LOS ANGELES (CBSLA.com) — Federal authorities Wednesday arrested nine people and seized approximately $65 million in cash in a massive sweep of the Fashion District that targeted money laundering for Mexican drug cartels.

The raids, conducted  by approximately 1,000 officers with the DEA, ICE, IRS and FBI, were carried early Wednesday morning on approximately 80 businesses in the downtown area.

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The businesses were suspected of using “Black Market Peso Exchange” schemes to launder drug money for international cartels, the Department of Justice said.

In one of three cases unsealed Wednesday alleges that the Sinaloa Drug Cartel used a Fashion District business to accept and launder ransom payments to secure the release of a United States citizen who was kidnapped by the organization after the U.S. government seized more the 100 kilograms of cocaine that he was supposed to distribute.

The man was held hostage, beaten, shot, electrocuted and waterboarded at a ranch in Mexico. He was released after relatives paid $140,000 in ransom.

(credit: DOJ)

(credit: DOJ)

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The other two cases in the indictment involved defendants who worked for or owned businesses in the Fashion District that operated a Black Market Paso Exchange scheme.

In a BMPE scheme, a peso broker worked with a drug trafficker, “who has currency in the United States that he needs to bring to a foreign country, such as Mexico, and convert into pesos. The peso broker finds business owners in the foreign country who buy goods from vendors in the United States and who need dollars to pay for those goods. The peso broker arranges for the illegally obtained dollars to be delivered to the United States-based vendors, such as the stores in the Fashion District, and these illegally obtained dollars are used to pay for the goods purchased by the foreign customers,” officials said.

The scheme is typically used by Mexican cartels to collect money from U.S.-based sale without the risk of smuggling bulk amounts of cash across the border. BMPE also lessens the risk of illegal activity being detected.

“Los Angeles has become the epicenter of narco-dollar money laundering with couriers regularly bringing duffel bags and suitcases full of cash to many businesses,” said Robert E. Dugdale, the Assistant United States Attorney who oversees the Criminal Division in the Central District of California.

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