April 09, 2019
Contact: Jodie Underwood
Phone Number: (206) 553-1162
Federal investigation of Portland drug trafficking organization reveals black market peso exchange scheme
PORTLAND, Ore.—Esteban Guillen Ramirez, 53, of Guadalajara, Jalisco, Mexico, was sentenced on April 7, 2019, to one year in federal prison and three years’ supervised release for his role in a complex black market peso exchange money laundering scheme. The scheme was uncovered in 2015 following a lengthy investigation by the United States Drug Enforcement Administration into a Portland-based heroin trafficking organization.
In February 2015, the DEA executed multiple search warrants throughout the Portland and Vancouver, Washington metropolitan area following a long-term heroin trafficking investigation. Agents arrested over 20 drug trafficking defendants, seized multiple kilos of heroin and seized over $400,000 in bulk cash. At one search location, agents seized evidence of bank deposit slips and deposit instructions, in which heroin traffickers deposited drug proceeds into multiple wholesale businesses in the Los Angeles Fashion District.
Agents began a money laundering investigation. Bank records showed that the majority of cash deposits made by Portland heroin traffickers into the Los Angeles wholesale business bank accounts were systematically structured to avoid detection by the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
In Nov. 2015, agents executed 14 federal search warrants in the Los Angeles Fashion District. At four separate wholesale businesses, agents seized financial records identifying Stefano Fashions as the beneficiary of the cash deposits made by the Portland heroin traffickers. Stefano Fashions, owned by Guillen Ramirez, is a successful Guadalajara business engaged in the sale of women’s accessories and cosmetics. Financial investigators found evidence of a high volume of structured cash deposits and large quantities of bulk cash delivered to the wholesale businesses on behalf of Stefano Fashions. While this financial activity was highly unusual for a U.S. wholesale business, it was a telltale sign the Los Angeles Fashion District businesses and Stefano Fashions were participating in a black market peso exchange scheme to launder the drug proceeds of a Mexican drug trafficking organization.
A black market peso exchange is a trade-based money laundering scheme commonly used by Mexican drug trafficking organizations to obtain pesos in exchange for U.S. dollars acquired from narcotics sales in the U.S. This complex money laundering scheme involves money derived from the sale of drugs in the United States that is laundered through wholesale business in the Los Angeles Fashion District in order to repatriate the drug proceeds back to Mexican drug trafficking organizations.
In July 2018, federal agents arrested Guillen Ramirez in Las Vegas, Nevada. Guillen Ramirez pleaded guilty to one count of conspiracy to commit money laundering on Dec. 13, 2018. Five Los Angeles wholesale business owners and one former CEO pled guilty to money laundering, tax and structuring related crimes. Each of the business owners that has been sentenced was required to a serve prison term and more than $2 million has been seized, forfeited or applied to restitution.
Following this money laundering investigation, the national bank used by the drug traffickers to deposit proceeds changed its policy governing third-party cash deposits. Prior to this investigation, this national bank allowed third parties to make cash deposits under $10,000 into personal bank accounts without providing identification. The bank now requires individuals making cash deposits into third party accounts to provide identification and be an authorized user of the account.
This case was the result of a joint investigation by the DEA, Homeland Security Investigations (HSI), IRS-Criminal Investigation, and the U.S. Marshals Service. The money laundering prosecution was led by Steven T. Mygrant, Assistant U.S. Attorney for the District of Oregon.
This case was brought as part of the Justice Department’s Organized Crime and Drug Enforcement Task Force (OCDETF) program, the centerpiece of the department’s strategy for reducing the availability of drugs in the U.S. In 2018, the case was recognized nationally by OCDETF with the Outstanding Investigation Award for the Financial Investigation of an Opioid Network.
OCDETF was established in 1982 to mount a comprehensive attack on drug trafficking by disrupting and dismantling major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in coordination with state and local law enforcement.