Jail for textiles executives in black-market peso exchange TBML scheme

The owners of Los Angeles based Pacific Eurotex Corp who participated in a massive money laundering scheme for two Mexican drug cartels have been sentenced to prison after pleading guilty last year to federal money-laundering and tax-evasion charges.

Morad Neman, chief executive of Pacific Eurotex was sentenced to two years in prison while his brother, Hersel Neman, the firm’s chief financial officer was sentenced to 18 months in prison.

The scheme they masterminded involved the use of the black-market peso exchange typology of trade-based money laundering (TBML).

Massive raid

Pacific Eurotex and about 75 other companies were raided in 2014 in a vast operation in the Los Angeles Fashion District. Cash and property worth more than US$140 million were seized.

Prosecutors said the defendants in the Pacific Eurotex case would receive cash they knew was illegal from the Sinaloa and Knights Templar drug cartels as part of a black-market peso exchange TBML operation.

Concealed cash

To keep this activity secret, the company kept two sets of books, court documents claim.

Prosecutors said the second unofficial set of books kept track of the cash received from the drug cartels and concealed this cash from the company’s accountants to avoid paying taxes on the income.

How it worked

The Los Angeles Fashion District companies such as Pacific Eurotex that operated TBML schemes would import apparel and textiles into the US or manufacture goods in the US with dollars illicitly earned in the US by the drug cartels.

Those goods were then exported to Mexico and sold at local stores for pesos that were then deposited in the Mexican bank accounts of the drug cartels.

 



Categories: Trade Based Financial crimes News