(Just The News)—The U.S. Treasury Department is cracking down on Mexican cartel crude oil smuggling in Texas and along the southwest border.
The department’s Office of Foreign Assets Control on Thursday (OFAC) sanctioned multiple Mexican nationals and Mexico-based entities involved in a drug trafficking and fuel theft network connected to the Mexican cartel, Cartel Jalisco Nueva Generacion (CJNG).
In February, the Trump administration designated CJNG and other Mexican cartels and transnational criminal organizations as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorist (SDGT).
Crude oil smuggling, “huachicol,” is interconnected with “a slew of criminal activities, including fentanyl trafficking,” and a range of violent crimes. It’s considered “the most significant non-drug revenue source for Mexican cartels and other illicit actors,” OFAC said. The thieves, “huachicoleros,” use a variety of means to steal fuel and crude oil from Mexico’s state-owned energy company, Petróleos Mexicanos (Pemex), including bribing and threatening Pemex employees, illegally drilling taps into pipelines, stealing from refineries and hijacking tanker trucks.
Their operations are facilitating “rampant violence and corruption across Mexico, and undercutting legitimate oil and natural gas companies in the United States,” OFAC states.
Stolen fuel is sold on the black market in Mexico and Central America through unregulated roadside fuel stops and cartel-controlled gas stations.
It’s also smuggled into the U.S. by brokers who label it as “waste oil” or hazardous material to evade detection. Stolen crude oil is then sold and shipped to oil and natural gas companies and refineries in Texas and nationwide, as well as to Japan, India, Africa and other countries, investigators found. It’s sold at a significant discount and the illicit proceeds are sent back to the FTOs and SDGTs.
According to law enforcement estimates, the U.S.-based importers earn roughly $5 million for each oil tanker shipment of crude oil to foreign jurisdictions, with multiple tankers leaving Texas ports every month. Most purchasing the shipments are likely unaware they’ve been stolen, OFAC states.
Those sanctioned this week include CJNG leader Mexican national Cesar Morfin Morfin (a.k.a. Primito) of Tamaulipas, for his alleged role in transporting, importing and distributing narcotics, including fentanyl, heroin, methamphetamine, cocaine, and marijuana, and fentanyl and methamphetamine precursor chemicals sourced from China into the U.S.
Primito’s older brother, Alvaro Noe Morfin, was also sanctioned for his alleged role in CJNG narcotics trafficking. Both Primito brothers are on a 10 Most Wanted list in Texas and Tamaulipas, published by U.S. Customs and Border Protection and the Mexican government.
Their younger brother, Remigio Morfin, was also sanctioned for alleged drug trafficking, operating out of Hidalgo, Mexico.
Mexican national Cesar Morfin was also sanctioned for his role in CJNG drug trafficking, as were two of his family members and business associates, who are linked to CJNG fuel theft, OFAC said. However, he’s allegedly now focused primarily on stealing crude oil, OFAC said.
As Trump administration border security efforts shut down illegal entries, Primito’s network refocused their efforts to smuggle crude oil into the U.S., OFAC said. “Given his control over port of entry bridges between the Tamaulipas and Texas border regions, Primito also charges fees to any trucks moving crude into the United States via these routes.” He and his subordinates also allegedly falsify official customs documents to facilitate cross-border smuggling of stolen crude oil, investigators allege.
In addition to the sanctions, OFAC and several federal agencies issued an alert to U.S. financial institutions urging them to vigilantly detect, identify and report suspicious activity that might be connected to stolen crude oil smuggled by FTOs and SDGTs.
“In recent years, fuel theft in Mexico, including crude oil smuggling, has become the most significant non-drug illicit revenue source for the Cartels and enables them to sustain their global criminal enterprises and drug trafficking operations into the United States,” the alert states.
The alert provides an overview of methodologies and financial typologies associated with cartel crude oil smuggling, includes red flag indicators and reminds financial institutions of Bank Secrecy Act reporting requirements.
Since the Trump administration designated Mexican cartels and transnational criminal organizations as FTOs and SDGTs in February, the Treasury Department has sanctioned 11 individuals and six entities affiliated with the Sinaloa Cartel, La Nueva Familia Michoacana, and the Beltran Leyva Organization.
Last September, OFAC also sanctioned nine Mexican nationals and 26 Mexico-based entities linked to CJNG fuel theft activities, including senior CJNG member Ivan Cazarin Molina (a.k.a. El Tanque).
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