Employees of a City of Industry toy company were arrested today in a money laundering scheme that allegedly funneled millions of dollars in Colombian and Mexican drug money, ICE officials announced.
Five people from Woody Toys -- two owners and three company employees -- were arrested and charged with evading federal reporting requirements for financial transactions, according to Immigration and Customs Enforcement officials. Two Mexican toy dealers also were arrested earlier this month on similar charges, the agency said. Woody Toys co-owner Jia Hui Zhou and toy dealer Luis Ernesto Flores Rivera are additionally charged with conspiring to launder money.
It is believed that at least $6 million in drug money was channeled through Woody Toys between 2005 and 2011.
Based on its website, Woody Toys seems to specialize in adorably fluffy (but cheaply made) dolls. Products include “Farm Frenz,” “Jungle Pals” and “Sea Cuddles.”
Strange as the allegations sound, they’re not unique these days, according to ICE agents. In fact, this is the second recent case involving a local toy company laundering drug profits. A federal probe into toy wholesaler Angel Toy Co., located at 400 S. Los Angeles St. in downtown L.A., ended with that company’s two top executives being sentenced earlier this year to more than three years in prison.
The laundering schemes are apparently fallout from the Mexican government tightening its banking regulations.
“They can’t walk up with duffel bags of money and continue with their business,” explained Claude Arnold, special agent in charge for ICE homeland security investigations in Los Angeles. “They have to find creative ways to convert that money into pesos and launder it so it doesn’t look like illegal proceeds.”
Authorities said the two Mexican toy dealers were buying U.S. dollars made off drug sales, then purchasing toys in the U.S. by sending the cash to Woody Toys via courier or bank deposits.
-- Associated Press and Staff Reports