LOUISVILLE, Ky. – An undocumented immigrant has been sentenced to 70 months in federal prison after being convicted of multiple money laundering offenses and possession of a firearm by a prohibited person.
Two other foreign nationals who were in the country illegally also received sentences for their roles in the money laundering scheme.
Jose Malagon Castro, 49, a citizen of Mexico who was unlawfully in the United States, was sentenced to 70 months in prison followed by three years of supervised release. He was also fined $30,000 and ordered to forfeit $516,800 after being convicted on twenty-four counts related to money laundering and one count of possession of a firearm by a prohibited person. Castro was barred from possessing a firearm because he was in the United States illegally.
The other two undocumented immigrants, Kelin Hernandez Barahona, 31, a citizen of Honduras, and Suri Rosmeri Hernandez Del Cid, 28, a citizen of Guatemala, were each sentenced to just over 11 months in prison followed by three years of supervised release for assisting Castro’s money laundering operation.
According to the U.S. Attorney’s Office, between at least January 2020 and December 2024 in the Western District of Kentucky, Castro used his Money Service Business operated at three grocery store locations—El Rey I, II, and III—to launder drug trafficking proceeds.
Authorities say Castro either transmitted the drug proceeds himself or directed his two co-defendants to send the funds through his money service business to various beneficiaries and locations in Mexico. Forensic accounting conducted by the IRS found that Castro laundered more than $1.9 million in drug proceeds to Mexico for a single drug trafficking organization.
On Dec. 4, 2024, law enforcement executed several search warrants at Castro’s businesses, residences, and vehicles. Officers seized $516,800 in money laundering proceeds, along with multiple firearms and ammunition.
United States Attorney Kyle Bumgarner said, “Castro laundered over $1.9 million in drug proceeds to Mexico on behalf of a drug trafficking organization. That $1.9 million of laundered drug money represents a significant amount of poison that was sold in our community. Castro will now spend 70 months in prison before being expelled from the United States.”
There is no parole in the federal prison system.
Two additional co-defendants connected to Castro’s case remain at large.
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