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Sinaloa Cartel Money Laundering in Los Angeles Part 3: Luxury Cars, Nightclubs, Restaurants & El Mago

Wednesday, July 24, 2024 2:11

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“Socalj” for Borderland Beat

Part 3 of a Series Looking into Money Laundering Operations Out of Southern California tied to the Sinaloa Cartel. Read Part 1, Part 2

Part 3 Business Fronts & Investments

Part 3 of the ‘Sinaloa Cartel Money Laundering in Los Angeles’ series dives into several Sinaloa connected traffickers and their involvement in legitimate businesses such as nightclubs and restaurants, including those operated around the nexus of “El Mago” and connected friends.

El Rodeo Nightclub

In 2012, Edgar Fragoso, owner of El Rodeo Nightclub in Pico Rivera, California, allegedly told a DEA informant that the night club was used for money laundering for Mexican-based but California born trafficker Ramón González also known as”Don Ramon.”

El Rodeo Night Club owner Edgar Fragoso.

The DEA then placed Fragoso under surveillance, and recorded all of his cell phone conversations and text messages. The BlackBerry phone that Fragoso used for sending messages was registered to Javier Pineda, an immigration attorney based in Santa Ana, California.

The investigation into the Pico Rivera club was initially triggered by the 2012 arrests of two people who were trafficking methamphetamine in Texas. That investigation lead back to two businesses registered to Fragoso’s mother and sister.

The undercovers eventually made multiple payments to Fragoso at El Rodeo including 3 payments for purchases of methamphetamine originating from the Mexican drug dealer and 2 payments for a fictitious drug trafficking organization introduced to Fragoso by the informants.

Fragoso laundered the drug proceeds and returned multiple checks to them, including from an account registered to his mother, Eva Meneses. At first the laundering amounts were small at $6,000. Then in May 2013 a $19,000 request was processed.

Fragoso offered to launder even more money through the purchase of properties and through construction opportunities. He also said he could launder the money through “promotions” at his nightclubs.

Fragoso explained that they could bring the cash to the club then the club would set up a night where the cash would be used to pay for the music, alcohol, and staff. The club would then write them a check for “promotions” for an amount equaling the total amount of cash brought in, minus the percentage charged for laundering.

Fragoso explained that if the money was laundered this way, everyone would be clean; he would be clean and the money would come back clean. Fragoso then said he would be able to launder quantities of around $50,000 and return the money within a few days; larger amounts would take longer to return.

In April 2014, Fragoso agreed to launder $150,000 through a construction scheme. Two checks were both written in June from the account of Vidal Vargus Construction. The amounts were each $30,000 with ‘Payment for Loan’ written on the check, one made out to a payee ‘Kim.’

The feds raided the night club Febuary, 2015, seizing the property and arresting Fragoso. In addition to money laundering conspiracy, Fragoso was charged with seven counts of money laundering for allegedly issuing more than $200,000 in checks to a fictitious drug trafficking organization. The bogus drug operation was set up by the DEA and IRS in an undercover operation. Fragoso pleaded guilty in 2015 to laundering cartel money for “Don Ramon” and the fictitious undercover drug organization.

Ramón González was a major producer and distributor of methamphetamine who trafficked across the borders of Texas and California, and had warrants in Chicago and Dallas. Fragoso also boasted of having friendly relations with some family members of Joaquin “El Chapo” Guzman and Rafael “Rafa” Caro Quintero.

Ramón González was born in Southern California, living in the Monterey Park, and Whittier areas of Los Angeles County. He was using the nightclub to launder some of the cartel’s meth proceeds. According to court transcripts, Gonzalez and Fragoso were ‘compadres’ working together on money laundering at least since 2009.

“Gonzalez directs others to deposit money (drug proceeds) into his wife’s bank account that she in turn spends on any number of things, such as paying the mortgage on their Hacienda Heights home and purchasing vehicles,” court records said. Members of the drug conspiracy, including some in North Texas, deposited his illegal drug proceeds into various accounts she set up in the U.S. since 2009, federal authorities said. It had totaled about $10,000 per month in cash, authorities said.

Ramón’s wife, Bambi Adams, was arrested in February 2015 at her Hacienda Heights house. Court documents showed that Adams was receiving around $10,000 month in cash from her husband who was a fugitive living in Mexico. All the while she was taking care of her 5 kids and was active in her school PTA.

Prosecutors said Bambi Adams knew about the source of the money, which was her only source of income, and traveled to Mexico 13 times during the prior two years to visit her husband. She pleaded guilty to the money laundering conspiracy charge and was sentenced to 9 years in a federal prison and released in 2021.

Another shooting took place at the nighclub in 2013. A valet was killed and a security guard wounded.

Violence Connected to El Rodeo

El Rodeo Nightclub was a popular hangout for cartel figures, money launderers and gang members. It has a long history of violence associated with the Mexican Mafia, the prison based gang that was running protection for the owner and the club. Fragoso told the undercover informant that, “The guys from La Eme came and said that here (in El Rodeo) a lot of money was made with people who sell drugs and that they wanted something, that they wanted $5,000 a month.” Prostitution was also suspected to have taken place at the club. Following the raid on the nightclub, it shuttered its doors and was ultimately demolished in 2020.

The nightclub was also connected to the infamous 2008 shooting death of Jose “Huerito” Macias in his silver Bentley, following a serious of altercations stemming from a fight at the Pico Rivera nightclub.

Macias worked for the Arellano Felix organization, the Tijuana-based rival cartel. Macias’ friends often got into fights with Andy Medrano and his friends. Andy is alleged to be Eddie Escobedo’s brother, better known as “El Mago.”

On February 23, 2008, Victor Iriarte went to El Rodeo nightclub with his brother and two friends, including Jose Macias. Andy Medrano and his friend Michael Angel Aleman, were also at the nightclub and Iriarte recognized them. A woman who briefly dated Aleman told police that Aleman and his friends got into fights at El Rodeo with friends of prominent “big shot” Macias.

Iriarte was tipsy when he arrived at El Rodeo, and proceeded to drink 8 or 9 glasses of liquor there. He departed at closing time in a friend’s Chevrolet Camaro. Three to five gunshots were fired at the Camaro, one of which struck Iriarte. He was hospitalized for a grazing bullet wound to his chest, inches from his heart.

Sabino Cabral, a friend who was in Aleman’s Cadillac Escalade on the night of the Iriarte shooting, had arranged to meet Aleman and Medrano at a church festival at Placita Olivera. After picking up his friends Richard and Marlene Moreno, Cabral drove to the post office parking lot at Cesar Chavez and Alameda to meet up with the rest of the group and go to the festival.

Medrano told Cabral that he and Jose Macias got into a fight during the festival, which was broken up by security guards. Around 2:30AM, Cabral and the Morenos walked back to Cabral’s car. A passing Bentley caught Cabral’s and the Morenos’ attention.

Richard Moreno saw the Aleman and Medrano standing at the intersection with singer Roberto Tapia. They argued with Macias, the Bentley driver, who pulled away then made a U-turn. When the Bentley stopped, several gunshots were heard.

Macias’ car crashed on the 101 freeway 2 miles from the church festival. The festival was about 100 steps from the shooting site at Cesar Chavez and Alameda. A festival goer unknowingly helped place Aleman at the festival that night when they took a photo of him next to Roberto Tapia, later posting it on social media.

The shooting seeminhly stemmed from a serious of altercations amongst the rival groups but police suspected that Eddie Escobedo had ordered or at least ok’d the killing. According to a search warrant affidavit, detectives believed he and Macias were engaged in “a power struggle” over control of trafficking networks in the Los Angeles area.

Escobedo was never charged in the murder, but Andy Medrano, supposedly his brother and Aleman were convicted and are serving life sentences. At his 2014 detention hearing in federal court, Prosecutor Braverman said Los Angeles detectives suspected Escobedo “ordered the homicide to occur.”

“Our understanding is that individual was a rival drug trafficker driving in that Bentley,” he said. The luxury car came from Dream Motor Cars on La Cienega but was not registered to Jose Macias at the time of his death.

“El Mago” Ivan’s Guy in LA

Eduardo “Eddie” Escobedo-Silva, a 39 year-old convicted marijuana distributor for Iván Archivaldo Guzmán Salazar, was shot to death in South Los Angeles, on Thanksgiving morning in November 2023.

Eddie Escobedo, who also went by Emilio according to his 2014 indictment, was nicknamed “El Mago,” or “The Magician.” He was born and raised in East Los Angeles and rose to become the primary distributor of marijuana in Los Angeles for Guzman’s oldest son, Ivan Archivaldo Guzman Salazar, the prosecutor said at a 2014 detention hearing.

In July 2011, Escobedo, then 27, was arrested leaving a stash house in Torrance, California where police found a ton of marijuana. In October 2013, Escobedo was caught on a wiretap speaking with Ivan Guzman Salazar about smuggling more than 5 tons of marijuana through a tunnel under the US-Mexico border, Braverman said. Authorities seized 2.7 tons of cannabis from a courier working for Escobedo, according to the prosecutor.

Escobedo was also helping Ivan launder money through the purchase of sports cars that were shipped to Culiacan, prosecutors said. Federal agents determined that Escobedo used a false name to buy two Lamborghinis from an Orange County dealership.

An example of a 2006 Lamborghini Murcielago.

Mago’s Mercialago

Covered in depth in Part 2 of this Series is the method of moving drug proceeds employed by the Sinaloa Cartel and other organizations called the ‘Black Market Peso Exchange’ also termed ‘Trade Based Money Laundering.’ This is a system of value transfer (including goods and services) as opposed to the transfer of actual currency.

In 2011, Orange County California had been without a Lamborghini dealership since 2009, when Lamborghini Orange County owner Vik Keulyian pleaded guilty to wire fraud charges. In 2011, a new team opened up a temporary dealership site in Costa Mesa as Lamborghini of Newport Beach before eventually opening the dealership and showroom in nearby Irvine.

In 2011, 17 separate cash deposits totaling $164,200 were deposited to a bank account owned by Lamborghini of Newport Beach to purchase of a 2006 Lamborghini Murcielago. The 17 deposits were conducted at 16 different U.S. Bank branches throughout Southern California, all on the same day. Each of the 17 cash deposits was for an amount between $9,400 and $9,800 just under the reporting threshold. This pattern was clear evidence of “structuring.”

The vehicle was purchased by a third party using a dealer’s license belonging to the company Remate. Aside from being a way to layer and hide not only the source of the purchasing funds but the true owner of a car; dealer-to-dealer sales are often used to exempt the purchase from sales tax, saving thousands on the overall cost of the car. The LNB salesman testified that he was aware of this type of arrangement, where people would borrow an associate’s dealer paperwork in order to purchase luxury cars for personal use while avoiding sales taxes.

Remate’s principal, Raul Ernesto Zugasti-Coria was apparently aware that the vehicle was purchased in Remate’s name. However, according to his wife Mariscal, Zugasti was only seen around the vehicle on one occasion. It was never registered as part of Remate’s sales inventory, nor placed on their dealership lot for sale.

Further cloaking the origins of the funds and eventual driver of the Lamborghini, it was delivered from the Newport Beach dealership to an address in Los Angeles. The address provided on the paperwork didn’t actually exist; so the driver contacted the purchaser en route to obtain a delivery address.

Mariscal believed Eddie Escobedo was the person in possession of the Lambo when purchased in 2011 and impounded by Irwindale PD in early 2012 after the dealer plate and registration had expired. On February 1, 2012, the car was seized by ICE agents as part of a federal seizure warrant.

Eddie Escobedo was an associate of Zugasti. According to court documents, Eddie Escobedo would give money to Zugasti to buy cars; he would also use Remate’s dealer’s license to buy cars himself.

Exotic Cars Seized in Mexico

Agents listened on a wiretap as Guzman Salazar asked Escobedo to purchase a Nissan GTR and make $50,000 in modifications, prosecutor Braverman said. Mexican authorities seized the Nissan GTR in Culiacan in 2014, as well as a McLaren that Escobedo had bought in California for $175,000. These seizures stemmed from a 2013 indictment charging Ivan as well as “El Mayo” and his sons as well.

In a March 2018 interview for belha Knack magazine, Iván revealed some of the cars in his collection. “I love my Ferraris, Lamborghinis and Bentleys, my thoroughbred horses,” he told journalist Ernesto Rodríguez Amari.

Ovidio on the other hand, had a reputation for being less flashy, who only had a weakness for thoroughbred horses and roosters. However, several luxury cars were found at his Jesus Maria ranch after his arrest, including Mercedes Benz G-Wagons and side-by-side RZR all-terrain vehicles. Also found were Rolex watch boxes, Marta Peña jewelry and bags from luxury brands such as Prada and Chanel. Some of these may have been purchased in the United States and sent to Mexico as gifts or payment to the cartel.

Hair Extensions & Music Labels

At the time of his arrest in 2014, Escobedo was living in a sprawling Granada Hills home with a pool and tennis court. DEA agents searched Escobedo and found him carrying a large amount of cash, 4 phones and keys to 5 different cars.

A father of 4, Escobedo claimed his annual income of about $200,000 came from a business he owned with his wife, International Hair Authority, that imported hair extensions and sold them. Escobedo also reportedly owned a record label, Magic Records Corporation.

Braverman said agents suspected Escobedo was using the hair company’s accounts to launder drug money, pointing to a $50,000 wire transfer from a man named Harvinder Singh. Scotland Yard arrested Singh and his associates, who were shipping cocaine from Mexico to London on British Airways flights.

After pleading guilty to conspiring to distribute marijuana and launder money, Escobedo was sentenced to 57 months in federal prison. He served 4 years and 9 months in federal prison for conspiring to distribute more than 10,000 kilograms of marijuana and laundering drug proceeds. He was released in 2018.

Benihibachi Food Trucks

Soon after his release, just as Los Chapitos were expanding their influence and dominance in Mexico following the extradition of their father, Sinaloa Cartel founder “El Chapo,” Eddie Escobedo established a new business, a hibachi style food truck first named Benihibachi. Later, following a copyright infringment suit brought by the owners of Benihana; the company was renamed Besthibachi.

Japanese food, including sushi and hibachi or teppanyaki has become popular amongst Sinaloans due largely in part to the availability of fresh seafood along the southern Pacific Coast of Sinaloa.

A photo of Eddie in a food kitchen slicing onions was provided to prove his job status and that he was turning away from his criminal past when looking to be released from supervised custody.

His attorney, Ezekiel Cortez, urged the judge to see the good Escobedo had done after leaving prison. “As a society, you recognize that they listened. You recognize people who turned their lives around,” Cortez said at a hearing. “You recognize people who cut their ties, as in this case, with former very bad associations.”

Several of the food trucks and even a brick and mortar location in Los Angeles were operating while “El Mago” continued to flaunt his wealthy lifestyle on social media with posts including high end luxury cars, bags of cash and even singing along at parties or privados.

It was in the early morning on Thanksgiving last year that Escobedo was shot and killed following a late night privado party at a warehouse in Los Angeles. Sheriff’s have since closed the case as it was believed that the shooting was done by an 18th Street gang member who was also killed at the scene.

A week prior to his death, Mago alongside narco corrido singer Larry Hernandez and the owner of Culichi Town restaurants headed to Las Vegas for F1 race’s debut on the Las Vegas Strip. Track tickets were upwards of $2,000 with some strip facing hotel suites going for over $20,000 per night during the race.

Following the shooting death of “El Mago” several of his associates and friends showed their support across social media accounts. This included several notable figures often seen in photos at parties, concerts, clubs and other venues with Escobedo.

Most notable was a photo taken of a group at the opening of a La Carneceria meat market in. Tagged in the photo was again the owner of Culichi Town Restuarants, singer Larry Hernandez, singer Gerardo Ortiz who was implicated in the DEL Records sanctions violations case related to concert promotions with a CJNG money launderer in Mexico. Other business owners including a exotic car dealer and trucking companies were also tagged in the photo.

Part 1 Chinese Money Brokers

Part 2 Trade Based Money Laundering

Sources Los Cerritos News, LA Times, DOJ, Borderland Beat, Borderland Beat, Univision, La Opinion, Findlaw, CaseText, Autoblog, GT Spirit

El Mago Graphics by HEARST

Source: https://www.borderlandbeat.com/2024/07/sinaloa-cartel-money-laundering-in-los_24.html

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