In a case stemming from an investigation into Fashion District businesses using “Black Market Peso Exchange” schemes to launder narcotics proceeds for international drug cartels, an import-export textile business and two executives have pleaded guilty to federal money laundering and tax charges.

Pacific Eurotex Corp. and its owners Morad “Ben” Neman, of Westwood, and Hersel Neman, of Beverly Hills, pleaded guilty on Dec. 22 to federal charges in an indictment accusing them of using the business to receive bulk cash that they knew or believed to be the proceeds of narcotics trafficking. The defendants admitted in court documents that they failed to report to federal authorities the receipt of this bulk cash, and that they “structured” frequent deposits of the cash, in amounts less than $10,000, to avoid a bank reporting requirement that would have drawn the scrutiny of law enforcement.

The Nemans also pleaded guilty to conspiring to defraud the United States by maintaining two sets of business records in order to conceal income for tax purposes.

“Black Market Peso Exchange” schemes are designed to assist drug traffickers who have United States currency that they want to send to a foreign country, such as Mexico, and convert into pesos. As part of the scheme, a broker finds business owners in the foreign country who buy goods from U.S. companies and who need U.S. dollars to pay for the goods.

The broker arranges for the illegally obtained dollars to be delivered to the United States-based vendors, such as Pacific Eurotex, and the illegally obtained money is used to pay for goods purchased by the foreign customers. Once the goods are shipped to the foreign country and sold by a foreign business, the pesos are turned over to the broker, who then pays the drug trafficker in the local currency of the foreign country, thus completing the laundering of the illegally obtained funds.

Pacific Eurotex received, laundered and structured approximately $370,000 in bulk cash delivered on four separate occasions in 2013 by an undercover agent posing as a money courier, according to court documents. The defendants admitted in court that they laundered the money after being specifically advised by special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations that bulk cash payments were frequently derived from illegal activity and that they were required to report cash transactions involving more than $10,000 in currency.

Morad “Ben” Neman, 57, the chief executive officer of Pacific Eurotex, pleaded guilty to four counts including conspiring to structure monetary transactions with a domestic financial institution, conspiring to defraud the United States by obstructing the lawful functions of the Internal Revenue Service, subscribing to and filing a false 2013 tax return understating income he received from Pacific Eurotex, and aiding and assisting in the filing of another false 2013 tax return. Hersel Neman, 58, chief financial officer of Pacific Eurotex, pleaded guilty to three counts of conspiring to launder money, conspiring to defraud the United States by obstructing the lawful functions of the IRS, and subscribing to and filing a false tax return.

All three defendants are scheduled to be sentenced by United States District Judge John A. Kronstadt on June 14.

The also names two other defendants who are scheduled to go on trial on March 6. Mehran Khalili, 49, of Beverly Hills, a brother in law of Hersel Neman, is charged with conspiring to structure cash transactions; and Alma Villalobos, 55, of Arleta, the in-house accountant and bookkeeper for Pacific Eurotex, faces charges including conspiracy to launder money.