California women sentenced in toys for drug money scheme

Reuters News
Posted: Jan 31, 2012 9:33 PM
California women sentenced in toys for drug money scheme

LOS ANGELES (Reuters) - Two sisters were sentenced to over three years in prison on Tuesday after a California judge found they laundered money for drug cartels using sales of teddy bears and mouse dolls shipped from China to Colombia.

Meichun Cheng Huang and Ling Yu pleaded guilty last year to conspiracy to structure currency transactions, after prosecutors said they had laundered over $8 million for cartels in Mexico and Colombia through their company, Angel Toy Corp.

Stuffed toys played a leading role in the scheme, including Topo Gigio mouse dolls. Topo Gigio was a character seen in Italian television and in the United States on "The Ed Sullivan Show" in the 1960s. It remains popular in Latin America.

Huang, Yu and their California-based company were ordered to forfeit $1 million to the U.S. government. At a federal court hearing in Los Angeles on Tuesday, U.S. District Judge S. James Otero chided the two women for their actions.

"The word on the street was, if you were involved in drugs and wanted to launder money, you went to Angel Toy," Otero said.

Yu, 53, who was president of the company, and her 58-year-old sister Huang, who served as the vice president in charge of sales, were each sentenced by the judge to three years and one month behind bars.

Huang most recently lived in Irvine, southeast of Los Angeles, and Yu was from nearby Arcadia.

Under the scheme, the company received cash deposits from drug cartels that were all under $10,000 in order to avoid financial reporting requirements, prosecutors said.

The company was part of what is called a "black market peso exchange," which trades drug money in the United States for 'clean' Colombian pesos through the international purchase and shipment of goods, a sentencing memorandum in the case said.

After receiving the money from cartels, Angel Toy Corp. executives wired it to China to purchase stuffed animals and dolls, according to the U.S. Attorney's Office.

The toys were then exported to Colombia, where an associate of Yu and Huang apparently arranged for their sale. Proceeds were used to reimburse the cartels, prosecutors said.

In a brief statement to the court on Tuesday, Yu blamed "cultural differences" for her actions. Both women have limited English skills and said they were not fully aware of their involvement in the money laundering scheme.

But Otero said they "knew exactly what was occurring."

"It was just too profitable to turn away from," he said.

(Reporting By Alex Dobuzinskis)