Cooperation with Mexico results in Treasury sanctions of arms trafficker tied to major drug cartel following HSI Nogales, multiagency investigation

NOGALES, Ariz. – The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated an individual engaged in the trafficking of high-caliber firearms from the United States to one of Mexico’s most powerful drug organizations as a result of a Homeland Security Investigation (HSI) and multiagency probe. This action would not have been possible without the cooperation and support of the Government of Mexico (GoM) and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Today’s action is the result of ongoing efforts by U.S. agencies and the GoM to disrupt Mexican drug trafficking organizations’ procurement of weapons, including those sourced in the United States.

OFAC designated Obed Christian Sepulveda Portillo (Obed Sepulveda), pursuant to Executive Order (E.O.) 14059 for acting for or on behalf of the Cartel de Jalisco Nueva Generacion (CJNG), a violent drug trafficking organization based in Mexico responsible for a significant proportion of fentanyl and other deadly drugs trafficked into the United States.

“Cartels exist for one reason and one reason only – to generate a profit. The CJNG is no exception and has demonstrated they will go through great lengths, costing lives, in efforts to further their control,” said Scott Brown, special agent in charge, for HSI Phoenix. “As a border state, we see first-hand how these criminal organizations continue their attempts to smuggling narcotics and contraband through our shared border. With the coordination of our partnered agencies, HSI is committed to end the plague that is CJNG.”

Portillo, a Mexican national, was designated for, being directed by, or acting or purporting to act for or on behalf of, directly or indirectly, CJNG. Portillo coordinated the daily procurement of firearms and bulk ammunition from the U.S. southwest border into Mexico through a network of individuals working directly with CJNG.

“CJNG’s power and violence are only possible because of its ability to obtain high-powered weapons, which are used to protect drug trafficking routes, territory, and other illicit assets,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Treasury is actively targeting those who support and supply drug trafficking and criminal organizations, especially those engaged in the production and distribution of synthetic opioids that claim the lives of tens of thousands of Americans each year.”

Previous Actions Against CJNG

On April 8, 2015, OFAC designated CJNG and its leader, Oseguera Cervantes, pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for playing a significant role in international narcotics trafficking. On Dec. 15, 2021, OFAC also designated CJNG and Oseguera Cervantes pursuant to E.O. 14059. OFAC has also designated a wide range of businesses and individuals that play critical roles in CJNG’s drug trafficking activities.

Sanctions Implications

As a result of today’s action, all property, and interests in property of this designated individual that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all transactions by U.S. persons or persons within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. As with any provision of goods or services, including firearms, unlicensed transactions, or dealings by U.S. persons for the direct or indirect benefit of any designated drug trafficking organization are prohibited. U.S. persons may face civil or criminal penalties for violations of these sanctions.

These actions are part of a whole-of-government effort to counter the global threat posed by the trafficking of illicit drugs into the United States that is causing the deaths of tens of thousands of Americans annually, as well as countless more non-fatal overdoses. OFAC, in coordination with its U.S. government partners and foreign counterparts, will continue to target and pursue accountability for foreign illicit drug actors.

U.S. sanctions need not be permanent; sanctions are intended to bring about a positive change of behavior. Consistent with the findings of Treasury’s 2021 Sanctions Review, the removal of sanctions is available for persons designated under counter narcotics authorities who demonstrate a change in behavior and no longer engage in activities linked to international illicit drug trafficking or other sanctionable activity.

For information concerning the process for seeking removal from any OFAC list, including the Specially Designated Nationals and Blocked Persons List (SDN List), please refer to OFAC’s Frequently Asked Question 897.

Tips concerning the individual designated today can be submitted to HSI by phone 1-866-347-2423. Learn more about Arizona’s commitment of investigating cartel activity at @HSIPhoenix.

HSI is the principal investigative arm of the U.S. Department of Homeland Security (DHS), responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce of over 10,400 employees consists of more than 7,100 special agents assigned to 220 cities throughout the United States, and 80 overseas locations in 53 countries. HSI’s international presence represents DHS’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.