OFAC Sanctions Mexican and Colombian Nationals Involved in Sinaloa Cartel

On September 26, 2023, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 10 individuals involved in illegal fentanyl, cocaine, and methamphetamine trafficking into the United States on behalf of Mexico’s Sinaloa Cartel. As we’ll explore below, one of those individuals controls an Ethereum address that was included as an identifier on his SDN List entry. Today’s actions represent a coordinated effort between OFAC, the Drug Enforcement Administration (DEA), the Government of Mexico’s La Unidad de Inteligencia Financiera, and the Colombia Counternarcotics Working Group.

Who are the sanctioned individuals and what did they do?
Nine of the 10 sanctioned individuals are based in Mexico. Seven of the nine were previously indicted by the U.S. District Court for the Southern District of New York (SDNY) in April 2023 for fentanyl and weapons trafficking, and money laundering:

Jorge Humberto Figueroa Benitez managed personal security for Sinaloa Cartel members, and facilitated fentanyl production and trafficking.
Leobardo Garcia Corrales operated fentanyl labs.
Martin Garcia Corrales (Leobardo’s brother) also operated fentanyl labs.
Liborio Nunez Aguirre helped transport fentanyl into the U.S.
Samuel Leon Alvarado also helped transport fentanyl into the U.S.
Carlos Mario Limon Vazquez also helped transport fentanyl into the U.S.
Mario Alberto Jimenez Castro laundered money on behalf of the Sinaloa Cartel by using virtual currencies and wire transfers.
Julio Cesar Dominguez Hernandez worked with Jimenez Castro to transport drugs into the U.S.
Jesus Miguel Vibanco Garcia acted as a fentanyl supplier.

Jobanis de Jesus Avila Villadiego is the leader of Clan del Golfo, a Columbian criminal enterprise involved in cocaine production and transportation. He supplied cocaine to the Sinaloa Cartel and has a history of initiating other threatening activities, including a murder campaign against Columbian security and an “armed strike.”
Analyzing Mario Alberto Jimenez Castro’s on-chain crypto activity
Previous OFAC sanctions have revealed that many criminals involved in illegal drug production and trafficking use cryptocurrency to facilitate sales and launder money. Additionally, the DEA has reported that the most common flow of illicit drugs involves the movement of precursor chemicals from China to Latin America, after which Mexico-based drug cartels create drug products and smuggle them into the U.S. Our on-chain research confirmed these patterns and illustrated that fentanyl sales using cryptocurrency happen on a large scale.

OFAC included Jimenez Castro’s cryptocurrency address on its Specially Designated Nationals (SDN) List, 0x9c2bc757b66f24d60f016b6237f8cdd414a879fa, allowing us to examine his on-chain activity in Chainalysis Reactor. On the graph below, we see several payments coming from USDT-ETH addresses at U.S.-based exchanges, which then move either directly or through a single intermediary wallet into the now-sanctioned deposit address. This deposit address is nested at another mainstream exchange.

The activity shown above appears to align with OFAC’s press release, which details that U.S.-based couriers were picking up cash in the U.S., then depositing it into different cryptocurrency wallets on behalf of Jimenez Castro, likely at the exchanges shown above. These funds were then likely transferred back out to a faction of Mexico’s Sinaloa Cartel for the production of illicit fentanyl.

Monitoring drug trafficking involving cryptocurrency
Fentanyl and other illicit drugs continue to cause untold harm to United States citizens. We commend OFAC, the DEA, and Mexico’s La Unidad de Inteligencia Financiera for their efforts in disrupting drug operations and will continue to provide updates on the situation when available. We have labeled the relevant address as associated with the sanctioned entity in our product suite.

Article Credit: https://www.chainalysis.com/blog/ofac-fentanyl-sanctions-mexico-september-2023/