HOUSTON – A nearly two-year undercover investigation of Houston cell phone businesses revealed they were laundering money to a Mexican drug cartel, federal prosecutors announced Friday, after the arrest of nearly 30 people.
The bust was announced during a news conference Friday morning at Houston’s Drug Enforcement Administration (DEA) headquarters. The investigation spanned across different jurisdictions and states including Florida, Alabama, and other parts of Texas.
A total of 43 people are charged in the U.S. and Mexico but currently, 29 have been arrested, according to the U.S. Attorney’s Office. The remaining fugitives are all believed to be in Mexico.
“This investigation revealed that the transactions were conducted as part of a complex international trade-based money laundering network operating in all major cities throughout the United States and throughout the world,” Acting U.S. Attorney Jennifer Lowrey said.
According to investigators, the dangerous and violent Mexican drug cartel Jalisco New Generation (CJNG) would send drugs to the United States and after selling them, the money would go to at least two Houston-area phone stores.
The stores would then ship phones to at least seven cell phone stores in Mexico, where the phones would be sold for a higher amount in pesos and most of the proceeds then went back to CJNG.
Investigators called it a sophisticated investigation, which involved help from the DEA and the IRS.
“Not only did we crack the code, we went undercover and we got down and dirty with them and created cell phones stores that they did not know it was us, law enforcement. We took their money. We helped them. And now they’re going to jail and they will pay for it,” DEA Houston Special Agent in Charge Daniel Comeaux said. “This operation sends a clear message to anyone thinking about doing bad. When you own a legitimate business, if you own a legitimate business, don’t get in bed with drug cartels. If you get involved with drug cartels, understand that when you go to sleep, it could be us knocking at your door at six in the morning."
Through undercover work over nine months and multiple agencies working together, officials were able to uncover a complex money laundering network for the cartel in which cell phones were used as currency.
The best explanation is that they were trying to avoid detection by law enforcement by not shipping large amounts of currency back to Mexico.
About 85 kilograms of meth, 10 kilograms of cocaine, 17 firearms, $481,000 from a bank account, and approximately $566,000 of bulk in cash and drug proceeds were seized as well.
Legitimate business owners charged
Two defendants, Nabeel Iqbal and Asad Kesaria, are legitimate cell phone stores owners in the Houston area, but knowingly worked with dealers in exchange for money, investigators said.
KPRC 2 tracked down Iqbal’s business, Cellular Wear, on the southwest side off Harwin Drive, using court documents and Texas Secretary of State business records.
The store, with a security gate out front and several security cameras pointed in every direction, wasn’t open Friday afternoon.
A neighboring business manager said he saw cops descend on the business Thursday as several of the arrests were made across the Houston area.
“As far as we know, they are doing the cell phone store. Accessories, iPads...” Muhammad Irfan said. “There might be approximately eight to ten police officers ... I came here to get the charger, and that’s it. He said, ‘You cannot go right now, there’s some investigation going on,' ... I saw they took two boxes, yeah, in the dolly yesterday.”
Irfan said Iqbal was always a nice business neighbor and he often saw several boxes being shipped from the business.
Reached by phone, a woman who answered and claimed to be Kesaria’s wife said she didn’t know what was going on but confirmed that he was arrested Thursday at their home.
Among the 43 charged, Francisco Jaramillo-Valdovinos aka Chico Jaramillo, is said to be a top CJNG commander, is one of those charged but remains at large.
Anyone with information about his whereabouts or any of the others involved in the case are asked to contact the Drug Enforcement Administration (DEA) at 713-693-3000.