LOS ANGELES—Dirty money is piling up in Los Angeles. In the last three weeks, federal agents made three seizures that each netted more than $1 million in suspected drug proceeds.
The reason, according to the city’s top drug enforcement official: The coronavirus pandemic has slowed trade-based money laundering systems that drug trafficking groups use to repatriate profits and move Chinese capital into Southern California, the Los Angeles Times reported.
With storefronts closed, supply chains in disarray and the global economy in peril, these complex schemes are hobbled and cash is backing up in Los Angeles, Bill Bodner, special agent in charge of the Drug Enforcement Administration’s Los Angeles field division, told the Los Angeles Times.
The shuttering of nonessential businesses has made a “tremendous impact” on a money laundering system dubbed the black market peso exchange, Bodner said. In the fashion district in downtown Los Angeles — the exchange’s epicenter — drug trafficking groups from throughout the country use wholesalers to remit profits to Mexico, according to cases filed in federal courts in Los Angeles and elsewhere.