Animals sold to Texas ranchers by 2 companies can be seized
By MICHAEL HEDGES
Copyright 2005 Houston Chronicle Washington Bureau
WASHINGTON - The Treasury Department, trying to block an elaborate money-laundering scheme, has announced that two Mexican cattle companies are fronts for drug-trafficking cartels.
The action means that cattle sold by the companies to Texas ranchers after Friday's announcement are subject to seizure by the federal government, said a high-ranking Treasury official who asked not to be named.
"Cattle already purchased and owned before the companies were identified as tied to the drug cartels are not going to suddenly be blocked," the official said.
The Treasury Department plans to inform cattle associations and other groups later this week of the action taken against the Mexican companies, officials said. The Treasury also will provide other information, such as the brands used by the cattle companies linked to the drug cartels.
For now, buyers are expected to practice due diligence when purchasing cattle.
Two Mexican drug cartels were named in the Treasury Department's statement, the Arriola Marquez organization and the Arellano Felix cartel based in Tijuana. The Arriola Marquez group, based in Mexico's Chihuahua state, is linked to Mexican drug kingpin Joaquin "El Chapo" Guzman, the department said. Guzman leads one of the factions fighting for control of Nuevo Laredo and its smuggling routes into Texas, officials have said.
'Another blow' to cartels
Treasury officials said the Arriola Marquez group developed the idea of laundering cash from drug deals by buying large herds of cattle in Mexico.
Identifying the companies laundering drug money "deals another blow to the notorious Mexican drug cartels by targeting their financial webs," said Robert Werner, director of Treasury's Office of Foreign Assets Control.
The two Mexican cattle companies named by the Treasury Department are Corrales San Ignacio S.P.R. de R.L. de C.V. and Del Nortes Carnes Finas San Ignacio S.A. de C.V., both of Mexico's Chihuahua state.
A U.S. company in Presidio called Corrales San Ignacio L.L.C. was identified by the Treasury Department as a "mirror" entity - an organization that exists on paper to give a foreign company a U.S. outlet - officials said. "I don't know that (the Presidio) company has any cattle pens or feed lots," the Treasury official said.
Representatives of the companies could not be reached.
Tommy Guerra, a fourth-generation rancher in Roma, Texas, said the usual process of buying cattle from Mexico involved using a Mexican broker who would take an order, then purchase the animals from auctions or at ranches south of the border. The cattle are then held by the U.S. Agriculture Department for up to a month while they are checked for diseases.
"These are reputable people," Guerra said of the brokers. "Fly-by-night people don't last very long."
Business prohibited
Guerra said he had not heard of the companies linked to drug cartels.
As to whether he thought drug cartels had infiltrated the cattle business in Mexico, he said, "We're talking about another Colombia in Mexico. Who is involved in the drug business would be hard to say."
The United States cannot seize cartel property outside the country. But once the companies have been identified as having links to drug cartels, federal law prohibits anyone from doing business with them. And it allows the federal government to take any property of the groups "in the possession or control of U.S. persons."
It is not clear how many Mexican cattle owned by companies linked to drug cartels had been sold in Texas, said government officials and Texas cattle raisers.
Jimmy Mud, one of the owners of the Cuero Livestock Commission, said he had not heard anything about Mexican drug lords trying to move cattle into Texas for resale.
"I would have heard about that," he said. "I'm sitting here talking to someone who goes all over the area, and he's not heard anything like that. And we would know."
Another official, Matt Brockman, executive vice president for the Texas and Southwestern Cattle Raisers Association, said there's no easy way to determine whether any of cartel-owned cattle had entered Texas markets.
"We've been importing Mexican cattle for decades," he said. "Typically, they are young cattle brought here to go onto feed or grass to be grown out before slaughter."
Most Texas ranchers buying significant numbers of cattle from Mexico have developed relationships with their Mexican counterparts dating back years, Brockman said.
"These are established relationships in which the parties know each other very well," he said.
"When you are talking about transactions involving lots of money, you tend to know who you are dealing with."
Chronicle reporter Terri Langford in Houston contributed to this article.
By MICHAEL HEDGES
Copyright 2005 Houston Chronicle Washington Bureau
WASHINGTON - The Treasury Department, trying to block an elaborate money-laundering scheme, has announced that two Mexican cattle companies are fronts for drug-trafficking cartels.
The action means that cattle sold by the companies to Texas ranchers after Friday's announcement are subject to seizure by the federal government, said a high-ranking Treasury official who asked not to be named.
"Cattle already purchased and owned before the companies were identified as tied to the drug cartels are not going to suddenly be blocked," the official said.
The Treasury Department plans to inform cattle associations and other groups later this week of the action taken against the Mexican companies, officials said. The Treasury also will provide other information, such as the brands used by the cattle companies linked to the drug cartels.
For now, buyers are expected to practice due diligence when purchasing cattle.
Two Mexican drug cartels were named in the Treasury Department's statement, the Arriola Marquez organization and the Arellano Felix cartel based in Tijuana. The Arriola Marquez group, based in Mexico's Chihuahua state, is linked to Mexican drug kingpin Joaquin "El Chapo" Guzman, the department said. Guzman leads one of the factions fighting for control of Nuevo Laredo and its smuggling routes into Texas, officials have said.
'Another blow' to cartels
Treasury officials said the Arriola Marquez group developed the idea of laundering cash from drug deals by buying large herds of cattle in Mexico.
Identifying the companies laundering drug money "deals another blow to the notorious Mexican drug cartels by targeting their financial webs," said Robert Werner, director of Treasury's Office of Foreign Assets Control.
The two Mexican cattle companies named by the Treasury Department are Corrales San Ignacio S.P.R. de R.L. de C.V. and Del Nortes Carnes Finas San Ignacio S.A. de C.V., both of Mexico's Chihuahua state.
A U.S. company in Presidio called Corrales San Ignacio L.L.C. was identified by the Treasury Department as a "mirror" entity - an organization that exists on paper to give a foreign company a U.S. outlet - officials said. "I don't know that (the Presidio) company has any cattle pens or feed lots," the Treasury official said.
Representatives of the companies could not be reached.
Tommy Guerra, a fourth-generation rancher in Roma, Texas, said the usual process of buying cattle from Mexico involved using a Mexican broker who would take an order, then purchase the animals from auctions or at ranches south of the border. The cattle are then held by the U.S. Agriculture Department for up to a month while they are checked for diseases.
"These are reputable people," Guerra said of the brokers. "Fly-by-night people don't last very long."
Business prohibited
Guerra said he had not heard of the companies linked to drug cartels.
As to whether he thought drug cartels had infiltrated the cattle business in Mexico, he said, "We're talking about another Colombia in Mexico. Who is involved in the drug business would be hard to say."
The United States cannot seize cartel property outside the country. But once the companies have been identified as having links to drug cartels, federal law prohibits anyone from doing business with them. And it allows the federal government to take any property of the groups "in the possession or control of U.S. persons."
It is not clear how many Mexican cattle owned by companies linked to drug cartels had been sold in Texas, said government officials and Texas cattle raisers.
Jimmy Mud, one of the owners of the Cuero Livestock Commission, said he had not heard anything about Mexican drug lords trying to move cattle into Texas for resale.
"I would have heard about that," he said. "I'm sitting here talking to someone who goes all over the area, and he's not heard anything like that. And we would know."
Another official, Matt Brockman, executive vice president for the Texas and Southwestern Cattle Raisers Association, said there's no easy way to determine whether any of cartel-owned cattle had entered Texas markets.
"We've been importing Mexican cattle for decades," he said. "Typically, they are young cattle brought here to go onto feed or grass to be grown out before slaughter."
Most Texas ranchers buying significant numbers of cattle from Mexico have developed relationships with their Mexican counterparts dating back years, Brockman said.
"These are established relationships in which the parties know each other very well," he said.
"When you are talking about transactions involving lots of money, you tend to know who you are dealing with."
Chronicle reporter Terri Langford in Houston contributed to this article.
