A judge presiding over a trade-based money laundering (TBML) case in Texas delayed accepting a defendant’s guilty plea when he questioned on what charge the defendant was indicted if he was not aware that the goods he was buying and selling were part of an illegal TBML operation.

The case raises questions, not only over the culpability of participants in a money-laundering scheme if they are unaware it is illegal, but also over the use of unwitting actors in TBML operations.

Case summary

The case centred on a black market peso exchange operation involving South Tex Beauty Supply in the city of McAllen and two other defendants who purchased beauty products from the store.

They then took the products the short distance across the border into Mexico where they sold them for pesos that were passed on to an alleged drug dealer.

The TBML operation lasted for several years during which prosecutors say the defendants laundered more than US$2 million in drug proceeds.

Judge’s questions

The judge accepted the guilty pleas of Maria Estela Suprise and Daisy Yannette Suprise, who own the beauty supply company.

District judge Ricardo Hinojosa also narrowly accepted the guilty plea of one of the distributors, Yolanda Peña, but would not accept a similar plea from Francisco Dominguez-Bermudez.

“In 39 years [as a judge], I’m having the hardest time understanding what he was doing,” Hinojosa told the court.

Questions of legality

Local media reports suggest that the judge struggled to understand the TBML operation, which had to be explained to him several times by counsel for both the defence and the prosecution.

The case highlights potential difficulties in identifying suspicious transactions and prosecuting TBML cases when, in this case a distributor, appeared to be selling legitimate products to legitimate customers.

Categories: Trade Based Financial crimes News

Tags: TBML, USA