotex; Morad Neman, 54, of the Westwood District of Los Angeles, the chief executive officer of Pacific Eurotex and brother of Hersel Neman; Mehran Khalili, 45, of Beverly Hills, who is a brother in law of the Nemans; and Alma Villalobos, 52, of Arleta.
This indictment alleges that Pacific Eurotex received, laundered and structured approximately $370,000 in bulk cash delivered on four separate occasions by an undercover agent posing as a money courier. The indictment alleges that defendants laundered the money after being specifically advised by Homeland Security Investigations agents that bulk cash payments were frequently derived from illegal activity and that they were required to report cash transactions involving more than $10,000 in currency. According to the indictment, the defendants laundered money, despite the fact that, on one occasion, some of the bulk currency appeared to be spattered with blood.
source
In a major takedown in Los Angeles, nearly 1,000 federal, state, and local law enforcement officers seized approximately $100 million in cash, arrested nine subjects, and searched dozen of businesses in the city’s downtown fashion district alleged to have laundered money for Mexican drug cartels.
LOS ANGELES -- In a major takedown in Los Angeles, nearly 1,000 federal, state, and local law enforcement officers seized approximately $100 million in cash, arrested nine subjects, and searched dozen of businesses in the city’s downtown fashion district alleged to have laundered money for Mexican drug cartels.
The ongoing investigation—three indictments have been unsealed — is specifically aimed at the Sinaloa Cartel and its activities, including narcotics trafficking, hostage taking, and money laundering in Los Angeles and elsewhere in the U.S. and Mexico.
In one case, the cartel used a fashion district business to funnel ransom payments related to a kidnapped U.S. citizen who was held hostage and tortured by cartel members in Mexico.
“The victim, who worked as a distributor for the Sinaloa Cartel, was kidnapped after 100 kilograms of cocaine he was supposed to distribute were seized by U.S. law enforcement,” said Bill Lewis, assistant director in charge of our Los Angeles Field Office. The victim—who was ultimately released and safely returned to the U.S.—was kidnapped because of his drug debt.
The cartel sent demands to the victim’s family in the U.S. and instructed them to deliver the ransom money — separate payments of $100,000 and $40,000 — to a Los Angeles business known as QT Maternity. “Our investigation determined that the ransom payment was distributed to 17 other businesses located in the fashion district,” Lewis said. “These stores were used as third-party money launderers in a scheme commonly referred to as the Black Market Peso Exchange (BMPE).”
The peso exchange scheme essentially turns dollars into Mexican currency through the sale of legitimate goods. The Mexican businesses that participated used illicit drug money to purchase goods, which were then sold in Mexico for pesos. The proceeds were returned to the cartel in Mexican currency. This laundering process avoided the risk of smuggling large amounts of cash across the border.
“We have targeted money laundering activities in the fashion district based on a wealth of information that numerous businesses there are engaged in Black Market Peso Exchange schemes,” said Robert Dugdale, an assistant U.S. attorney in the Central District of California. “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,” he explained, “law enforcement in Los Angeles is now at the forefront of combating this issue.”
Wednesday’s operation was the result of a task force investigation made up of multiple federal and local law enforcement agencies, including the FBI, the Los Angeles Police Department, the Drug Enforcement Administration, the Internal Revenue Service, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. ICE-HSI efforts alone resulted in seizures of more than $65 million.
“Today’s arrests and searches should send a message to international drug cartels that the FBI and our partners won’t tolerate the exploitation of American businesses for the purposes of illicit financial transactions that fund hostage taking and the distribution of narcotics,” Lewis said Wednesday after the takedown. “In addition, today’s actions should send a warning to American businesses that turn a blind eye to the crime they facilitate while avoiding reporting requirements, transaction fees, and law enforcement scrutiny.”
In the criminal case related to the laundering of ransom money to the Sinaloa Cartel, three people were arrested for their roles in a BMPE scheme based at a Fashion District wholesaler named QT Fashion, Inc., (which did business under the names QT Maternity and Andres Fashion). The indictment in this case also alleges that a Sinaloa, Mexico-based business, Maria Ferre S.A. de C.V., was involved in the scheme to launder ransom money. Following the kidnapping of a United States Citizen by the Sinaloa Drug Cartel, QT Fashion allegedly accepted bulk cash and funneled the money through 17 other Fashion District businesses at the direction of Maria Ferre.
The indictment alleges that the Sinaloa Drug Cartel ordered the kidnapping of the victim after authorities in the United States seized more than 100 kilograms of cocaine that he was responsible for distributing. The victim was held at a ranch in Culiacan, Sinaloa, where he was beaten, shot, electrocuted and waterboarded. The hostage was released after relatives paid $140,000 in ransom, and he is currently in the United States.
Three defendants related to QT Fashion were arrested this morning—Andrew Jong Hack Park (aka Andres Park), 56, of La Canada-Flintridge; Sang Jun Park, 36, of La Crescenta; and Jose Isabel Gomez Arreoloa (aka Chabelo), 49, of downtown Los Angeles.
Three defendants linked to Maria Ferre are wanted by authorities. They are Luis Ignacio Orozco Munoz (aka Nacho), 50, of Culiacan, Sinaloa; Armando Arturo Chavez Gamboa, 43, of Culiacan, Sinaloa; and Daisy Corrales Estrada, 30, of Culiacan, Sinaloa.
The six individual defendants were charged in a three-count indictment returned under seal by a federal grand jury on June 19. The indictment, which was unsealed this morning, accuses the defendants of conspiracy to launder money, conspiracy to operate an unlicensed money transmitting business, and operating an unlicensed money transmitting business. If they are convicted of the charges in the indictment, each defendant would face a statutory maximum penalty of 30 years in federal prison.
The investigation into the money laundering scheme related to the kidnapping was conducted by the FBI, IRS—Criminal Investigation and the Drug Enforcement Administration. The case is being prosecuted by Assistant United States Attorney Angela Scott (213-894-6683).
“Today’s Fashion District takedown sends a clear message that law enforcement will not tolerate the actions of those who use the cover of legitimate business to conceal bulk cash obtained directly from drug trafficking and associated acts of violence,” said DEA Associate Special Agent in Charge Stephen G. Azzam. “These indictments and arrests deal a massive blow to complex trade-based money laundering schemes in general, and will therefore severely impair the ability of drug cartels to realize profits and further entrench themselves in our nation’s socioeconomic fabric.”
In the second case announced today, three members of a Temple City family — Xilin Chen, 55; Chuang Feng Chen (aka “Tom”), 24, who is Xilin Chen’s son; and Aixia Chen, 28, who is Xilin Chen’s daughter — have been charged with conspiring to launder monetary instruments, money laundering, and various immigration offenses for their roles in running various businesses in the Fashion District that were used in BMPE schemes. During this morning’s operation, Xilin Chen and Chuang Chen were arrested. Aixia Chen is a fugitive currently being sought by authorities.
The indictment related to the Chens’ businesses — Yili Underwear and Gayima Underwear — alleges that they received bulk cash from a narcotics trafficker in Los Angeles and from an undercover agent posing as a drug trafficker. The Chens allegedly laundered the money to drug trafficking organizations outside of the United States through use of the BMPE scheme, and “structured” the deposits of the bulk cash they received at their businesses to avoid currency reporting requirements that would have alerted law enforcement to their criminal conduct.
“Through our collective efforts, we are gaining access to more and more information on the abusive practices of individuals and businesses involved in the laundering and structuring of drug proceeds through the Los Angeles Fashion District, and you can expect us to use all of our enforcement tools to stop this abuse," said IRS—Criminal Investigation’s Special Agent in Charge Erick Martinez. "IRS—Criminal Investigation is working hard to ensure criminals do not use the United States financial system to legitimize their illegal profits.”
If they are convicted, Xilin Chen would face a statutory maximum sentence of 100 years in federal prison, Chuang Chen would face up to 40 years, and Aixia Chen could be sentenced to as much as 80 years.
The case naming the Chens was investigated by the Drug Enforcement Administration and IRS—Criminal Investigation under the auspices of the Southwest Border Initiative. The case is being prosecuted by Assistant United States Attorney John Kucera (213-894-3391) and Assistant United States Attorney Vicki Chou (213-894-8692).
In the third case announced today, a business in the Fashion District named Pacific Eurotex, Corp. and four individuals connected to that business have been charged with 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. This Indictment alleges that the defendants utilized Pacific Eurotex as a repository to receive bulk cash that they knew or believed consisted of drug money, that they later laundered those drug proceeds to foreign countries through a trade-based money laundering scheme; that they failed to report the receipt of this bulk cash, as required; and that they structured deposits of this bulk cash into bank accounts by making frequent deposits of the cash in amounts less than $10,000 to avoid a bank reporting requirement that would have drawn the scrutiny of law enforcement to their actions.
“These arrests and seizures should serve as a sobering warning to companies that seek to bolster their bottom line by doing business with drug traffickers—you will pay a high price for your complicity,” said Claude Arnold, special agent in charge for Homeland Security Investigations in Los Angeles. “Unscrupulous companies that help cartels cover their financial tracks by laundering their illicit funds are contributing to the devastation wrought by the international drug trade.”
The four individual defendants named in the Pacific Eurotex indictment were arrested this morning. Those taken into custody are: Hersel Neman, 55 of Beverly Hills, the chief financial officer of Pacific Eurotex; Morad Neman, 54, of the Westwood District of Los Angeles, the chief executive officer of Pacific Eurotex and brother of Hersel Neman; Mehran Khalili, 45, of Beverly Hills, who is a brother in law of the Nemans; and Alma Villalobos, 52, of Arleta.
This indictment alleges that Pacific Eurotex received, laundered and structured approximately $370,000 in bulk cash delivered on four separate occasions by an undercover agent posing as a money courier. The indictment alleges that defendants laundered the money after being specifically advised by Homeland Security Investigations agents that bulk cash payments were frequently derived from illegal activity and that they were required to report cash transactions involving more than $10,000 in currency. According to the indictment, the defendants laundered money, despite the fact that, on one occasion, some of the bulk currency appeared to be spattered with blood.
source
No comments:
Post a Comment