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October 5, 2015

Canadian Man Charged in Scheme to Launder Money for Drug Rings, including the Sinaloa Cartel, Arrives in L.A. to Face Charges

Filed under: California Defense Attorney — fayarfa @ 12:06 am

LOS ANGELES – The leader of an international money laundering organization is scheduled to be arraigned this afternoon on federal charges that allege he moved millions of dollars in drug money for organizations that included the Sinaloa Cartel.

Gurkaran Singh Isshpunani was arrested on September 14 in Buffalo, New York as he attempted to enter the United States from Canada. A federal magistrate ordered Isshpunani held without bond and directed that he be transported to Los Angeles, where he arrived last night.

Isshpunani is the lead defendant in a grand jury indictment that charges 22 defendants with money laundering and operating unlicensed money remitting businesses violations. The illegal scheme allegedly spanned the world and involved operatives in Canada, India, the United States and Mexico who laundered drug trafficking proceeds generated from multi-kilogram and multi-pound sales of narcotics in Canada and the United States for and on behalf of the Sinaloa Cartel and their affiliated drug trafficking organizations. The laundered money is alleged to have either been transported to the Sinaloa Cartel as profits or reinvested in additional narcotics to be sold and distributed in the United States and Canada.

The indictment accuses Isshpunani of being the leader of an international “hawala” ring that transferred narcotics proceeds for the Sinaloa drug cartel and other drug trafficking organizations. Isshpunani, 34, who is believed to reside in the Canadian province of Ontario, will be arraigned this afternoon on a three-count indictment that charges him and 21 other defendants with conspiracy to launder money, conspiracy to operate an unlicensed money transmitting business (a hawala), and a substantive count of operating an unlicensed money transmitting business.

Previously in this case, 14 other defendants have been arrested and arraigned. The indictment charges seven defendants who are currently fugitives.

The indictment specifically alleges that the hawala network transferred more than $4.5 million in narcotics proceeds and was involved in the trafficking of 29 kilograms of cocaine and approximately 90 pounds of methamphetamine.

However, during the course of a four-year federal wiretap investigation by the Drug Enforcement Administration’s LA Strike Force and IRS - Criminal Investigation, authorities seized a total of $15,467,293 in bulk United States currency, 321 kilograms of cocaine, 98 pounds of methamphetamine, 11 kilograms of MDMA (“ecstasy”) and nine kilograms of heroin.

Isshpunani and the others are charged in a 36-page indictment that outlines the workings of a “hawala,” which is an alternative form or method of money remittance which operates outside of traditional banking or financial systems. Through hawala transactions, only the value of the money is transferred, not the money itself. The hawala system transfers money via a network of brokers known as “hawaladars.” According to the indictment, Isshpunani is a hawaladar who is a part of a network of Indian men who move money based on a trust system.

The indictment explains that, in its most basic form, a hawala needs at least two brokers who are typically located in separate countries (but can be located in different cities within one country). The transfer of monetary value occurs between the brokers based solely upon the trust that exists between the brokers. Thus, there are no promissory instruments or any legally binding features of the hawala system. The necessary trust and long-established connections between brokers are typically based on familial, ethnic, religious, regional and/or cultural grounds. Often, a given hawala network consists of many brokers operating in multiple countries around the world in which all brokers are in contact with each other and money movements can occur in a variety of directions from one country to another.

“Drug traffickers in Canada would generate drug proceeds from multi-kilogram and multi-pound sales and distributions of drugs provided by Mexican cartels, including the Sinaloa Cartel,” the indictment alleges. The Canadian-based drug traffickers coordinated money transfers to their counterparts in Mexico by instructing Isshpunani and other alleged hawaladars in Canada to deliver specified amounts of money to couriers in the U.S. who were working on behalf of the cartels. The Canadian-based hawaladars, once in possession of the drug traffickers’ bulk Canadian currency, would contact U.S.-based hawaladars and authorize the release of the equivalent amounts of U.S. currency to the couriers operating in the Los Angeles area. A number of co-defendants named in the indictment served as U.S.-based couriers, picking up and subsequently delivering bulk U.S. currency in the Los Angeles area in exchange for narcotics that were to be transported back to Canada for sales and distribution.

The indictment in this case was returned under seal by a federal grand jury in Los Angeles in November 2014. Authorities began arresting defendants several months ago. In addition to Isshpunani, 14 defendants have been taken into custody and have been arraigned in Los Angeles.

Those previously arrested, and who have pleaded not guilty, are:

· Miguel Melendrez Gastelum, 35, of Coachella, California, who surrendered to federal authorities on September 16;

· Shannon Aubut, 30, a resident of the province of Ontario, who was arrested on August 14 at the Camplain, New York Port of Entry;

· Paul Alan Jacobs, 42, of Venice, California, who surrendered to authorities on August 13;

· Jose De Jesus Montenegro, 49, of Coachella, who was arrested at the Tecate, California Port of Entry;

· Breidi Alberto Espinoza, 28, of Corona, California, who was arrested on July 10 at the Otay Mesa Port of Entry;

· Alberto Diaz, 28, of San Diego, who was arrested on July 4 at the San Ysidro Port of Entry;

· Christopher Fagon, 37, a resident of the province of Ontario, who was arrested on June 28 at Los Angeles International Airport;

· Jose Luis Barraza, 47, of Coachella, who was arrested on June 27 at Calexico Port of Entry;

· Bradley John Martin, 54, of Carlsbad, California, who was arrested on June 12 at San Ysidro Port of Entry;

· Ramesh Singh, 46, of Alhambra, California, who surrendered to authorities on June 2;

· Sanjeev Wadhwa, 36, an Indian national, who was arrested on May 30 at LAX;

· Sucha Singh, 51, of Arleta, California, who was arrested at his residence on May 30;

· Harinder Singh, 30, of Monrovia, California, who was arrested on May 30; and

· Harmeet Singh, 54, of Chino Hills, California, who was arrested at his residence on May 30.

A trial date for the defendants who have been arraigned in Los Angeles has been scheduled for May 24, 2016.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

The money laundering conspiracy charge carries a statutory maximum sentence of 20 years in federal prison. Each of the two counts related to the alleged unlicensed money transmitting business carries a maximum sentence of five years.

The seven fugitives named in the indictment are:

· Sanjeev Bhola, of India;

· Balwat Bhola, of India;

· Bakshish Sidhu, of India;

· Jason Robert Carey, 37, a resident of the province of Ontario;

· Jesus Manuel Perez Rios, 33, of Coachella, who authorities believe fled to Mexico;

· Tina Pham, 25, of Montreal; and

· a Canadian man known only as “Buddy.”

The investigation in this case is being conducted by the Drug Enforcement Administration and IRS – Criminal Investigation. These agencies received assistance and support from the Santa Ana Police Department, the Beverly Hills Police Department and the Pomona Police Department.

Isshpunani was apprehended last month by U.S. Customs and Border Patrol while attempting to enter the United States from Canada at the Buffalo, New York Port of Entry.

22 Charged in Nation’s First Major Case involving ‘Hawala’ Transfers of Drug Money

USAO - California, Central Updated October 2, 2015

Central District of California DOJ / 15-100 / October 2, 2015

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