Louisville, KY - A foreign national was sentenced yesterday 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 were also sentenced yesterday for their roles in assisting in the money laundering offenses.

U.S. Attorney Kyle G. Bumgarner of the Western District of Kentucky, Karen Wingerd, Special Agent in Charge, Detroit Field Office, IRS Criminal Investigation, Acting Special Agent in Charge Colin W. Jackson of Homeland Security Investigations (HSI) Nashville, Special Agent in Charge John Nokes of the ATF Louisville Field Division, Special Agent in Charge Jim Scott of the DEA Louisville Field Division, Special Agent in Charge Olivia Olson of the FBI Louisville Field Office, Chief Paul Humphrey of the Louisville Metro Police Department, and Chief Richard Sanders of the Jeffersontown Police Department made the announcement

On March 5, 2026, Jose Malagon Castro, 49, a citizen of Mexico and unlawfully in the United States, was sentenced to 70 months in prison, followed by 3 years of supervised release, fined $30,000, and forfeited $516,800, for twenty-four counts related to money laundering and one count of possession of a firearm by a prohibited person. Castro was prohibited from possessing a firearm because he was an alien illegally and unlawfully in the United States.

Also sentenced on March 5 were Kelin Hernandez Barahona, 31, a citizen of Honduras and unlawfully in the United States, and Suri Rosmeri Hernandez Del Cid, 28, a citizen of Guatemala and unlawfully in the United States. They were each sentenced to just over 11 months incarceration with 3 years' supervised release for their roles in assisting Castro's money laundering operation.

Between at least January 2020 and continuing until at least December 2024, here in the Western District of Kentucky, Castro utilized his Money Service Business (MSB) operated at three grocery store locations, El Rey I, II and III, to launder drug trafficking proceeds. Specifically, Jose Malagon Castro transmitted himself or had his cashiers, Kelin Hernandez Barahona, and Suri Rosmeri Hernandez Del Cid, transmit drug proceeds through his MSB service to multiple beneficiaries and locations in Mexico. Forensic accounting conducted by the IRS determined that Castro laundered to Mexico over 1.9 million dollars of drug proceeds for a single drug trafficking organization. On December 4, 2024, law enforcement executed multiple search warrants for Castro's businesses, residences, and vehicles and seized $516,800 in money laundering proceeds and multiple firearms to include: an Aguirre Y Aranzabal (AYA), model 4/53, 12-gauge shotgun; a Marlin Firearms Company, model 336W, 30-30 rifle; a Henry Repeating Rifle Company, model H004GE Golden Eagle, .22lr rifle; a Maverick Arms, model 88, 12-gauge shotgun; a Colt, model King Cobra, .357 magnum revolver; a Smith & Wesson, model CSX, 9mm pistol; and ammunition.

Co-defendants, Vanessa Avila Galaviz, 29, a citizen of Mexico, and Kelin Hernandez Barahona, 32, a citizen of Honduras, have never appeared before the Court following their indictment and remain fugitives at large.

United States Attorney Kyle Bumgarner stated, "Castro laundered over 1.9 million dollars in drug proceeds to Mexico on behalf of a drug trafficking organization. That 1.9 million dollars 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 system.

This case is being investigated by the IRS, ATF, DEA, HSI, FBI, LMPD, and the Jeffersontown Police Department.

Assistant U.S. Attorneys Mac Shannon and Joseph Ansari are prosecuting this case.

This prosecution is part of the Homeland Security Task Force (HSTF) initiative. The HSTF is a United States government partnership dedicated to eliminating criminal cartels, transnational gangs, and transnational criminal organizations (TCOs) worldwide. This initiative identifies TCOs engaged in a wide range of criminal schemes that violate federal law, while dismantling cross-border human smuggling and trafficking networks that fuel violence and instability that threatens the safety and security of the United States and its global partners. It also places a particular emphasis on criminal offenses involving children and ensures the use of all available law enforcement tools to prosecute offenders and/or facilitate the removal of criminal aliens from the United States. HSTF Nashville is comprised of agents and officers from IRS, ATF, DEA, HSI, and FBI and the prosecution is being led by the Office of the United States Attorney for the Western District of Kentucky.

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