News

A human trafficking ring that forced hundreds of women to work in brothels across the United States used businesses in and around Los Angeles and accounts at large U.S. banks to funnel at least $20 million to Thailand, court records show.

According to more than 500 pages of trial transcripts and other records published May 13, from 2009 to 2017 the network of facilitators structured cash deposits into dozens of accounts opened under victims’ names, combined proceeds with off-book remittances from restaurant owners, and used trade-based techniques to move funds.

The records outline a scheme in which freelance launderers not only handled profits for traffickers, but also served them logistically by running photoshoots and booking flights and hotels for their victims. Profits were even wired to the accounts of future victims in Thailand, thus creating an appearance of legitimate commerce to bolster their applications for U.S. visas.

According to the records, the suspects moved millions of dollars without ever meeting “M,” the Thailand-based woman who allegedly micromanaged virtually every aspect of the business through email and Skype, including the flow of proceeds from across the United States to Los Angeles, then onto Thailand.

Thirty-one members of the organization have pleaded guilty to charges ranging from sex trafficking to conspiring to launder money. Federal prosecutors in Minnesota secured convictions against five others in December, including managers of several U.S. brothels where the victims lived.

The case underscores that unlike drug traffickers and other organized criminals, human traffickers typically rely on a loose web of affiliates and disparate techniques to launder their profits, said Bassem Banafa, a forensic accountant who assists state human-trafficking investigations.

“I don’t see many cases where even one task force is able to investigate funnel accounts, hawala, and TBML [trade-based money laundering] at the same time,” Banafa said. “This is progress.”

‘House bosses’

After arriving in Los Angeles and sometimes in New York, most of the women would be taken by a fixer to branches of Wells Fargo, Bank of America and other banks to open accounts in their own names.

The suspects preferred large U.S. banks that tended to operate multiple branches in major U.S. cities where the victims would be kept against their will, John Tschida, an IRS criminal investigator, testified at the trial in November.

The traffickers shuttled the women between hotels and apartments in Austin, Dallas, Chicago, Los Angeles, Minneapolis and elsewhere, and forced them to have sex with as many as 10 customers a day to pay off “debts” as high as $60,000.

A defense attorney for Michael Morris, 65, one of the convicted co-conspirators who operated three apartments in Los Angeles that doubled as brothels, unsuccessfully argued in trial that his client merely ran a “house of prostitution” and the women worked there voluntarily.

“Some of the women would ask them to deposit money for them in certain bank accounts, and Mr. Morris would do that for them,” the attorney, Robert Sicoli, claimed during the trial. “But he wasn’t taking any of the money, [and] he doesn’t know for sure what they did with it.”

Prosecutors countered that Morris and other “house bosses” laundered money for themselves and made transfers on behalf of the victims. Morris deposited hundreds of thousands of dollars in cash into banks, while hiding “10 times” that amount in empty soup cans and elsewhere in his home, according to Tschida, the IRS investigator.

Victims in at least one brothel placed cash from each commercial sex transaction in an envelope, then hid the envelope in the building’s freezer. Morris and other house bosses typically took a cut of roughly 40 percent of the proceeds.

Thailand via Los Angeles

Other women deposited proceeds into accounts held in their own names. One of the network’s money launderers—such as Noppawan Lerslurchachai, a 37-year-old L.A. cabdriver known as “Moo”—would then withdraw the funds in cash in Los Angeles or transfer them to other accounts.

Moo testified in November that she was working as an unlicensed cabbie for the Thai diaspora in L.A. when a passenger named “Kate”—a prostitute who had already worked off her debt—told her that she had a friend named M who was looking for drivers.

By 2010, Moo said she was taking newly arrived victims to Bank of America or Wells Fargo, and texting victims in Minnesota, Illinois and other U.S. states the numbers of accounts into which to structure their cash deposits so that she could pick up the funds in Los Angeles.

She primarily turned to a couple who owned a restaurant in Huntington Beach— Pornthep Sukprasert, or P’Ouu, and his wife, Mulchulee Chalermsakulrat—who used at least four of their own accounts at Wells Fargo as well as the accounts of their associates to wire millions of dollars to M-controlled accounts in Thailand.

Moo physically ferried cash from L.A. victims to P’Ouu but used a variety of methods to deliver proceeds from victims located elsewhere, including by directing money into a friend’s account, and withdrawing it via pre-signed checks ranging from $1,500 to $8,000.

Other funds would arrive at a corporate account at Bank of America controlled by yet another Los Angeles-area entrepreneur, Peerasak Guntetong, whose firm, “ML Enterprises,” exported protein powders, vitamins and luggage from the U.S. for resale in Thailand.

“P’Ouu, he would know people or companies who work at import/export industry,” Moo testified. “He would give me all the account numbers. … I don’t think it was something under his control … but it seemed as if those account owners already wanted to use some money.”

M’s most sophisticated associate may have been Bhunna Win, a 51-year old San Diego resident who received millions of dollars in proceeds from across the U.S. into a Wells Fargo account for Excel InterTrade, which, according to Tschida, the IRS investigator, bought and shipped “automotive filters” from Malaysia to Thailand.

Win, who pleaded guilty to transmitting funds without a license, would ensure that the Thai baht, or the currency generated from the sales from the car parts in Thailand, would ultimately flow back to M and other debt holders, minus a fee of $10 on every $1,000 of sales, according to Tschida.

The proceeds pooled into “a kind of underground loan,” Tschida testified. “[Win] was able to use it for her own personal business and make money off it. … We get the records from the bank, we see all the money coming in from all over the U.S. … and you just see a large wire transfer to a business in Malaysia.”

From 2009 to 2017, according to the records, Win, the Guntetongs and other co-conspirators managed at least $5.2 million in trafficking proceeds via 20 accounts at Wells Fargo. More than 140 accounts at Bank of America, JPMorgan Chase and other lenders were also used in the scheme.

A bank’s onboarding system may catch a spike in foreign nationals from the same country who all visit the same branch, but it would take a “very astute” employee to connect that influx to trafficking, according to a compliance officer for a West Coast lender who reviewed the case.

“It’s hard to connect all these individuals together, especially when they’re depositing money right under the [$10,000 reporting] threshold,” the compliance officer said.

Sentencing dates for Moo, Morris, Win and other conspirators have yet to be scheduled.

Contact Daniel Bethencourt at dbethencourt@acams.org