Plush Toy Company Owner, Workers Indicted On Money Laundering Charges
CITY OF INDUSTRY (CBS) — Federal officials said Monday a Southland toy maker has laundered millions of dollars in Mexican and Columbian drug money.
KNX 1070′s Charles Feldman reports on the latest Los Angeles toy company to be linked to foreign drug proceeds.
The co-owners and three employees of Woody Toys in the City of Industry made their first appearances in federal court on Monday following their indictment for allegedly orchestrating an elaborate financial scheme to launder millions of dollars for drug trafficking organizations in Mexico and Colombia.
The two-count indictment unsealed Monday accused the City of Industry toy wholesaler and seven individual defendants with using dozens of “structured” cash deposits in the United States to launder illicit proceeds generated by drug trafficking organizations.
Court documents show that between 2005 and December 2011, Woody Toys took in approximately $3 million in out-of-state cash without filing the required IRS forms.
Additionally, during that same six-year timeframe, Bank of America (BoA) records indicate another $3 million in out-of-state cash was deposited into Woody Toys’ BoA accounts in structured amounts.
Woody Toys is also accused of receiving multiple cash payments of more than $10,000 without filing the required paperwork with the IRS. The case is being prosecuted by the U.S. Attorney for the Central District of California.
Bank records also showed a Bank of America account belonging to Woody Toys “frequently received anonymous, out-of-state cash deposits in amounts less than $10,001″ credited to Mexican and Columbian accounts, according to a criminal complaint filed back on March 29.
Officials suspect that Woody Toys and its customers were engaged in a “Black Market Peso Exchange Scheme”, a common laundering scheme that allows drug traffickers to convert their U.S. drug proceeds into pesos.
Some employees even admitted to picking up bulk cash payments as high as $60,000, including one occasion where the owner received “approximately seven bricks of cash from two Hispanic men who are not customers”, according to the indictment.
Claude Arnold, special agent in charge for Homeland Security Investigations(HSI) in Los Angeles, said the laundry list of charges “doesn’t comport with what you’d expect from a company that sells children fluffy animals”.
“What lends itself to trade-based money laundering is any business that exports goods from the United States to a drug source country,” Arnold said.
The defendants listed in the indictment — who are accused of money laundering activities dating back to 2005 and continuing as late as December 2011 — include Jia “Gary” Hui Zhou, 43, of Diamond Bar, co-owner of Woody Toys; Dan “Daisy” Xin Li, 43, of Diamond Bar, co-owner of Woody Toys; Kit Yee Lam, 51, of Diamond Bar, accountant for Woody Toys; Jazmin Contreras, 33, of Los Angeles, accountant for Woody Toys; Anabel Rufino, 32, of Norwalk, sales manager for Woody Toys; Jose Miguel Yong-Hinojosa, 26, of Guadalajara, Mexico, Woody Toys client; and Luis Ernesto Flores Rivera, 53, of Guadalajara, Mexico, Woody Toys client.
The multi-agency probe targeting Woody Toys began in November 2010 based on evidence uncovered during a similar money laundering investigation targeting another Los Angeles-area toy wholesaler, Angel Toys.
Angel Toys’ two top executives pleaded guilty to money structuring violations and were sentenced earlier this year to 37 months in prison. Several former employees of Angel Toys subsequently went to work for Woody Toys.