A Mexico City-based attorney has admitted to his role in a sophisticated money laundering scheme that funneled more than $52 million in drug proceeds for the notorious Sinaloa Cartel through San Diego-based shell companies. The guilty plea marks a significant development in federal authorities' ongoing crackdown on the cartel's financial networks that have increasingly targeted Southern California as a hub for laundering drug money.
The Scheme and Key Players
Hector Alejandro Paez Garcia, 43, pleaded guilty in federal court to conspiracy charges, according to the U.S. Attorney's Office for the Southern District of California. As reported by Times of San Diego, Paez served in a managerial role within the money laundering organization, overseeing operations that collected bulk cash in amounts up to $200,000 from dozens of cities across the United States.
The operation utilized a network of San Diego shell companies to process drug proceeds generated through the Sinaloa Cartel's distribution network. ABC 10News San Diego reports that employees traveled to cities including Chicago, Boston, New York, Baltimore, and Philadelphia to collect the illicit funds, which were then transferred to Mexican bank accounts controlled by Paez.
Fugitive Remains at Large
Federal authorities continue searching for Alberto David Benguait Jimenez, also 43, who according to the Treasury Department operates a money laundering network that has processed over $50 million for the Sinaloa Cartel. Benguiat was sanctioned by the Treasury's Office of Foreign Assets Control in March 2025 for his role in laundering money on behalf of the cartel and fentanyl trafficker Jose Angel Rivera Zazueta. The FBI is seeking information about Benguiat and can be contacted at 858-320-1800.
Cryptocurrency Pivot Foiled
When federal agents began seizing the organization's traditional bank accounts—66 in total throughout the United States—Paez shifted operations toward cryptocurrency to evade detection, as detailed by News Channel 3. However, the FBI successfully infiltrated and dismantled the cryptocurrency laundering network. This represents a growing trend in cartel money laundering, with TRM Labs reporting that cryptocurrency deposits to Chinese precursor manufacturers increased by over 600% between 2022 and 2023.
Pattern of Sinaloa Cartel Money Laundering in San Diego
This case represents the latest in a series of major Sinaloa Cartel money laundering prosecutions in the region. The U.S. Attorney's Office reports that in May 2024, Luis Reinaldo Ramirez of Mesa, Arizona, was sentenced to 120 months in prison for leading a transnational criminal organization that laundered $16.5 million for the cartel.
According to federal court documents from November 2021, another Imperial Valley-based money laundering organization processed over $32 million in drug proceeds, with operatives using burner phones and code phrases to coordinate bulk cash deposits into fictitious business bank accounts. These organizations have consistently used San Diego's proximity to the Mexican border and its robust financial infrastructure to facilitate large-scale money transfers.
International Coordination and Recent Arrests
The investigation demonstrates extensive international law enforcement cooperation. Colombian national Hugo Andres Velasquez Pantza, who allegedly helped implement cryptocurrency operations for the organization, was arrested in Rome, Italy, in January 2025 following an undercover FBI operation and extradited to the United States in April, according to federal prosecutors.
Other co-conspirators have already entered guilty pleas, including Miguel Angel Encinas Gomez of Mexicali, Mexico, who admitted to laundering $35 million in bulk cash proceeds in July 2023, and James Harmon Yarbrough of Apopka, Florida, who worked to convert $326,000 in illicit proceeds to cryptocurrency.
Broader Enforcement Efforts
The case is part of Operation Take Back America, a nationwide Department of Justice initiative targeting cartels and transnational criminal organizations. To date, these money laundering investigations have resulted in charges against 51 defendants and seizures of more than $4.1 million, along with approximately 1,304 kilograms of methamphetamine, 34 kilograms of heroin, 11 kilograms of cocaine, and 14 kilograms of fentanyl, as reported by the Internal Revenue Service Criminal Investigation.
Legal Implications and Sentencing
Paez faces up to 20 years in federal prison and a maximum fine of $500,000 when sentenced on August 15, 2025. The charges stem from violations of Title 18, U.S.C., Section 1956, which covers international money laundering conspiracy. The prosecution is being handled by Assistant U.S. Attorneys Paul Benjamin and Robert Miller, with former Assistant U.S. Attorney Owen Roth having contributed significantly to the case development.
Federal authorities emphasize that money laundering prosecutions represent a critical strategy in combating drug trafficking organizations. As U.S. Attorney Tara McGrath stated in previous cases, according to the DEA, targeting money launderers strikes at "the life blood of the drug trafficker" by disrupting the financial systems that enable cartels to operate.
