As preparations proceed for Mexico’s most notorious drug lord to face trial in the United States, his successor continues to bring in massive profits for the Sinaloa Cartel.
Almost two years after his extradition to the United States, Joaquín “El Chapo” Guzmán is on the cusp of having his first day in court.
Selection of the jury to pass judgement on the former boss of the Sinaloa Cartel began in New York today under tight security.
The names of all potential jurors will not be released and those selected to make up the panel will also remain anonymous and be afforded special security.
Opening statements in the trial, which is expected to last for between two and four months, are tentatively scheduled for November 13.
Guzmán, who gained additional notoriety for his two prison escapes, faces the possibility of life imprisonment if convicted on charges of criminal enterprise, drug trafficking, money laundering and homicide, among other crimes.
Meanwhile, Ismael Zambada García, a 70-year-old former poppy-field worker and long-time partner of “El Chapo,” is fighting to continue the cartel’s lucrative illicit activities as other criminal organizations try to expand their influence.
During several decades, the trafficker better known as El Mayo, along with Guzmán and other Sinaloa Cartel members, built a multi-billion-dollar empire on cocaine and heroin among other drugs as well as human trafficking.
In addition to life imprisonment, authorities in the United States are seeking a US $14-billion forfeiture from Guzmán while the Bloomberg Billionaires Index estimates that Zambada has a net worth of at least US $3 billion.
Their vast riches are fruits of the cartel’s ability to switch the products it sells in response to demand, virtually monopolize key markets in the United States and expand its export links to countries on the other side of the world, such as Australia.
“Their reach is incredible,” said Anthea McCarthy-Jones, a professor at the University of New South Wales who researches the structure of transnational crime networks from Canberra, Australia.
“Sinaloa still remains the organization with the best international connections. That’s something that they seem to be really good at.”
The cartel has allegedly laundered ill-gotten gains through some of the world’s largest banks to subsequently invest in both Mexican and foreign companies or to shift funds to offshore accounts.
According to the United States Drug Enforcement Agency (DEA), leadership of the Sinaloa Cartel has injected cash into some 250 companies, many of which are still in business.
The network of cartel businesses, the news agency Bloomberg said, stretches from the Sinaloa capital of Culiacán to Honduras, Panama and Colombia.
A water park and a children’s daycare center allegedly run by Zambada’s daughter María Teresa are among El Mayo’s many interests.
“He has a very diversified portfolio,” said Mike Vigil, the former head of international operations for the DEA.
“Even though he’s only had maybe an elementary-school education, he’s received a Harvard-level education from some of the most prolific, knowledgeable and astute drug lords that Mexico has ever had,” he added.
A Bloomberg analysis based on seizure and pricing figures from the DEA found that the Sinaloa Cartel rakes in, on average, US $11 billion a year.
However, that figure is likely below the real dollar-amount because it doesn’t include revenue from markets outside the United States and it assumes that 50% of all drugs shipped to the U.S. are seized, the news agency said.
According to people with knowledge of the cartel’s activities who spoke to Bloomberg, at least 5% of the total revenue has gone to the criminal organization’s top leadership, meaning that since 2011 Zambada would have received US $3 billion.
But with a US $5-million reward from the United States State Department on his head and as he continues to hide out in the mountains of northern Mexico, “the last capo standing may be losing his grip on the world’s largest drug cartel,” Bloomberg said.
With Chapo’s former allies sensing a power vacuum and other criminal organizations – most notably the Jalisco New Generation Cartel (CJNG) – filling or aiming to fill it, Mexico’s homicide rate is going through the roof.
With more than 30,000 murders, 2017 was the most violent year in at least two decades and this year is on track to be even bloodier.
But as the blood flows in Mexico, so too does the money.
U.S. authorities have “shut down some of the businesses [the Sinaloa Cartel is involved in], not all,” Vigil said.
Mexican “asset-forfeiture laws and seizures have a lot of loopholes,” he added.
The Sinaloa Cartel also continues to diversify not only the products it deals in but also the markets it buys and sells in.
Under Zambada’s reign, the Sinaloa Cartel has widened its supply sources for precursor chemicals used to make drugs such as fentanyl and methamphetamine to markets as far away as China.
It imports the raw materials and later ships the final product across the northern border or further afield, generating enormous profits.
Some proceeds are used to buy clothing — often counterfeit products from factories in China. The goods are then imported to supposedly legitimate businesses in Mexico, where prices are marked up, generating yet more profits.
Pirated clothing and other goods, known colloquially as fayuca, abound in certain tianguis, or street markets, such as that in the notoriously dangerous Mexico City neighborhood of Tepito.
Sales of fentanyl, a synthetic opioid for which demand in the United States has grown as that country’s so-called opioid crisis unfolds, has provided a potent injection to the Sinaloa Cartel’s finances.
Diversification into the product is perhaps its “most successful innovation,” Bloomberg said.
One kilogram of the drug bought in China can generate revenue 24 times greater than a kilo of traditional heroin bought in Colombia, according to the DEA.
“In the last three or four years, we started to see this fentanyl hit the streets,” said Bryce Pardo, an associate health policy researcher at Rand Corp.
“It seems like China is the primary source, at least with regards to the precursors, if not the finished product itself. The Mexican cartels have been involved with trafficking the finished products across the border.”
However, while the Sinaloa Cartel’s continued profits appear to be assured, there is less certainty about its long-term leadership.
Zambada, who suffers from diabetes, is getting on in years while one of his sons is set to be sentenced in Chicago next month on drug trafficking charges and another pleaded guilty to the same crime in California in 2013.
El Chapo, who has allegedly continued to wield some influence in the Sinaloa Cartel despite being behind bars, is about to face trial.
His sons, one of whom is on the DEA’s 10 most wanted fugitives list, are increasingly involved in the cartel’s operations but according to Vigil, they lack the criminal expertise of their father and Zambada.
For El Mayo, death – from illness or otherwise – or a decision to step down voluntarily, rather than capture by authorities, would appear to be the most likely ways for his reign to end.
“I have been up into those mountains and it’s very difficult to capture anybody,” Vigil said.
“Mayo Zambada is one of the most astute drug traffickers that Mexico has ever spawned.”
Unlike El Chapo, he has never escaped from prison. In more than half a century in the drug trade, he’s never had to.