2019 National Drug Threat Assessment: Mexican Cartel Related Excerpts & Sections

Chivis Martinez Borderland Beat  Small Wars Journal Dr. Robert Bunker

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Executive Summary Excerpts

Fentanyl and Other Synthetic Opioids: Fentanyl and other highly potent synthetic opioids— primarily sourced from China and Mexico—continue to be the most lethal category of illicit substances misused in the United States. Fentanyl continues to be sold as counterfeit prescriptions pills as traffickers—wittingly or unwittingly—are increasingly selling fentanyl to users both alone and as an adulterant, leading to rising fentanyl-involved deaths. Fentanyl suppliers will continue to experiment with other new synthetic opioids in an attempt to circumvent new regulations imposed by the
United States and China. [p. 5]

Heroin: Heroin-related overdose deaths remain at high levels in the United States, due to continued use and availability, while fentanyl is increasingly prevalent in highly pro table white powder heroin markets. Mexico remains the primary source of heroin available in the United States according to all available sources of intelligence, including law enforcement investigations and scientific data. Further, high-levels of sustained opium poppy cultivation and heroin production in Mexico allow Mexican Transnational Criminal Organizations (TCOs) to continue to supply high-purity, low-cost heroin. [p. 5]

Methamphetamine: Methamphetamine remains widely available, with traffickers attempting to create new customers by expanding into new, non-traditional methamphetamine markets such as the Northeast, or other user bases with new product forms. Most of the methamphetamine available in the United States is produced in Mexico and smuggled across the Southwest Border (SWB). Domestic production occurs at much lower levels than in Mexico and seizures of domestic methamphetamine laboratories have declined steadily for many years while overall supply has increased. [p. 5]

Mexican TCOs: Mexican TCOs remain the greatest criminal drug threat to the United States; no other groups are currently positioned to challenge them. The Sinaloa Cartel maintains the most expansive footprint in the United States, while the Jalisco New Generation Cartel (Cartel Jalisco Nueva Generación or CJNG) has become the second-most dominant domestic presence over the past few years. Although drug-related murders in Mexico continue to reach epidemic proportions, U.S.-based Mexican TCO members still generally refrain from domestic inter-cartel conflicts, resulting in minimal spillover violence in the United States. [p. 6]

Gangs: National and neighborhood-based street gangs and prison gangs remain the dominant distributors of illicit drugs through street-sales in their respective territories throughout the country. Struggle for control of lucrative drug trafficking territories continues to fuel the majority of the street- gang violence facing local communities. Meanwhile, some street gangs are working with rival gangs to increase both gangs’ drug revenues, while individual members of assorted street gangs have pro ted by forming relationships with friends and family associated with Mexican cartels. [p. 6]

Mexican Transnational Criminal Organizations

Overview  

Mexican TCOs continue to control lucrative smuggling corridors, primarily across the SWB, and maintain the greatest drug trafficking influence in the United States, with continued signs of growth. They continue to expand their criminal influence by engaging in business alliances with other TCOs, including independent TCOs, and work in conjunction with transnational gangs, U.S.-based street gangs, prison gangs, and Asian money laundering organizations (MLOs). Mexican TCOs export significant quantities of heroin, cocaine, methamphetamine, marijuana, and fentanyl into the United States annually. The drugs are delivered to user markets in the United States through transportation routes and distribution cells that are managed or influenced by Mexican TCOs, and with the cooperation and participation of local street gangs. [p. 99]

Most Significant Mexican TCOs Currently Active in the United States

Although offshoots from previously established TCOs continue to emerge, the DEA assesses the following six Mexican TCOs as having the greatest drug trafficking impact on the United States: Sinaloa Cartel, CJNG, Beltran-Leyva Organization, Juarez Cartel, Gulf Cartel, and Los Zetas Cartel. These TCOs maintain drug distribution cells in designated cities across the United States that either report directly to TCO leaders in Mexico or indirectly through intermediaries. The following is a background on each of the six major Mexican TCOs, with examples of their drug trafficking impact on distinct U.S. cities: [p. 99]

Sinaloa Cartel – The Sinaloa Cartel (aka the Pacific Cartel), based in the Mexican State of Sinaloa, is one of the oldest and more established DTOs in Mexico. The Sinaloa Cartel controls drug trafficking activity in various regions in Mexico, particularly along the Pacific Coast. Additionally, it maintains the most expansive international footprint compared to other Mexican TCOs. The Sinaloa Cartel exports and distributes wholesale amounts of methamphetamine, marijuana, cocaine, heroin, and fentanyl in the United States by maintaining distribution hubs in cities that include Phoenix, Los Angeles, Denver, Atlanta, and Chicago. Illicit drugs distributed by the Sinaloa Cartel are primarily smuggled into the United States through crossing points located along Mexico’s border with California, Arizona, New Mexico, and West Texas. [p. 99]

Jalisco New Generation Cartel (CJNG) – CJNG, based in the city of Guadalajara in the Mexican State of Jalisco, is the most recently formed of the six TCOs. With drug distribution hubs in Los Angeles, New York, Chicago, and Atlanta, it is one of the most powerful and fastest growing cartels in Mexico and the United States. CJNG smuggles illicit drugs into the United States by accessing various trafficking corridors along the SWB including Tijuana, Juarez, and Nuevo Laredo. CJNG’s rapid expansion of its drug trafficking activities is characterized by the willingness to engage in violent confrontations with Mexican Government security forces and rival cartels. Like most major Mexican TCOs, CJNG is a poly-drug trafficking group, manufacturing and/or distributing large amounts of methamphetamine, cocaine, heroin, and fentanyl. CJNG reportedly has presence in at least 24 of 32 Mexican states. [pp. 99-100]

Beltran-Leyva Organization (BLO) – The BLO asserted its independence after the Beltran-Leyva brothers and their associates split from the Sinaloa Cartel in 2008. While all the Beltran-Leyva brothers have now been killed or incarcerated, splinter groups and remnants of their organization continue to operate in various parts of Mexico, including the States of Guerrero, Morelos, Nayarit, and Sinaloa. The splinter groups, though still generally regarded as being under the BLO umbrella, are asserting greater independence and influence. The two most prominent of these splinter groups, Los Rojos and Los Guerreros Unidos, operate independently due in part to their role in the heroin trade. BLO splinter groups rely on their loose alliances with CJNG, the Juarez Cartel, and Los Zetas for access to drug smuggling corridors along the SWB. BLO members primarily traffic marijuana, cocaine, heroin, and methamphetamine, and maintain distribution centers in Phoenix, Los Angeles, and Chicago. [p. 100]

Juarez Cartel – The Juarez Cartel is one of the older Mexican TCOs. The Mexican State of Chihuahua, south of West Texas and New Mexico, represents the traditional AOR of the Juarez Cartel. The Juarez Cartel endured a multi-year turf war with the Sinaloa Cartel, which resulted in many drug-related murders in Chihuahua at its height in mid-2010. Though not as expansive as the rival Sinaloa Cartel, the Juarez Cartel continues to influence U.S. drug consumer markets, primarily in El Paso, Denver, Chicago, and Oklahoma City. The Juarez Cartel mainly traffics marijuana and cocaine and has recently expanded into heroin and methamphetamine distribution. Recent law enforcement reporting indicates opium poppy cultivation overseen by the Juarez Cartel has increased significantly in the State of Chihuahua since 2013, outpacing marijuana cultivation in some regions. [p. 100]

Gulf Cartel – The Gulf Cartel has been in operation for decades. With a traditional power base in the Mexican State of Tamaulipas, the Gulf Cartel traffics primarily marijuana and cocaine but has expanded to include heroin and methamphetamine. The Gulf Cartel has fought for dominance in areas of Northeast Mexico against Los Zetas since the Gulf-Zetas split in 2010. Due to its influence over areas in northeast Mexico, the Gulf Cartel smuggles a majority of its drug shipments into South Texas through the border region between the Rio Grande Valley and South Padre Island. The Gulf Cartel maintains a presence and holds key distribution hubs in Houston and Detroit. [p. 100]

Los Zetas Cartel – Los Zetas formed as an independent cartel in early 2010 when it officially splintered from the Gulf Cartel. At the time of the rupture, Los Zetas controlled drug trafficking in large parts of eastern, central, and southern Mexico. However, due to pressure from rival cartels, Mexican law enforcement, and internal conflicts, the influence of Los Zetas has lessened significantly in recent years. Los Zetas are currently divided into two rival factions: the Northeast Cartel (Cartel del Noreste or CDN), a rebranded form of mainstream Zetas, and a breakaway group, the Old School Zetas (Escuela Vieja or EV). Members of Los Zetas smuggle the majority of their illicit drugs through the border area between Del Rio and Falcon Lake, Texas, with a base of power in Nuevo Laredo, Mexico. Los Zetas’ members currently traffic methamphetamine, marijuana, cocaine, and heroin through key distribution hubs in Laredo, Dallas, and New Orleans. [pp. 100-101]

Structure and Characteristics

Mexican nationals or U.S. citizens of Mexican origin mainly oversee Mexican TCO activity in the United States. U.S.-based TCO members of Mexican nationality enter the United States legally and illegally and often seek to conceal themselves within densely populated Mexican- American communities. Mexican TCO members operating in the United States can be traced back to leading cartel figures in Mexico, often through familial ties. U.S.-based TCO members may reside in the United States prior to employment by a Mexican TCO. In some cases, U.S.-based TCO members are given high-ranking positions within the organization upon returning to Mexico after years of successful activity in the United States. [p. 101]

Consistent with previous years, the Sinaloa Cartel maintains the widest national influence, with its most dominant positions along the West Coast, in the Midwest, and in the Northeast. CJNG continues to be the Mexican TCO with second-most widespread national influence. BLO activities remain more dispersed throughout the United States, with heavier concentrations in areas with large heroin markets. [p. 101]

Selected Field Division Highlights

The San Diego, Atlanta, and Los Angeles FDs report the Sinaloa Cartel and CJNG are the most dominant Mexican TCOs affecting their AORs. San Diego FD reports that both Sinaloa Cartel and CJNG control the Tijuana/San Diego trafficking corridor. The Phoenix FD has not witnessed CJNG in their AOR and reports that the Sinaloa Cartel remains the dominant TCO affecting Arizona. [p. 101]

The Miami FD reports an increase in Mexican TCOs transporting and distributing large quantities of cocaine, methamphetamine, heroin, and fentanyl into Florida from Mexico in recent years. The Sinaloa Cartel, CJNG, and BLO are the most significant Mexican TCOs in the Miami FD AOR. [p. 101]

The New England FD reports Mexican TCOs, primarily the Sinaloa Cartel, serve as the main sources of supplies for the Dominican TCOs that dominate distribution of wholesale supplies of heroin, fentanyl, and cocaine. Dominican TCOs act as intermediaries between Mexican TCOs and the local criminal groups and gangs responsible for street-level. [p. 101]

Operational Structure in the United States

U.S.-based Mexican TCOs are composed of various compartmentalized cells assigned specific functions such as drug distribution or transportation, consolidation of drug proceeds, or money laundering. Mexican TCO operations in the United States typically function as a supply chain: Operators in the chain are aware of their specific function, but are unaware of other aspects of an operation. In most cases, individuals hired to transport drug shipments within the United States are independent, third- party “contractors” who may work for multiple Mexican TCOs. The number of transportation groups is increasing in some areas, and they often transport smaller shipments. Sinaloa and Nayarit are responsible for most of the black tar and brown powder heroin distributed in Colorado and Utah. [p. 102]

Relationship with Local Criminal Groups and Street Gangs

U.S.-based Mexican TCO members generally coordinate the transportation and distribution of bulk wholesale quantities of illicit drugs to U.S. markets while smaller local groups and street gangs, who are not directly affiliated with Mexican TCOs, typically handle retail-level distribution. At times, Mexican TCOs collaborate directly with local criminal groups and gangs across the United States to distribute and transport drugs at the retail level. [p. 102]

Drug Smuggling and Transportation Methods

Mexican TCOs transport the majority of illicit drugs into the United States across the SWB using a wide array of smuggling techniques. The most common method employed involves smuggling illicit drugs through U.S. POEs in passenger vehicles with concealed compartments or commingled with legitimate goods on tractor-trailers. [p. 102]

Other cross-border smuggling techniques employed by Mexican TCOs include the use of subterranean tunnels, which originate in Mexico and lead into safe houses on the U.S. side of the border. Underground tunnels are mainly used to smuggle ton quantities of marijuana, though other illicit drugs have been commingled in shipments. Tunnels destroyed by U.S. law enforcement authorities along the SWB are primarily found in California and Arizona, and are generally associated with the Sinaloa Cartel. [p. 102]

Mexican TCOs also transport illicit drugs to the United States aboard commercial cargo trains and passenger buses. To a lesser extent, Mexican TCOs use maritime vessels clandestinely or through of official maritime POEs, typically off the coast of California. Mexican TCOs also rely on traditional drug smuggling methods, such as the use of backpackers, or “mules,” crossing remote areas of the SWB into the United States. Mexican TCOs exploit various aerial methods to transport illicit drugs across the SWB. [p. 102]

These methods include the use of ultralight aircraft, unmanned aerial systems (UAS), and drones to conduct airdrops. Ultralight aircrafts predominantly transport marijuana shipments, depositing the drugs in close proximity to the SWB. Currently, as UAS can only carry only small multi-kilogram amounts of illicit drugs, they are not commonly used, although there is potential for increased growth and use, particularly if their carrying capacity is increased. Mexican TCOs also use UAS to monitor the activity of U.S. law enforcement along the SWB to identify cross- border vulnerabilities. [p. 102]

Spillover Violence

Drug-related murders in Mexico continue to reach epidemic proportions. However, there is little spillover violence in the United States as U.S.-based Mexican TCO members generally refrain from inter-cartel violence to avoid law enforcement detection and scrutiny. Mexican TCO-related acts of violence do occur in parts of the United States, particularly along the SWB; however, they are less frequent and mainly associated with ‘trafficker-on-trafficker’ incidents. [p. 103]

Money Laundering Activity 

Mexican TCOs generate billions of dollars annually through the sale of illegal drugs in the United States. They utilize a variety of methodologies to counter law enforcement efforts to identify and confiscate their illicit proceeds in the United States and Mexico. In the United States, Mexican TCOs exploit bulk cash smuggling, the placement of proceeds into the U.S. banking system and electronic transfer to Mexico, the BMPE via networks of money brokers, and the use of Money Service Businesses (MSBs) to transfer the proceeds to Mexico. Inside Mexico, the Mexican TCOs place illicit proceeds into the financial system through foreign exchange businesses, the purchase of assets with cash, and use of front and shell companies to receive electronic transfers in order to conceal the true beneficial ownership of the illicit proceeds. There has also been evidence of the utilization of cryptocurrencies by Mexican TCOs as a means by which to transfer their wealth internationally. [p. 103]

An alarming trend is the increasing presence of Asian MLOs engaged in the laundering of drug proceeds on behalf of the Mexican TCOs. This trend is a result of the imposition of a cap by the Government of China on foreign exchange transactions ($50,000/year) and overseas withdrawals on Chinese bank issued credit and debit cards ($15,000/year). The demand of Chinese nationals to transfer their wealth outside of China and into the United States has fueled the demand for U.S. dollars. Asian MLOs are eager to acquire U.S. dollars (drug proceeds) from the Mexican TCOs in exchange for the payment of pesos in Mexico or their equivalent debts in China via a Chinese Underground Banking System (CUBS) scheme. Asian MLOs resell the U.S. dollars to customers (Chinese nationals within the United States) for a profit, normally in exchange for Renminbi (RMB) payments in China. This demand for foreign exchange, i.e. the U.S. dollar in particular, has provided an outlet for Mexican TCO drug proceeds that is changing the landscape of money laundering within the United States. [p. 103]

Colombian Transnational Criminal Organizations

Collaboration with Mexican TCOs   

While Colombian TCOs control the production and shipment of the majority of cocaine destined for consumption in the United States, Mexican TCOs are responsible for its exportation into and distribution throughout the United States. Mexican TCOs work directly with Colombian sources of supply, often sending Mexican representatives to Colombia, Ecuador, and Venezuela to coordinate cocaine shipments. [p. 104]

Similarly, Colombian TCOs maintain delegates in Mexico to serve as brokers for cocaine orders or illicit money movements. Central American TCOs work with both Mexican and Colombian TCOs for the northbound movement of cocaine and the southbound flow of illicit drug proceeds. [p. 105]