Dirty money piling up in L.A. as coronavirus cripples international money laundering

laTIMES ^ | 4/29/2020 | By MATTHEW ORMSETH

[bitt]

Dirty money is piling up in Los Angeles. In the last three weeks, federal agents made three seizures that each netted more than $1 million in suspected drug proceeds.

The reason, according to the city’s top drug enforcement official: The coronavirus pandemic has slowed trade-based money laundering systems that drug trafficking groups use to repatriate profits and move Chinese capital into Southern California.

With storefronts closed, supply chains in disarray and the global economy in peril, these complex schemes are hobbled and cash is backing up in Los Angeles, Bill Bodner, special agent in charge of the Drug Enforcement Administration’s Los Angeles field division, said in an interview.

The recent million-dollar interceptions were reminiscent of seizures the DEA made before drug traffickers embraced trade-based money laundering, said Bodner, a 28-year agent.

The shuttering of nonessential businesses has made a “tremendous impact” on a money laundering system dubbed the black market peso exchange, he said. In the fashion district in downtown Los Angeles — the exchange’s epicenter — drug trafficking groups from throughout the country use wholesalers to remit profits to Mexico, according to cases filed in federal courts in Los Angeles and elsewhere.

Steven Mygrant, a federal prosecutor in Oregon who charged six people with laundering heroin proceeds through Los Angeles businesses, said two primary factors drive the exchange: Drug trafficking groups need to convert dollars to pesos, which is expensive to do legitimately, and they need to move money from the United States to Mexico, which is risky to transport in cash.

To accomplish this, Mygrant said, a broker pays pesos for the drug traffickers’ dollars. The traffickers deliver cash to an exporter in Los Angeles, who ships goods — commonly clothing, cosmetics, jewelry or sportswear — to a retailer in Mexico. The retailer sells the goods for pesos

[Rapscallion]

I have a bteer way to handle it.