Feds seize cash, arrest 9 in L.A. fashion district sweep
William M. WelchUSA TODAY
This photo provided by U.S. Immigration and Customs Enforcement shows a box of cash that was among items seized by federal agents in Los Angeles on Wednesday. Federal prosecutors said they arrested nine people and seized $65 million in a sweep aimed at alleged money laundering operations.
LOS ANGELES — Federal agents seized more than $65 million and arrested at least nine people in the city’s fashion district Wednesday in a law enforcement sweep that targeted alleged money laundering operations by Mexican drug cartels.
Justice Department officials said about 1,000 law enforcement agents fanned out across the commercial fashion area in downtown Los Angeles, executing search and arrest warrants linked to what officials said were “black market peso exchange” schemes.
Agents seized large amounts of cash and also money in bank accounts around the world related to the investigation.
Federal prosecutors alleged that in one case, the Sinaloa, Mexico, drug cartel used a business in the fashion district to accept and launder ransom payments to secure the release of a U.S. citizen who was kidnapped, held hostage and tortured at a ranch in Mexico.
Assistant U.S. Attorney Robert Dugdale said “numerous businesses” in the fashion district were involved in laundering illicitly obtained dollars into Mexican pesos.
“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.
“We are stepping up our efforts to go after their money, which is the lifeblood of these criminal organizations,” he said.
Bill Lewis, the FBI’s assistant director in charge of the Los Angeles division, said the actions “send a warning to American businesses who turn a blind eye to the crime they facilitate while avoiding reporting requirements, transaction fees and law enforcement scrutiny.”
The raids were based on at least three separate federal indictments relating to money laundering and other financial violations. Besides the nine arrests, prosecutors said agents were searching for at least four others charged in the alleged schemes, including three in Mexico.
Federal agents check a clothing store during a raid in the Los Angeles fashion district Wednesday. U.S. agents raided dozens of businesses early Wednesday as part of an investigation into suspected money laundering done for Mexican drug cartels.
Dugdale said Los Angeles is a major shipping point for narcotics and a hub for traffickers to handle money after drugs are sold. Many of the 3,000 businesses in the fashion district have been used to launder money because of the sheer volume of trade with Mexico, he said.
“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.”
Drug Enforcement Agency associate special agent in charge Stephen Azzam said the indictments and arrests “deal a massive blow to complex trade-based money laundering schemes” benefiting drug cartels.
