By AML Intelligence Correspondents
U.S. Treasury Secretary Janet Yellen today (Thursday) announced new sanctions on leaders of a Mexican drug cartel involved in trafficking fentanyl and its pre-cursor chemicals into the U.S. as part of a broader push to try to stem the flow of the deadly synthetic opioid.
Yellen also announced a new supplemental advisory to banks from the Treasury’s Financial Crimes Enforcement Network (FinCEN) to help them identify and report suspicious transactions related to procurements of fentanyl precursor chemicals and manufacturing equipment by Mexico-based criminal organizations from China.
The new guidance includes “red flags” for banks and other counterparties, including transactions linked to chemical and pharmaceutical companies in China or Hong Kong, or a vendor on an e-commerce or “darknet” site using Chemical Abstracts Service numbers to identify offerings.
Mexican companies with little or no online presence or that predominantly do business with Chinese chemical or pharmaceutical companies also should be treated with suspicion, according to the guidance.
Reporting of such transactions will help FinCEN and partner agencies track down traffickers, Yellen said, calling it an “important step” in the fight against fentanyl and other synthetic opioids.
“This allows us to follow the money behind the illicit fentanyl supply chain and go after the criminals perpetrating and profiting off of the opioid epidemic,” Yellen said in prepared remarks to be delivered at the Richard B. Russell Federal Building in Atlanta.
Yellen also called for increased cooperation with Mexico on curbing trafficking of fentanyl and its precursor chemicals, and said the Biden administration would emphasize this in its engagement with Mexican President-elect Claudia Sheinbaum.
Yellen announced the sanctions against eight leaders and eight affiliates of the La Nueva Familia Michoacana cartel during a trip to Georgia, a key battleground state in the Nov. 5 presidential election.
In addition to fentanyl, Treasury said La Nueva Familia Michoacana trafficks cocaine and methamphetamines into the U.S. and smuggles migrants across the southern U.S. border.
The sanctions cut the targets off from the dollar-based financial system and freeze any assets that they may have in the U.S. or in U.S.-based institutions.
FinCEN issued the Supplemental Advisory to highlight critical new information to help U.S. banks and other financial institutions guard against activity associated with the illicit fentanyl supply chain.
The advisory includes new trends and red flags that can be indicators of activity associated with the procurement of precursor chemicals and manufacturing equipment used for the synthesis of illicit fentanyl and other synthetic opioids. Reporting from financial institutions of suspected financial transactions involving illicit fentanyl and narcotics trafficking plays a key role in law enforcement investigations and Treasury’s sanctions efforts globally.
“The opioid crisis, and especially the rise of synthetic opioids like fentanyl, has devastated communities and claimed the lives of hundreds of thousands of Americans. President Biden and I are committed to using every tool we have to target illicit fentanyl and its precursor chemicals so we can disrupt these deadly supply chains,” said Secretary of the Treasury Janet L. Yellen.
“Treasury has unique capabilities and expertise to target the financial flows of these cartels who are poisoning our communities, and going after them is a top priority for me and the Department,” she added.
Over the past two years, Treasury has sanctioned more than 250 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.
Additionally, FinCEN and IRS CI recently established a new public-private information-sharing partnership series called “Promoting Regional Outreach to Educate Communities on the Threat of Fentanyl” (or PROTECT). Launched as part of the Counter-Fentanyl Strike Force, the PROTECT series brings law enforcement agencies and financial institutions together to share typologies and approaches on combatting illicit fentanyl trafficking in U.S. cities that are highly impacted by the opioid epidemic.
LA NUEVA FAMILIA MICHOACANA’S INVOLVEMENT IN DRUG TRAFFICKING AND HUMAN SMUGGLING
Historically, La Nueva Familia Michoacana trafficked mostly methamphetamine. However, in recent years, it has expanded into fentanyl trafficking, obtaining the necessary precursor chemicals, purchasing critical pill press machines, and then producing fentanyl in throughout Mexico, including in Mexico City, Pineda, Santa Teresa, Ciudad Altamirano, Tejupilco, Arcelia, Cuernavaca, Culiacan, Guadalajara, and Toluca, Mexico.
La Nueva Familia Michoacana sends fentanyl and other drugs to the United States through Nuevo Laredo and Tamaulipas/Reynosa across the southern Texas border via buses, among other modes of transportation. Once the drugs are in the United States, the drugs are then sent to multiple cities across the United States, including Atlanta, Houston, Dallas, Tulsa, Chicago, and Charlotte.
La Nueva Familia Michoacana is also involved in human smuggling. For instance, La Nueva Familia Michoacana members stage photos and videos in which individuals appear under interrogation or at risk of being murdered. With these photos or videos in hand, the individuals will then falsely claim to United States immigration officials their purported need to seek asylum in the United States. In return for this service, the individuals pay La Nueva Familia Michoacana money.
Separately, La Nueva Familia Michoacana is also known for forcing individuals to enter the United States illegally with drugs for the purpose of selling narcotics in the United States. If the individuals do not comply with the order to sell the drugs provided by La Nueva Familia Michoacana, they are informed that they and their families will be killed. La Nueva Familia Michoacana also uses workers in the tobacco industry to smuggle narcotics into the United States.
TOP LEADERS OF LA NUEVA FAMILIA MICHOACANA
Rodolfo Maldonado Bustos is a powerful and trusted member of La Nueva Familia Michoacana cartel and is next-in-line to Johnny Hurtado Olascoaga and Jose Alfredo Hurtado Olascoaga, the two co-leaders of La Nueva Familia Michoacana, both of whom OFAC designated in November 2022. Rodolfo Maldonado Bustos controls the drug routes that pass from Ciudad Altamirano, Guerrero, Mexico to the Zihuatanejo-Lazaro Cardenas, Guerrero, Mexico area. On April 23, 2017, a federal grand jury in the United States Attorney’s Office for the Northern District of Georgia returned an indictment against Rodolfo Maldonado Bustos on two counts of heroin conspiracy charges.
Josue Ramirez Carrera is a financial leader and third-in-line in the leadership of La Nueva Familia Michoacana. Josue Ramirez Carrera is in control of laundering drug money for the La Nueva Familia Michoacana cartel through used clothing business. He is also involved in arms trafficking where he directs people along the Rio Grande Valley to conceal weapons within packs of used clothing destined for Mexico City.
Josue Lopez Hernandez is a key lieutenant for La Nueva Familia Michoacana and has significant regional connections with other cartels such as CJNG.
David Duran Alvarez is a key lieutenant for La Nueva Familia Michoacana and is known to send various drugs to Houston, Texas.
Uriel Tabares Martinez is a sicario, or assassin, that works directly for Johnny Hurtado Olascoaga and Jose Alfredo Hurtado Olascoaga. He is known to have a La Nueva Familia Michoacana leadership role in the Guerrero/Ciudad Altamirano region of Mexico. He is known as “El Medico” for the violent and surgical manner in which he tortures and murders those that cross the high-ranking members of the La Nueva Familia Michoacana cartel.
Kevin Arzate Gomez is a key lieutenant for La Nueva Familia Michoacana and has contacts and associates along the Mexico/United States border. Kevin Arzate Gomez negotiates on behalf of the cartel to have drugs enter the United States and assists in getting the money from those drugs sales back to Mexico.
Euclides Camacho Goicochea works closely with Rodolfo Maldonado Bustos and Uriel Tabares Martinez. He moves a significant amount of drugs, particularly methamphetamine, to Houston, Texas, and Atlanta, Georgia, among other areas. On August 23, 2017, a federal grand jury in the United States Attorney’s Office for the Northern District of Georgia returned an indictment against Euclides Camacho Goicochea on two counts of heroin conspiracy charges and one charge of money laundering.
Lucio Ochoa Lagunes is a key lieutenant for La Nueva Familia Michoacana and works directly for Jose Hurtado Olascoaga. He is also a leader of a sub-plaza in Tlapehuala, Guerrero, Mexico.
Rodolfo Maldonado Bustos, Kevin Arzate Gomez, and Euclides Camacho Goicochea are being designated for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production.
Josue Ramirez Carrera, Josue Lopez Hernandez, David Duran Alvarez, Uriel Tabares Martinez, and Lucio Ochoa Lagunes are being designated for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, La Nueva Familia Michoacana.
FINCEN SUPPLEMENTAL ADVISORY
Today’s Supplemental Advisory builds off FinCEN’s 2019 Advisory with new typologies and red flags to assist financial institutions in identifying and reporting suspicious transactions potentially related to Mexico-based transnational criminal organizations (TCOs) and their illicit procurement of fentanyl precursor chemicals and manufacturing equipment from People’s Republic of China (PRC)-based suppliers.
Mexico-based TCOs have become the predominant suppliers of illicit fentanyl and other synthetic opioids into the United States since 2019. These TCOs purchase precursor chemicals and manufacturing equipment from PRC-based suppliers and through chemical brokers to synthesize illicit fentanyl and other synthetic opioids in clandestine labs in Mexico. These TCOs then traffic these highly addictive and deadly drugs across the U.S. southwest border and into American communities.
The Supplemental Advisory furthers FinCEN’s focus on combating the financing behind drug trafficking organization activity and transnational criminal organization activity—two of FinCEN’s Anti-Money Laundering/Countering the Financing of Terrorism National Priorities—and is being issued pursuant to Section 3202ofthe recently enacted FEND Off Fentanyl Act.
It also advances efforts of the North American Drug Dialogue Illicit Finance Working Group, which is comprised of the financial intelligence units (FIUs) of Canada, Mexico, and the United States; among other goals, the three FIUs have spent the last year, since the working group was formed, exploring possible indicators related to illicit fentanyl.
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.
Click here for the FinCEN Supplemental Advisory.
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