8 Arrested in Laundering of Drug Money

The breakup of what authorities said was a money-laundering operation capable of handling millions of dollars a week was disclosed Wednesday with the arrest of eight people, including the assistant manager of Security Pacific National Bank’s central cash vault in downtown Los Angeles and five other bank employes.

The U.S. attorney’s office issued a complaint accusing the eight of conspiring to launder $364,000, which an Internal Revenue Service undercover agent posing as a drug trafficker had represented as proceeds from illegal drug sales.

The charges ended a four-month investigation by IRS agents and Security Pacific’s internal investigators. It resulted in the arrest of the assistant manager of the cash vault, Jose O. Lopez, 27, in the vault Wednesday afternoon.

“We were very fortunate to uncover this,” Bill Gilligan, branch chief of IRS criminal investigations, said. “Lopez was in a position to be one of the largest money-laundering operators in the nation. He was in a position to launder millions of dollars a week.”

According to investigators, Lopez charged a 5% fee for the services of his incipient money-laundering organization and told an IRS undercover agent that he could launder a million dollars a week by opening four bank accounts in fictitious names.

The other bank employees arrested along with Lopez were Carlos O. Huertas, 29, of La Puente; Luis A. Arroyo, 36, of Los Angeles; Ignacio Rojas Jr., 32, of Baldwin Park; Doris Moreno, 37, of Bell Gardens, and Ana L. Azucena, 27, of Huntington Park.

With the exception of Azucena, all worked for Lopez in Security Pacific’s central cash vault. Azucena was employed as an account and loan representative at at the bank’s Montebello branch.

“We are extremely pleased to have cooperated in this successful and important investigation,” said Walter S. Fisher, executive vice president and general auditor for Security Pacific Corp., headquartered in Los Angeles.

Two others who were not bank employees, Geno M. Apicella, 27, of Los Angeles, and Terrell N. Madison, 27, of Hawthorne, also were arrested. Madison was arraigned before U.S. Magistrate Volney Brown on Wednesday on charges of conspiracy to launder drug money.

In an affidavit supporting the U.S. attorney’s office complaint, IRS special agent Virginia F. Gregg said she met with a informant, who was not identified publicly, on July 13 and was told about plans of Lopez and others to launder money through Security Pacific.

That same day, Gregg said, IRS special agent Richard Carl, acting under cover, met with Lopez at the Four Seasons Hotel in Newport Beach “to discuss Jose Lopez’s money-laundering services.”

The meeting, like several others in Los Angeles-area hotels during the next four months, was recorded on audio and video tapes. According to Gregg, Lopez offered to funnel drug money through fictitious bank accounts and evade requirements to file currency transaction reports with the IRS.

Investigators allege that the money to be laundered was delivered to Security Pacific’s central cash vault in the name of a legitimate account, then transferred by deposit, which was not recorded, to fictitious accounts.

One of the phony accounts was opened in the name of Chamakian Jewelers, and on Aug. 24, according to Gregg, $100,000 in federal funds delivered by agent Carl to Apicella was deposited in it.

In all, a total of $364,000 was funneled into fictitious bank accounts, she said.

If convicted on the charges alleged by the government, the eight defendants each face a possible sentence of 20 years in prison and a $250,000 fine.