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July 12, 2006
HP-08
Treasury Identifies Money Laundering Cell of the Arellano Felix Organization
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today identified 34 companies and individuals associated with two Mexican drug cartels, the Arellano Felix Organization and the Arriola Marquez Organization, pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Both the Arellano Felix Organization (AFO) and Arriola Marquez Organization (AMO) were previously named by the President as Mexican drug kingpins under the Kingpin Act.
"Our action designates a key financial cell of Mexico's notorious Arellano Felix Organization," said Barbara Hammerle, Acting Director of OFAC. "This financial network, headed by Mexican national Lorenzo Arce Flores, utilizes money service businesses and other front companies in Mexico to launder the AFO's monies. Our designation process exposes the financial nerve center of Mexican drug cartels, thereby encumbering efforts to bankroll illicit proceeds."
"Taking down multinational drug organizations such as the AFO and AMO requires a two-pronged approach – arresting the traffickers and seizing their financial assets. DEA and its OFAC partners are committed to bringing traffickers from the kingpin to the runner to justice while at the same time stripping them of the money and assets they need to carry on their illicit operations," said Donald Semesky, Chief of Financial Operations for the Drug Enforcement Administration (DEA).
The first OFAC action targets an Arellano Felix Organization money laundering cell, run by key individual Lorenzo Arce Flores, comprised of 14 companies and 15 individuals located in Tijuana, Baja California, Mexico. The second OFAC action identifies five individuals who are financial operatives of the Arriola Marquez Organization in the state of Chihuahua, Mexico.
"Whenever money and drugs intertwine for illicit profit, our financial expertise will be utilized to unravel the most complex and sophisticated money laundering schemes", said Special Agent in Charge Kenneth Hines, IRS Criminal Investigation, San Diego Field Office
Lorenzo Arce Flores is a key AFO money launderer who is also tied to AFO lieutenant, Jesus Abraham Labra Aviles. The AFO was designated as a drug kingpin by the President in June 2004 and Jesus Abraham Labra Aviles was designated by OFAC in November 2004. Lorenzo Arce Flores directs an extensive and diversified operation which facilitates money laundering and bulk smuggling of cash across the border. OFAC has identified several Mexican money service businesses that are part of the Arce Flores network, including CAJA AMIGO EXPRESS S.A. DE C.V., OPERADORA DE CAJA Y SERVICIOS S.A. DE C.V., MULTICAJA DE TIJUANA S.A. DE C.V. and PROFINSA, all located in Tijuana, Baja California, Mexico. In addition, a Mexican armored car company, STRONG LINK DE MEXICO S.A. DE C.V., is named as part of this money laundering operation.
Lorenzo Arce Flores' principal money laundering method is the smuggling of U.S. currency into Mexico. It is then converted into Mexican Pesos through a number of money service businesses (commonly referred to as "casas de cambio" or "centros cambiarios") that he or AFO lieutenant Jesus Abraham Labra Aviles own or control. Two key Arce Flores operatives, Frederico Carlos Torres Ramirez and Nancy Karina Rocha Lopez, were also designated today. The 29 companies and individuals designated by OFAC are all key components in this money laundering cell's operations.
Today's OFAC action also targets 5 individuals, previously blocked pending investigation, that are part of the Arriola Marquez Organization's financial network. These individuals include key family members of Mexican drug kingpin Oscar Arturo Arriola Marquez and other key individuals who control CORRALES SAN IGNACIO S.P.R. DE R.L. DE C.V., a large cattle breeding company in Chihuahua, Mexico previously named by OFAC in August 2005.
Oscar Arturo Arriola Marquez, Miguel Angel Arriola Marquez and the Arriola Marquez Organization were all identified by President Bush as drug kingpins on June 1, 2005. Oscar and Miguel Arriola Marquez were indicted in the District of Colorado for federal drug trafficking and money laundering violations. Both are currently incarcerated in Mexico awaiting extradition to the U.S.
OFAC attributes close coordination with the Drug Enforcement Administration (DEA) as a key factor in today's enforcement action. Notably, the San Diego and El Paso/Juarez Field Divisions, as well as Immigration and Customs Enforcement in San Diego, the IRS-CI San Diego and the Imperial County Narcotics Information Network (NIN) in San Diego.
The entities and individuals designated today are subject to the economic sanctions imposed against narcotics traffickers under the Kingpin Act. Today's action by OFAC freezes any assets found in the United States and prohibits all financial and commercial transactions between the designees and any U.S. person.
The action taken today brings the total number designated under the Kingpin Act to 270: 62 drug kingpins worldwide and 79 companies and 129 other individuals in Mexico, Colombia, Jamaica, Peru, Thailand and St. Kitts.
A complete list of the individuals and entities designated today may be accessed here: http://www.treasury.gov/offices/enforcement/ofac/actions/index.shtml
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