Money Laundering in L.A.’s Fashion District
A law enforcement sweep targeting alleged money laundering operations by Mexican drug cartels has led Federal agents to seize more than $65 million and arrest at least nine people in the Los Angeles fashion district. The Money Laundering Control Act of 1986 made money laundering a federal crime.
Arrest and Search Warrants
According to Justice Department officials, 1,000 law enforcement agents were dispersed throughout the downtown L.A. commercial fashion district to execute search and arrest warrants that were linked to what officials are calling “black market peso exchange” schemes. Large amounts of cash and bank accounts in relation to the investigation have been seized around the world.
Federal prosecutors allege that in one case, the Sinaloa, Mexico, drug cartel has been using a fashion district business as an in between to accept and launder ransom payments in order to secure the release of a U.S. citizen who had been kidnapped, held hostage, and tortured at a ranch in Mexico. According to Assistant U.S. Attorney Robert Dugdale, “numerous businesses” in the fashion district had been laundering illicitly obtained dollars into Mexican pesos. He went on to say, “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.”
According to Dugdale, Los Angeles is a prime shipping location for narcotics and has become a hub for traffickers to be able to launder money after the drugs are sold. Many of the fashion district’s business have been used to handle this money. “They produce cheap wares that can be sold down in Mexico,” Dugdale said. “The fashion district in particular seems to be where this is thriving at the moment.”
Stephen Azzam, associate special agent at the Drug Enforcement Agency who has been in charge of the investigation said the indictments and arrests “deal a massive blow to complex trade-based money laundering schemes” that benefit the drug cartels. The raids were done on the basis of three separate federal indictments related to money laundering as well as other financial violations. Agents are searching for at least four others who have been charged in the alleged scheme. Reportedly three of the four are in Mexico.
Source: USA Today, Feds seize cash, arrest 9 in L.A. fashion district sweep, September 11, 2014
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