Volkswacht Bodensee - US Treasury sanctions target alleged drug cartel-linked fuel smuggling ring

The fuel theft scheme involved cross-border smuggling between the United States and Mexico, falsified customs documents and shell companies, allowing the cartel to evade taxes and generate millions of dollars each year, the Treasury said in a statement.

The new sanctions target two Mexican nationals and nine companies allegedly linked to the plot.

The United States has stepped up its fight against Latin American drug gangs under President Donald Trump, designating several cartels -- including Jalisco New Generation (CJNG) -- as terrorist organizations.

Smuggled or adulterated fuel -- known in Mexico informally as "huachicol" -- has grown in prominence as a revenue generator for drug cartels in recent years.

The US Treasury estimated fuel smuggling by cartels had cost the Mexican government tens of billions of dollars in lost revenues.

The scheme involves fuel and crude oil stolen from Mexico's state-owned oil company and then sold on the black market domestically or smuggled into the United States.

The fuel is stolen through a variety of means, including illegally tapping pipelines, stealing from refineries, hijacking tanker trucks, and bribing or threatening officials.

The cartels are also accused of purchasing fuel in the United States and smuggling it into Mexico, thereby evading taxes and selling it at a vast profit at cartel-affiliated gas stations.

"Today's action highlights the extent to which Mexico's cartels are expanding beyond traditional drug trafficking to generate revenue for their criminal organizations, which continue to traffic deadly drugs that kill Americans," said US Treasury Secretary Scott Bessent.

CJNG is one of Mexico's most prominent and violent drug gangs.

In February, following the killing of its leader Nemesio "El Mencho" Oseguera, CJNG gunmen blocked highways and set fires across 20 of Mexico's 32 states, bringing life in those areas to a standstill.

T.Suter--VB