Thread: Mexican Cartels Smuggling Oil into U.S.

U.S. Firms Probed in Mexico Oil Scam
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By SUSAN DAKER, ANA CAMPOY and JOEL MILLMAN

SAN ANTONIO -- The U.S. government is investigating whether several U.S. companies took part in a cross-border scheme to siphon oil products from Mexico's state oil company and smuggle them across the border.

The probe is part of a broader two-year joint U.S.-Mexican investigation into a network of Mexican oil smugglers supported by the Gulf drug cartel, one of Mexico's most powerful and brutal criminal organizations.

.Oil theft has been common on both sides of the border for decades. But the breadth of the smuggling operation, extending from Petroleos Mexicanos, Mexico's state oil company, to U.S. companies, is a troubling sign of the growing reach of cross-border organized crime, as well as the efforts by Mexican drug cartels to diversify their business.

John Morton, the assistant secretary of U.S. Immigration and Customs Enforcement, said Tuesday that his agency was looking into whether U.S. refiners knowingly bought the stolen products. He declined to name any of the refineries or other companies because the investigation is continuing.

"People are going to jail," Mr. Morton said at a news conference Tuesday in San Antonio. "Fines will be paid."

Investigators didn't specify either the quantity or value of the smuggled oil products. But they said the operation involved some U.S. companies that allegedly knew the oil was stolen. They have executed 10 search warrants in Texas. In April, Mexican security forces said they had arrested a group that made $46 million smuggling oil into the U.S. over two years.

Mexican officials said Tuesday the cartel's foray into oil smuggling was a sign that Mexican President Felipe Calderón's nearly two-year military campaign against drug organizations was working.

"The cartels are fighting for pieces of a shrinking pie. When you have no pie left...then you have to look for another illegal business to pay your people," said Ariel Moutsatsos, adviser for international affairs for the attorney general of Mexico.

Industry experts warned of the risks to Mexico from unchecked oil-smuggling.

"You could eventually end up in the same situation that you have in Africa," said Wayne Wilson, managing director with Protiviti, a risk-management consulting firm. In Nigeria, violent gangs tap into oil pipelines and raid oil company facilities to steal hundreds of millions of dollars worth of oil each year.

So far, the U.S. side of the investigation has resulted in the prosecution of Houston businessman Donald Schroeder, the former president of oil marketing company Trammo Petroleum. Mr. Schroeder was the middleman in a plot to smuggle $2 million worth of stolen petroleum condensate from Mexico into Brownsville, Texas, and sell it in the U.S., according to Assistant U.S. Attorney Jim McAlister.

Mr. Schroeder pleaded guilty in federal court in May and will be sentenced in December. Trammo paid $2 million in federal fines. Mr. McAlister declined to say whether Mr. Schroeder is cooperating with the investigation. Neither Mr. Schroeder nor his lawyer could be reached for comment.

A spokesman for the National Petrochemicals and Refiners Association, an industry trade group, said that Trammo's transaction is "not indicative of how domestic refiners operate."

Trammo employees didn't know of any illegal dealings, a company representative said, adding that Mr. Schroeder has been fired and the company is cooperating with authorities. Trammo also agreed to repay $2.4 million in compensation to the Mexican government. An oversized check was given to Mexican officials at Tuesday's news conference hosted by the Department of Homeland Security. In a statement, Pemex thanked U.S. and Mexican authorities that collaborated in the arrest of Mr. Schroeder.

Several high-profile criminal cases in Mexico show how pervasive corruption has become in the country's energy sector.

Two weeks ago, Mexican law-enforcement officials deposed about a dozen security officers at Pemex and questioned personnel reporting to retired Mexican army general Miguel Estrada Martinez about those in his command who had been implicated in illegal sales of Pemex products. The operation was part of a national sweep of Pemex installations, targeting an alleged network of stolen-fuel traffickers operating out of the Mexican state of Veracruz.

Authorities said they detected more than 70 companies linked to an industrial park in the city of Poza Rica, that allegedly were using a Mexico City-based distributor to sell stolen gasoline and other products to hundreds of buyers across eastern Mexico.

An even more elaborate network was uncovered in March in the border state of Tamaulipas. The state's leader of the opposition Democratic Revolution Party -- known as the PRD -- was arrested and charged with leading a gang that sold stolen Pemex products in Mexico's black market, as well as bribing Mexican customs officials to export shipments into Texas.

Miguel Angel Almaraz Maldonado was allegedly working under the protection of Los Zetas -- a gang of reputed former Mexican soldiers turned assassins -- and their patrons in the notorious Gulf cartel, which operates in Mexico's most important oil-producing regions, according to authorities.

Mr. Almaraz's gang allegedly was paying Mexican police and soldiers $1,500 per tanker for free passage on Mexican highways to the U.S. border. Officials say when the ring was busted, officers found 15 tanker trucks on Mr. Almaraz's property, including several with Pemex logos. Mr. Almaraz denied any wrongdoing. He remains in federal prison in Mexico awaiting trial and couldn't be reached for comment.

—José de Cordoba in Mexico City contributed to this article.

http://online.wsj.com

Originally Posted by vmonkey56

The U.S. is returning $2.4 million in funds generated from smuggling to the Mexican government, a spokeswoman for ICE said.

Do what? Who is paying this money? Or is this money that the police found?

In the later article, it sounds like money recovered from the investigation so it would be Mexico's property or repayment/compensation from the company.

Trammo also agreed to repay $2.4 million in compensation to the Mexican government.

Dixie

The U.S. government is investigating whether several U.S. companies took part in a cross-border scheme to siphon oil products from Mexico's state oil company and smuggle them across the border.

Oh my! Companies stealing from Mexico. What about illegal aliens stealing from The United States Taxpayers?