On December 22, 2017, it was announced that a business in the Los Angeles Fashion District had been using black market peso exchange schemes to launder narcotics proceeds for international drug cartels. As a result, an import-export textile business and two executives have pleaded guilty to money laundering and tax charges. Pacific Eurotex Corp. and its owners, Morad “Ben” Neman and Hersel Neman pleaded guilty to federal charges. They were accused of using the business to receive bulk cash that they knew or believed could be the proceeds of narcotics trafficking.
The defendants confessed to failing to report the receipt of this bulk cash to federal authorities and to structuring frequent deposits of the cash in amounts of less than $10,000 to avoid bank reporting requirements. The Nemans also pleaded guilty to conspiring to defraud the United States by keeping two sets of business records to hide income for tax reasons.
A Black Market Peso Exchange scheme is engineered to help drug traffickers with United States currency send the money to a foreign country and convert the money into another currency. It was found that Pacific Eurotex has received, laundered and structured roughly $370,000 in bulk cash delivered on four separate occasions over a two-and-a-half-month period in 2013. The company laundered the money, despite being warned by special agents that bulk cash payments were frequently derived from illegal activity.
The three defendants are scheduled to be sentenced on June 14, 2018. Additional details can be found here.