LOS ANGELES – Morad “Ben” Neman and Hersel Neman – the owners and top executives of Pacific Eurotex Corp., an import-export textile company based in the Los Angeles Fashion District – each received federal prison sentences today for their roles in a “Black Market Peso Exchange” scheme to launder money for international drug cartels.
Morad “Ben” Neman, 58 of Westwood, the chief executive officer of Pacific Eurotex, was sentenced to two years in federal prison, to be followed by six months of home confinement. In addition to the prison term, Neman is jointly liable with the company to forfeit $3,178,230 million to the government.
Morad Neman pleaded guilty to 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 that understated income he received from Pacific Eurotex, and aiding and assisting in the filing of another false 2013 tax return. When he pleaded guilty in December 2017, Morad Neman admitted to structuring frequent deposits of the cash in amounts less than $10,000 to avoid a bank reporting requirement that would have triggered the attention of law enforcement.
Hersel Neman, 59 of Beverly Hills, the chief financial officer of Pacific Eurotex, was sentenced to 18 months in federal prison, to be followed by six months of home confinement. He pleaded guilty to 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. Hersel Neman is liable to forfeit approximately $370,000.
Pacific Eurotex itself was sentenced to three years of probation and was ordered to pay a fine of $400,000 for its conviction on charges of conspiring to launder money and conspiring to structure monetary transactions with a domestic financial institution.
Hersel Neman and Pacific Eurotex pleaded guilty in December 2017 to using the company to launder large amounts of cash that they deliberately ignored were drug trafficking proceeds. Both defendants admitted in court papers that they did not report to federal officials the receipt of the bulk cash.
The Neman brothers and their company were sentenced by United States District Judge John A. Kronstadt, who will issue a final order related to criminal fines for the three defendants.
This case was the result of an investigation into Fashion District businesses using “Black Market Peso Exchange” schemes to launder narcotics proceeds for international drug cartels. The Nemans were arrested in September 2014 on the same day that approximately 1,000 law enforcement officials executed dozens of search warrants in the Fashion District and seized more than $100 million in laundered drug money.
The Black Market Peso Exchange is one of the largest mechanisms by which international drug cartels obtain the proceeds of illicit drug sales in the United States, according to court documents. This type of scheme allows drug traffickers who have their proceeds in U.S. currency to convert it to a different currency, such as Mexican pesos, via the sale of goods shipped across international borders.
In a typical Black Market Peso Exchange scheme, drug cartels sell their cash proceeds to a money broker who finds businesses in a foreign country that purchase goods from U.S. companies and who need dollars to pay for these goods. The money broker then arranges for delivery of the illegally-obtained dollars to U.S.-based vendors such as Pacific Eurotex. These dollars are then used to pay for the goods purchased by the foreign businesses. Once the goods are shipped to and sold by the foreign business, the money – now in the local, non-U.S. currency – is turned over to the money broker, who then pays the drug cartel in the foreign country's local currency.
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 company laundered this money after being specifically advised by special agents with U.S. Immigration and Customs Enforcement's Homeland Security Investigations that bulk cash payments were frequently derived from illegal activity and that it was required to report cash transactions involving more than $10,000 in currency.
The defendants admitted in court documents that they instructed other people to deposit the cash into the personal Wells Fargo bank account of Hersel Neman's wife. In total, 384 deposits totaling nearly $3.18 million were divided into increments of less than $10,000 to prevent Wells Fargo from filing a currency transaction report with the U.S. Treasury Department, according to court documents.
In September 2018, Mehran Khalili, 50, of Beverly Hills, who is a brother-in-law of Hersel Neman, was found guilty by a federal judge of one count of conspiracy to structure financial transactions to avoid detection by law enforcement. He faces a statutory maximum sentence of 10 years in federal prison when he is sentenced by Judge Kronstadt on January 31.
Another defendant in the case, Alma Villalobos, 56, of Arleta, pleaded guilty in March 2018 to one felony count of conspiracy to cause Pacific Eurotex to fail to file reports of currency transactions over $10,000 in a non-financial trade or business. She also faces a statutory maximum sentence of 10 years in prison at her sentencing hearing, which is scheduled for January 24.
There are no comments for this post. Be the first and Add your Comment below.
Leave a Comment