A massive raid of 50 to 75 businesses in downtown Los Angeles’ fashion district turned up over $100 million in ill-gotten money being laundered by Mexican drug cartels. The bust is a stark wake-up call, reminding Americans that the cartels have far reaching influence.
When the drug cartel Sinaloa needed money laundering services to get a ransom payment from the U.S. to Mexico, they turned to Q.T. Fashion, a maternity clothing wholesaler, to get the job done. According to federal officials, the business used the money to pay for clothing shipments to an importer run by Sinaloa, which then gave the money to the cartel in pesos.
The deal occurred in 2012, and the FBI was watching, laying the groundwork for the recent bust.
In the early hours of Wednesday more than 1,000 agents launched the raid, arresting 9 people and seizing over $100 million in laundered money. Prompting Robert E. Dugdale, the assistant U.S. attorney, to make this declaration,
“Los Angeles has become the epicenter of narco dollar money laundering, with couriers bringing duffle bags full of cash to many of those businesses. Because Los Angeles is at the forefront of this money laundering activity, law enforcement in Los Angeles is now at the forefront of combating this issue.”
A frightening prospect for a city that has enjoyed recent low crime rates, despite its troubled past, but the city might be only one of many narco-financing centers in America.
After all, Sinaloa is becoming well-known for its money laundering prowess. The cartel was the financial service provider of choice for Jimmy Cournoyer, one of New York City’s biggest marijuana dealers.
The New York Times reported that Mr. Cournoyer laundered nearly $1 billion over the course of his 10-year-long career, both through the cartel and through an intricate system of pick-up trucks that moved the money to Canada. The New York city dealer lived a life of luxury until he was finally sentenced last month to 27 years in federal prison.
Nevertheless, the connection begs the question, how deeply rooted is the problem of money laundering in America?
According to the Los Angeles Times, the practice of laundering money through legitimate trade, like through the Fashion district of L.A., has been on the rise ever since Mexico restricted the use of the U.S. dollar in 2010. The law forces the cartels to get their money in pesos in ways that cannot directly connect to them.
In the end, the scene looks like it came out of Breaking Bad, but on a grand scale. It’s impossible to tell which run-of-the-mill business will turn out to be a front for money laundering.
[Image Credit: TaxRebate.org.uk/Flickr.com]