LOS ANGELES – The city’s Fashion District was not only hiding the best bargains for clothing and accessories, but also a money laundering scheme linked to international drug cartels.
On Wednesday, Sept. 10, 1,000 officers from local police and federal agencies raided around 50 businesses and found cash hidden in shipping boxes and duffel bags.
The incident, considered one of the largest sweeps in the city’s history, led to the seizure of $90 million – $70 million of which was in cash. Federal agents also revealed that another $35 million was found in banker’s boxes at a condo and $10 million in a duffel bag at a Bel-Air mansion.
Nine individuals were arrested. They are facing charges for money laundering and dispersing the cash received into several bank accounts.
According to the Los Angeles Times, one of the businesses involved was Q.T. Fashion, a store that sells maternity clothing.
The owners were drawn in after family members of a hostage held by the Sinaloa cartel approached the store with $140,000 in ransom money.
The money was used to pay a clothing importer associated with Sinaloa. The importer would then exchange the dollars into pesos to be delivered to the cartel. Seventeen other stores in the district have allegedly also been involved with this direct scheme.
By using this trading method, dubbed the “Black Market Peso Exchange,” Sinaloa and other cartels were able to evade sending money through wire transfer, which is heavily watched by federal authorities.
Two other companies were named in the shakedown. Pacific Eurotex Corp., is accused of receiving $370,000 in cash and depositing it into several bank accounts, while a family who owns two underwear companies were indicted for receiving money for a drug trafficker and an undercover law enforcement officer.
Robert E. Dugdale, chief of the criminal division at the US attorney’s office in Los Angeles, said the Fashion District has become the hub for trade-based money laundering because many products sold there are imported from Mexico.
“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,” Dugdale said. “Because Los Angeles is at the forefront of this money laundering activity, law enforcement in Los Angeles is now at the forefront of combating this issue.”
Bill Lewis, assistant director of the city’s FBI office, said that Wednesday’s arrests and searches should be a deterrence to further international drug operations, either through illegal financial transactions “that that fund hostage-taking and the distribution of narcotics.”
Asian Americans Advancing Justice – Los Angeles released a statement saying this operation involving Department of Homeland Security and US Immigration and Customs Enforcement may put business owners in the area on edge and open up questions about their immigration status.
(With reports from Associated Press and Los Angeles Times)
(www.asianjournal.com)
(LA Weekend September 13-16, 2014 Sec. A pg.1)
