The company literature says Angel Toy Co. distributes teddy bears and other stuffed animals around the world.
According to the sentences handed down today, sisters Ling Yu of Arcadia and Meichun Cheng Huang of Irvine are spending the next three years in federal prison for using their Los Angeles toy company to launder money for Colombian drug cartels.
U.S. District Judge S. James Otero in Los Angeles sentenced Huang, the 58-year-old vice president in charge of sales at Angel Toy Co. (ATC), and company president Yu, 53, to 37 months behind bars. Otero then remanded the sisters into custody and ordered each to pay $20,000 in fines. The toy company was also fined $200,000, and ATC and the sisters must forfeit another $1 million to the government.
"Businesses that launder profits for drug trafficking organizations should understand that they will actually be the ones paying the price when their illicit proceeds are forfeited," says Claude Arnold, special agent in charge of U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations in LA, says in a statement issued today by the U.S. Attorney's office.
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The feds say federal authorities learned from multiple sources in 2008 that ATC was involved in money laundering for cartels, sparking an investigation by Arnold's office and the California Attorney General's Bureau of Narcotics Enforcement. They discovered ATC developed an international reputation for laundering money generated by drug trafficking through a complicated money structuring scheme known as the "Black Market Peso Exchange." Drug money from the U.S. was essentially exchanged for "clean" Colombian pesos through the international sale of legitimate items--in this case plush toys.
"The investigation revealed two primary ways in which ATC received and structured cash: in some cases, people affiliated with drug traffickers simply dropped cash at ATC's offices in downtown Los Angeles; the second method involved cash deposits made directly into an ATC bank account, sometimes by individuals located as far away as New York," reads the U.S. Attorney's statement.
Not a single transaction exceeded $10,000--which is the amount that rings bells with banks--but during a four-year period the investigation into ATC tracked more than $8 million total deposited in ATC accounts.
Last March, Yu and Huang pleaded guilty to conspiracy to structure currency transactions, admitting that, from 2000 through July 2010, there was an agreement that cash deposits into ATC's bank accounts had to be under $10,000 in order to avoid financial reporting requirements.