Woodys Toys' Money Laundering Scheme Funneled $6 Million in 'Narco Cash,' Feds Say
Good meaning bad. At least according to federal authorities, who this week threw the book at two co-owners, three employees and two clients of the City of Industry toy wholesaler for allegedly doing way more than importing toys.
A two-count indictment unsealed yesterday alleges that the 7 took bundles of "narco cash" and deposited it as part of a money laundering scheme:
Feds allege that the suspects took as much as $6 million, some delivered to parking-lot rendezvous in cellophane-wrapped bricks, failed to declare it to the IRS, and deposited it on behalf of customers from Mexico and Columbia.
A statement from the U.S. Attorney's Office alleges the scheme went like this:
... Foreign toy retailers with Colombian and Mexican pesos would contact currency brokers to buy discounted U.S. dollars to purchase merchandise from Woody Toys. The dollars being "sold" were allegedly proceeds from illegal drug sales that have been deposited in the toy company's accounts or delivered to the business. Finally, the Colombian or Mexican pesos the currency broker received from the foreign toy retailer are remitted to the drug trafficking organization.
Defendants were named as:
Jia "Gary" Hui Zhou, 43, of Diamond Bar, co-owner of Woody Toys;
Dan "Daisy" Xin Li, 43, of Diamond Bar, co-owner of Woody Toys;
Kit Yee Lam, 51, of Diamond Bar, accountant for Woody Toys;
Jazmin Contreras, 33, of Los Angeles, accountant for Woody Toys;
Anabel Rufino, 32, of Norwalk, sales manager for Woody Toys;
Jose Miguel Yong-Hinojosa, 26, of Guadalajara, Mexico, Woody Toys client; and
Luis Ernesto Flores Rivera, 53, of Guadalajara, Mexico, Woody Toys client.
The investigation began in late 2010 after "several" employees of wholesaler Angels Toys, where two top executives were convicted of money laundering, went to work for ... you guessed it, Woodys Toys.
Defendants Zhou and Flores face conspiracy to launder money charges, which come with a possible 20-year prison sentence for those convicted.
The others were hit with charges of evading federal IRS reporting requirements, which come with a 5-year max.
Authorities also want to get their hands on $3.7 million in what they say constitutes laundering proceeds.
The government isn't playing around.