US Treasury targets Jalisco cartel's fuel-theft money
Money MovesWashington expands financial pressure on CJNG from drugs to stolen fuel, freezing assets and warning banks
July 1st, 2026: US Ambassador Johnson credits bilateral cooperation on CJNG actionNew here? Follow stories to track developments over time. Create a free account to get updates when stories you care about change.
Overview
Updated Jul 1On June 30, the U.S. Treasury froze the American assets of two Mexican men and nine companies, accusing them of funneling tens of millions of dollars a year to Mexico's most powerful cartel through a fuel-smuggling ring. Mexico's financial intelligence unit moved the same day, blocking 20 entities: the 11 OFAC targets plus nine additional people and firms it identified on its own.
For years, Washington fought the Jalisco New Generation Cartel mainly over drugs. This action goes after a different revenue stream: stolen and mislabeled fuel, the cartel's largest earner after narcotics. With both governments freezing accounts simultaneously, CJNG faces a harder path to rebuilding through new shell companies on either side of the border.
Why it matters
Fuel theft is now cartels' largest income source after drugs. Cutting it off tests whether U.S. financial pressure can shrink CJNG's budget.
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People Involved
Organizations Involved
The Treasury office that freezes U.S. assets and bars Americans from dealing with sanctioned people and firms.
The Treasury bureau that collects bank reports on suspicious money and warns lenders about criminal financial patterns.
Mexico's most powerful cartel, designated a Foreign Terrorist Organization by the U.S. in 2025.
Mexico's financial intelligence unit, part of the Ministry of Finance. It designates individuals and companies to a national Blocked Persons List, cutting them off from the Mexican banking system.
Timeline
January 2025 July 2026
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US Ambassador Johnson credits bilateral cooperation on CJNG action
Latest DiplomaticUS Ambassador Ronald Johnson said the joint action shows that those profiting from drug trafficking, fuel theft, or other criminal activity will face justice, and cited coordination between President Trump and President Sheinbaum.
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Treasury sanctions smuggling facilitators, alerts banks
EnforcementOFAC sanctions two Mexican men and nine firms over CJNG fuel smuggling. FinCEN issues a supplemental alert on fuel-theft red flags.
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Mexico's UIF blocks 20 entities in tandem with OFAC
EnforcementMexico's financial intelligence unit froze accounts for all 11 U.S.-sanctioned targets and added nine more individuals and companies to its own Blocked Persons List, cutting the network off from Mexico's banking system at the same moment OFAC cut it off from the U.S. side.
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First fuel-theft sanctions and bank alert
EnforcementOFAC sanctions a CJNG fuel-theft network, including cell leader Cesar Morfin Morfin. FinCEN warns banks about crude-oil smuggling.
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CJNG designated a terrorist organization
LegalThe designation takes effect, adding counterterrorism sanctions and prosecution tools to the campaign against CJNG.
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Trump orders cartel terrorist designations
PolicyAn executive order directs the State Department to label major cartels as Foreign Terrorist Organizations.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
Cali Cartel front-company sanctions (1995)
President Clinton used a new executive order to name Colombia's Cali Cartel and hundreds of its front businesses as Specially Designated Narcotics Traffickers. The goal was to freeze the commercial empire, not just the drug loads. Pharmacies, real estate, and finance firms landed on the list.
U.S. assets were blocked and American firms had to cut ties with the listed companies.
The approach became a template for attacking cartel finances, though many businesses simply re-formed under new names.
It is the original playbook for the June 30 action: sanction the accountants and shell firms, not only the gunmen.
Kingpin sanctions on Sinaloa's business network (2013)
Under the Kingpin Act, OFAC repeatedly sanctioned businesses and family members tied to the Sinaloa Cartel and Joaquín 'El Chapo' Guzmán. Targets ranged from ranches to a soccer team. The aim was to strip the cartel of legitimate cover for its money.
Named companies lost access to the U.S. financial system and legitimate banking partners.
The cartel endured and El Chapo was convicted in 2019, but the sanctions complicated laundering and warned banks off cartel clients.
It sets expectations: financial pressure squeezes cartel operations over time but rarely delivers a quick knockout.
Mexico's pipeline fuel-theft crackdown (2019)
Mexico's government shut down major fuel pipelines to stop theft, or huachicol, that was draining billions from state oil company Pemex. The move caused weeks of gas shortages and long station lines. It exposed how deeply theft networks had penetrated the fuel supply.
Fuel shortages spread across central Mexico, and one illegal tap explosion killed more than 100 people.
Theft dipped but adapted; cartels shifted toward smuggling and mislabeled imports rather than tapping pipelines.
It shows why huachicol is worth billions and why the current scheme leans on customs fraud instead of pipeline taps.
