In a move to disrupt the financial backbone of the Cartel Jalisco Nueva Generacion (CJNG), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced sanctions against three Mexican nationals and two Mexico-based entities involved in a sprawling drug trafficking and fuel theft network.
This network reportedly generates hundreds of millions of dollars annually for the CJNG through a variety of illicit activities, including fentanyl trafficking, fuel theft, and the smuggling of stolen crude oil from Mexico into the United States.
Simultaneously, the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an Alert outlining financial typologies and red flags indicative of crude oil smuggling schemes along the U.S. southwest border that are linked to the CJNG and other Mexico-based transnational criminal organizations.
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“Fuel theft and crude oil smuggling are cash cows for CJNG’s narco-terrorist enterprise, providing a lucrative revenue stream for the group and enabling it to wreak havoc in Mexico and the United States,” stated Secretary of the Treasury Scott Bessent. “Treasury, as part of the Administration’s whole-of-government effort, will continue to use all available tools to relentlessly target drug cartels and foreign terrorist organizations to Make America Safe Again.” A video message from Secretary Bessent further detailing today’s actions was also released.
This coordinated effort by OFAC involved collaboration with numerous U.S. law enforcement agencies, including the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), Federal Bureau of Investigation (FBI), and U.S. Customs and Border Protection, as well as the Government of Mexico, including its Financial Intelligence Unit (UIF). FinCEN’s Alert was similarly coordinated with the DEA, FBI, HSI, and OFAC.
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The FinCEN Alert builds upon a series of recent advisories and analytic products issued by the agency focusing on the financial activities of Mexico-based transnational criminal organizations, including the procurement of fentanyl precursor chemicals, fentanyl-related threat patterns, timeshare fraud, human smuggling, and bulk cash smuggling.
CJNG: A Dual Threat
The CJNG is a U.S.-designated Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT), recognized as a highly violent drug trafficking organization operating out of Mexico. The cartel is identified as a major contributor to the fentanyl and other deadly drugs trafficked into the United States.
In recent years, groups like the CJNG have increasingly engaged in fuel theft and crude oil smuggling, resulting in billions of dollars in losses for the Mexican government and providing a significant revenue stream to fuel their criminal operations and violence. The Department of State officially designated CJNG as an FTO and SDGT on February 20, 2025.
“Huachicol”: Fueling Cartel Profits
Fuel theft, known as “huachicol” in Mexico, including the smuggling of crude oil, has become a primary non-drug revenue source for Mexican cartels. These “huachicoleros” employ various methods to steal fuel and crude oil from Mexico’s state-owned energy company, Pemex, including bribing employees, illegally tapping pipelines, stealing from refineries, hijacking tankers, and threatening Pemex personnel.
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The stolen fuel is then sold on the black market across Mexico, the United States, and Central America. Crude oil is often smuggled into the U.S. by complicit brokers, mislabeled to avoid scrutiny, and sold at discounted rates to U.S. importers, with profits repatriated back to the cartels.
Targeting a Key CJNG Leader and Associates
Building on previous sanctions targeting CJNG’s fuel theft operations, today’s action specifically targets Cesar Morfin Morfin, also known as “Primito,” identified as a CJNG cell leader for Tamaulipas, Mexico. Primito, who previously led a faction of the Cartel del Golfo before aligning with CJNG due to his close ties with sanctioned CJNG leader Ruben Oseguera Cervantes (“El Mencho”), is involved in a wide range of narcotics trafficking into the U.S., including fentanyl and precursor chemicals sourced from China.
More recently, Primito and his network have focused on the high-profit margin activity of smuggling stolen crude oil into the United States, leveraging his control over key border crossings in the Tamaulipas-Texas region. He allegedly charges fees for crude oil shipments and utilizes front companies to sell stolen fuel.
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OFAC also designated Primito’s brothers, Alvaro Noe Morfin Morfin and Remigio Morfin Morfin, for their involvement in narcotics trafficking and stolen crude oil activities. Additionally, two hazardous materials transportation companies, SLA. Servicios Logisticos Ambientales, S.A. de C.V. and Grupo Jala Logistica, S.A. de C.V., were sanctioned for operating on behalf of Primito and facilitating the transportation of fuel and crude oil between Mexico and the United States.
Continuing the Fight Against Cartel Finances
Today’s actions are part of a broader U.S. government strategy to dismantle the financial infrastructure of Mexican cartels and transnational criminal organizations.
Since President Trump’s directive to pursue the total elimination of cartels, the Treasury has utilized its sanctions authorities to target numerous individuals and entities linked to various cartels, including the Sinaloa Cartel, La Nueva Familia Michoacana, and the Beltran Leyva Organization.
Sanctions Implications
As a result of these sanctions, all property and interests in property of the designated individuals and entities within the United States or under the control of U.S. persons are blocked and must be reported to OFAC. U.S. persons are generally prohibited from engaging in any transactions with these blocked individuals and entities.
Violations of U.S. sanctions can result in civil or criminal penalties. Furthermore, foreign financial institutions engaging in significant transactions with the designated parties risk facing secondary sanctions, including restrictions on U.S. correspondent accounts. Exports, reexports, or transfers of items subject to U.S. export controls involving these individuals and entities may also face additional restrictions.
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