On March 31, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated members of a money laundering network that supports the Sinaloa Cartel, one of the most notorious and violent drug trafficking organizations in the world. According to OFAC, the Sinaloa Cartel is responsible for a significant portion of illicit fentanyl and other deadly drugs that trafficked into the United States. On February 20, 2025, the U.S. Department of State identified the Sinaloa Cartel as a Foreign Terrorist Organization and as a Specially Designated Global Terrorist.
OFAC designated a total of six individuals and seven entities for laundering funds on behalf of the Sinaloa Cartel. The designees include Enrique Dann Esparragoza Rosa who allegedly operates a money laundering organization that transfers illicit narcotics proceeds from the United States to Mexico. According to OFAC, Esparragoza transfers the funds using a currency arbitrage scheme that is operated through currency exchange businesses along the U.S.-Mexico border. OFAC reported that Esparragoza has laundered at least $16.5 million for Sinaloa Cartel clients. OFAC also designated Tapgas Mexico S.A. de C.V., a Mexico-based company that Esparragoza controls.
All of the new designations were imposed pursuant to Executive Order 14059, which targets persons involved in the international proliferation of illicit drugs or their means of production, and pursuant to Executive Order 13224, as amended, which targets terrorist groups and their supporters. As a result of these designations, all property and interests in property of the designated persons within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving a designated person. Entities owned 50 percent or more by one or more blocked persons are also blocked.
On the day of the designations, the U.S. District Court for the Southern District of California unsealed two federal grand jury indictments that charged five newly-designated individuals with money laundering offenses in 2022. OFAC reported that federal prosecutors unsealed indictments of Mexicali-based designees Salvador Diaz Rodriguez and Israel Daniel Paez Vargas, who allegedly laundered funds on behalf of the Sinaloa Cartel. Indictments were also unsealed for Mexico City-based designee Alberto David Benguiat Jimenez, who allegedly operated a money laundering network responsible for moving illegal narcotics proceeds from the United States into Mexico for the Sinaloa Cartel, and designee Christian Noe Amador Valenzuela, a close associate of Benguiat who allegedly laundered funds as part of Benguiat’s network. The U.S. Attorney’s Office for the Southern District of California (“USAO”) also revealed that Esparragoza had been previously charged with money laundering conspiracy. According to the USAO, all of the defendants remain fugitives from justice.
On March 31, 2025, the Financial Crimes Enforcement Network (“FinCEN”) also issued a related Alert on the cross-border smuggling of bulk cash from the United States into Mexico and its repatriation into U.S. and Mexican financial systems by Transnational Criminal Organizations (“TCOs”) based in Mexico. FinCEN urged financial institutions to be vigilant to such activity.
U.S. Department of Treasury Press Release | OFAC – Sinaloa Cartel Money Laundering Network Chart | USAO SDCA Press Release | FinCEN Alert