A Pico Rivera nightclub owner has agreed to plead guilty to money laundering as part of a drug-trafficking ring operating in the United States and Mexico, according to an agreement filed Tuesday by federal prosecutors.
Edgar Fragoso, an owner and general manager of El Rodeo nightclub, admitted to laundering about $235,000 in cash and forfeited the state liquor license issued to his Washington Boulevard nightclub, according to court papers.
As part of the plea deal, prosecutors agreed to seek the dismissal of seven other counts. At sentencing, prosecutors also agreed to recommend a reduction in Fragoso's penalties. One count of money laundering imposes a maximum of 20 years in prison, along with fines and probation.
Fragoso, who operates a second El Rodeo bar in Moreno Valley, was arrested Feb. 23 on suspicion of money laundering after agents from the Drug Enforcement Administration raided his nightclub and Hacienda Heights home. He was later freed on a $100,000 bond.
According to a 52-page sworn affidavit by federal investigators filed on Feb. 20, the nightclub served as a drop-off point where undercover operatives for the DEA would fork over as much as $150,000 in cash at a time.
Fragoso openly discussed the various methods he could employ to launder the illicit funds, all while undercover operatives recorded his words, according to the affidavit.
The investigation into El Rodeo was triggered by the 2012 arrest of two people who were trafficking methamphetamine in Texas, according to the affidavit.
The pair, whose names were not released, told investigators that the alleged leader of a Mexico-based drug-trafficking organization, Ramon Gonzalez, was using Fragoso to clean up money from the sale of methamphetamine, the affidavit said.
The nightclub, located in a large shopping center near the intersection of Washington and Rosemead boulevards, has been a hotbed of violence. A valet was killed there in 2013, and a decade before, a shooting left one person dead and two others injured.
Fragoso's attorney did not immediately respond to a request for comment.