Pacific Eurotex Corp. owners admit money laundering in Los Angeles Fashion District

Los Angeles - Starting off the year on a bad note, it seems that Pacific Eurotex Corp. has found itself in some legal trouble. Owners of the textile company just plead guilty to federal money laundering and tax charges in a recent Los Angeles Garment District case.

The chief executive, and his brother leading as chief financial officer, plead guilty to charges that included accusing them of taking advantage of the company in order to receive mass amounts of cash. The cash that the two were receiving were the proceeds of narcotics trafficking, according to a press release by the U.S. Immigration and Customs Enforcements.

Los Angeles Fashion District business faces consequences of money laundering

In the Fashion District, it's not uncommon for various business to use "Black Market Peso Exchange" tactics using their textile companies to launder narcotics for international drug cartels. As an import-export business, it seems both Morad and Hersel were using their positions in the company to receive bulk cash.

In official court documents, the two defendants admitted that they did not report to the federal authorities the cash they received. They also strategically deposited in the cash in various amounts less than 10,000 dollars at a time, as to avoid reporting the amount, according to the press release. "These deposits, 384 in all, were divided into increments less than 10,000 dollars each with the intent to prevent Wells Fargo, a domestic financial institution, from filing Currency Transaction Reports," according to the court documents.

The downtown-based company received and laundered approximately 370,000 dollars in bulk cash that was delivered in 2013, as stated from Justice.gov. The two have agreed to forfeit to the United States approximately 3.18 million dollars including the narcotics proceeds they received during that time. The defendants will receive a sentence later this year by United States District Judge John A. Kronstadt on June 14.

Photo: Screenshot website Fashion District

Update 19/01/21: This article has been anonymized upon request.