Date: March 19, 2024 Contact: newsroom@ci.irs.gov OAKLAND — Felipe de Jesus Ornelas Mora, the owner of Rincon Musical, a money transmitting business in Oakland, was sentenced today to 18 months in federal prison following his conviction for conspiracy to commit money laundering, announced First Assistant United States Attorney Patrick D. Robbins; IRS Criminal Investigation (CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office; and Drug Enforcement Administration (DEA), San Francisco Field Division, Special Agent in Charge Brian M. Clark. The sentence was handed down by the Hon. Jeffrey S. White, Senior United States District Judge. Ornelas Mora of Oakland, pleaded guilty to one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), in October 2023. He had originally been charged with that offense in August 2022. According to his plea agreement, Ornelas Mora owned and operated Rincon Musical. From no later than September 2020 through August 2022, Ornelas Mora and his employees knowingly laundered drug proceeds by accepting large amounts of cash from drug dealers and wiring it to Mexico, disguising it to look like routine remittances. The defendant and his employees used legitimate customers’ names and IDs to circumvent the compliance controls of Rincon’s parent wire service, Money Services Business-1 (MSB-1). The defendant oversaw the structuring of large amounts of cash into multiple wire transfers of less than $3,000, which is the threshold above which federal law imposes mandatory customer reporting requirements. Employees of Rincon then disguised the wire payments as routine remittances by sending them using the names and IDs of legitimate customers to avoid arousing the suspicion of MSB-1 and the U.S. authorities. Ornelas Mora and his employees engaged in these practices after completing extensive anti-money laundering training, which is required annually for money services businesses employees. “This defendant knowingly aided Bay Area drug dealers by disguising drug money as remittances and laundering it through his business through wire payments to Mexico,” said First Assistant U.S. Attorney Patrick D. Robbins. “By disrupting the flow of drug money, this Office demonstrates its commitment to a sweeping approach to combatting the drug trade in the Northern District of California. Today’s sentence should send a signal to other money services businesses who launder drug proceeds and abuse the financial system: we will find you and we will prosecute you.” “Facilitating the profitability of drug trafficking by laundering illegal drug proceeds perpetuates the deadly drug epidemic in our communities, and we will not stand for it,” said CI Acting Special Agent in Charge Michael Mosley. “Taking money launderers off the street and leading criminal investigations that land them in prison is what CI special agents do. CI special agents are experts at uncovering money trails and dedicated to the safety of our communities.” “Money and greed are the foundation of the cartel business model and Ornelas Mora provided a lifeline by laundering drug proceeds,” said DEA Special Agent in Charge Brian M. Clark. “This sentence underscores our commitment to aggressively pursue every level of the drug supply chain to include those facilitators who enable transnational criminal networks.” In its sentencing papers, the government described how the investigation leading to Ornelas Mora’s conviction began with wire receipts found on the cell phones of drug dealers who had been arrested. Wire receipts found on the phone of one drug dealer (Drug Trafficker-1) showed that, between August 2020 and December 2020, Drug Trafficker-1 had wired more than $109,000 to Mexico and Honduras from Rincon. Federal agents determined from the receipts that Drug Trafficker-1 had used Rincon to send more than 60 wire payments to Mexico between August 2020 and December 2020. The receipts showed that Rincon employees had made Drug Trafficker-1’s wire payments look legitimate by using the names of unrelated customers and listing those customers as the senders of the wires. As the investigation continued, federal agents used two confidential witnesses—CW-1 and CW-2—to conduct multiple undercover wire transactions at Rincon. CW-1 and CW-2 told Rincon cashiers that they did not want their names and IDs used to send large amounts of cash from Rincon to recipients in Mexico. Two Rincon cashiers structured the cash brought in by CW-1 and CW-2 into multiple wire transfers that fell below $3,000 to avoid federal reporting requirements. The cashiers then processed the wire payments using legitimate customers’ names and IDs, without authorization from those customers, to feign compliance with MSB-1’s ID requirements. During an undercover operation on June 16, 2022, for example, CW-2 wired more than $12,000 to five recipients in Mexico. With Ornelas Mora present at the adjacent teller window when CW-2 requested the wires, a Rincon cashier sent each of the wire payments in amounts less than $3,000. Later that evening, the Rincon cashier texted CW-2 receipts that reflected the names of other individuals as the senders of the wires. In his plea agreement, Ornelas Mora admitted he knew that large amounts of cash he and his employees received from certain individuals and sent to Mexico and Honduras using the names and IDs of unrelated customers were drug proceeds. He also admitted that he knew the structuring of cash payments in excess of $3,000 into multiple wires falling below that threshold was prohibited by federal law. And he admitted he knew that he and his employees acted with intent to avoid mandatory customer information and customer information reporting requirements by structuring wire payments to fall below the $3,000 threshold. In addition to sentencing Ornelas Mora to prison, Judge White ordered the defendant to serve three years of supervised release to begin after his prison term is completed. This prosecution is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multiagency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Assistant United States Attorney Daniel Pastor is prosecuting the case with assistance from Amanda Martinez and Andy Ding. The prosecution is the result of an investigation by CI and DEA, with assistance from the Oakland Police Department. 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.
