Toy Company Owners to Be Sentenced in Drug Scheme Drug cartels have developed a number of money laundering schemes in recent years to turn dirty proceeds into clean cash. Among them was working with a Los Angeles toy company that sold cuddly stuffed animals. Large amounts of cash were dropped off by couriers at Angel Toy Corp.'s downtown headquarters, broken down into smaller amounts and deposited into company accounts. The money was eventually funneled back to Colombia and into the hands of drug lords, authorities said. On Tuesday, two Angel Toy co-owners are expected to be sentenced for their role in a case that highlights how cartels have attempted to avoid detection. Federal prosecutors said the toy company served as a financial conduit for the drug cartels in a scheme commonly known as the black market peso exchange. The scam allows middlemen to handle transactions between drug dealers and others who want to buy U.S. dollars outside the legitimate banking system to avoid taxes and import fees. More than $1.6 million was deposited into Angel Toy's bank accounts over a two-year period and each deposit was for less than $10,000 to avoid raising suspicion, court documents show. The money was then used by a Colombian importer to purchase teddy bears and other stuffed animals. These toys were sent on to Columbia, where the importer sold them and gave the proceeds, in pesos, to the drug traffickers, authorities said. Meichun Cheng Huang and Ling Yu pleaded guilty last year to one count of conspiracy to structure currency transactions and face up to 15 months in prison as part of an agreement with prosecutors. The company also pleaded guilty to the same charge and will likely have to forfeit $1 million dollars and pay a $200,000 fine. Prosecutors said that while Huang and Yu, who are sisters, haven't admitted knowing the money came from drug cartels, the scheme continued even after Angel Toy was audited in 2008. "Even though the suspicious cash drops and egregious structuring scream of unlawful activity, business owners like Huang agree to 'look the other way' and make a substantial profit in the meantime," prosecutors wrote in court documents. Both Huang and Yu spoke of their charitable work and devotion to their family in court documents but neither addressed if they were aware they worked at the behest of drug cartels. "I am regretful for my failures, but I am determined to never again do anything that is not honorable," Huang said.