Thursday, 11 September 2014

Federal agents seize $75 million in L.A. Fashion District raid

When a Mexican drug cartel took a U.S. citizen hostage for a cocaine debt two years ago, it demanded his family deliver $140,000 in ransom to QT Maternity, a wholesaler selling pastel tank tops and ruched swimsuits in downtown Los Angeles.

Federal agents on Wednesday raided that store and others in the bustling fashion district, seizing more than $75 million they declared “blood money.”

Calling Los Angeles the “epicenter” of money laundering for Mexican cartels, Assistant U.S. Attorney Robert E. Dugdale said some fashion district merchants accept huge sums of cash stuffed in duffel bags, boxes and luggage carried into their stores, sometimes by strangers.

Relatives of the man being held hostage took cash to QT Maternity, according to indictments unsealed Wednesday, charging that business and two others with money laundering. The payment secured his release from a ranch in Culiacán, Sinaloa, where over 62 days he was beaten, shot, electrocuted and waterboarded.

On Wednesday, some 1,000 officers searched 19 stores, six large warehouses and numerous homes.

Cartels seek to exchange for pesos the dollars collected from such ransoms and the sale of cocaine, methamphetamine and heroin in the United States, officials said.

Under deals arranged by “peso brokers,” fashion district vendors in return for the cash send their goods to businesses in Mexico. There, the goods are sold for pesos that are eventually routed to drug traffickers.

Agents found $10 million in a duffel bag at a Bel-Air mansion and $35 million in bankers boxes in a Los Angeles condo.

“This is blood money. ...When narcotics proceeds are laundered and funneled back to the street to drug cartels, it contributes to violence, pain and bloodshed,” said Claude Arnold, special agent in charge of U.S. Immigration and Custom Enforcement’s Homeland Security Investigations.

Authorities arrested nine people, including QT Maternity owner Andrew Jong Hack Park, 56, of La Cañada-Flintridge and manager Sang Jun Park, 36, of La Crescenta.

Two other indictments named Yili Underwear and Gayima Underwear and Pacific Eurotex, Corp.

In two stings tied to Wednesday’s raid, undercover agents delivered bundles of cash to merchants, some of it wrapped in dryer sheets or cellophane. One accepted the money, even though some of the bills appeared to be spattered in blood, officials said.

Not all fashion district merchants deal in large cash transactions, and some said they only accept credit cards and checks. Source

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