L.A. fashion district faces closer scrutiny in money laundering probe

jueves 2 de octubre de 2014 13:00 GYT
 

LOS ANGELES Oct 2 (Reuters) - The U.S. Treasury Department will soon order heightened financial disclosure requirements for about 2,000 businesses in the Los Angeles fashion district, which is suspected of operating as a major money laundering hub for Mexican and Colombian narcotics traffickers, officials said.

The order by the department's Financial Crimes Enforcement Network takes effect on Oct. 9 and lasts for six months, making it one of the biggest actions of its kind for the division, officials said.

Under the order, about 2,000 businesses in the fashion district will have to disclose details on any cash transaction of $3,000 or more, forcing them to list information such as the parties involved in the transaction, said Stephen Hudak, a spokesman for the Financial Crimes Enforcement Network.

The order, which applies to most district businesses, lowers the threshold that under federal law requires all businesses in the nation to report those details for any cash transaction of $10,000 or more, Hudak said.

On Sept. 10, in a crackdown called Operation Fashion Police that targeted businesses in the district, nine people were arrested on charges of taking part in the money laundering through a "black market peso exchange" scheme, officials said. This involved bulk amounts of ill-gotten U.S. cash being converted to Mexican currency on behalf of drug cartels in Mexico and Colombia.

Authorities carted off scores of boxes stuffed with U.S. currency in large-denomination bills after finding the money in file boxes, duffel bags and backpacks, officials said.

Investigators searching the district and homes and properties linked to individuals with ties to it seized over $90 million in cash in what is believed to be the largest single-day bulk cash seizure in U.S. history, Virginia Kice, a spokeswoman for U.S. Immigration and Customs Enforcement, said in an email. ICE also participated in the operation.

In one of three indictments unsealed in connection with the raids, a wholesaler named QT Fashion was accused of accepting and laundering $140,000 paid as ransom for an American drug dealer kidnapped and tortured by the Sinaloa drug cartel in Mexico.

The Treasury Department order applies to a wide range of businesses in the district, including textile, lingerie, shoe, beauty supply and electronics stores as well as flower shops. The district has thousands of businesses that cover about 100 city blocks of downtown Los Angeles. (Reporting by Alex Dobuzinskis; Editing by Eric Walsh)