The $207-million question in Mexico

The strange saga of Zhenli Ye Gon and the $207 million in cash discovered during a March raid of his mansion here shows no signs of ending soon.

First, there is the matter of the money itself, which officials called the largest drug-cash seizure in history. The stacks of U.S. currency filled several steel cabinets and suitcases in Ye Gon’s home in the fashionable Lomas de Chapultepec district. It has since been shipped by Mexican authorities to New York to be counted.

Ye Gon’s wife and six others were arrested during the raid. But Ye Gon remains a fugitive.

Authorities said the money belonged to a ring of traffickers who manufactured methamphetamine in Mexico using chemicals imported from India and China.

But on Monday, a Mexican newspaper published excerpts from the latest missive from the Chinese Mexican entrepreneur, who charged from hiding that he was holding the money for corrupt Mexican officials and members of President Felipe Calderon’s National Action Party.

Calderon responded to the accusations with a Spanish pun. He called Ye Gon’s letter, published in full by the newspaper El Universal on its website, “a Chinese tale” (un cuento chino), an idiomatic expression meaning “tall tale.”

“Not only are they false statements, they are also ridiculous,” Calderon said at a news conference with visiting Spanish Prime Minister Jose Luis Rodriguez Zapatero. “Most Mexicans can see that it’s part of a silly and clumsy strategy to avoid justice.”

Calderon called the raid Mexico’s “biggest strike against methamphetamine trafficking” and promised to bring Ye Gon to justice.

In an interview with the Associated Press this month, Ye Gon said Calderon’s Labor secretary, Javier Lozano, had given him the cash. The money, Ye Gon said, had been destined to fund Calderon’s presidential campaign and “terrorist” activities in the event of the victory of Calderon’s opponent, Andres Manuel Lopez Obrador.

Ye Gon repeated those assertions in his 17-page letter published Monday, saying, “I am an innocent victim and I was blackmailed to participate in these activities of the corrupt politics of Mexico.”

The letter spun a fantastic story that involved suitcases filled with money delivered by cars with diplomatic license plates. Officials from the Institutional Revolutionary Party, or PRI, made him an “honorary senator,” Ye Gon wrote.

Officials countered that no such title exists and that a Senate ID recovered at Ye Gon’s home in the March 15 raid was a crude fake.

Labor Secretary Lozano traveled to the United States last week to hire a lawyer to pursue a slander suit against Ye Gon. Mexican authorities believe Ye Gon is hiding in the United States; they have filed papers seeking his extradition should he be arrested. In the meantime, the money recovered from his Mexico City home has undergone its own odyssey.

In the days after the raid, the cash -- which weighs more than 2 tons -- was transported to Mexico’s Bank of the Army, whose vaults are among the most heavily guarded in the country. It totaled $205.6 million in U.S. currency, almost of all it in $100 bills, along with $1.6 million in Mexican pesos and Hong Kong dollars.

Beginning March 29, the U.S. bills were shipped to New York to be recounted and checked for counterfeits.

It took three trips to haul the cash, officials said. Mexico’s attorney general said authorities paid Bank of America $1.4 million to count and authenticate the money. After counting the cash five times, bank officials discovered an additional $960,000, bringing the new total to $207 million. Representatives of the Bank of America declined to comment.

The money was then electronically transferred back to the Bank of Mexico and the Mexican Treasury.

According to Mexico’s Service for the Administration and Appropriation of Goods, the agency that monitors property seized in criminal cases, the money had earned $1.6 million in interest as of June 30. A report in the Mexico City newspaper El Financiero said the money had been invested in Mexican Treasury bonds.

Should a court convict Ye Gon of a crime, all the money and interest would become property of the Mexican state. But if he is found not guilty, every peso and dollar would be returned to him.

hector.tobar@latimes.com