As of Thursday, June 4, 2015
Nine months after agents busted a long-running Mexican drug money–laundering operation in the Los Angeles Fashion District, an underwear importer has pleaded guilty to several offenses linked to the scheme.
Xilin Chen, owner of Yili Underwear and Gayima Underwear, pleaded guilty in U.S. District Court to three felony accounts: knowingly passing false documents through a U.S. custom house, conspiracy to launder money and unlawful procurement of citizenship.
In a plea agreement filed with the federal court in Los Angeles on May 29, Chen acknowledged he received bulk-cash payments at his business that he had reason to believe were from illegal drug activities but avoided learning the truth about the money. The importer acknowledged that on three occasions he accepted bulk cash as payment for apparel from an undercover agent posing as someone with links to narcotics traffickers.
Chen also pleaded guilty to a customs offense when he claimed in a form filed with the U.S. Customs and Border Protection that he was importing apparel from China worth $86,635 when the true value was pegged at $175,535.
The Chinese immigrant also pleaded guilty to illegally procuring citizenship in 2012, when he declared he was not involved in criminal activity even though he was involved in customs fraud and money laundering. As a result, Chen will lose his U.S. citizenship.
Chen’s son, Chuang Feng Chen, known as Tom, also pleaded guilty to conspiracy to passing false documents through a U.S. custom house.
As part of the case, the Chens have agreed to forfeit to the United States proceeds from the sale of their building, which houses their underwear company; two houses in Temple City, Calif.; and more than $435,000 seized by federal agents last fall.
As part of the agreement, prosecutors have asked U.S. District Judge Percy Anderson to dismiss charges against Xilin Chen’s daughter, Aixia Chen.
The Chens, due to be sentenced Aug. 24, were just a few of the Los Angeles apparel- industry people accused of being wrapped up in a plan that helped Mexican cartels selling drugs in the United States launder their money and bring it back to Mexico.
Last September, about 1,000 federal and state agents fanned out across the Los Angeles Fashion District to crack down on the operations. The raid of 75 fashion and textile businesses yielded cash and property seizures totaling more than $140 million.
The companies are being accused of taking cash payments from drug-cartel agents, using that money to import garments from overseas and then shipping them to Mexico, where they were sold in stores for pesos. This system of converting dollars into pesos is called trade-based money laundering.