The Biggest Money Laundering Investigation in San Diego

The Biggest Money Laundering Investigation in San Diego

San Diego federal prosecutors have announced they have indicted 75 people nationwide, including 40 in San Diego, in what is being called the biggest money-laundering investigation ever in San Diego.

Biggest San Diego Investigation Into Money Laundering

According to interim U.S. Attorney Adam Braverman, defendants in the case have laundered drug proceeds from the Sinaloa cartel for years. Braverman announced the network, led by 32-year-old Jose Roberto Lopez-Albarran, was responsible for laundering tens of millions of dollars in drug profits over the past three years.

The indictment of so many is the result of a three-year probe undertaken by a both federal and local law enforcement under the FBI’s Cross Border Violence Task Force.

Investigators seized $6 million in cash as well as hundreds of pounds of drugs like methamphetamine, fentanyl, heroin, cocaine and marijuana. Lopez, the alleged leader of the operation, oversaw a large network of people now being called “money movers.” These “money movers” were responsible for shuttling money across the country. Cash was hidden in vehicles, or in cash-stuffed duffel bags, luggage, and even shoe boxes. The cash was then deposited in “funnel accounts,” which were set up at U.S. banks that are able to receive deposits from multiple states. That money was deposited in amounts of less than $10,000 as to not be flagged by banks which are required to file official reports with regulators. That money was then wire transferred to accounts for bogus Mexican companies which were actually controlled by the organization.

Lopez was arrested in San Diego on Feb. 9 and has been in custody ever since.

An additional 21 people who were named in the indictments are also in custody, officials said. The 19 remaining people have not been arrested.

Another co-defendant, 62-year-old Manuel Reynoso Garcia, has been accused of orchestrating the money-laundering activities. He was charged last month in federal court with money laundering conspiracy and other charges and pleaded not guilty.

“We have siphoned the cash and life out of a San Diego-based international money laundering organization with ties to the Sinaloa cartel,” Braverman said.

US Treasury Department Cracks Down on Money Laundering

Starting in March, the Treasure Department will be tracking sales of high-end real estate in Miami and Manhattan. According to the department’s Financial Crimes Enforcement Network, it will now be required that certain title companies identify the individuals behind shell companies that purchase properties exceeding more than $3 million in all-cash transactions in Manhattan and exceeding more than $1 million in all-cash transactions in Miami.

Manhattan and Miami are being targeted because they are two of the country’s most expensive housing markets, but if the program is successful in identifying fraudulent action, then the initiative might be adopted elsewhere.

Money Laundering

Money laundering, often referred to as a “white collar crime” is the act by which criminals disguise the original ownership of funds so that it appears to have derived from a legitimate source. Money laundering happens not only within the nation, but quite often throughout various nations, as it is often easy for criminals to transfer funds to off-shore accounts.

While there are numerous money-laundering techniques, the Treasury’s initiative hopes to crack down most on shell companies. Shell companies are fake companies that are established to take in money as payment for goods or services that are not actually offered, thus providing a place to “hide” the money that it receives. Fake invoices and balance sheets are a way to make transactions appear valid and legitimate.

Reason for Money Laundering Crack Down

The Treasury is concerned that some of the deal estate deals taking place in Manhattan and Miami are actually being made by corrupt foreign government officials and other international criminals in an attempt to launder money. Because many of these all-cash transactions are made through shell companies, the individuals behind the sales are able to disguise their identities. Making the problem even more difficult to trace is that fact that many shell companies are held by other shell companies, thus providing even more layers between the transaction and the individual making the purchase.

March Unveiling

According to the Treasury’s announcement, the new disclosure requirements will apply for 180 starting in March. During that time, all all-cash real-estate transactions over $3 million in Manhattan and $1 million in Miami will require full names of those making the purchase. Those in the title insurance industry will be required to not only identify buyers, but also report the information to the government, who will then record the information in a database for the US Treasury Department.

Title companies will implement the government’s initiative “to help prevent money-laundering schemes and the illegal purchase of real estate in the United States,” said Michelle Korsmo, CEO of the American Land Title Association.

This will only apply to all-cash transactions as those are the ones that are the hardest to track. For those that need financing, etc… they are already required to provide information to obtain the financing. While the initiative will only take place for 180 days, the government will still be able to seek an extension under federal law that would require full disclosure of identification.

Is Money Laundering Really a Problem?

The real estate markets in Manhattan and Miami have boomed over the past year. At the close of 2015, the median Manhattan home sold for $1.5 million. That’s up 17.3% from the previous year, according to the real estate brokerage Douglas Elliman. Those prices haven’t been seen since right before the housing crisis of 2008. And the median sales price for a luxury unit was $6 million. That’s an even higher jump of 25% from the previous year.

Most importantly, nearly half of those purchases were all-cash. And if the Treasury is correct, that means a lot of potentially illegal money laundering activity.

But that’s just Manhattan. In Miami Beach, the median sales price for a luxury single-family home exceeds $6 million. A chic condo towers within the area’s expensive locations are causing buyers to flock to the Miami.

There was $100 billion spent on Florida real estate transactions last year. And according to the National Association of Realtors, nearly a quarter of that came from international buyers. Of those purchases, 74% were all-cash.

Housing Industry Reacts

The new measure might prove difficult for the housing industry and those working within it such as realtors and appraisers

“It’s painting the high-end segment as having overall treachery, and that’s unfortunate,” said Jonathan Miller, chief executive at the appraiser Miller Samuel. “It’s certainly not helpful to the high end of the market because it adds another level of complication to a transaction.”

Real estate developer Kevin Maloney doubts the initiative will affect sales. He estimates about 60% of his buyers typically use corporations for their transactions, but that isn’t because they are trying to hide any illegal activity.

“People who are buying in the luxury sector want privacy, want anonymity,” said Maloney. “We generally know our buyers because they come in, and they interface with us.”

Money Laundering and Concealment

According to the International Monetary Fund (IMF), the amount of money laundered every year is estimated to be between $600 billion and $1.5 trillion.

A large aspect of money laundering, and being convicted of money laundering has to do with concealment. For money laundering charges to be brought, a prosecutor must show that the person concealed money specifically in order to conceal the ownership and source of the money, as well as control of the money, as to make it appear as if it came from a legitimate source.

Proving concealment is key. For example, if you make a $10,000 profit from privately selling your car and then try to hide that income from the IRS, you have not committed “money laundering.” Yes, you’ve violated tax laws, but because your sale was legal, money laundering charges cannot be brought.

Penalties for Money Laundering

There are state and federal laws regarding penalties for money laundering. Typically, being convicted of committing money laundering results in fines, prison, probation, or a combination of these penalties.


While money laundering is typically charged as a felony offense, some states charge it as a misdemeanor. A misdemeanor money laundering conviction can result in a year-long jail sentence. Felony convictions carry penalties of a year or more in prison. In situations where a person is a repeat offender and money laundering was part of an ongoing criminal enterprise, or if money laundering was related to terrorist activities, prison sentences can be 35 years or more.


The fines associated with a money laundering conviction can be steep. A misdemeanor money laundering conviction can mean fines up to no more than a few thousand dollars. A federal conviction can result in fines of up to $500,000 or double the amount of money that was laundered, whichever is greater.


A court can also impose a probation sentence for money laundering convictions. This probation usually lasts for at least one year, but sometimes as long as three years or more. During the time someone is on probation he or she will have to meet specific probation conditions, including: regularly reporting to a probation officer, allowing the officer to conduct random home checks, taking random drug tests, and not committing other crimes. Violation of probation can cause a court to revoke probation. If this happens, a person will most likely need to serve a prison term, face additional fines, increased probation period, and/or face other penalties.

Being Charged with a Federal Crime

Being investigated or charged with a crime by a federal agency is a sobering and often intimidating situation. The Federal Government can use an array of powerful investigative tools as well as having access to judicial assistance to build a case against you.

Federal prosecutors have the power to create a task force from various law enforcement agencies at all levels - federal, state and local- into a powerful prosecution team. Accordingly, federal prosecuting attorneys have the ability to bring tremendous resources against you, and they will not hesitate to do so.

Federal Crime Definition

Crimes are defined as federal crimes when they either cross state lines, involve a federal agency (e.g., the post office, federally insured banks, the SEC and HUD) or involve the Internet. The most common cases prosecuted at the Federal level include drug trafficking, bank robbery, and Internet pornography, but also white-collar offenses such as mail fraud, wire fraud, bank fraud, and money laundering.

As with any criminal charge, you will want to follow all the legal rules and precautions you can, and the best way you can protect yourself is by working with an experienced defense attorney such as Sevens Legal Criminal Lawyers.

After you have discussed the specifics of your case, your Sevens Legal Criminal Lawyers, will let you know your case’s strengths and weaknesses, as well as any possible risks associated with punishment and convictions you may face. Your Sevens Legal Criminal Lawyers, defense attorney can help negotiate a plea deal or whether the best course of action is to move forward to trial, while working constantly for your best interests.

Sevens Legal Criminal Lawyers, criminal defense lawyers put our experience to work for you. Every defendant deserves a zealous defense. To schedule your free consultation with one of our Sevens Legal Criminal Lawyers, criminal defense lawyers, call (619) 430-2355. Contact Sevens Legal Criminal Lawyers, today for a free consultation.

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