Sanctions: US Treasury explains its actions in banning dealings with Mexican drug lords

Today's designations were taken pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), which prohibits U.S. persons from conducting transactions with the designees and freezes any assets they may have under U.S. jurisdiction. Alejandro Flores Cacho, a pilot, controls a multinational drug transport network in coordination with Sinaloa Cartel members Joaquin Guzman Loera and Ismael Zambada Garcia, both of whom were previously identified by the President as significant foreign narcotics traffickers pursuant to the Kingpin Act.

Today's action exposes Alejandro Flores Cacho's cadre of pilots and operatives who coordinate the delivery and distribution of narcotics by air and sea from South America to Mexico and then on to the United States. Flores Cacho's organization's aviation wing is supported by Mantenimiento, Aeronautica, Transporte, y Servicios Aereos S.A. de C.V., an aircraft hangar and maintenance business located in Toluca, Mexico; Capicitacion Aeronautica Profesional S.C., a flight school in Cuernavaca, Mexico used to train pilots involved in drug trafficking; and Aero Express Intercontinental S.A. de C.V., a Mexico City-based air cargo carrier – all designated by OFAC today.

"Today's designation targets the network of Alejandro Flores Cacho, who has used his air cargo and financial front companies to move drugs and money on behalf of the Sinaloa Cartel," said OFAC Director Adam Szubin. "Treasury will continue to target the Mexican drug cartels in support of the Government of Mexico's dedicated and courageous efforts to combat narcotics trafficking and money laundering."

Flores Cacho's network of financial operatives includes his wife, Diana Lorena Toro Diaz, and brother, Javier Flores Cacho, who, along with others, operate a variety of front companies, including a restaurant, a cattle ranch, an agricultural business, a manufacturing and distribution firm, a sports management club, an electronics company, and an office supplies store. Legal adviser and principal front person for Flores Cacho, Arturo Ruiz de Chavez Martinez, and Rafael Duarte Torres, a bulk cash smuggling coordinator for the organization, were also designated today.

OFAC has also blocked, pending investigation, an additional five entities located in Mexico City that evidence indicates are owned and operated by individuals designated today, including Javier Flores Cacho, Diana Lorena Toro Diaz, Arturo Ruiz de Chavez Martinez, and Enrique Torres Gomez.

Alejandro Flores Cacho and Ricardo Garcia Sanchez, one of his key lieutenants also designated today, are fugitives from U.S. authorities. In May 2008, the U.S. District Court for the Southern District of Texas indicted both individuals on charges of drug trafficking and money laundering.

Supported by the Drug Enforcement Administration and its Houston Field Division, today's action is the latest in a series of efforts by OFAC to apply financial measures against significant foreign narcotics traffickers worldwide.

Today's action is complimented by the ongoing efforts of Mexico's Procuraduría General de la República - Subprocuraduría de Investigación Especializada en Delincuencia Organizada to combat money laundering in Mexico.

Internationally, OFAC has designated nearly 800 businesses and individuals linked to 87 drug kingpins since June 2000. Penalties for violations of the Kingpin Act range from civil penalties of up to USD1.075 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to USD5 million. Criminal fines for corporations may reach USD10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

The full list of those banned under this order is at www.BankingInsuranceSecurities.com