Dennis RomeroThe next time you're shopping in Santee Alley for a pleather handbag or a $20 pair of distressed jeans, look around you. The vendor selling you that fine Cucci wallet might be laundering money for one of the globe's largest drug cartels.
See also: “Los Angeles Has Become the Epicenter of Narco-Dollar Money Laundering,” Fed Says
Some of downtown L.A.'s clothing retailers and wholesalers are so awash in dirty cash that the federal government this week announced that it will be requiring “additional reporting and record-keeping obligations” for nearly the entire L.A. Fashion District.
It's an attempt to squeeze out this currency game once and for all.
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Following last month's federal seizure of $90 million in alleged Mexican cartel money tied to Fashion District businesses, the U.S. Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) that puts much of the area under strict financial surveillance.
It means that targeted businesses must report cash transactions of $3,000 or more for 180 days starting next Thursday, according to FinCEN. The Fashion District area is allegedly rife with black market peso exchange schemes, which were explained by the network this way:
Much of the money laundering is conducted through Black Market Peso Exchange schemes, also known as trade-based money laundering, in which drug money in the United States is converted into goods that are shipped to countries such as Mexico, where the goods are sold and money now in the form of local currency goes to the drug trafficking organizations.
The U.S. Attorney's Office in L.A., the IRS and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations requested the so-called GTO.
Credit: Eduardo Sciammarella/Flickr
FinCEN called Fashion District money laundering “pervasive.” The new reporting requirements will help feds crack down further on the cartels' U.S. cash flow, said FinCEN director Jennifer Shasky Calvery.
Targeted business include garment and textile stores, transportation companies, travel agencies, perfume stores, electronics and cellphone stores, shoe stores, lingerie stores, florists, beauty supply stores, and, says FinCEN, “stores bearing 'import' or 'export' in their names.
Which is pretty much everybody.
The acting U.S. Attorney in L.A., Stephanie Yonekura, said:
My office sought the unprecedented order from FinCEN with the goal of shutting down the flow of dirty money to foreign drug cartels – a huge problem that has contaminated the Fashion District.
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