Thread: LA Fashion District company and 2 owners plead guilty in money laundering scheme

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FINANCIAL CRIMES

12/22/2017

LA Fashion District company and 2 owners plead guilty in money laundering scheme

LOS ANGELES – In a case stemming from an investigation into Fashion District businesses using “Black Market Peso Exchange” schemes to launder narcotics proceeds for international drug cartels, an import-export textile business and two executives have pleaded guilty to federal money laundering and tax charges.

Pacific Eurotex Corp. and its owners – Morad “Ben” Neman and Hersel Neman – pleaded guilty yesterday to federal charges in an indictment that accused them of using the business to receive bulk cash that they knew or believed to be the proceeds of narcotics trafficking.

The investigation into Pacific Eurotex was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and IRS - Criminal Investigation.

The defendants admitted in court documents that they failed to report to federal authorities the receipt of this bulk cash, and that they “structured” frequent deposits of the cash, in amounts less than $10,000, to avoid a bank reporting requirement that would have drawn the scrutiny of law enforcement.

The Nemans also pleaded guilty to conspiring to defraud the United States by maintaining two sets of business records in order to conceal income for tax purposes.

A Black Market Peso Exchange scheme is designed to assist drug traffickers who have United States currency that they want to send to a foreign country, such as Mexico, and convert into pesos. As part of the scheme, a broker finds business owners in the foreign country who buy goods from U.S. companies and who need dollars to pay for those goods. The broker arranges for the illegally obtained dollars to be delivered to the United States-based vendors, such as Pacific Eurotex, and these illegally obtained dollars are used to pay for the goods purchased by the foreign customers.

Once the goods are shipped to the foreign country and sold by the foreign business, the pesos are turned over to the broker, who then pays the drug trafficker in the local currency of the foreign country, thus completing the laundering of the illegally obtained dollars.

Pacific Eurotex received, laundered and structured approximately $370,000 in bulk cash delivered on four separate occasions over 2½ months in 2013 by an undercover agent posing as a money courier, according to court documents. The defendants admitted in court yesterday that they laundered this money after being specifically advised by HSI special agents that bulk cash payments were frequently derived from illegal activity and that they were required to report cash transactions involving more than $10,000 in currency.

The defendants who appeared yesterday in United States District Court are:

• Pacific Eurotex, which pleaded guilty to conspiring to launder money and conspiring to structure monetary transactions with a domestic financial institution;

• Morad “Ben” Neman, 57, of Westwood, the chief executive officer of Pacific Eurotex, who pleaded guilty to four counts – conspiring to structure monetary transactions with a domestic financial institution, conspiring to defraud the United States by obstructing the lawful functions of the Internal Revenue Service, subscribing to and filing a false 2013 tax return understating income he received from Pacific Eurotex, and aiding and assisting in the filing of another false 2013 tax return; and

• Hersel Neman, 58, of Beverly Hills, the chief financial officer of Pacific Eurotex and brother of Morad Neman, who pleaded guilty to three counts – conspiring to launder money, conspiring to defraud the United States by obstructing the lawful functions of the IRS, and subscribing to and filing a false tax return.

All three defendants are scheduled to be sentenced by United States District Judge John A. Kronstadt on June 14.
In court documents, the defendants admitted that, as part of the money laundering scheme, they instructed other individuals to deposit the cash into the personal Wells Fargo bank account of Hersel Neman’s wife. “These deposits, 384 in all, were divided into increments less than $10,000 each with the intent to prevent Wells Fargo, a domestic financial institution, from filing Currency Transaction Reports,” according to the documents. The defendants have agreed to forfeit to the United States nearly $3.18 million, which includes the narcotics proceeds they received and deposited in structured cash transactions into the Wells Fargo account.

When they are sentenced by Judge Kronstadt, Morad Neman will face a statutory maximum sentence of 21 years in federal prison, and Hersel Neman will face a sentence of up to 28 years. Pacific Eurotex faces a statutory maximum sentence of up to 10 years’ probation and almost $2 million in fines.

The indictment in this case names two other defendants who are scheduled to go on trial on March 6. Mehran Khalili, 49, of Beverly Hills, who is a brother in law of Hersel Neman, is charged with conspiring to structure cash transactions; and Alma Villalobos, 55, of Arleta, the in-house accountant and bookkeeper for Pacific Eurotex, faces several charges, including conspiracy to launder money.

This case is being prosecuted by Assistant United States Attorneys Julie J. Shemitz, Jamie A. Lang and Puneet V. Kakkar of the Organized Crime Drug Enforcement Task Force.

https://www.ice.gov/news/releases/la...ndering-scheme

Last Reviewed/Updated: 12/27/2017

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