A Los Angeles Fashion District underwear importer was sentenced Thursday to 14 months behind bars for laundering cash belonging to Mexican drug cartels.
Xilin Chen, 59, was also sentenced by U.S. District Judge Percy Anderson to serve three years of supervised release after his release from federal prison. The judge additionally ordered Chen to wear an electronic ankle monitor prior to self-surrendering on Sept. 25 to begin his prison sentence.
Defense attorney Victor Sherman indicated he would immediately file an appeal.
Chen, the owner of Yili Underwear and Gayima Underwear, pleaded guilty in June 2015 to three felony counts under a plea agreement that requires him to forfeit $5 million in assets and will probably result in the loss of his U.S. citizenship, according to the U.S. Attorney’s Office.
“Laundering drug proceeds for apparent drug traffickers is a serious offense,” Anderson said from the bench. “The defendant was willing to profit at the expense of communities that have to live with the consequences.”
Anderson added that Chen “had no respect for the laws of this country.” He “jeopardized the life he has worked so hard to build for himself and his family in this country,” the judge said.
If it were not be for the “substantial assistance” Chen provided investigators, the sentence would have been far harsher, Anderson said.
The Temple City man 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 admitted 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 declined an opportunity to make a statement before he was sentenced.
Chen, a Chinese national, pleaded guilty to knowingly passing false documents filed with U.S. Customs and Border Protection, conspiracy to launder money, and unlawful procurement of citizenship. Prosecutors had recommended a “time-served” sentence, followed by three years of supervised release to include up to 12 months of home confinement, but the judge determined that a prison sentence was necessary in the case.
Chen’s 28-year-old son, Chuang Feng “Tom” Chen, also pleaded guilty to conspiracy to passing false documents. The status of his case is pending.
As part of the case, the Chens agreed to forfeit proceeds from the sale of their building, which houses their underwear company; two houses in Temple City; and more than $435,000 seized by federal agents.
According to the plea agreement, prosecutors asked Anderson to dismiss charges against Xilin Chen’s daughter, Aixia Chen.
The investigation into Chen’s companies was part of a larger investigation into black market peso exchange schemes in downtown L.A.’s Fashion District. In September 2014, more than 1,000 agents swarmed the district to execute search-and-seizure warrants. Dubbed “Operation Fashion Police,” the raids netted more than $90 million in cash packed in banker’s boxes, shoe boxes and duffel bags, authorities said.