February 19, 2015
Contact: SA Doug Dorley
Phone Number: (314) 538-4600
Brokerage Accounts Used To Launder Drug Proceeds Forfeited
ST. LOUIS - Drug Enforcement (DEA) Special Agent in Charge, James P. Shroba announced today that all forfeiture claims in the civil case against $11,071,188.64, seized from brokerage accounts involving money laundering transactions, were struck down by U.S. District Judge Carol E. Jackson, of the Eastern District of Missouri. The Judge further ordered the proceeds to be forfeited to the United States.
“This forfeiture is significant because it not only shows the incredible profit derived from the drug trafficking organizations, but more importantly, DEA’s resolve to identify these illegal assets regardless of location,” said Special Agent in Charge Shroba.
The civil forfeiture complaint in rem, filed in the Eastern District Court of Missouri, alleged the $11,071,188, which had been held in brokerage accounts in the name of LaOstriches & Sons Ltd., was the product of the sale and distribution of narcotics from Colombia to the United States through Mexico by members of the Sinaloa Drug Cartel. As a result, the United States alleged the property was forfeitable to the United States as property traceable to, and/or involved in, money laundering transactions that violated 18 U.S.C. §§1956 and 1957.
As set out in Court documents, Timber Development Ltd., a company incorporated in the British Virgin Islands, was owned by a member of the drug Cartel responsible for supplying narcotics to the Sinaloa Cartel and laundering proceeds. In order to liquidate assets owned by a drug cartel member, Timber Development transferred the illicit proceeds and assets into brokerage accounts titled to LaOstriches & Sons LLC. LaOstriches & Sons was incorporated in the BVI by Laura Avila-Barraza, the widow of drug trafficker Humberto Ojeda-Barraza, and other family members. In addition to being the widow of Ojeda-Barraza, the Government alleged that Avila-Barraza herself was an associate of the Sinaloa Drug Cartel and top members, including Joaquín Guzmán, aka “Chapo.” For over ten years, LaOstriches’ transferred the illicit proceeds and assets through eight brokerage accounts held at multiple securities broker-dealers in the United States in order to conceal the nature, location, source, ownership, or control of the proceeds. As President of LaOstriches, Avila-Barraza authorized brokers and financial advisors to use the company’s proceeds and assets to buy and sell securities in the open market. These financial transactions took place in St. Louis, Missouri and Miami, Florida.