Treasury Sanctions Three Drug Traffickers Tied to Mexican Drug Lord Chapo Guzman

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today designated three individuals with ties to Sinaloa Cartel leader Joaquin Guzman Loera (a.k.a. Chapo Guzman) as Specially Designated Narcotics Traffickers (SDNTs) pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). As a result of today’s action, U.S. persons are prohibited from conducting financial or commercial transactions with the designees and any assets they may have under U.S. jurisdiction are frozen.

 

“Today marks the fourth time in the past year that OFAC has targeted and exposed the support structures of the organization led by Chapo Guzman, the world’s most powerful drug trafficker,” said OFAC Director, Adam J. Szubin. “OFAC will continue to work with law enforcement and foreign counterparts to help disrupt, and eventually dismantle, Chapo Guzman’s criminal empire.”

 

Two of the individuals designated today, Mexican nationals Oscar Alvarez Zepeda and Joel Valdez Benites, are from Culiacan, Sinaloa, Mexico. The other individual, Colombian national Carlos Mario Torres Hoyos, is from Medellin, Colombia. These three individuals provide material support to the drug trafficking activities of Guzman Loera and the Sinaloa Cartel and also have ties to Colombian drug trafficker Jorge Milton Cifuentes Villa. Oscar Alvarez Zepeda is the brother of the previously-designated Mexican national Alfredo Alvarez Zepeda. The Alvarez Zepeda brothers are relatives of Chapo Guzman.

 

Guzman Loera and the Sinaloa Cartel were identified by the President as drug kingpins pursuant to the Kingpin Act in 2001 and 2009, respectively. OFAC designated Cifuentes Villa as an SDNT in February 2011 along with more than 70 other individuals and entities. Guzman Loera and Jorge Milton Cifuentes Villa were indicted on drug trafficking and/or money laundering charges in the U.S. District Court for the Southern District of Florida in November 2010. In February 2011, Jorge Milton Cifuentes Villa was also indicted on drug trafficking charges in the U.S. District Court for the Southern District of New York.

 

OFAC coordinated on this investigation with the Drug Enforcement Administration. Today’s action is part of ongoing efforts pursuant to the Kingpin Act to apply financial measures against significant foreign narcotics traffickers and their organizations worldwide. Treasury has designated more than 1,000 individuals and entities pursuant to the Kingpin Act since June 2000.

 

Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

Treasury Targets Sinaloa Cartel Narcotics Distribution Network Under The Kingpin Act

Mexican troops operating a
counter-drug checkpoint

WASHINGTON – The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced the designation of a key Sinaloa Cartel lieutenant, Martin Guadencio Avendano Ojeda, his two brothers and two companies located in Mexico pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act).

 

“Today’s action aims to disrupt the ability of Martin Avendano Ojeda’s drug distribution network and its money laundering businesses to generate funds for the Sinaloa Cartel,” said OFAC Director Adam Szubin. “These actions build on Treasury’s ongoing efforts to identify and disrupt the financial pathways exploited by the Sinaloa Cartel, Ismael Zambada Garcia, and his lieutenants.” 

Martin Guadencio Avendano Ojeda controls a money laundering and narcotics distribution network based in Culiacan, Mexico, that is supplied by Sinaloa Cartel leader Ismael Zambada Garcia and facilitates the importation of narcotics from Mexico into the U.S. with the assistance of his brothers, Hector Manuel and Sergio Avendano Ojeda, who are also designated today. 

 

Ismael Zambada Garcia and the Sinaloa Cartel were previously identified by the President as significant foreign narcotics traffickers pursuant to the Kingpin Act in 2002 and 2009, respectively. 

 

Treasury also designated Autos Mini, a car dealership in Ensenada, Baja California owned by Martin Guadencio Avendano Ojeda, and Autodromo Culiacan, an auto race track located in Culiacan, Sinaloa owned by Martin and his brother Hector Manuel Avendano Ojeda. 

 

As a result of today’s action, U.S. persons are prohibited from engaging in transactions with the designees and any assets they may have under U.S. jurisdiction are frozen. This action was supported by the Drug Enforcement Administration (DEA) and Internal Revenue Service and is the latest in ongoing efforts by OFAC to apply financial pressure to Mexican drug trafficking organizations and to pursue those who profit from drug trafficking.

 

“DEA and our partners, to include the Government of Mexico, continue to pursue the highest levels of the Sinaloa Cartel, as well as their business associates, financial backers, and those who profit from drug trafficking, violence and corruption,” said DEA Administrator Michele M. Leonhart. “The Cartel amasses a fortune in illicit assets by trafficking drugs to the United States. These Treasury sanctions represent yet another targeted strike against Cartel leadership and the financial networks that fuel the activities of the Sinaloa Cartel.”

 

Internationally, OFAC has designated more than 1,000 businesses and individuals linked to 94 drug kingpins since June 2000.  Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5 million.  Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

War On Drugs: Treasury Sanctions Cocaine and Bulk Cash Trafficking Coordinator with Ties to Sinaloa Cartel Leader Chapo Guzman

WASHINGTON – The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced the designation of Mexican national Alfredo Vasquez Hernandez (a.k.a. Alfredo Compadre) pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for providing support to and acting on behalf of the Sinaloa Cartel and its leader, Joaquin Guzman Loera (a.k.a.Chapo Guzman). 

“Alfredo Vasquez Hernandez has played a key role in Chapo Guzman’s drug trafficking and bulk cash smuggling operations,” said OFAC Director Adam J. Szubin. “Today’s designation of Chapo Guzman’s logistical coordinator increases the pressure on the Sinaloa Cartel and Chapo’s drug trafficking organization.”

As a result of today’s action, U.S. persons are prohibited from conducting financial or commercial transactions with the designees and any assets they may have under U.S. jurisdiction are frozen. 

A federal grand jury in the Northern District of Illinois indicted Vasquez Hernandez in August 2009 on two counts of conspiring to traffic drugs in an indictment targeting the Sinaloa Cartel and its leaders, Chapo Guzman and Ismael Zambada Garcia. The indictment charges Vasquez Hernandez and others with conspiring to import cocaine and heroin into the United States. Specifically, the indictment describes Vasquez Hernandez as the logistical coordinator of the importation of multi-ton quantities of cocaine from Mexico and South and Central American countries into the United States, and of deliveries of bulk currency from the United States to Mexico to Chapo Guzman. Mexican authorities arrested Vasquez Hernandez in January 2011. His extradition to the United States is currently pending.

OFAC worked closely with the Drug Enforcement Administration (DEA), in particular, the DEA Chicago Field Division and the DEA Los Angeles High Intensity Drug Trafficking Area/Southern California Drug Task Force on this investigation. 

Today’s action is part of ongoing efforts pursuant to the Kingpin Act to apply financial measures against significant foreign narcotics traffickers worldwide. Internationally, more than 1,000 individuals and entities linked to drug kingpins named by the President and OFAC have been designated pursuant to the Kingpin Act since June 2000. 

Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

War on Drugs: Successes and Accomplishments of the Merida Initiative

Office of the Spokesperson (State Department)

Washington, DC

Question Taken at the September 14, 2011 Daily Press Briefing

September 16, 2011

QUESTION: What is the State Department reaction to members of Congress who say the Merida Initiative is a failure?

ANSWER: We believe the Initiative is already having a positive impact. Through its bold efforts, with U.S. support, the Mexican government has successfully dismantled drug smuggling routes, seized major amounts of illicit drugs, and jailed drug kingpins. Building institutional capacity for the rule of law is crucial to long-term success. The Merida Initiative is a long-term initiative to support Mexican efforts in this regard.

A variety of U.S. federal agencies—including the Department of State, the Department of Homeland Security, the Department of Defense, the U.S. Agency for International Development, and the Department of Justice—are working with the Mexican government to implement Merida projects. We have seen an increase in bilateral law enforcement cooperation since the Merida Initiative began.

As President Obama has clearly stated: “We share with Mexico responsibility for meeting this challenge and we are committed to continuing our unprecedented cooperation in confronting these criminal organizations.”

QUESTION: What are the accomplishments of the initiative to date?

ANSWER: As of September 1, more than $504 million in equipment, training, and capacity-building has been delivered. With additional deliveries in 2011, we will bring this total to almost $900 million.

Moreover, our partnership with Mexico under the Merida Initiative has helped to strengthen and enhance our cooperation with Mexico in terms of our overall bilateral agenda. Since the partnership was formalized in 2008, more than $1.6 billion has been appropriated for the Merida Initiative (FY08-11). We have put into place an effective bilateral implementation structure that is now accelerating the implementation of our activities.

Since the inception of the Merida Initiative, working together, the United States and Mexico have:

•Trained more than 6,800 federal police officers, 4,300 prosecutors and justice sector personnel, and 2,000 corrections and penitentiary staff;

•Strengthened ties to investigate cross-border financial flows and combat money laundering;

•Transferred 14 helicopters to Mexican security forces and police to increase their mobility in their operations;

•Trained more than 23,000 justice sector personnel on their new roles in the oral, adversarial system, including litigation, negotiation, witness preparation, case development, and management.

•Increased information sharing on transnational drug trafficking organizations, which has undergirded successful efforts to remove more than 29 drug cartel bosses;

•Expanded the deployment of non-intrusive inspection devices, including canine teams, at our common border;

•Expanded collaboration to trace weapons found in Mexico by serial number to determine whether they come from the U.S. “e-Trace”;

•Continued the high level of extraditions and fugitive apprehensions.

•Purchased and trained more than 114 canines for the Federal Police (SSP), Attorney General’s Office (PGR), and Customs Service (SAT) -- all of which are developing canine academies with Merida funding and technical assistance.

•Increased by 70 percent the number of cases now referred to as pre-trial case resolution alternatives in the states where the judicial reforms are being implemented. This has resulted in increased proportions of indictments of more serious crimes.

•Provided technical assistance to victims’ services and alternative justice centers in Chihuahua and Morelos, and trained over 3,500 government officials and members of civil society to attend to victims of trafficking, domestic violence, and sexual assault.

QUESTION: Is a counterinsurgency strategy, as suggested by members of Congress, right to combat the drug cartels in Mexico?

ANSWER: We fully support Mexico’s efforts to combat organized crime, reduce violence, and enforce the rule of law. We share responsibility for these challenges and Mexico's efforts and interests in this regard can and do coincide with our own. We are committed to working with Mexico on both sides of the border in order to counter transnational criminal organizations.

Mexican authorities assert control throughout Mexico, in all Mexican states. Although organized crime tries to act with impunity, the Mexican government is using its resources to ensure that state authority will prevail and criminals will be punished, and we are supporting them.

U.S. support to Mexico through the Merida Initiative is designed to support the efforts of Mexican authorities, especially the civilian law enforcement agencies.

Free Market Consequences of the Nanny State, part 2

By Zach Foster

Continued from Part 1

Legalization of narcotics would bring a true victory—or at least a Nixonian Peace With Honor—in the War on Drugs.  How so?  First and foremost, safety would rise dramatically in areas affected by drug-related violence.  With narcotics available at drug stores or dispensaries, they would no longer be a part of the underground market, robbing the drug lords of both their consumer base and their profits, and by extension destroying any need to fight law enforcement and other cartels.  Shootings and assassinations would decline sharply just the way alcohol-related gang violence plummeted after Prohibition was repealed.  This means that both cartel violence and local gang commerce and violence—all of them fueled by drug money—would decline sharply.  If not, they could at least branch out to become legitimate enterprises under government regulation, so people would at least not be getting killed in gun battles.[1]  If Wal-Mart and Target can exist in the same city without having routine gun battles, kidnappings, and executions, then two former cartels can compete peacefully in the free market under the law.

Better yet, drug use would actually be safer if state governments regulated production according to health laws.  This means that under state supervision, narcotics could be purely organic and NOT be mixed with cement, quicklime, sulfuric acid, and other deadly chemicals.  Yes, there would still be the possibility of drug overdoses occurring, but that is a matter of personal discretion.  Over 20,000 people die every year from alcohol causes (EXCLUDING drunk driving incidents), mainly alcohol poisoning.[2]  What has the nanny state done to protect these people?  Nothing, as it is impossible to protect determined people from harming themselves.  At least with state regulated non-toxic drugs, users wouldn’t be dropping like flies.

An economic incentive for the nanny state to get out of local drug matters (as if the safety and health aspects weren’t enough) is the potential tax revenue.[3]  This means that both the state and the federal government can tax this vice.  Right now marijuana prices vary, but are quite high in comparison to tobacco and alcohol.  Several decent quality joints would cost the same as at least a full carton (10 packs) of cigarettes, or two bottles of good quality Jack Daniels.  In the west coast, an ounce of decent marijuana costs anywhere between two and three hundred dollars.  On the west coast, an ounce costs well over four hundred.

The high pricing has nothing to do with the time or labor being put into growing and harvesting marijuana. If that was the case, then corn, apples, cotton, and tobacco would also cost three hundred dollars an ounce.  The reason narcotics—especially marijuana—are so expensive is supply and demand.  A huge amount of narcotics are harvested and manufactured every single day, both in the U.S. and south of the border.  In some cases, farmers have huge amounts of illegal crops.  In most cases, a lot of people have a few plants.  Because of federal laws, only so much can be harvested and sold before the Feds take notice, either to legal dispensaries or on the underground market.  It is known that every single day the U.S. Border Patrol and Immigrations and Customs Enforcement agencies catch tens of millions of dollars’ worth of narcotics being smuggled into the country.  The fact that so many narcotics are produced attests to the fact that there is a huge demand for them.  The fact that the supply is severely limited, both by law enforcement operations and producer cautiousness, explains why the price is so high.  Even with heavy taxation, narcotics on the free market will no longer cost hundreds of dollars, and prices will ultimately be lower.

Continued in Part 3: Helping People Kick the Habit

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[1] Stamper, Norm. How Legalizing Drugs Will End the Violence. http://www.alternet.org/drugs/39565/

[2] Drinking: The Danger Zone. http://www.parent-teen.com/substances/poisoning2.html

[3] Miron, Jeffrey. The Budgetary Implications of Drug Prohibition. Harvard University. February 2010.http://www.economics.harvard.edu/faculty/miron/files/budget%202010%20Final.pdf

Free Market Consequences of the Nanny State

By Zach Foster

Best read with the companion article: Legislating Morality in the Nanny State

Apart from the reduction of individual liberty that comes from the Nanny State’s constant need to legislate morality, this moral crusade also has profound consequences on the free market and people’s quality of life.  Everyone knows that the federal government’s War on Drugs has been a massive failure.  All in all, the people who are going to consume drugs are already consuming drugs unapologetically.  Whenever someone gets caught with narcotics and arrested, they may temporarily regret the error of their ways, not because they regret the drug use that has been pleasurable to them, but simply because they got caught.

Criminalizing narcotics has only cemented their use,[1] much like Prohibition laws in the 1920s saw a hike in the consumption of alcohol.[2]  Prohibition laws, meant to “protect the citizens” from themselves failed to do so, and they put citizens in more danger as organized crime rose up in the streets of cities across America, fueled by alcohol sales on the black market.  Such a scourge never left society, as criminal enterprises intelligently branched out into other business front, both on the black market—prostitution, narcotics, underground gambling—and in the legitimate business world—casinos, burlesque houses, hotels, and many other ventures.

Organized crime today is primarily fueled by drug trafficking and weapons trafficking—when people are buying industrial quantities of narcotics, they need guns to defend those drugs from police and competitor raids.[3]  This underground enterprise makes gang life profitable—at the expense of the lives of gang victims[4] and the futures of many young inner city children—and the damaging effects on society can be seen in Mexico[5] and Columbia,[6] where powerful drug cartels are wealthy and strong enough to fight multiple-front wars against government police and soldiers and other cartels.

When drugs are made and sold on the black market, the health of citizens is in exponentially more danger.  Apart from the risk of becoming addicted—a risk that also applies to legal drugs like alcohol and pharmaceuticals—there is no way for a person to know what is in the narcotics he or she is about to consume.  Columbian cocaine, after the harvest of the coca plants, is known to be made with cement, ammonia, quicklime, and sulfuric acid.[7]  Those chemicals make it portable and compactible, and those chemicals go into the nostrils and lungs of human beings. 

 

Continued in Part 2: Underground narcotics, prostitution, and skyrocketing prices

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[1] War On Drugs A Failure! http://tabacco.blog-city.com/war_on_drugs_a_failure_criminalization_doesnt_work__time_.htm

[2] Did Alcohol Use Decrease During Alcohol Prohibition? http://www.druglibrary.org/prohibitionresults1.htm

[3] The War On Drugs Has Failed. http://thebuzzcincy.com/international/1230amwdbz2/the-global-war-on-drugs-has-failed/

[4] Drugs and Guns Are Killing Two Thirds of NY’s Black Men. http://newsone.com/nation/newsonestaff4/drugs-and-guns-are-killing-ny-two-thirds-of-murder-victims-are-black-drugs-involved/

[5] Mexico Under Siege. http://projects.latimes.com/mexico-drug-war/#/its-a-war

[6] Columbian Drug Wars: Guerrillas, Paramilitary Groups, and the Government. http://www.bookrags.com/research/colombian-drug-wars-guerrillas-para-hbh-01/

[7] Why the war on drugs in Columbia may never be won. http://www.guardian.co.uk/world/2010/feb/16/colombia-drugs-cocaine-trafficking