EU Facade Companies Buy Huachicol from Cartels
- oil and natural gas companies operating in teh Southwest to smuggle and sell crude oil stolen from Petróleos Mexicanos (Pemex), according to the U.S.
- The Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued an alert May 1, detailing how criminal organizations, including the Sinaloa, Jalisco New Generation, and Gulf cartels, are delivering...
- In many instances, U.S.-based accomplices are leveraging business networks, including shell and front companies, to receive the stolen crude oil from mexican criminal organizations. the oil is transported...
Mexican Cartels Smuggling Stolen Oil into U.S., Treasury dept. Warns
Table of Contents
- Mexican Cartels Smuggling Stolen Oil into U.S., Treasury dept. Warns
- Mexican Cartels Smuggling Stolen Oil into the U.S.: A Q&A
- What is the U.S. Treasury Department warning about?
- Which cartels are involved in this oil smuggling scheme?
- How are the cartels smuggling the stolen oil?
- Where does the stolen oil come from?
- How is the stolen oil being transported into the U.S.?
- What happens to the stolen oil once it’s in the U.S.?
- Where is the smuggled oil being sold?
- How are the cartels profiting from this scheme?
- How do these financial transactions work?
- How does FinCEN describe the overall impact of this scheme?
- What actions does the treasury Department and fincen recommend?
- What tactics do the cartels use to steal the oil in Mexico?
- What is the impact of the oil theft operations in Mexico?
- Why is Mexico vulnerable to this type of crime?
- What are the key facts about this oil smuggling scheme?
WASHINGTON – Mexican cartels are utilizing small U.S. oil and natural gas companies operating in teh Southwest to smuggle and sell crude oil stolen from Petróleos Mexicanos (Pemex), according to the U.S. Department of the Treasury.
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an alert May 1, detailing how criminal organizations, including the Sinaloa, Jalisco New Generation, and Gulf cartels, are delivering fuel falsely labeled as “used oil” to intermediaries in the United States. These intermediaries, acting on behalf of the cartels, then sell the stolen crude at discounted rates to both local and international companies as West Texas Intermediate crude oil, a benchmark in the international market, and other grades.
In many instances, U.S.-based accomplices are leveraging business networks, including shell and front companies, to receive the stolen crude oil from mexican criminal organizations. the oil is transported across the Southwest border in tanker trucks falsely declared as carrying “used oil” or other oil and natural gas byproducts, designed to avoid scrutiny, taxes, and regulations, according to FinCEN.
Stolen Crude Sold on International Markets
Once the stolen crude crosses the border, it is indeed frequently enough stored in mobile storage tanks operated by U.S. companies under the control of Mexican intermediaries or complicit American importers, FinCEN said. The oil is then sold in U.S. and international energy markets,including those in Japan,India,and Africa.
FinCEN estimates that American importers of stolen Pemex oil can reap profits exceeding $5 million per shipment from the United States to other countries, with multiple tanker ships en route each month.
Financial Transactions Masked as Legitimate Business
according to FinCEN, American oil importers receive national and international electronic transfers, a portion of which is then transferred to Mexican companies controlled by the Sinaloa, Jalisco New Generation, and Gulf cartels.
“As part of the scheme, the instructions of electronic transfers fraudulently claim that American importers send payments for invoices associated with the importation of used oil or other hazardous materials to hide the oil smuggling scheme,” the FinCEN document states.
FinCEN asserts that this scheme has allowed the cartels to transform fuel theft in Mexico, including crude oil smuggling, into a primary source of illicit income, supplementing their drug trafficking operations into the United States.
Alert Issued to Financial Institutions
The alert urges U.S. financial institutions to be vigilant in detecting, identifying, and reporting suspicious activities related to the smuggling of stolen crude oil from Mexico across the Southwest border by the Jalisco New Generation Cartel, the Sinaloa Cartel, the Gulf Cartel, and other transnational criminal organizations.
The alert aims to assist financial institutions in detecting, identifying, and preventing the flow of illicit income from Mexican criminal organizations, according to FinCEN.
Mexico, despite being a major oil producer, lacks the refining capacity to process all of its crude oil into sufficient gasoline, diesel, and other fuels to meet domestic demand. This necessitates Pemex and other oil and natural gas companies to export crude and import fuels, a vulnerability exploited by cartels to smuggle thousands of liters of crude oil and generate millions of dollars in illicit gains.
Cartel Tactics and Impact
“The cartels and their ‘huachicoleros’ (fuel thieves) obtain crude oil mainly by bribing corrupt Pemex employees and local government officials, although thay may use other tactics to steal Pemex crude throughout Mexico, such as illegally opening pipelines, stealing from refineries, and threatening Pemex employees,” FinCEN said. “These oil theft operations have generated violence and corruption throughout Mexico and, in some cases, catastrophic pipeline explosions due to illegal perforations.”
The Treasury Department warned that it will continue to pursue cartels and their affiliates under the authority of anti-narcotics and anti-terrorism sanctions.
Mexican Cartels Smuggling Stolen Oil into the U.S.: A Q&A
What is the U.S. Treasury Department warning about?
The U.S. department of the Treasury is warning that Mexican cartels are smuggling stolen crude oil from Petróleos Mexicanos (Pemex) into the United States.
Which cartels are involved in this oil smuggling scheme?
According to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), the Sinaloa, Jalisco New Generation, and gulf cartels are involved in smuggling stolen crude oil.
How are the cartels smuggling the stolen oil?
The cartels use small U.S. oil and natural gas companies operating in the Southwest to deliver fuel falsely labeled as “used oil” across the border. This allows them to avoid scrutiny, taxes, and regulations.
Where does the stolen oil come from?
The stolen oil is taken from Petróleos Mexicanos (pemex), Mexico’s state-owned oil company.
How is the stolen oil being transported into the U.S.?
The oil is transported across the Southwest border in tanker trucks falsely declared as carrying “used oil” or other oil and natural gas byproducts.
What happens to the stolen oil once it’s in the U.S.?
Once the oil crosses the border, it is indeed frequently enough stored in mobile storage tanks operated by U.S. companies controlled by Mexican intermediaries or complicit American importers. It is then sold in U.S. and international energy markets.
Where is the smuggled oil being sold?
The stolen crude oil is sold in U.S. and international energy markets, including those in Japan, india, and africa.
How are the cartels profiting from this scheme?
American importers of the stolen Pemex oil can reap profits exceeding $5 million per shipment from the United States to other countries.
How do these financial transactions work?
American oil importers receive national and international electronic transfers. A portion of these funds is then transferred to Mexican companies controlled by the cartels.The instructions for these transfers fraudulently claim the payments are for used oil or other hazardous materials to hide the oil smuggling scheme.
How does FinCEN describe the overall impact of this scheme?
FinCEN asserts that this scheme has allowed the cartels to transform fuel theft in Mexico, including crude oil smuggling, into a primary source of illicit income, supplementing their drug trafficking operations into the United States.
What actions does the treasury Department and fincen recommend?
The alert urges U.S. financial institutions to be vigilant in detecting,identifying,and reporting suspicious activities related to the smuggling of stolen crude oil from Mexico across the Southwest border. The alert aims to assist financial institutions in preventing the flow of illicit income from Mexican criminal organizations.
What tactics do the cartels use to steal the oil in Mexico?
According to FinCEN, the cartels and their “huachicoleros” (fuel thieves) obtain crude oil mainly by bribing corrupt Pemex employees and local government officials. They may also illegally open pipelines, steal from refineries, and threaten Pemex employees.
What is the impact of the oil theft operations in Mexico?
These oil theft operations have generated violence and corruption throughout mexico and, in some cases, catastrophic pipeline explosions due to illegal perforations.
Why is Mexico vulnerable to this type of crime?
Mexico, despite being a major oil producer, lacks the refining capacity to process all of its crude oil to meet domestic demand. This necessitates Pemex and other oil and natural gas companies to export crude and import fuels, a vulnerability exploited by cartels.
What are the key facts about this oil smuggling scheme?
Here is a summary of the key facts:
| Aspect | Details |
|———————|——————————————————————————————————————————————|
| Stolen Oil Source | petróleos mexicanos (Pemex) |
| Cartels Involved | Sinaloa, Jalisco New Generation, and Gulf cartels |
| Smuggling Method | Falsely labeling oil as “used oil” and transporting it across the Southwest border via tanker trucks |
| Destination Markets | U.S. and international markets,including Japan,India,and Africa |
| Financial Impact | American importers can profit over $5 million per shipment. The scheme supplements the cartels’ drug trafficking operations. |
| U.S. Response | FinCEN alert to financial institutions to monitor, detect and report suspicious transactions. Treasury Department sanctions are possible.|