Four men, including the alleged ringleader, have been arrested on charges in a federal indictment unsealed Thursday in Orange County, alleging a complicated scheme to launder more than $60 million in drug-peddling profits.
The lead defendant in the case — Gustavo Barba, 59, of Guadalajara, was arrested Tuesday night as he attempted to enter the United States through the Otay Mesa Port of Entry in San Diego, according to Thom Mrozek of the U.S. Attorney’s Office.
The Mexican national’s business, Barba International Inc., which has offices in Guadalajara and Los Angeles, is also a named defendant in the indictment, Mrozek said.
The indictment alleges that legitimate businesses participated in the money laundering scheme, which federal authorities call the Black Market Peso Exchange.
“Understanding the (Black Market Peso Exchange) requires understanding two unrelated problems faced by two very different groups: drug cartels dealing drugs in the United States and legitimate businessmen in Mexico and South America,” the indictment alleges.
“The drug cartels have entirely too much U.S. currency or cash to transport to Mexico undetected,” according to the 32-count indictment which was handed down last July but remained sealed for months.
“At the same time, legitimate businesses in Mexico need U.S. dollars physically present in the United States to pay invoices to suppliers and manufacturers in the United States without incurring fees and taxes that would result if they wired the money to the United States using legitimate channels,” the indictment states.
Through the black market exchange scheme, “the peso broker or professional money launderer brings these two groups together and solves both of their problems, ” the indictment alleges. “The peso broker receives narcotics proceeds in the United States and uses the narcotics proceeds to pay United States entities for the goods ordered or outstanding invoices incurred by Mexico-based businesses. In turn the peso broker receives payments in Mexico from the Mexico-based businesses for the goods ordered or invoices paid in the United States on behalf of the Mexico-based businesses.”
The broker “turns over the money in Mexico, minus his profit, to the narcotics dealer (or his intermediaries), completing the cycle,” according to the indictment.
The scheme allows drug profits in the U.S. to find their way to Mexico without crossing the border or via the banking system, the indictment alleges.
“The drug dealer has successfully laundered the proceeds of narcotics sold in the United States and the Mexico businesses have successfully paid for goods, all without any government scrutiny,” the indictment alleges.
The other defendants arrested so far are:
— Isaias Navarro, 37, of Fullerton, who ran Barba International’s office in Los Angeles;
— Vidal Gutierrez Vargas, 58, of Whittier, who is accused of helping with the money laundering operation; h was arrested this morning and;
— Gervork Hagopian, 61, of Los Angeles, who, is accused of receiving the money laundering profits and helping with the alleged scheme.
Three other defendants are fugitives. They are:
— Roberto Castaneda, 77, of Guadalajara, Barba’s father-in-law, who is accused of coordinating the delivery of the drug profits and tracking the money being laundered;
— Jose Luis Guizar, 43, of East Palo Alto, an alleged courier of the organization; and
— Leo Alfonso Alvarez, 35, of Edinburg, Texas, who is also an alleged courier.
— Wire reports