It could only happen in America.

In what reads like a script for a blockbuster action movie, the US Drug Enforcement Agency has busted an international drugs, money laundering and weapons smuggling ring centred around a Hollywood film company headed by Charlie Chaplins granddaughter.

Seven people have been arrested in what the DEA colourfully christened Operation Directors Cut a two year undercover sting operation involving Limelight Films in Los Angeles and its parent company, ADB Swiss S.A in Switzerland.

According to the DEAs media statement Limelight Films was used to launder hundreds of thousands of dollars of drug money. The chairman of Limelight is Kiera Chaplin, the actor granddaughter of Chaplin.

Her fianc, Alexandre De Basseville, an executive of ADB, was one of the seven arrested in the operation.

But a DEA spokeswoman said Ms Chaplin was not part of the investigation.

Undercover DEA agents posed as drug dealers during the operation. According to documents filed in the US Federal Court, De Basselville offered to launder drug proceeds, supply weapons and broker ecstacy deals in meetings held in Virginia, Miami, Los Angeles, Amsterdam and Geneva.

On two occasions De Basseville and Limelight Films chief executive officer Bruno DEsclavelles allegedly took cash totalling $300,000, which they believed to be the proceeds of drug deals, and laundered it through Limelight Films.

The ring also arranged to sell the agents 500,000 ecstasy pills in the Netherlands.

Limelight Films is mainly an international film distribution company, although has also produced music videos. It claims to have a distribution network stretching as far as Australia.

It describes itself as having been created out of a desire to promote worldwide talented individuals who treasure cinema and cherish the creative spirit of Charlie Chaplin.

Kiera Chaplin, a 23-year-old model-turned-actress with parts in a number of little-known films to her credit, lived with De Basseville in Hollywood. In an interview with the San Francisco Chronicle in March she described how she wanted to use Limelight Films to follow in her grandfathers footsteps as an independent film producer.