Date: Feb. 16, 2024 Contact: newsroom@ci.irs.gov SAN DIEGO — Jesus Vazquez Padilla of Tijuana was sentenced in federal court today to 40 months in custody for the unlicensed transmission of more than $42 million of illicit proceeds derived from the sale of drugs across the United States. According to court records, between Jan. 4, 2016 and May 24, 2019, Vazquez Padilla led the operation of an illegal unlicensed money transmission business by using 22 shell corporations and 85 corporate bank accounts at various U.S. banks to launder drug sale proceeds. Using the corporate bank accounts, Vazquez Padilla and his co-conspirators offered money transmitting services to the public for a fee by performing tasks that included: (1) depositing cash at financial institutions throughout the United States; (2) transferring money by wire, checks, and inter-bank transfers, and (3) transferring money to Mexico on behalf of third parties. “The complexity of this money laundering operation was remarkable but as it unraveled so did the string of drug proceeds into the coffers of the cartels,” said U.S. Attorney Tara McGrath. “The United States will prosecute not only the drug traffickers, but also the facilitators who cannot out-maneuver justice.” “Mr. Vasquez Padilla knowingly and willingly subverted laws that protect our financial institutions from becoming unwitting pawns in funding transnational crime and terrorism,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation (CI), Los Angeles Field Office. “Furthermore, by moving over $42 million in drug money, Mr. Vasquez Padilla and his co-conspirators’ put our sons and daughters at risk of becoming statistics in the drug crisis we face as a country. CI is committed to following the money to bring criminals like Mr. Vasquez Padilla to justice.” In total, Vazquez Padilla’s business deposited $42,276,668 into the U.S. financial system. Of those deposits, approximately 95 percent of those funds were transferred to third party bank accounts in Mexico. The remaining 5 percent constituted the business’ fee for transmitting the funds. Under U.S. law, a money transmission business must register with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury; file Currency Transaction Reports and Suspicious Activity Reports; and maintain an effective anti-money laundering compliance program. Vazquez Padilla did not comply with any of these requirements. On Dec. 5, 2022, Vazquez-Padilla’s co-conspirator, Jose Gonzalez, was sentenced to 30 months’ custody for operating an unlicensed money transmission business and for assisting in the preparation of false tax returns related to the conspiracy. Gonzalez helped Vazquez Padilla open approximately 11 shell corporations and then, to create a veneer of legitimacy, Gonzalez filed federal tax returns on behalf of 10 of the shell corporations in tax years 2016 and 2017. In doing so, Gonzalez invented $19,615,192 in false and fictitious deductions so the shell corporations would not owe taxes. On Dec. 18, 2023, another co-conspirator, Juan Medina, was sentenced to 12 months and one day in custody for operating an unlicensed money transmission business. Despite knowing the laundered money represented illegal drug proceeds, Medina helped Vazquez Padilla open bank accounts for the shell corporations to enable the money laundering. Vazquez Padilla’s sister and co-conspirator, Monica Vazquez, remains at large. Assistant U.S. Attorneys Christopher Beeler and Carl Brooker of the Southern District of California are prosecuting the case. CI investigated this case. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
