FBI agents recently arrested a West Los Angeles man who is one of two defendants charged in a federal grand jury indictment alleging a scheme that laundered at least $2 million in proceeds obtained from victims of grandparent scams who were defrauded with bogus claims that their relatives were in distress and urgently needed funds.

James Wesley Jackson III, also known by the nickname Imperial, 42, pleaded not guilty to one count of conspiracy to commit money laundering and one count of conspiracy to commit bank fraud.

The two-count indictment also charges Christopher Fagon (who had several aliases, mostly variations of Christopher Broker), 45, who at the time of the alleged scheme lived in the Beverly Grove neighborhood of Los Angeles, and who is now believed to reside in or near Toronto, Canada.

The indictment outlines how perpetrators of grandparent scams convince victims to send money – purportedly to help relatives, often their grandchildren who are typically described as being in legal trouble – to bank accounts, business entities and addresses created by the scam perpetrators. The victims’ money often is initially handled by “money mules,” who allow their addresses or bank accounts to be used or agree to receive or negotiate cashier’s checks.

Fagon allegedly was a manager of money mules, including Jackson, who also recruited his own money mules. The indictment further alleges that Fagon created business entities and opened bank accounts using information stolen from identity theft victims.

Once money was in the accounts associated with the money mules or identity theft victims, Fagon and Jackson allegedly engaged in transactions designed to conceal the true nature of the funds, which had been obtained via wire fraud.

The bank fraud scheme alleged in the indictment involves fraudulently obtained funds that were held in suspense in an account that had been set up in the name of an identity theft victim. Fagon, Jackson and a co-conspirator allegedly worked together to contact the bank and impersonate the identity theft victim to have a check issued for nearly $83,000 that was remaining in the account, authorities said.

A trial for Jackson was scheduled to begin on Feb. 6 in federal court in Los Angeles.