Key facts
- The U.S. Treasury sanctioned two individuals and nine companies linked to the Jalisco New Generation Cartel's fuel smuggling operations.
- The scheme involves evading Mexican import taxes on fuel and generates hundreds of millions of dollars annually for the cartel.
- The Treasury issued a bank alert to financial institutions to identify red flags in the cross-border fuel trade.
- Fuel smuggling and stolen crude oil are the second-largest revenue sources for Mexican cartels after drugs.
The U.S. Treasury announced sanctions against two Mexican nationals and nine entities connected to a fuel smuggling scheme linked to the Jalisco New Generation Cartel (CJNG). The scheme allegedly moves fuel from the United States into Mexico, evading significant import taxes and generating hundreds of millions of dollars annually for the cartel. According to the U.S. government, smuggled fuel and stolen crude oil have become the second-largest revenue source for Mexican cartels, surpassed only by drug trafficking.
Treasury Secretary Scott Bessent stated that this action underscores the expanding criminal enterprises of Mexican cartels beyond traditional drug trafficking. The Treasury detailed that these networks evade taxes through methods such as misclassifying customs documentation and bribing government officials. Complicit U.S. companies reportedly facilitate the diversion of fuel using front and shell companies. The smuggled fuel is then sold in Mexico through cartel-controlled stations and unregulated roadside stops at a substantial profit, with proceeds laundered through investments in luxury goods and real estate.
In addition to the sanctions, the Treasury issued new guidance to financial institutions, including banks, to help them identify red flags associated with cross-border fuel trade. Among those sanctioned were Oscar Juraidini and seven companies he controls, designated for acting on behalf of CJNG, and J. Refugio Ruiz along with his two logistics companies, for providing material support to the cartel.