Authorities confiscated more than $200 million in U.S. currency from methamphetamine producers in one of this city’s ritziest neighborhoods, they said Friday, calling it the largest drug cash seizure in history.
The seizure reflected the vast scope of an illegal drug trade linking Asia, Mexico and the United States, officials said. Two of the seven people arrested Thursday at a faux Mediterranean villa in the Lomas de Chapultepec neighborhood were Chinese nationals.
The group was part of a larger drug-trafficking organization that imports “precursor chemicals” from companies in India and China for processing into methamphetamine in Mexican “super labs,” authorities said. The methamphetamine is eventually sold in the United States.
The raid resulted from an investigation that began in December, when authorities seized 19 tons of pseudoephedrine, a cold medicine that is a key ingredient in the production of methamphetamine, at a Mexican port on the Pacific Coast.
A legally registered Mexican company, listed by a trade association as the country’s third-largest importer of pseudoephedrine, was implicated, officials said.
Mexican drug-trafficking organizations have become increasingly important in the U.S. methamphetamine trade, because the U.S. has imposed tougher controls on the sale of the chemicals used to produce the highly addictive drug.
President Felipe Calderon hailed the seizure as a major development in his government’s war on drug traffickers, who have ravaged several Mexican cities and towns.
“We are working in a decisive manner to save our country and to keep Mexico safe and clean,” Calderon told an audience in Tijuana. “I don’t even want to imagine how many young people this gang poisoned with its drugs. But I can assure you, they will do it no longer.”
Mexican officials said the cash seized was mostly in U.S. $100 bills and weighed at least 4,500 pounds.
“Kudos for the Mexicans,” said Donald C. Semesky, financial operations chief for the U.S. Drug Enforcement Administration. “They’re very serious in this effort, and we commend them.”
U.S. officials said that, if confirmed, the cash seizure would be several times larger than any other made from drug traffickers. A spokesman for the Mexican attorney general’s office said that experts were still analyzing the $205.6 million in cash to check for counterfeits but that the bills appeared to be legitimate.
Officials with the attorney general’s organized crime unit used a moving truck, guarded by a 25 patrol-car caravan, to take the money to its headquarters.
Authorities said the traffickers were led by a naturalized Mexican citizen of Chinese descent who appeared to have left the country.
Several machines for manufacturing pills were found at the site, but the group did not produce drugs there. The mansion appeared to serve as a financial operations center and cash storage facility.
The neighborhood is home to some of the capital’s wealthiest residents and many members of the diplomatic corps. The back of the property is contiguous with a racquetball court at the Ukrainian ambassador’s residence. The Israeli Embassy is a few blocks away.
Most neighbors and the many maids and security guards who work in the area declined to comment on the raid. The few who did said they had no knowledge of illicit activity.
“The problem is that all of these houses are veritable fortresses,” said one of the neighborhood’s security guards, who asked not to be named. “You never know what goes on inside. The doors open automatically. The owners all have chauffeurs. People go in and out, and you never see anything.”
A driver-bodyguard arrested at the house had told neighbors he was a retired lieutenant colonel in the Mexican army. Neighbors said he walked a German shepherd along the tree-lined streets.
Authorities said the chain of events that brought police to the mansion began in December, when they discovered a shipping container filled with barrels of pseudoephedrine on a storage lot at customs offices in Lazaro Cardenas, a port city about 175 miles northwest of Acapulco.
The chemicals had been manufactured in China and shipped to Mexico on a British-flagged vessel that was bound for Long Beach. The seizure led authorities to a chemical company, Unimed Pharm Chem, based in the city of Toluca, about 40 miles west of Mexico City. The company reported legally importing 32 tons of pseudoephedrine in 2004.
“The resulting investigation showed that this company illegally imported ... pseudoephedrine acetate from India,” the attorney general’s office said in a statement. “These chemicals are used to illegally produce methamphetamines.”
Mexican Atty Gen. Eduardo Medina Mora said in a radio interview that one of the Chinese exporters involved in shipping the chemicals to Mexico is an illicit “shadow” company not registered with Chinese authorities.
Last year, Mexican authorities raided what they termed the largest methamphetamine lab in the Western Hemisphere at an industrial park in Guadalajara. The factory had 11 custom-designed pressure cookers capable of producing 400 pounds of the drug each day, about 20 times the production of a typical California lab.
U.S. officials estimate that 80% of the methamphetamine sold on U.S. streets is produced by Mexican criminal organizations.
For these drug cartels, whose business mushroomed when they became the middlemen in the shipment of Colombian cocaine to the United States, methamphetamine is a lucrative side business worth billions of dollars, analysts say.
Officials at the DEA’s Office of Financial Operations estimated that 90% of the money transferred from the United States to Latin American suppliers of drugs leaves the U.S. as cash. Drug traffickers transfer $8 billion to $24 billion to Mexico each year, according to authorities.
$100 bills preferred
Most of the cash is carried across the U.S.-Mexico border by car or on foot as $10 and $20 bills and later converted to $100 bills, officials say.
Semesky said $100 bills are the preferred method for making large payments between drug organizations, because they are less bulky. With $20 bills, $1 million weighs 110 pounds.
“They don’t want to build a storage location for 20s,” the DEA’s Semesky said of the drug traffickers. “You’re talking about decreasing that bulk at least five times.”
Before Friday, the largest reported amount of cash seized by Mexican authorities was $7 million, which was found inside electric appliances at Mexico City’s international airport in 2005. The appliances were headed for Colombia.
Mexican officials said they worked past midnight Thursday to count the seized bills, which were hidden inside locked metal shelves, suitcases and closets. It was five times the amount that was seized in all of 2006 by Mexican authorities in anti-narcotic and money-laundering operations.
To provide a sense of the scale of the money involved, Mexican media compared the amount seized to various items in the 2007 federal budget.
The $205.6 million was more than the funding allocated to pensions for the handicapped by Mexico’s social security agency. It exceeded the amount of public funds provided to Mexico’s political parties for campaign spending and also surpassed the budget of the Mexican Senate.
“It’s a lot of money, and we didn’t know a thing,” said one security guard assigned to a nearby property. “We work outside and can’t even imagine what goes on inside these houses.”