‘Conceal the source’ is one type of money laundering
A Chinese man living in California and the wife of a convicted drug trafficker have been sentenced in federal court for an elaborate money-laundering scheme operating out of Lexington.
An investigation by Lexington police and the Drug Enforcement Administration, which began in 2016, led to the seizure of large sums of drug money from Fengqiang Zhang and Nancy Garcia Zapata who were sentenced Friday. The same investigation resulted in the 2018 conviction of Zapata’s husband, Fernando Lara Salas, who is serving a 29-year sentence.
All told, tips from the confidential sources led to multiple arrests and seizures of hundreds of pounds of marijuana, more than 100 kilograms of cocaine, and the seizure of more than $1 million in drug proceeds, according to a DEA agent’s affidavit in court files.
Salas was arrested in July 2017 when officers found 6 kilograms of cocaine, more than 50 grams of meth and about $110,000 in his Dartmoor Drive residence. He was found to have distributed drugs — along with Jorge Macias Pedroza — in Central Kentucky and elsewhere.
That same residence continued to be a focus of a police investigation.
Last October, three months after Salas was sentenced, DEA agents seized more than $400,000 in drug proceeds from Zhang. On Nov. 27, investigators saw Zhang meet with Garcia at the residence, according to court documents.
A Lexington police detective saw Garcia carry a large black plastic bag to a driver, Zhang, and they put the bag into the back seat of a Camry, court records show.
Zhang drove away and was later stopped by the detective. Zhang consented to a search of the car and the detective located about $150,000 inside the duffel bag given to him by Garcia. Zhang admitted to police the money came from drug proceeds and he was to deliver it to an address in New York City, according to an affidavit.
A search warrant of the Dartmoor Drive home resulted in police finding an additional $272,000 in drug proceeds, according to court documents.
About $40,000 of the money was found beneath the spare tire in the trunk of a 2013 Kia, an affidavit said. The rest of the money was found in various spots, including suitcases, bags and other items, in the house.
Both Zhang and Garcia admitted all of the money seized by police was from drug trafficking. They were each indicted in January and later pleaded guilty.
Zhang was sentenced to four years in federal prison for a federal money laundering conspiracy charge, and Garcia was sentenced to five years, 11 months for the same charge, according to the U.S. attorney’s office for the Eastern District of Kentucky. Zhang also faces deportation to China.
“We will continue to emphasize the importance of anti-money laundering efforts, especially related to drug trafficking investigations,” U.S. Attorney Robert Duncan, Jr. said in a release. “By disrupting the ability of a criminal organization to launder and move proceeds of illegal drug trafficking activities, law enforcement personnel are able to weaken that organization. In disrupting the flow of money, law enforcement also disrupts the flow of drugs.”