A Canadian man accused of participating in a drug- smuggling scheme made his first appearance in a federal Santa Ana courtroom today, and a co-defendant is scheduled to be arraigned Monday.
John Philip Co, 41, of Richmond, British Columbia, was ordered held without bond and was scheduled to return to court April 13, said Virginia Kice of U.S. Immigration and Customs Enforcement.
Co-defendant June Jie Zhang, 31, of Toronto, had his arraignment rescheduled for Monday because he had an attack of high blood pressure today, Kice said.
The two were accused of participating in a larger conspiracy that included the smuggling of high-grade marijuana and Ecstasy into the United States from Canada, selling it here, and then using the profits to buy cocaine from Mexican smugglers and then taking it back over the border to Canada, Kice said.
However, Co and Zhang did not realize that the Mexican cartel drug dealers they were dealing with were actually undercover ICE investigators who tumbled to the alleged conspiracy, Kice said.
"Their job was to set up deals so they could buy cocaine imported from Mexico wholesale and the smuggle it back into Canada,'' Kice said.
ICE investigators seized $750,000 in cash in the undercover deal, Kice said. Authorities found $350,000 more in a Pasadena hotel room, Kice said.
Co and Zhang were arrested late Wednesday, Kice said. Co was arrested by ICE agents at a storage facility in Costa Mesa, where he was allegedly waiting to get the 80 pounds of cocaine bought from undercover agents, and South Gate police detectives arrested Zhang at a casino in Commerce, Kice said.
The two were charged with conspiracy to distribute more than 37 kilograms of cocaine, Kice said. They could face life in prison if convicted, she added.
The multi-agency undercover investigation started in February when Homeland Security investigators in Santa Ana received a lead about Canadian drug traffickers looking to buy large amounts of cocaine, Kice said.
"It's a novel twist on money laundering,'' Kice said.
"Money laundering can take many forms, but it's unusual to find a scheme where suspects seek to cover their tracks by using criminal proceeds to buy more contraband,'' said Claude Arnold, special agent in charge for Homeland Security Los Angeles.
"But Canadian organizations are willing to take the risk. First they reap huge profits by selling marijuana and Ecstasy in this country. Then they double their money by buying cocaine here and exporting it to Canada where it commands twice the price."
Investigators suspect the duo may have been involved in laundering more than $15 million, Kice said.