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Mexican cartels diversify their activities with fuel, tortillas and piso

Vaseline

Karol Suarez
| For the Courier Journal

MEXICO CITY — In a small town in the western Mexican state of Michoacán, members of a criminal group forced residents to pay for expensive internet services — or face death.

Following these threats, the residents paid monthly extortion fees, while simultaneously reporting the situation to the authorities.

After months of investigation, officers searched three buildings and found evidence, such as antennas, internet amplifiers and connections. These were handed over to the Public Prosecution Service.

While it may sound surprising that Mexican drug cartels are involved in Internet services, those who follow the activities of these criminal groups are not at all surprised.

“Drug cartels have diversified their activities since their inception,” said security analyst David Saucedo. “Many of them started as criminal organizations whose primary activity was not drug trafficking.”

For example, some gangs were involved in fuel theft, others in car theft and still others specialized in public transportation robberies, Saucedo said.

“Criminal groups that joined the drug trade had these other activities before.”

In addition to the billions of dollars that drug cartels make from drug trafficking, the U.S. Drug Enforcement Administration says the most powerful drug cartels, Sinaloa and Jalisco New Generation (CJNG), are involved in many illegal activities that generate profit.

“The Sinaloa Cartel is most commonly associated with drug trafficking, but is also involved in extortion, oil and mineral theft, arms trafficking, human smuggling, and prostitution,” according to the 2024 National Drug Threat Assessment.

CJNG orchestrates the theft of fuel from pipelines, extorts agave and avocado farmers, migrants and prison officials, and taxes migrant smugglers, the report said.

“The portfolio is extensive. Although drug trafficking is the most profitable activity, it has a longer recovery time for the investment compared to other… criminal activities, which generate almost immediate profits,” Saucedo said.

From cartels soliciting older Americans to offer timeshares in Mexico, resulting in nearly $40 million in losses, to cartel-backed smugglers reaping ever-increasing profits from trafficking migrants across the US-Mexico border: their criminal reach has expanded.

Here are some ways the cartels have expanded their reach:

Fuel theft

Fuel theft, known as huachicoleo in Mexico, is a highly profitable activity for organized crime groups. In the first nine months of 2022, Mexico’s state oil company Pemex lost $730 million due to illegal pipeline connections.

Mexican cartels have developed a sophisticated approach to stealing fuel. Corruption, precision and violence are used.

This includes tactics such as bribing Pemex workers and local officials for information, drilling precise illegal taps into pipelines, and using modified tanker trucks to transport stolen fuel for distribution in black market networks.

Several cartels are involved in these criminal activities. For example, the Santa Rosa de Lima Cartel, led by Jose Antonio Yepez, also known as El Marro, established its dominance through fuel theft before turning to drug trafficking.

In addition, CJNG and the Gulf Cartel are also linked to fuel theft, which supports their criminal activities.

Avocados

Mexico’s multibillion-dollar avocado industry, which breaks export records every year, is also one of the top targets for drug cartels.

Avocados are known as “green gold” in Mexico and the country has become the world’s largest producer of the popular fruit.

But as the growers’ fortunes increased, they faced increasing threats from drug cartels wanting a share of the profits.

In Michoacán, the only state allowed to export the fruit to the US, CJNG and local gangs are demanding payments from farmers, known as “protection fees.”

These fees can range from $135 to $500 per acre monthly, depending on the size of the farm and the level of perceived threat.

The extortion process begins with cartels identifying and attacking profitable farms. Armed cartel members then approach the farmers and threaten violence or property damage if the farmers refuse to comply.

In February 2022, the US suspended avocado imports from Mexico after a US official received a death threat while working in Uruapan.

Imports resumed a week later following new security measures implemented by the Mexican government in the region.

Two years later, according to locals, the situation has not changed much and avocado growers are still dealing with criminal organizations in the region.

Tortillas

According to the Mexican Ministry of Agriculture, the average Mexican consumes about 70 kilos of tortillas per year. It is a staple of Mexican cuisine and therefore cartels have decided to profit from it.

Cartel extortion affects nearly 20,000 tortillerías, directly impacting the prices Mexicans pay.

According to the National Tortilla Council, in an interview with the Washington Post, of the more than 130,000 tortillerías in the country, between 14 and 15 percent are subject to extortion.

Homero López García, president of the organization, told El Sol de México that institutions must pay between $135 and $190 weekly to multiple criminal groups to continue operating.

“Well, look, nothing surprises me anymore,” Saucedo, the security analyst, said of cartels extorting tortillerías. “Maybe it’s a somewhat insensitive and cynical attitude on my part, but the truth is that I remain open to all possibilities in this regard.”

Chicken

A video posted to social media two days before Christmas 2023 showed an armed group arriving at a poultry store in Toluca, Mexico. They kidnapped four employees and put them in a white van.

The Mexican State Attorney General’s Office said the victims were shopkeepers who were forced to buy chicken from some establishments and paid a fee of $2.50 per kilo in exchange for not being killed by the Familia Michoacana cartel.

Authorities say that as a result of their efforts to combat extortion, the criminal groups La Familia Michoacana and CJNG have lost more than $43 million by threatening poultry and egg sellers in municipalities in the Toluca Valley and the southern part of the state.

Prosecutors said they received 4,010 complaints about this crime in 2023 alone, of which they found that only one in four was filed in person, while the rest were made indirectly through phone calls, social media and emails.

Three months later, the four workers kidnapped in December were found alive and four perpetrators were arrested, but those behind the kidnappings remain at large and the extortion of poultry sellers continues, officials said.

‘Piso’ compensation

They asked me for $600 a month cobro de piso“We reported it and had to close the doors for a month,” Guillermo, a businessman in downtown Mexico City, told local media, recalling the cartel’s extortion.

The cobweb of pisoThese are the fees that cartels charge to entrepreneurs in exchange for “protection,” and they are the biggest problem for traders in Mexico City.

“The first group of businesses affected are restaurants, followed by convenience stores in second place and jewelers in third place,” said Jose de Jesus Rodriguez, president of the Mexico City Chamber of Commerce.

In recent years, extortion has increased. Depending on the areas, some establishments reportedly receive phone calls, emails or personal visits from armed men demanding compensation from the cartel.

“They have tried several times, through phone calls,” restaurant owner Israel Zavala told Mexican media. “The trust in the authorities is not very high; complaints have been filed, but they do not go any further.”

Analyst Saucedo said the problem with the statistics is that we have never had access to their accounting data.

“We will never know the total amount of the taxable compensation because many do not report it to the authorities.”

Many criminal organizations are active in Mexico City that engage in drug trafficking, but also charge extortion money from small entrepreneurs such as tortilla shops, street vendors and taxi drivers.

“Since Mexico City is a densely populated area and we have a very large informal economy, unfortunately many people are susceptible to paying protection money. Consequently, it is a profitable activity for the local mafia,” Saucedo said.

“In addition to the official tax you pay to work, you also have to pay a tax to them,” said Angel Campos, a vendor at a street market in Mexico City.

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