California Textile Executives Sentenced for Laundering Drug Cartel Money

LOS ANGELES-A district court in California sentences executives from Pacific Eurotex Corp, a Los Angeles-based textile company, to federal prison. California Apparel News reports that the sentencing comes after executives pled guilty last year to a money-laundering and tax-evasion scheme involving Mexican drug cartels.

According to the report, Pacific Eurotex is one in more than 70 companies snagged in a raid by state and federal authorities conducted in Sept. 2014. Agents canvassed the Los Angeles fashion district in efforts to crack down on money-laundering operations that benefitted Mexican drug cartels under the name Operation Fashion Police. The news outlet notes that the total amount of cash and property seized is more than $140 million. Raids uncovered cash at multiple locations in the greater Los Angeles area. The accused reportedly stockpiled the money using various tactics such as $30 million packed in boxes, $10 million stowed in duffel bags, and more than 30 bank accounts holding roughly $19 million.

California Apparel News explains the overarching structure of the operation:

“Los Angeles companies would import apparel and textiles into the United States with U.S. dollars left by the drug cartels or manufacture goods in the United States,” the newspaper states. “Those goods were then exported to Mexico and sold at local stores for pesos. Those pesos were deposited in Mexican bank accounts, reportedly for the Sinaloa and Knights Templar drug cartels.”

A news release on the U.S. Justice Department’s website details the Sinaloa Drug Cartel’s involvement in the region. The cartel used a Los Angeles Fashion District business to accept and launder ransom payments for a U.S. citizen kidnapped by the organization, held hostage, and tortured at a ranch in Mexico. The department’s report names Eurotex, as well as a host of other California-based companies in its report.

Individuals sentenced from Pacific Eurotex include chief executive Morad “Ben” Neman and chief financial officer Hersel Neman, Ben Neman’s brother. In addition to the Nemans, other company employees were indicted for conspiring to launder money and structure cash transactions.