U.S. targets cartel-linked fuel theft network in Mexico

The U.S. Treasury Department imposed sanctions on a group of people and businesses it says are tied to a fuel-theft operation benefiting the Jalisco New Generation Cartel. The move expands U.S. pressure on one of Mexico’s most powerful criminal groups beyond drug trafficking and into the energy trade.

Treasury said its Office of Foreign Assets Control sanctioned two Mexican men and nine companies connected to transportation, financial services and real estate. The department accused them of involvement in a cartel-linked fuel theft ring designed to avoid Mexican taxes and produce tens of millions of dollars a year for the cartel.

The action was paired with a notice from Treasury’s Financial Crimes Enforcement Network to banks and other financial institutions. FinCEN said the alert identifies warning signs tied to fuel smuggling from the United States into Mexico in schemes involving Mexican tax evasion.

Treasury Secretary Scott Bessent said in a statement that the action showed how Mexican cartels are broadening their revenue sources beyond drug trafficking. He said those organizations continue to traffic deadly drugs that kill Americans.

Fuel theft becomes a cartel revenue stream

The Jalisco New Generation Cartel, often identified by its Spanish initials CJNG, has drawn growing attention from U.S. agencies for its reach inside Mexico. The U.S. Drug Enforcement Administration has said the cartel has a presence in 21 of Mexico’s 32 states.

That footprint exceeds the DEA’s estimate for the Sinaloa Cartel, which the agency says operates in 19 Mexican states. U.S. officials have treated both groups as major criminal threats tied to drug trafficking and other illicit businesses.

President Donald Trump last year designated the Jalisco New Generation Cartel and five other Mexican cartels as foreign terrorist organizations. That designation added another tool for U.S. officials seeking to target cartel finances and operations.

Mexican authorities have reported seizures of large volumes of stolen diesel, gasoline and petroleum distillates in states along the Texas border. According to authorities, organized crime groups tap pipelines and divert fuel into illegal distribution networks.

U.S. authorities have said some service stations are forced to buy fuel from cartels, while stolen fuel is also sold directly on the street. They have also accused the Jalisco New Generation Cartel of operating its own gas stations.

Bank alert focuses on smuggling indicators

FinCEN’s alert directs financial institutions to watch for red flags connected to fuel moving from the United States into Mexico. Treasury said the schemes are linked to efforts to evade Mexican taxes.

The sanctions and banking alert together point to a broader U.S. effort to disrupt cartel income channels outside narcotics. Treasury’s action focuses on the financial and commercial infrastructure that officials say supports fuel theft, smuggling and resale.

This story draws on original reporting from Fortune.