LOS ANGELES – A Carlsbad man was sentenced this week to five years and three months in federal prison for his part in an international money laundering organization that conspired to move more than $15 million dollars in drug money for organizations that included the Sinaloa Cartel.

Bradley John Martin, 55, pleaded guilty in May to conspiracy to launder money and operating an unlicensed money remitting business. The illegal scheme 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 was 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.

In his plea, Martin admitted that he was a repeat money courier in an international “hawala” ring that transferred narcotics proceeds for the Sinaloa drug cartel and other drug trafficking organizations. Specifically, Martin admitted to personally transporting over $1,800,000 in cash, which he knew was drug trafficking proceeds.  When his sentence is complete, Martin will be on supervised release for three years.

“Law enforcement will continue to use every available tool to cripple the operations of major drug trafficking operations like the Sinaloa Cartel,” said United States Attorney Eileen M. Decker. “This case shows that membership in the cartel is not a prerequisite to prosecution; criminals outside of the cartel that enable drug trafficking will also face substantial prison sentences.”

According to the indictment, a “hawala” 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, 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.

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.

“Individuals lending assistance to drug traffickers in the form of laundering drug proceeds are arguably no better than the traffickers themselves,” said Drug Enforcement Administration Special Agent in Charge John S. Comer.  “Martin's sentence is a warning to others that might be tempted to collude with drug trafficking organizations.”

Previously in this case, 14 other defendants have been arrested and arraigned. The indictment charges seven defendants who are currently fugitives. Of the 14 who have been arraigned, 10 have pled guilty and four have been sentenced.  The three defendants who have been arraigned but have not yet pled guilty are scheduled for trial in April, 2017.

“Martin–a frequent money courier for the Sinaloa Drug cartel–used Bud Light and Diet Coke cardboard drink boxes to move illicit drug proceeds through Southern California.  IRS Criminal Investigation will continue our vigilant pursuit of unlicensed money transmitters who attempt to circumvent the financial system of the United States,” stated Anthony J. Orlando, Acting Special Agent in Charge of IRS Criminal Investigation.

The seven fugitives named in the indictment who have not yet been apprehended 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.”

Additionally, defendant Breidi Alberto Espinoza, 28, of Corona, California, was arrested on July 10 at the Otay Mesa Port of Entry, but authorities believe he has now fled to Mexico.

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. This case is being prosecuted by Assistant United States Attorneys Carol Alexis Chen and Ellen E. Lansden of the Organized Crime Drug Enforcement Task Force.

USAO – California, Central Updated November 30, 2016

Central District of California DOJ / 16-295 / November 30, 2016