The U.S. Treasury sanctioned the Los Mayos faction of the Sinaloa Cartel on Thursday, targeting one of Mexico’s most powerful drug trafficking groups operating near the U.S.–Mexico border and along trafficking routes into Texas.
The action freezes assets and bans financial transactions with the faction’s armed wing leader and 20 associates alleged by Treasury to control smuggling routes into California.
The sanctions mark an escalation in the Trump administration’s campaign against Mexican cartels, which were designated as foreign terrorist organizations earlier this year. Treasury officials say the move aims to choke off financial lifelines fueling America’s fentanyl crisis.
“The Sinaloa Cartel is a foreign terrorist organization that continues to traffic narcotics, launder its proceeds, and corrupt local officials,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley. “Today’s action, taken in coordination with our law enforcement partners, demonstrates Treasury’s dedication to President Trump’s priority of stopping the threats across our borders.”
Los Mayos emerged as a dominant faction after the arrests of cartel founders Joaquín “El Chapo” Guzmán and Ismael “El Mayo” Zambada García. The group now battles El Chapo’s sons for control of lucrative trafficking routes.
At the faction’s helm is Juan Jose Ponce Felix, known as “El Ruso,” who commands an armed network in Baja California. A 2015 federal indictment alleged he carried out kidnapping, torture, and murder to protect cartel interests.
The State Department announced a $5 million reward for information leading to El Ruso’s capture. His network extends through Rosarito, a coastal town just 15 miles south of the California border.
Treasury officials alleged in the sanctions notice a web of corruption reaching into Rosarito’s city hall. Former Mayor Hilda Araceli Brown Figueredo was accused of collecting extortion payments for cartel bosses through intermediaries Jesus Gonzalez Lomeli and Candelario Arcega Aguirre.
Gonzalez, a restaurant magnate, owns the Bombay Beach Club, Coco Beach Club, and other nightlife venues across Mexico. Officials said he laundered millions in drug proceeds through these businesses.
The sanctions also target Carlos Alberto Paez Pereda, leader of “Los Rugrats,” a fentanyl production gang in Culiacán. Known as “Carlitos,” he is accused of carrying out assassinations on orders from cartel leadership.
Violence between Los Mayos and rival factions has killed more than 1,000 people in Sinaloa state. The turf war threatens to spill across the border as both sides fight for control of smuggling corridors.
Thursday’s designations freeze all U.S. assets belonging to the sanctioned individuals and companies. American citizens face criminal penalties for conducting business with them.
The action represents close coordination between the Treasury, the DEA’s San Diego office, and federal prosecutors. Officials said the sanctions are intended to disrupt operations flooding the U.S. with fentanyl, cocaine, methamphetamine, and heroin.