Blood money fashion doesn't come out in the wash

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Blood money fashion doesn't come out in the wash

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http://www.washingtonpost.com/news/morn ... g-cartels/
How blood-spattered cash goes through U.S. fashion companies to Mexican drug cartels

By Gail Sullivan September 11 at 6:32 AM

What do Mexican drug cartels have to do with the maternity wholesalers and underwear importers in Los Angeles? A lot, apparently.

On Wednesday, an investigation called “operation fashion police” culminated in the arrest of nine people and seizure of more than $90 million in an early morning raid.

“Los Angeles has become the epicenter of narco-dollar money laundering with couriers regularly bringing duffel bags and suitcases full of cash,” Assistant District Attorney Robert E. Dugdale said in a press release detailing three money-laundering cases involving Mexican drug cartels and L.A.-based fashion businesses.

Boxes containing U.S. currency seized during a raid in the Los Angeles Fashion District are seen in an undated handout photo released by the U.S. Department of Justice on Sept. 10, 2014. (REUTERS/U.S. Department of Justice/Handout)

The indictment against one company alleged that, after it was warned by the Department of Homeland Security that bulk cash payments were often the proceeds of illegal activity, it continued to accept money, including one payment spattered with blood.

At one business, officers found 35 bank boxes, each with a $1 million inside. A search of a Bel-Air mansion turned up $10 million stuffed in duffel bags. And there was $80,000 in a bag of dog food.

More than 1,000 law enforcement officers fanned out across the city to search businesses suspected of participating in black market peso exchanges, a scheme that allows cartels to convert money made selling drugs in the United States to pesos without having to bring it across the border or use banks.

Here’s how it works: The cartel hires a peso broker. The broker finds Mexican businesses that need dollars to pay for goods legally imported from the United States. The broker arranges for traffickers in the United States to pay the American vendors for the products to be shipped to Mexico. Once they are sold south of the border, the pesos go to the cartel.

This sort of scheme has long been used to launder drug money, but prosecutors said the practice has expanded since 2010 when Mexico limited deposits of American dollars, forcing cartels to convert their U.S. profits into pesos.

In one case, the scheme was used to launder ransom payments from the American relatives of a drug trafficker kidnapped and tortured by the infamous Sinaloa cartel after federal agents seized cocaine he or she was supposed to sell. The cartel took the trafficker to a ranch in Culiacan, Mexico, where the trafficker was waterboarded, electrocuted, beaten and shot before being released.

The victim’s relatives paid $140,000 to QT Fashion, a maternity clothing wholesaler that allegedly launders money. Three of the six people wanted in connection with the scheme were arrested today and, if convicted, face a maximum of 30 years in prison.

In the two other cases, members of the family that owns Yili Underwear and Gayima Underwear and four people tied to a fabric company called Pacific Eurotex were arrested for allegedly laundering drug money through black market peso schemes. In both cases, they were busted after allegedly accepting payments from undercover agents.

Indictments in all three cases were unsealed Wednesday.
"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros
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