Mexican Cartels: “The Asian Connection”
10 Dec 2020

Jorge A. posed proudly in front of the five-star hotel Radisson Blu Hotel Shanghai New World in January 2016. The photo’s caption set the tone for his business trip. “Busy working,” he gloomily wrote on Facebook. Jorge A. works for Corporativo Escomexa, a Mexican import-export company that specializes in the trade of tequila, and agricultural and chemical products. He was thousands of kilometers from his home in Culiacan, Mexico and dressed for a bitter cold winter day. The photo got hundreds of likes. His mother, apparently touched, commented, “Blessings my son…Take care of yourself and succeed in your efforts…I love you! Kisses!!” The whole trip was carefully documented on Facebook—from a badly cropped selfie to an intimate portrait of his crab dinner.

Two associates accompanied Jorge A. on this frenetic Asia business trip and appeared in many of his photos. Over several weeks, this team from Mexico strung together stopovers: after Shanghai followed Hong-Kong, Japan, and finally, India. There, they joined Manu Gupta, an Indian businessman who they had previously met in Hong Kong. Gupta is the director of Mondiale Mercantile Pvt Ltd, a company whose missions are as diverse as they are vague. Aside from its export-import business, Mondiale Mercantile also offers legal advice for customs procedures. The company operates in a variety of sectors: chemical and pharmaceutical industries, agri-food products, sand, and even machinery.

Two years later, the true nature of Gupta’s business came to light. On September 25, 2018, Indian authorities arrested Gupta, along with a Mexican associate and an Indian chemist. The three partners were caught in a lab in Indore wearing masks and gloves and in possession of fentanyl—a powerful synthetic pain reliever. Fentanyl is a heavily abused drug that causes thousands of overdoses across the world. Gupta and his associates intended to ship the fentanyl to Mexico on a commercial flight, hidden in a suitcase. In a December 2018 internal report from the U.S. Drug Enforcement Agency (DEA) obtained by Forbidden Stories, Manu Gupta—currently imprisoned and awaiting trial along with the two other suspects—is described as “an alleged associate of a known Sinaloa Cartel member, who obtained precursor chemicals used to manufacture illicit drugs in Mexico that are subsequently distributed in the United States.” Forbidden Stories tried to reach out to Manu Gupta but didn’t receive any reaction.

By cross-checking information from “BlueLeaks”, a massive internal data leak from American law enforcement agencies published last June, Forbidden Stories and its 25 international partners were able to investigate this case in India, which sheds light on the strategies employed by Mexican cartels to dominate the lucrative market for fentanyl. As murderous as they are, Mexican cartels use the same strategies as any other business—namely, a quest for profitability, outsourcing, and continuous adaptations to reflect changing international regulations. All of this for a multinational criminal organization.

Fentanyl: the new golden goose

A classified DEA report from October 2019 published in “BlueLeaks” soberly summarizes the situation: “Law enforcement data analyzed from 2018 through the end of February 2019 indicates that the Sinaloa Cartel has established itself as a prominent producer and trafficker of Mexico-based fentanyl into the United States.” Despite the arrest in 2016 of Joaquin Guzman, the infamous cartel leader known as “El Chapo,” the DEA acknowledged that the drug business is still running at full capacity.

Across the border in the US, the drug has claimed thousands of lives. In 2018, fentanyl and similar synthetic drugs accounted for nearly half of the 67,367 drug overdose deaths in the United States. This marks a 10% increase from 2017—an epidemic equivalent to the heroin crisis from 2000-2010. Back then, heroin (made by extracting morphine from the poppy plant) was wreaking havoc in North America. And Mexican cartels were reaping the benefits. In 2016, 90% of heroin sold in the United States originated in Mexico.

Now, the cartels are looking forward. And the future is synthetic. Northern Mexico, known as the “golden triangle” because of its marijuana and opioid cultivation, is transforming under the influence of the Sinaloa cartel. In the mountainous terrain around Culiacan, poppy fields are being replaced by laboratories. “Due to government restrictions, [the Mexican army destroyed poppy crops] we began the transition to synthetic opiates, which were cheaper,” a chemist hired by the Sinaloa cartel told Forbidden Stories.

In his clandestine laboratory nestled among the trees near Culiacan, the chemist decrypted the business. “It’s one of the most attractive drugs for cartels. It brings in more profits. You only need one pill per person. So if we transport 10,000 pills, then it’s 10,000 people who are going to take them.” In a kitchen dish, he stirred white powder with a plastic spatula. This powder is used to make fentanyl pills. Stamped with the letter “M,” these pills are supposed to imitate oxycodone—a highly addictive opioid. “I know my pill is very powerful and that it will create a dependence,” the chemist said. “And that’s what I want. When a consumer takes one and then needs another dose.”

Fentanyl’s profitability is extraordinary. Manufacturing this highly powerful drug requires only a minimal workforce and infrastructure. In a 2019 report, the DEA estimated that a fentanyl pill costs only $1 to produce. Each pill is then resold in the US for $10 or more. It’s a jackpot for Mexican cartels, with the Sinaloa cartel leading the charge.

A well-oiled machine

Until very recently, China exported a vast part of the fentanyl sold in the US. “You had individuals importing fentanyl from China, pressing the tablets in their basement and then putting those online for retail, on the darknet, or connecting up with a local distributor to sell those on the street,” explained Bryce Pardo, a Policy Researcher at RAND and expert in drug policy.

But stricter regulations imposed internationally and in China, in 2017 and 2019, changed the game. Shipping fentanyl directly became riskier. Cartels saw their opportunity to enter into the market as intermediaries. “The profit margins they get out of it is by synthesizing plus refining the product, as it were, into its consumable form,” explained Falko Ernst, senior Mexico analyst at International Crisis Group in Mexico.

With its well-established network, the Sinaloa cartel already had a solid infrastructure to expand into synthetic drugs. One of the DEA memos released through “BlueLeaks” described a highly organized circuit that included warehouses at the border and distributors across the United States. Further down, the memo detailed one of the cartel’s techniques for sourcing precursors, mentioning the involvement of “an individual based in Culiacan, Sinaloa, Mexico,” who served as an independent seller. His mission was to buy “purchase additional large quantities of fentanyl precursor chemicals directly from China” on behalf of the cartel.

But who is the man that the DEA is referring to? When Forbidden Stories asked the American agency, they declined to answer. “Generally speaking, we do not confirm or deny [whether] persons or entities were or are targets of our investigations.” Forbidden Stories has found many troubling coincidences about Jorge A., the Mexican businessman based in Culiacan, Sinaloa, who posed alongside Manu Gupta and his Mexican associates in 2016. An intelligence source in India told one of Forbidden Stories’ partners that Jorge A. is believed to be under investigation by U.S. authorities. And some of the import-export company’s activities that he works for raise questions. With the help of C4ADS, an NGO specializing in data analysis, Forbidden Stories drew on open-source information that revealed a network of entities connected to this company. The complexity of these networks is difficult to unravel.

Companies with suspicious activities

Online, Corporativo Escomexa, the company of which Jorge A. is the official auditor – and its “innovation manager” on LinkedIn – has highlighted products that can be used in the manufacture of methamphetamine . You can find a trace of it on its website but also on different B2B platforms.

An analysis of Corporativo Escomexa’s trades revealed multiple suspect transactions from September to October 2016. Over the course of one month, the company received a collection of pharmaceutical equipment from India—notably a pill press machine. They also obtained 676kg of lactose monohydrate powder, microcrystalline cellulose, and copovidone, all of which are used to make narcotic substances, including fentanyl.

By Audrey Travère, Forbidden Stories, December 2020

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