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Mexican cartels diversify into fuel, tortillas and flooring
The cartels’ reach extends into many areas of Mexico’s economy, from food production to fuel.
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MEXICO CITY — In a small town in the western Mexican state of Michoacán, members of a criminal group forced residents to pay for high-cost internet service — or face death.
After these threats, residents made monthly extortion payments and at the same time reported the situation. authorities.
After months of investigations, authorities searched three properties and found evidence such as antennas, internet repeater equipment and connections, which were handed over to the Public Prosecutor’s Office.
While it may seem surprising that Mexico’s drug cartels are involved in internet services, those who follow the activities of the criminal groups are not at all surprised.
“Medicine the cartels have diversified their operations from the beginning,” said security analyst David Saucedo. “Many of them started as criminal organizations whose primary activity was not drug trafficking.”
Some gangs were involved in, for example, fuel theft, others were involved in vehicle theft and others specialized in public transportation robberies, Saucedo said.
“The criminal groups that joined drug trafficking already had these other activities before.”
In addition to the billions of dollars that cartels earn from the drug trafficking industry, the U.S. Drug Enforcement Administration it says the most powerful drug cartels, Sinaloa and Jalisco New Generation (CJNG), are involved in many illegal ventures that result in profits.
“The Sinaloa Cartel is most closely identified with drug trafficking, but is also involved in extortion, oil and mineral theft, arms trafficking, migrant smuggling and prostitution,” the 2024 National Drug Threat Assessment States.
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The CJNG oversees the theft of fuel from pipelines, extorts agave and avocado growers, migrants and prison guards, and collects taxes from migrant smugglers, the report said.
“The portfolio is extensive. However, although drug trafficking is the most profitable activity, it has a longer recovery time compared to other… criminal activities, which yield almost immediate profits,” Saucedo said.
From cartels calling older Americans to offer timeshare in Mexico, resulting in a loss of almost 40 million dollars, for smugglers supported by cartels making increasing profits from smuggling migrants across the U.S.-Mexico border, their criminal reach is extensive.
Here are some ways cartels have expanded their reach:
Fuel theft
Fuel theft, known as huachicoleo in Mexico, is a highly lucrative activity for organized crime groups. In the first nine months of 2022, Mexico’s state-owned oil company, Pemex lost US$730 million from illegal pipeline taps.
Cartels in Mexico have developed a sophisticated approach to fuel theft that involves corruption, precision and violence.
These include tactics such as bribing Pemex officials and local authorities for information, drilling precise illegal taps into pipelines, and using modified tanker trucks to transport stolen fuel for distribution to black market networks.
Several cartels are involved in this criminal activity. For example, the Santa Rosa de Lima Cartel, led by Jose Antonio Yepez, also known as El Marro, established its dominance through fuel theft before moving into drug trafficking.
Furthermore, the CJNG and the Gulf Cartel are also linked to fuel theft, which supports their criminal activities.
Avocados
Mexico’s multibillion-dollar avocado industry, which continues to break export records every year, has also been a major target for drug cartels.
Avocados are known as “green gold” in Mexico, and the country has become the world’s largest producer of this popular fruit.
But as the producers’ fortunes grew, they faced increasing threats. of drug cartels seeking a share of the profits.
In Michoacán, the only state authorized to export the fruit to the US, the CJNG and local gangs demand payments from farmers, often called “protection fees.”
These fees can range from $135 to $500 per hectare monthly, depending on the size of the farm and the perceived level of threat.
The extortion process begins with cartels identifying and targeting profitable farms. Armed cartel members then approach the farmers, issuing threats of violence or property damage if the farmers refuse to comply.
In February 2022, the US suspended avocado imports from Mexico after a US official received a death threat while working in Uruapan.
Imports resumed a week later, following new security measures implemented by the Mexican government in the region.
Two years later, residents say the situation has not changed much, and avocado farmers continue to deal with criminal organizations in the area.
Pies
The average Mexican consumes about 70 kilograms of tortillas annually, according to the Mexican Ministry of Agriculture. It’s a staple in Mexican cuisine, which is why cartels have decided to profit from it.
Cartel extortion affects nearly 20,000 tortillerías, directly impacting the prices paid by Mexicans.
According to the National Tortilla Council, in an interview with The Washington PostOf the more than 130,000 tortillerias in the country, between 14 and 15% suffer from extortion.
Homero López García, president of the organization, said The Sun of Mexico that establishments must pay between $135 and $190 weekly to various criminal groups to continue operating.
“Well, look, nothing surprises me anymore,” Saucedo, the security analyst, said of cartels extorting tortillerías. “Maybe it’s a bit insensitive and cynical on my part, but the truth is that I remain open to all possibilities in that regard.”
Chicken
In a video posted on social media two days before Christmas 2023, an armed group was seen arriving at a poultry store in Toluca, Mexico, kidnapping four workers and putting them in a white van.
The Public Prosecutor’s Office of the State of Mexico said the victims were merchants who were forced to buy chicken from certain establishments. They were also forced to pay a fee of $2.50 per kilo in exchange for not being killed by the Familia Michoacana cartel.
Authorities said that as a result of their efforts to combat extortion, criminal groups La Familia Michoacana and CJNG have lost more than $43 million by threatening poultry and egg vendors in municipalities in the Toluca Valley and the southern part of the state.
The State Public Prosecutor’s Office reported that in 2023 alone, 4,010 complaints were received for this crime, of which it was determined that only one in four was made in person, with the remainder being indirect, through telephone calls, social networks and emails.
Three months later, the four workers kidnapped in December were found alive, and four perpetrators were arrested, but those responsible for the kidnappings remain at large and the extortion of poultry sellers continues, authorities said.
‘Floor’ Rate
“They were asking me for $600 a month to collect the floor; we reported it and had to close for a month,” Guillermo, a businessman from downtown Mexico City, told the site. media, recalling the cartel’s extortion.
The floor charge, which is the fee that cartels charge business owners in exchange for “protection,” has been the main problem for merchants in Mexico City.
“The first group of businesses affected are restaurants, followed by convenience stores in second place and, in third place, jewelry stores,” said José de Jesus Rodriguez, president of the Mexico City Chamber of Commerce.
In recent years, extortion has been on the rise. Depending on the area, some establishments have received calls, emails or personal visits from armed men demanding the cartel’s fee.
“They have tried several times, it’s through phone calls,” restaurant owner Israel Zavala told the Mexican media. “Trust in the authorities is not very high; complaints have been made, but they are not followed up on.”
Analyst Saucedo said the problem with the metrics is that we never had access to their accounting books.
“We will never have the full amount of the taxable rate because many do not inform the authorities.”
In Mexico City, there are many criminal organizations involved in activities such as drug trafficking, but also charging extortion fees from small businesses such as tortilla shops, street vendors and taxi drivers.
“Because Mexico City is a densely populated area, and we have a very large informal economy, many people are unfortunately susceptible to paying protection money. Consequently, it is a lucrative activity for the local mafias,” Saucedo said.
“In addition to paying an official fee to come and work, you have to pay them another one,” said Angel Campos, a vendor at a street market in Mexico City. he said.