9 arrests in fashion hub money laundering probe

Staff Writer
Columbus CEO

LOS ANGELES (AP) — Federal authorities arrested nine people and seized more than $65 million Wednesday in a crackdown on suspected drug money laundering by Mexican cartels in the fashion district of Los Angeles.

About 1,000 law enforcement officers fanned out across the city's downtown to search dozens of businesses suspected of taking bulk cash for clothing exported to Mexico as a way to launder money obtained from the sale of cocaine, methamphetamine and other drugs in the United States.

The raids came after three separate federal indictments on charges of money laundering and other financial violations. Nine people were arrested, and authorities were searching for four others charged in the alleged schemes, including three in Mexico, federal prosecutors said.

"We are stepping up our efforts to go after their money, which is the lifeblood of these criminal organizations," said Robert E. Dugdale, chief of the criminal division at the U.S. attorney's office in Los Angeles.

Since Mexican authorities tightened financial regulations in 2010, U.S. officials say drug cartels have sought new ways to launder proceeds from drug sales in the U.S. and are increasingly relying on international trade.

Los Angeles is a shipping point for narcotics and also a hub for traffickers to consolidate proceeds once the drugs are sold, Dugdale said. Many of the 3,000 businesses in the fashion district have been used to launder money because of the sheer volume of trade with Mexico, he said.

"They produce cheap wares that can be sold down in Mexico," Dugdale said. "The fashion district in particular seems to be where this is thriving at the moment."