The owner of a Los Angeles import-expo business pleaded guilty Friday to federal felony charges in connection with a black market money laundering scheme.

Xilin Chen, 55, of Temple City, owner of L.A.-based underwear firms YiLi Underwear Inc. and Gaiyi Underwear Inc., pleaded guilty in U.S. District Court to knowingly passing false documents through U. S. customs, to conspiracy to launder money and to unlawful procurement of citizenship, according to Assistant U.S. Attorney John Kucera.

Chen, who became a U.S. citizen in 2012, will lose his citizenship as a result as part of the deal with prosecutors.

Chen’s activities came to light as part of an investigation into the so-called Black Market Peso Exchange by the Drug Enforcement Administration and Internal Revenue Service. The exchange facilitated money laundering efforts by drug traffickers, who used cash from drug sales to buy goods that were then shipped overseas where they were converted back to currency for the drug traffickers.

As part of his plea, Chen acknowledged accepting money three times from an undercover agent posing as a drug dealer to buy clothing. He also pleaded guilty to illegally gaining citizenship when he said he was not involved in criminal activity.

Under the terms of the agreement signed with prosecutors, Chen will forfeit money from the sales of his business’s building at 425 Stanford Ave., two residences in Temple City and more than $435,000 seized last fall in connection with the investigation to the U.S. government, according to Kucera.

Chen’s son, Chuang Feng Chen, 25, and also of Temple City, also pleaded guilty Friday to conspiracy to pass false documents through U.S. customs.

Prosecutors have asked for charges to be dropped against Chen’s daughter, Aixia Chen under the settlement agreement.

The Chens’ sentencing is scheduled for August 24 before U.S. District Judge Percy Anderson.