Feds Tighten Reporting Rules for L.A. Fashion District After Money-laundering Bust
Federal officials announced new reporting rules for L.A.'s Fashion District in an attempt to crack down on money-laundering in the area. As of Oct. 9, more than 2,000 businesses in the district will be required to disclose any cash transaction exceeding $3,000. The order, announced by the U.S. Department of the Treasury's Financial Crimes Enforcment Network (FinCEN), will remain in effect for 180 days.
"This order requires nearly every business in the Fashion District to report any instance in which they receive at least $3,000 in cash, and failure to comply with the order could lead to a criminal indictment," said Acting United States Attorney Stephanie Yonekura in the FinCEN release. "My office sought the unprecedented order from FinCEN with the goal of shutting down the flow of dirty money to foreign drug cartels—a huge problem that has contaminated the Fashion District."
The new rules follow last month's massive Fashion District raids, in which 1,000 federal and local law enforcement officials seized upwards of $90 million in cash and arrested nine people allegedly involved in Mexican drug cartel money-laundering schemes. At least three apparel wholesalers were busted in the raid.
According to the Los Angeles Times, the order is one the largest ever issued by the U.S. government. "When we go in and do something of this magnitude in an industry where the cartels are so heavily invested, it stops their business," Jere Miles, deputy special assistant in charge for Immigration and Customs Enforcement in Los Angeles, told the paper. "The question is for how long."