Asset Search Blog : Asset Search & Hidden Assets : Lawyer & Attorney Fred Abrams : Tax Fraud, Asset Investigations

"A Strategy Of Seizing Sinaloa Drug Cartel Assets" is about the U.S. Department of Justice's use of asset forfeiture against Mexico's drug cartels.  U.S. Treasury's Office of Foreign Assets Control ("OFAC") pursues this forfeiture policy alongside the Department of Justice.  As explained by my February 11, 2009 "Asset Search News Roundup", the OFAC can list drug traffickers as "Specially Designated Narcotics Traffickers". 

If a drug trafficker is placed on the "Specially Designated Narcotics Traffickers" list, than his / her assets subject to U.S. jurisdiction are frozen.  A February 25, 2010 press release reveals that the OFAC added seven supposed leaders of the La Familia Michoacana (La Familia) drug cartel, to the Specially Designated Narcotics Traffickers list.  These seven suspected La Familia leaders are depicted in an OFAC link chart:

Chart Courtesy of U.S. Treasury's OFAC

Copyright 2010 Fred L. Abrams

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The January 6th article "Three in al Qaeda drug case plead not guilty in NY" discussed suspected terrorist financing by some West African men.  According to a December 18, 2009 press release, the criminal case against these men involved the alleged transnational funding of Al Qaeda terrorists through narco-trafficking.

"Terrorist Financing, Money Laundering & Financial Intelligence Units" referred to another case of suspected terrorist funding.  It mentioned the Egmont Group's money laundering typology case numbered 06063:

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In "Forfeiture & The DEA's Asset Search" Donnie the former DEA Special Agent spoke about the effectiveness of asset forfeiture.  In that article, Donnie said: 'asset forfeiture... can stop those who supply pseudophedrine to the meth super labs and Mexican cartels'.  "A Strategy Of Seizing Sinaloa Drug Cartel Assets" also recently explained that asset forfeiture was a vital tool in the fight against the Mexican drug cartels.

Notwithstanding the benefits of an ethical asset forfeiture program, there can be occasional abuses.  Eight plaintiffs raise the issue of supposed improper seizure or asset forfeiture in James Morrow et. al. v. City of Tenaha Deputy City Marshal Barry Washington et. al., U.S. District Court for the Eastern District of Texas, Index No. 2:08-CV-288.  These plaintiffs claim in their civil rights lawsuit pursuant to 42 U.S.C §1983, that some law enforcement officers in or near Tenaha Texas, had essentially seized assets in a racial profiling scheme. 

Furthermore, an August 20, 2009 Memorandum Decision & Order reveals that the presiding judge intends to certify the plaintiffs' case as a class action lawsuit under Fed. R. Civ. P. 23(b)(2).  The plaintiffs who are African-Americans, assert they were driving in Tenaha Texas or on nearby state Highway 59.  They allege they were subjected to unconstitutional traffic stops and cash seizures based on their race or ethnicity. 

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A U.S. Army Sergeant pleads guilty to taking bribes, then trying to conceal them in a money laundering conspiracy and $32.8 million in U.S. currency is interdicted because of "Project Coronado":

 *A U.S. Department of Justice press release describes the conviction of Army Sergeant Ana C. Chavez for a public corruption scheme which had bribery and money laundering components.  The Sergeant pleaded guilty on October 20, 2009 to taking $90,000 in bribe monies and trying to hide them in U.S. bank accounts through a money laundering conspiracy.  I already wrote about these kinds of public corruption schemes at: "Army Major Arrested For Money Laundering" and "Second Army Major Guilty Of Bribery".

*Another press release states that Project Coronado netted $32.8 million in suspected drug-related currency along with 11.7 tons of drugs.  Project Coronado resulted in almost 1200 arrests and focused on La Familia Michoacán, which is reportedly the most violent of Mexico's five drug cartels.  On April 15, 2009  La Familia Michoacán was placed on U.S. Treasury's Specially Designated Nationals List pursuant to the Kingpin Act.  This designation freezes any La Familia assets subject to U.S. jurisdiction, as described by my February 11, 2009 "Asset Search News Roundup".  Finally multiple cities were involved in Project Coronado:

Map Courtesy Of: U.S. Drug Enforcement Administration

Copyright 2009 Fred L. Abrams

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Holocaust-era assets and drug-related assets are both covered by this "Asset Search News Roundup": 

*My article "Searching For Nazi-Looted Art" described the Holocaust-era assets / contested provenance case of Bakalar v. Vavra, Index No. 05-CV-3037 (S.D.N.Y.).  The trial court in Bakalar rejected the claim that Egon Schiele's "Seated Woman With Bent Left Leg (Torso)" was Nazi-looted art ransacked during the Holocaust from Austrian-Jewish entertainer Fritz Grunbaum.  Bakalar, is now on appeal in the Second Circuit of the U.S. Court of Appeals and there was an oral argument in it on October 9, 2009.

 **"Interdicting The Assets Of Mexico's Narco-Traffickers" included a U.S. Treasury Office of Foreign Assets Control link chart and press release from October 2008.  This link chart and press release basically indicated that Telesforo Baltazar Tirado Escamilla was subject to sanctions under the Foreign Narcotics Kingpin Designation Act (21 U.S.C. § 1901-1908, 8 U.S.C. § 1182) and Executive Order 12978 of October 21, 1995.

Telesforo Baltazar Tirado Escamilla was sanctioned for supposedly using his "Productos Farmaceuticos Collins" company to supply the Mexican narco-trafficking Amezcua Contreras Organization with the precursor materials for methamphetamine production.

The Office of Foreign Assets Control recently claimed via its September 2009 link chart and press release, that Telesforo Baltazar Tirado Escamilla had attempted to evade the sanctions.  He is accused of evading the sanctions by using "key front individuals", as the September 2009 link chart reveals:

Link Chart: U.S. Treasury Office Of Foreign Assets Control

Copyright 2009 Fred L. Abrams

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The U.S. Department of Justice believes that seizing assets from Mexican drug cartels can generally help combat cross-border murder, kidnapping, robbery, etc.  Through the person of the Criminal Division's Assistant Attorney General Lanny A. Breuer, the Department of Justice reiterated its desire to seize the illicit assets of illegal narco-traffickers.

Assistant Attorney General Breuer stated at a July 22, 2009 conference, that U.S. asset forfeiture and money laundering laws gave authorities the necessary tools to trace and then seize illicit drug-related assets.  He stressed the importance of disrupting the finances of narco-traffickers because their existence was fueled by large sums of cash.  The Assistant Attorney General also said that prosecutors should conduct financial investigations and add asset forfeiture claims to indictments in their criminal cases. 

He additionally stated in a July 9, 2009 hearing before a committee of the U.S.House of Representatives, that: "... seizing the financial infrastructure of the cartels undermines their very existence".  During the Assistant Attorney General's July 9 and July 22 statements, he specifically mentioned Operation Xcellerator, which had targeted the Sinaloa drug cartel.  A May 17, 2007 news release also discussed Sinaloa narco-trafficking.  It.claimed that Ismael Zambada Garcia, (as a supposed Sinaloa trafficker), had laundered drug monies via the following financial network:

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A financial transfer through multiple jurisdictions which lacks any economic benefit, may especially be a red flag that assets have been hidden.  Although a variety of people sometimes use multiple jurisdictions to hide assets, this "Asset Search News Roundup" is about the front and / or shell companies reportedly used by the Fabio Enrique Ochoa Vasco drug trafficking network in Mexico, Colombia and the Caribbean.

According to a U.S. Treasury Department press release from yesterday, the Ochoa Vasco financial network includes the fifteen companies identified in the chart below.  Information about some other narco-traffickers can be found at: "Interdicting The Assets Of Mexico's Narco-Traffickers".

Click On Chart To Enlarge

Chart: Office Of Foreign Assets Control, U.S. Treasury

Copyright 2009 Fred L. Abrams

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Narco-traffickers who conduct their illicit activities across the U.S.-Mexican border may fall under the Foreign Narcotics Kingpin Designation Act (21 U.S.C. § 1901-1908, 8 U.S.C. § 1182) and Executive Order 12978 of October 21, 1995.  Assets are frozen under the Foreign Narcotics Kingpin Designation Act ("the Kingpin Act"), if they are subject to U.S. jurisdiction and belong to persons or entities designated as Specially Designated Narcotics Traffickers on the "Specially Designated Nationals and Blocked Persons" list.

This list was just changed on April 15, 2009 to reflect the Kingpin Act designation of the Mexican: Sinaloa drug cartel, Familia Michoacana and “Los Zetas".  The Amezcua Contreras Organization of Mexico is also on the Specially Designated Nationals and Blocked Persons list and was put there as early as December 2000.  According to an October 2, 2008 press release, the Amezcua Contreras Organization supplied precursor materials for methamphetamine production.  The Amezcua Contreras Organization is portrayed below:

Like those in the above image, Zhenli Ye Gon was accused of providing precursor materials for the manufacture of methamphetamine.  As mentioned by my post "Forfeiture & The DEA's Asset Search", Ye Gon had been arrested in Maryland on July 23, 2007 on methamphetamine drug and money laundering charges.  He had hidden $207 million in his Mexico City residence until law enforcement interdicted it on March 20, 2007.  The discovery of these monies was the "[l]argest cash drug seizure the world has ever seen", according to p. 166, Drug Enforcement Administration, 2003-2008.  Said $207 million is pictured below:    

  Copyright 2009 Fred L. Abrams

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The U.S. Treasury Department's Office of Foreign Assets Control ("OFAC") is the focus of this "Asset Search News Roundup".  OFAC administers economic and trade sanctions against international drug traffickers, terrorists and certain countries under Presidential national emergency powers or federal laws.  In order to impose such economic sanctions, OFAC or other governmental authorities search for assets owned by those on the Specially Designated Nationals and Blocked Persons list. 

OFAC for example, recently designated pharmaceutical company AQUILEA, S.A. and plastic bag manufacturer MEGAPLAST, S.A., as Specially Designated Narcotics Traffickers pursuant to Executive Order 12978.  As a U.S. Treasury Department press release explained, this designation freezes any assets subject to U.S. jurisdiction, which belong to MEGAPLAST or AQUILEA. 

Said press release also suggests that the true beneficial ownership of MEGAPLAST and AQUILEA, (by drug kingpins Miguel Rodriguez Orejuela and Gilberto Rodriguez Orejuela), may have been concealed.  Furthermore, the following OFAC chart indicates that these drug kingpins might have concealed their MEGAPLAST and AQUILEA assets through family members used as nominees:

Image: U.S. Treasury's Office of Foreign Assets Control

Copyright 2009 Fred L. Abrams

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"I'm out of the asset forfeiture business and Title-III wiretaps too", Donnie remarked as we discussed the Drug Enforcement Administration's on-going effort to find hidden assets related to drug trafficking and other crime.  Donnie had retired from the DEA after serving twenty-one years as a Special Agent.  Now he was deployed to the Green Zone in Iraq to teach Iraqi police through the International Criminal Investigative Training Assistance Program of the Department of Justice.


Special Agents like Donnie often develop a great deal of expertise in conducting an asset search since asset forfeiture allows them to seize the proceeds of drug trafficking, money laundering, or organized crime.  For example, while Donnie had been stationed in El Paso Texas in 1988, (and also worked in Bolivia), he, another Special Agent, and the Mexican Federal Police seized $6-8 million in drug money.  By following the money trail, Donnie and his co-agent forfeited the $6-8 million because of its relation to their earlier seizure of 21 tons of cocaine in Sylmar, California.


My discussion with Donnie quickly drifted toward Zhenli Ye Gon's arrest in Maryland on July 23, 2007 on methamphetamine drug and money laundering charges. Ye Gon was accused of supplying chemicals used to manufacture methamphetamine through his pharmaceutical wholesale business based in Mexico City, Mexico.  According to a Special Agent's affidavit, the more than $207 million seized from Ye Gon's Mexico City residence was "hidden in various compartments, false walls, suitcases, and closets."  Also seized from Ye Gon's Mexico City corporate headquarters were $111,000 dollars; documents regarding domestic and offshore bank accounts; and wire transfer confirmations from Mexican money exchange houses to various banks.  As Ye Gon's criminal indictment In the U.S. District Court for the District of Columbia further indicated, the government sought to forfeit his money and other assets pursuant to 21 U.S.C. §§ 853 and 970.


Given all of the above, Donnie finally said: "Because of its impact on organized crime, asset forfeiture is one of the things that can stop those who supply pseudophedrine to the meth super labs and Mexican cartels.  Asset forfeiture works so well that it has even become a kind of gold rush".  I then thought about the $ 1,143,341,308 in net deposits for 2006 made into the Department of Justice's Assets Forfeiture Fund-- which is a repository for just some of the federal agencies that forfeit assets.


Copyright 2007 Fred L. Abrams

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