U.S. Immigration and Customs Enforcement on Thursday announced the existence of a huge criminal operation in which dozens of companies in the Los Angeles fashion district have been laundering money for drug traffickers in Mexico and Colombia.
ICE said several stores in the fashion, garment and transportation industries in Los Angeles were accepting millions of dollars in cash that the cartels earned in the United States. In return, the companies would ship goods to Mexico and Colombia, where they would be converted back into local currency and then claimed by the cartels.
The agency said that on September 10, more than 1,000 federal and local agents conducted a sting operation, by swarming the fashion district to conduct searches and deliver arrest warrants. The raid, led by ICE's Homeland Security Investigations, ended up in the seizure of $90 million worth of U.S. currency.
As a result of that operation, the federal government is imposing a order that requires all companies in the fashion district to report any time they receive more than $3,000 in cash. Failure to comply could lead to a criminal indictment.
"Last month, in a matter of hours, HSI special agents seized tens of millions of dollars in cash from individuals with business interests in LA's garment district," said Claude Arnold, special agent in charge for HSI Los Angeles. "That's a mindboggling amount of money and it makes it abundantly clear the scale of criminal activity we're up against."
Officials said stopping the ability of drug cartels to continue the so-called "trade-based money laundering" scheme would make it much more difficult for them to continue their operations.
ICE said businesses covered by the geographic order include "garment and textile stores; transportation companies; travel agencies; perfume stores; electronic stores (including those that only sell cell phones); shoe stores; lingerie stores; flower/silk flower stores; beauty supply stores; and stores bearing 'import' or 'export' in their name."
The order takes effect October 9, and will stay in effect for 180 days.