CJNG Fuel Theft Network Deprives Mexico of Revenue while Strengthening Cartel
WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned nine Mexican nationals and 26 Mexico-based entities linked to a fuel theft network that generates tens of millions of dollars benefiting the Cartel Jalisco Nueva Generacion (CJNG), a violent Mexico-based drug trafficking organization responsible for a significant proportion of fentanyl and other deadly drugs trafficked into the United States. Mexico-based drug trafficking cartels such as CJNG have turned to fuel theft in recent years, resulting in billions of dollars in lost revenue to the Mexican government. Today’s action was coordinated closely with the Drug Enforcement Administration and the Government of Mexico, including La Unidad de Inteligencia Financiera (UIF), Mexico’s Financial Intelligence Unit.
“President Biden, Vice President Harris, and the Treasury Department are committed to taking decisive action to disrupt the funding and operations of deadly fentanyl-trafficking cartels like CJNG,” said Deputy Secretary of the Treasury Wally Adeyemo. “CJNG’s diverse revenue streams, including fuel theft, ultimately strengthen its ability to traffic fentanyl and other deadly drugs into the United States. Treasury will continue to use its expertise and tools to target relentlessly drug trafficking gangs to make our communities safer and keep poisonous drugs like fentanyl off our streets.”
Treasury plays a leading role in countering the trafficking of fentanyl and other illicit drugs as part of President Biden’s Unity Agenda, leveraging its expertise to fight illicit financing and financial crimes to disrupt the flows of money that criminal organizations rely on to operate. Over the past two years, Treasury has sanctioned more than 300 targets for involvement in drug trafficking activities at all stages of the supply chain, from major cartel leaders to under-the-radar labs, transportation networks, and chemical suppliers. Last year, Secretary Yellen launched the Counter-Fentanyl Strike Force, which brings together Treasury’s expertise and resources in fighting financial crime, led by the Office of Terrorism and Financial Intelligence (TFI) and IRS Criminal Investigation (CI). Secretary Yellen has also engaged with international partners to combat fentanyl trafficking, including during her travel to Mexico last year. In April, Secretary Yellen also announced the launch of an exchange with the People’s Republic of China to enhance cooperating in combatting money laundering associated with drug trafficking and other crime.
Today’s action is taken pursuant to Executive Order (E.O.) 14059, which targets persons involved in the Global Illicit Drug Trade. On April 8, 2015, OFAC sanctioned CJNG pursuant to the Kingpin Act for playing a significant role in international narcotics trafficking. On December 15, 2021, OFAC also designated CJNG pursuant to E.O. 14059. In other actions, OFAC has sanctioned numerous CJNG-linked individuals and companies pursuant to both the Kingpin Act and E.O. 14059 that were engaged in various commercial activities and multiple individuals who played critical roles in CJNG’s drug trafficking, money laundering, timeshare fraud, and corruption.
THICK AS THIEVES: MEXICAN CARTELS AND FUEL THEFT
Fuel theft, colloquially referred to in Mexico as huachicol, is the most significant non-drug revenue source for Mexican cartels and other illicit actors. Thieves in Mexico (or huachicoleros) steal fuel from Mexico’s state-owned petroleum company, Pemex, through numerous means, including illegally drilling taps into fuel pipelines, stealing from refineries, and hijacking tanker trucks. They also use bribery and violence in support of these illicit activities. Stolen fuel is then sold on the black market around Mexico and even in the United States and Central America. In recent years, as Mexican cartels have become more involved in fuel theft, the Mexican government has reported billions of dollars in lost revenue due to huachicol.
DISRUPTING CJNG FUEL THEFT
Ivan Cazarin Molina (a.k.a. “El Tanque”—meaning the storage tank) is a senior member of CJNG, reporting directly to CJNG leader Ruben Oseguera Cervantes (a.k.a. “El Mencho”) as part of his inner circle of trusted associates. Involved in the rise and consolidation of CJNG, El Tanque operates in the Mexican states of Jalisco and Veracruz. Although primarily involved in fuel theft, El Tanque has also engaged in drug trafficking, extortion, and homicide. El Tanque’s fuel theft generates tens of millions of dollars per year for himself and CJNG. El Tanque steals fuel through illicit taps of Pemex pipelines and stores it near the city of Veracruz in storage tanks capable of holding millions of liters. Through family members and associates acting as front persons, El Tanque manages a network of ostensibly legitimate retail gas stations where he sells stolen fuel. El Tanque also sells stolen fuel to third parties in Mexico, who in turn sell it to the U.S. market, often in Texas.
Fuel storage tanks used by El Tanque located in Veracruz, Mexico
OFAC designated El Tanque pursuant to E.O. 14059 for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, CJNG, a person designated pursuant to E.O. 14059.
TARGETING EL TANQUE’S TEAM
In addition to El Tanque, OFAC also designated his family members, who are linked, directly or indirectly, to CJNG fuel theft.
Often mistaken for one another, El Tanque is the younger brother of senior CJNG member Cesar Cazarin Molina (a.k.a. “Tornado”). Both El Tanque and Tornado have been identified as using the alias “Victor Hugo Delgado Renteria.” Like El Tanque, Tornado was a founding member of CJNG and is close friends with El Mencho. Involved in homicide and recognized as a member of the armed wing of CJNG, Tornado was arrested in 2013 but remains involved in CJNG activities in Veracruz from within prison. El Tanque shares his fuel theft profits with Tornado.
El Tanque’s father-in-law, Domingo Medina Diaz (a.k.a. El Mingo), is also known to be a member of the armed wing of CJNG and has been involved in Mexico’s fuel industry since the late 1980s. Like Tornado, El Mingo is also incarcerated in Mexico yet remains active in CJNG and receives shares of fuel profits from El Tanque.
Jahir Cazarin Ramos, nephew to El Tanque and son of Tornado, acts as a front person or officer in fuel-related companies in El Tanque’s network. Additionally, OFAC designated El Tanque’s associates who, directly or indirectly, play important roles in his fuel theft activities which benefit CJNG.
Gerardo Alvarado Castillo is a trusted associate of El Tanque and acts as a front person for a hazardous materials transportation company in El Tanque’s network.
Jose Saul Rodriguez Hernandez is an important front person for El Tanque, holding various positions in, and serving as the public face of, several fuel-related companies in El Tanque’s network.
El Tanque’s other associates acting as officers or front persons in fuel-related companies in his network include Brandon Ernesto Herrera Medina, Santos Aldair Estrada Medina, and Patricia Rivera Garcia.
OFAC designated Tornado, El Mingo, and Gerardo Alvarado Castillo pursuant to E.O. 14059 for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, CJNG, a person designated pursuant to E.O. 14059.
OFAC designated Jahir Cazarin Ramos, Jose Saul Rodriguez Hernandez, Brandon Ernesto Herrera Medina, Santos Aldair Estrada Medina, and Patricia Rivera Garcia pursuant to E.O. 14059 for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, El Tanque.
EXPOSING OSTENSIBLY LEGITIMATE BUSINESSES
El Tanque’s business network is particularly vulnerable to disruption given his use of seemingly legitimate retail gas station companies to sell stolen fuel.
Accordingly, OFAC sanctioned eleven retail gas station companies in El Tanque’s network and based in Veracruz, Mexico, namely Biocombustibles El Jicaro, S.A. de C.V.; Dos Oceanos Paso del Toro, S.A. de C.V.; Etanofuel, S.A. de C.V.; Rapicombustibles de Veracruz, S.A. De C.V.; Magnocombustibles de Veracruz, S.A. de C.V.; Ahorrocombustibles de Veracruz, S.A. de C.V.; Econocombustibles de Veracruz, S.A. de C.V.; Carburantes Dos Oceanos, S.A. de C.V.; Dos Oceanos Combustibles y Carburantes, S.A. de C.V.; Combustibles Evolutivos y Alternativos Dos Oceanos, S.A. de C.V.; and Suministros Combustibles Oceanos, S.A. de C.V.
Etanofuel, S.A. de C.V. (a.k.a. “G Energy”), a retail gas station company owned, controlled, or directed by, directly or indirectly, El Tanque
OFAC also sanctioned a Veracruz-based hazardous materials transportation company, Traver Permisionarios, S.A. de C.V., and construction company, Maquinas EDJA, S.A. de C.V., supporting El Tanque’s illicit fuel activities.
OFAC designated Biocombustibles El Jicaro; Dos Oceanos Paso del Toro; Etanofuel; Rapicombustibles de Veracruz; Magnocombustibles de Veracruz; Ahorrocombustibles de Veracruz; Econocombustibles de Veracruz; Carburantes Dos Oceanos; Dos Oceanos Combustibles y Carburantes; Combustibles Evolutivos y Alternativos Dos Oceanos; Suministros Combustibles Oceanos; Traver Permisionarios; and Maquinas EDJA pursuant to E.O. 14059 for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, El Tanque.
Finally, OFAC also sanctioned 13 Veracruz-based companies pursuant to E.O. 14059 for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, Jose Saul Rodriguez Hernandez, namely, 3D Modern Printing Press; Aceites y Lubricantes Maye, S.A. de C.V.; Aditivos y Suministros Etanofuel, S.A. de C.V.; Combustibles y Lubricantes Maye, S.A. de C.V.; Comercializadora Baguette Klic, S.A. de C.V.; Comercializadora Coffe Klic, S.A. de C.V.; Constructora Jjesa S.A. de C.V.; Etanoplus, S.A. de C.V.; Maxi-Gasoil Servicios, S.A. de C.V.; Mayegas, S.A. de C.V.; Multiservicios en Combustible Maye de Veracruz, S.A. de C.V.; Super Tiendas Klic, S.A. de C.V.; and Veracruzana de Servicios Hoteleros y Gastronomicos Los Angeles, S.A. de C.V.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. U.S. persons may face civil or criminal penalties for violations of E.O. 14059 and the Kingpin Act. Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.
Today’s action is part of a whole-of-government effort to counter the global threat posed by the trafficking of illicit drugs into the United States that is causing the deaths of tens of thousands of Americans annually, as well as countless more non-fatal overdoses. OFAC, in coordination with its U.S. government partners and foreign counterparts, and in support of President Biden’s Unity Agenda, will continue to hold accountable those individuals and businesses involved in the manufacturing and sale of illicit drugs.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.
To view the chart on the individuals designated today, click here.
Additionally, to view the chart on the entities designated today, click here.
For more information on the individuals and entities designated today, click here.
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