Hundreds of federal agents swarmed through a Southern California Fashion District Wednesday, arresting nine people and seizing $65 million as part of a crackdown on what prosecutors called a sophisticated operation to launder money for Mexican drug cartels.
The operation , which included 1,000 law enforcement officials, was linked to the release of a U.S. citizen who was kidnapped and tortured in Mexico by the Sinaloa drug cartel, officials said.
During the raids, authorities seized $65 million, some in U.S. currency, and some from around the world, prosecutors said.
Federal prosecutors said the business targeted in the raid was not the only Los Angeles Fashion District store being used to launder money from drug traffickers and other offenders.
Officials called the laundering ring a “Black Market Peso Exchange” scheme. The raids coincided with the unsealing of three federal indictments, one of which alleged a business was laundering ransom payments for the kidnapping victim.
Authorities are trying to counter a Southern California culture that “has become the epicenter of narco-dollar money laundering with couriers regularly bringing duffel bags and suitcases full of cash to many businesses,” according to Assistant U.S. Attorney Robert E. Dugdale.
According to the indictment, QT Fashion accepted bulk amounts of cash and funneled it through 17 other Fashion District businesses at the direction of a Mexico-based business called Maria Ferre S.A. de C.V.
The $140,000 in ransom was paid by relatives of a U.S. citizen who was kidnapped by the Sinaloa cartel after U.S. authorities seized more than 100 kilograms of cocaine the man had been responsible for distributing. The man was taken to a ranch in Mexico, where he was beaten, shot, electrocuted and water-boarded, according to federal prosecutors.
The man was released after the ransom was paid, officials said.
Andrew Jong Hack Park, 56, Sang Jun Park, 36, and Jose Isabel Gomez Arreoloa, 49, were arrested in connection with the QT Fashion case. Three other defendants named in the indictment, all in Mexico, remain at large.
A father, his son and daugher were named in a second indictment accusing them of money laundering through businesses called Yili Underwear and Gayima Underwear. Two were taken into custody.
Four people, including two brothers, connected to a business called Pacific Eurotex Corp. were named in a third indictment, accusing them of money-laundering.