LOS ANGELES: Police staged mass dawn raids in Los Angeles on Wednesday, seizing at least $65 million in cash and funds allegedly linked to money-laundering for Mexican drug cartels.
In what was dubbed “Operation Fashion Police, nine people were arrested as some 1,000 officers fanned out in the Fashion District in downtown Los Angeles, which one official called the “epicenter of narco-dollar money laundering.”
One business targeted in the huge crackdown was alleged to have laundered ransom payments which secured the release of a US national who was tortured while held in Mexico, prosecutors said.
Police executed dozens of search warrants on businesses suspected of using so-called “Black Market Peso Exchange” (BMPE) schemes to launder narcotics proceeds for international drug cartels.
Some $35 million in cash was found in one warehouses alone. Police released pictures of the money crammed into cardboard boxes.
“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 Assistant US Attorney Robert E. Dugdale.
“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,” he added.
In all, three indictments were unsealed Wednesday, revealing details of alleged money-laundering and other criminal activity.
In one case the notorious Sinaloa Drug Cartel allegedly beat, shot, electrocuted and waterboarded the victim in a ranch in Culiacan, before relatives paid $140,000 in ransom for his release.
In another three members of the same family, named Chen, were charged with money laundering and various immigration offences linked to their businesses, Yili Underwear and Gayima Underwear.
Chen Xilin, 55, his 24-year-old son Chuang Feng and 28-year-old daughter Aixia face up to 100 years in federal prison if convicted.
Possible links to China were also being investigated, said an official speaking on background.
In a BMPE scheme, drug traffickers with illegally-earned dollars in the United States get it converted into Mexican currency by using US businesses as middlemen, buying goods that are then exported to Mexico and sold for pesos.
Homeland Security special agent Claude Arnold said: “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,” he said.
Drug Enforcement Administration agent Stephen G. Azzam added: “These indictments and arrests deal a massive blow to complex trade-based money laundering schemes in general.”