Published: July 2, 2010
Updated: 9:30 p.m.

Irvine woman accused of using toy company to launder drug money

ByKIMBERLY EDDS
THE ORANGE COUNTY REGISTER

An Irvine woman has been arrested in connection with an elaborate multimillion-dollar worldwide scheme to use his toy company to launder millions of dollars for Mexican and Colombian drug traffickers by selling teddy bears and Topo Gigio dolls in order to generate clean money.

Meichun Cheng Huang, 57, of Irvine was one of three top-level executives of the Angel Toy Corp. arrested Friday as part of a two-year investigation by several state and federal agencies. Also arrested were Huang's business partner and company CEO, Ling Yu, 52, of Arcadia, and Xiaoxin "Judy" Ju, 48, of San Gabriel, the company's accountant.

Immigration and Customs Enforcement, the complex plan used the Los Angeles-based Angel Toy Corp. to launder drug profits through a number of structured cash deposits. The money was returned to drug traffickers when the toy company exported teddy bears and other stuff animals to foreign countries and sold them in order to get clean money, ICE spokeswoman Virginia Kice said.

"It's no small irony that a multimillion-dollar company which promoted itself as retailer of cuddly stuffed animals was allegedly acting as a financial linchpin for drug-trafficking operatives in Colombia and Mexico," said ICE Director John Morton in a statement. "It may be a toy company, but we believe these defendants' pursuits were anything but child's play.

Businesses that launder profits for drug-trafficking organizations should be on notice there will be a high price to pay for helping further these dangerous criminal enterprises."

A federal grand jury indicted the Angel Toy Corp. on Thursday. The five-count indictment charges a total of five defendants, including two owners of Angel Toy Corp. and a Colombia-based businessman who allegedly oversaw the importation of the toys into Colombia. ICE officials were working with the Colombian National Police and the U.S. Department of Justice to track down Colombian businessman Jose Leonardo Cuevas Otalora to arrest him, Kice said.

The charges include conspiracy to purposefully structure cash transactions to avoid federal reporting requirements that any cash transaction over $10,000 be disclosed to authorities. The indictment also seeks the forfeiture of more than $8.6 million, which is the amount authorities say the company laundered between 2005 and 2009.

According to the indictment, Huang and Yu ha their Colombian and Mexican clients to drop off cash at the company's Los Angeles office or deposit it into the company's bank accounts. Angel Toy's employees were instructed by Huang and Yu not to accept deposits of more than $10,000 in order to avoid federal reporting requirements, according to the indictment.

Cash deliveries made in excess of $10,000 were divided into amounts of less than $10,000 before the money was deposited into the company's accounts, according to the indictment.

After the deposits were made, Angel Toy executives wired the money to China to purchase stuffed animals, according to investigators. The toys were exported to Colombia, where Cuevas arranged for them to be sold, according to investigators.

The Colombian pesos made by the toy sales were then used to reimburse the Colombian drug traffickers, according to investigators.

All five defendants are charged with conspiracy to structure cash transactions. Yu is charged with conspiracy to smuggle cash out of the United States, along with structuring the exportation of monetary instruments. He faces up to 15 years in prison.

Huang is charged with witness-tampering in intimidation and coercion of an Angel Toy employee who testified before the federal grand jury about the case. That charge alone carries a maximum penalty of 20 years.
The company itself is charged with conspiracy to launder money.

The case is being prosecuted by the U.S. Attorney's Office in Los Angeles.
California Attorney General Edmund G. Brown Jr. called the scheme an "obscene travesty."

"Consumers in Mexico and Colombia thought they were buying teddy bears and Topo Gigio dolls when, in reality, they were unwittingly helping to launder millions of dollars of drug profits for ruthless drug cartels,"
Brown said in a statement.

Contact the writer: 714-796-7829 or kedds@ocregister.com

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