Jerónimo** arrived at the restaurant wearing a rooster cap, a black T-shirt, and denim pants. A semi-automatic pistol was holstered to his belt. He ordered a cold beer because, in the Tierra Caliente region in Michoacán, the midday heat regularly tops 40 degrees Celsius.
In a hesitant tone, he recounted his experience trafficking methamphetamine, or “crystal” — as it is popularly referred to — from this western region of Mexico, which has been a longstanding epicenter for synthetic drug production.
Jerónimo has worked independently supplying local drug trafficking groups, and has collaborated with some larger transport groups, or cartels, to move drugs to the Texas border, where he sells them to his own clients.
Production is vast. He assured us that moving fifty kilograms of crystal per week is normal for him, and that this haul can go even higher. He gets everything from clandestine labs that supply him and other traffickers in the Tierra Caliente area. Recently, he also started buying counterfeit pharmaceutical pills laced with fentanyl from a contact in the city of Guadalajara.
Jerónimo knows that the so-called “cooks” will produce what he requires as long as he provides them with the necessary supplies: precursors, pre-precursors, other essential chemical substances, and laboratory materials. Although many of these come from abroad and are subject to regulations, Jerónimo says he has had no problems obtaining what he needs. He rarely even worries about it as he relies on specialists for that part of his business.
“I know brokers who are dedicated to obtaining the substances,” said Jerónimo. “I buy the substances from them and only take care of getting them to the laboratory.”
Our year-long investigation into the flow of precursor chemicals into Mexico found that Jerónimo’s case is common. While groups like the Sinaloa Cartel and the Jalisco Cartel New Generation (Cartel de Jalisco Nueva Generación – CJNG) get the most attention from law enforcement and the media, these larger drug trafficking organizations typically only become involved at the latter stages of the synthetic drug supply chain. It is then that they purchase and stockpile the drugs produced by laboratories and transport them to the border. Prior to that, there are various actors and companies involved who operate within both legal and illegal spheres.
SEE ALSO: After US Hearing on Fentanyl, Is It Time to Retire the Word ‘Cartel’?
To be sure, both US and Mexican authorities have focused a significant part of their strategy and resources on combating synthetic drug trafficking by capturing cartel leaders. But what Jerónimo’s example, and the cases we will cover below, suggest is that the key link that authorities ought to concentrate on might not be the cartels, but rather those who facilitate the international trafficking of chemical substances: the brokers.
The Bottleneck
The supply chains of methamphetamine and fentanyl resemble an hourglass. The initial stage, the production of chemical substances, and the final stage, the sale of drugs to consumers, involve the greatest number of actors.
This is because chemical precursors and other necessary substances are produced legally and illegally by a variety of companies around the world. At the other end of the chain, selling synthetic drugs, especially at the retail level, has few barriers to entry and numerous distributors and sellers.
In the middle of the chain, linking the producers or sources of chemical substances with drug trafficking organizations, are brokers. These brokers may consist of individuals, networks, or companies whose sole role in the illicit market of synthetic drugs is to procure and accumulate the required chemical substances for their production.
Brokers are responsible for establishing connections with suppliers, importing chemicals that are subject to regulation, and redirecting less regulated substances to the illicit market.
Our investigation found that there is a limited number of actors in this category, as they must have extensive commercial knowledge, the ability to establish relationships with suppliers primarily based in Asia, a legitimate (or at least the appearance of a legitimate) business, and must maintain a low profile to avoid sanctions. Additionally, these actors typically supply multiple criminal organizations, according to an official from the Secretariat of the Navy (Secretaría de Marina – SEMAR) who spoke to InSight Crime, an account that aligns with intelligence reports recently cited by the Mexican newspaper Milenio.
For drug traffickers like Jerónimo, and for drug trafficking organizations like the Sinaloa Cartel and the Jalisco New Generation Cartel (Cartel Jalisco Nueva Generación – CJNG), these brokers also provide certain protection: They reduce the risks of exposure by dealing with actors in the legal industry and ensure a steady supply of chemicals.
Therefore, they are an essential piece of the puzzle.
Networks Connecting Supply and Demand
There are several examples of how these intermediaries operate. On April 14, US authorities announced five charges against the Chapitos, a major faction of the Sinaloa Cartel, and their alleged associates for their involvement in fentanyl trafficking. In one of these charges, prosecutors named Ana Gabriela Rubio Zea, a Guatemalan national who allegedly acted as a broker for the purchase of chemical precursors in China.
According to the accusation, Rubio Zea negotiated with other brokers in China, including Jiang Kun, Wu Yaqin, Yao Huatao, and Wu Yonghao, who then connected her with Wuhan Shuokang Biological Technology Ltd, the company that produced the substances. These substances were then transported directly to Mexico, hidden among legal chemicals or in food containers, and arrived at the port of Mazatlán or at the airports in Mexico City and Guadalajara. Occasionally, they were transported via routes that passed through Germany or the United States.
Rubio Zea allegedly managed the logistics to ensure that the products reached fentanyl manufacturing sites controlled by cells associated with the Chapitos. In essence, she collected chemical substances from various sources to supply one of the main drug trafficking organizations in the hemisphere without implicating them in the rest of the chain.
Both US and Mexican authorities have detected similar cases in the past. For instance, on January 30, 2023, the US Department of the Treasury sanctioned three individuals who are allegedly part of a network led by José Ángel Rivera Zazueta. They reportedly import chemical precursors from China to Mexico and maintain connections across the United States, Europe, Asia, Africa, Central America, and South America.
The network allegedly channels these substances to several methamphetamine and fentanyl production networks in Culiacán, Sinaloa, which are believed to be under the control of the Chapitos.
SEE ALSO: How Will Ovidio’s Arrest in Mexico Affect Sinaloa Cartel and the Fentanyl Trade
According to the Treasury report, Rivera Zazueta had a business relationship with Shanghai Fast Fine Chemicals, a company that, like hundreds of other firms in China, sells precursor and pre-precursor chemicals online. Although the US government had already sanctioned this company, along with two others, in December 2021, it was still operating as of April 2023.
Another example that illustrates how these intermediary actors work is the case of the Zheng network, a Chinese family clan that initially trafficked controlled substances to the United States through various import-export companies based in both countries. In 2019, the Mexican newspaper El Heraldo reported that Mexico’s financial intelligence unit (Unidad de Inteligencia Financiera – UIF) had knowledge that the network had also been smuggling these types of substances to Mexico since 2013, using a variety of front companies that they created in the country that offered veterinary care, clothing sales, clinical laboratories, and computer systems. The Zheng network presumably moved the substances through the ports of Ensenada, Manzanillo, and Lázaro Cárdenas, supplying both the Sinaloa Cartel and the CJNG.
The Legal Facade
Mexican authorities have found that cases like the Zheng network are the most common modus operandi for obtaining chemicals, although it typically occurs on a smaller scale, as Admiral Alfredo Hernández, the former head of the Naval Intelligence Unit of SEMAR, told InSight Crime.
This can involve both legitimate companies that import legal products from Asia and illegitimate shell companies created for this specific purpose. In both cases, these companies acquire permits for importing regulated substances through corruption or falsifying the labels of the products they import to make them appear legal.
According to the admiral, SEMAR and Cofepris shut down eight companies between December 2021 and December 2022 due to their involvement in importing chemical substances linked to the synthetic drug industry.
Among the most notable cases were Escomexa and Corporativo y Enlace RAM. Both companies were registered in Guadalajara: the former as an alcoholic beverage exporter and the latter as a provider of “professional, scientific, and technical services.” However, a 2020 investigative report by Forbidden Stories revealed both companies were fronts for importing fentanyl precursors from India and China for the Sinaloa Cartel. Milenio later reported that these same companies also supplied the CJNG, citing a government intelligence document.
Creating shell companies in Mexico is relatively easy, and they’re often used in corrupt schemes. As of January 2023, the Mexican Tax Administration Service (Servicio de Administración Tributaria de México – SAT) had identified 12,673 companies that were suspected of simulating their activities to evade taxes or facilitate illicit international trade. However, since these companies are likely just a small fraction of the total, the possibilities for diversion are considerable.
In addition, authorities have been paying attention to cases where legitimate companies are used to import precursors.
“They are usually owners or workers of import and export companies that have all the permits, and often evade the attention of authorities because the quantity of legal products they move is much greater than that of regulated chemicals,” said Hernández.
This is exemplified by the case of Carlos Agredo and Francisco Pulido, accused by the District of Columbia of importing methamphetamine precursors and pre-precursors from China and India, using apparently legitimate companies in Michoacán as a front. The two appeared to participate only in this part of the supply chain and reportedly supplied the CJNG as well as other methamphetamine-production networks in the region.
Despite their illegal activities, Agredo and Pulido managed to keep a low profile for several years. Authorities traced the beginning of their operations back to 2011 but did not formally charge them until 10 years later.
Diverting From the Legal Market
In addition to precursors and pre-precursors, synthetic drug manufacturers need a variety of solvents, dyes, catalysts, and binders, which come from international and local markets. For example, Jerónimo claims that these less-regulated substances “don’t come from China.” Rather, his contacts get them from nearby markets, such as the state of Querétaro, which has a significant chemical industry.
“They have no problem buying them; no one asks them questions. If they were to encounter any obstacles, they resort to bribes or threats,” he said.
Intermediary networks have also emerged around the local chemical products market to supply the production of narcotics. For example, the US Department of the Treasury recently sanctioned brothers Ludim and Luis Alfonso Zamudio Lerma, owners of a network of companies in different areas of Culiacán — including a pharmacy and a steel distributor — with whom they allegedly stockpiled chemicals used in the production of methamphetamine and fentanyl.
This appears to be a common practice, as there is little traceability for the purchase of less-regulated chemical products.
When InSight Crime visited a recently-confiscated methamphetamine lab in Culiacán, we discovered several sacks of sodium hydroxide, or caustic soda, from Industria Química del Istmo, a company with offices in Mexico City.
Sodium hydroxide is on the watch list due to its dual use, so its sale should be regulated. However, when contacted, a representative from the company assured us via email that their products reach a “wide variety of customers.” The representative also claimed that the company had “no knowledge” of their use for illicit purposes, which suggests that there was no traceability to the end customer.
*Steven Dudley, Sara Garcia, Parker Asmann, Carlos Arrieta, and Marcos Vizcarra contributed to this article.
**Names and personal details were modified for the safety of the sources.