NEWARK, N.J. – John G. McCabe, Jr., the Acting Special Agent in Charge of the New Jersey Division of the Drug Enforcement Administration (DEA) and Preet Bharara, the United States Attorney for the Southern District of New York, announced charges today against Vikram Datta, the owner of multiple retail perfume stores located on the United States-Mexico border, for his alleged participation in an international money laundering conspiracy. The charges against Datta are the result of an extensive undercover DEA investigation into the Mexican Black Market Peso Exchange (BMPE), a vehicle for laundering narcotics proceeds generated in the United States and ultimately returning them to Mexico. Datta was arrested on January 15, 2011, after meeting in Manhattan with an undercover agent.
"Vikram Datta allegedly tried to mask dirty money with, of all things, the scent of perfume. But as this case demonstrates, even the sweetest-smelling money laundering scheme is no match for determined law enforcement,” said Manhattan U.S. Attorney Preet Bharara. “We will continue working tirelessly with our partners at the DEA to dismantle money laundering rings and prosecute those involved."
"Mr. Datta tried to disguise his money laundering activity through his perfume Business,” said DEA Acting Special Agent in Charge for the New Jersey Division John G. McCabe, Jr. “However, DEA New Jersey Division revealed the putrid odor of his illegal criminal activity and eliminated his international money laundering scheme."
According to the Complaint unsealed in Manhattan federal court today:
Narcotics traffickers in Mexico and other countries in which narcotics are grown, processed, or transported (collectively, "Countries of Origin"), generate billions of dollars in proceeds when they are sold in the United States. The BMPE is one of the primary methods used by traffickers to launder these vast sums of cash. In Countries of Origin, traffickers owning narcotics proceeds generated in the U.S. contact "peso brokers," who agree to exchange domestic currency, such as Mexican pesos, for the cash proceeds in the U.S. Once this exchange occurs, the narcotics trafficker has effectively laundered his money and is out of the BMPE process.
The broker must then do something with the drug dollars that he has acquired in the U.S. in order to obtain more currency and begin the BMPE process again. The broker sometimes accomplishes this by using the narcotics proceeds to purchase products in the U.S., such as perfume or electronics, from complicit businesspeople, such as Datta. Those products are then shipped to Countries of Origin, where they are sold to generate local currency.
During the course of the BMPE investigation, the DEA identified Datta and learned that he owned numerous perfume stores in Texas, Arizona, and California on the United States- Mexico border. Through these stores, Datta accepted millions of dollars in cash from peso brokers and/or narcotics traffickers in exchange for perfume that Datta shipped to Mexico. Once in Mexico, the perfume was sold to generate Mexican pesos. During the investigation, Datta boasted that his businesses would take in "over $40 million" in 2010.
In August 2010, DEA undercover agents who purported to be narcotics traffickers were introduced to Datta, and Datta spoke and met with those agents on numerous occasions from August 2010 through January 2011. During those meetings, Datta admitted, among other things, that he "move[d] cash" from his "eleven stores on the border." Datta further admitted that he was receiving "a lot of cash" from his customers on the border and that "it’s all Sinaloa money," an apparent reference to the Sinaloa Cartel, a major Mexican narcotics trafficking organization.
The DEA’s analysis of financial records revealed that from January 2009 through January 2011, more than $25 million in U.S. currency was deposited in bank accounts controlled by Datta and his co-conspirators. The DEA also determined that Datta frequently failed to file financial reports concerning cash transactions that are required by the Bank Secrecy Act of 1930, including Reports of Cash Payments Over $10,000 Received by a Trade or Business, which must be filed by any person who receives more than $10,000 in a single transaction or a series of related transactions while conducting their trade or business.
Datta is charged with one count of participating in a money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
Bharara praised the investigative work of the DEA New Jersey Field Office, DEA Houston Field Office, and DEA Laredo Field Office. He also thanked the U.S. Immigration and Customs Enforcement Office of Homeland Security Investigations for its assistance.
Assistant U.S. Attorneys Howard Master, Peter Skinner, Alvin Bragg, Michael Ferrara, and Kan Nawaday are in charge of the prosecution.