Mexico: Ye Gon's meth ring & complicity of corrupt officials

The suspect has said he was forced by Mexican authorities to store money in his home.
(Richard Drew / AP)


http://www.latimes.com/news/printedition/asection/la-fg-mexdrugs25jul25,1,6713809.story?coll=la-news-a_section
From the Los Angeles Times
Calderon hails arrest in cash case
The owner of a mansion in Mexico City where $207 million was found is arraigned in the U.S.
By Héctor Tobar
Times Staff Writer

July 25, 2007

MEXICO CITY — A week ago, Zhenli Ye Gon was the toast of the Mexican media.
Speaking to reporters by telephone while in hiding, he said he would prove that senior officials of the government of President Felipe Calderon were responsible for the $207 million in illicit cash found in his Mexico City home.
On Tuesday, Ye Gon was in a U.S. courtroom, having been captured hours earlier at a restaurant in suburban Washington by U.S. agents who traced his cellphone. And Calderon was claiming victory in a case that officials say yielded the biggest haul of drug money in history.
"Today, those who commit crimes should know that my government will not spare any resources or effort to hunt them down wherever they may be, inside or outside our national territory," Calderon said at a speech at his alma mater here, the Free School of Law.
Agents of the U.S. Drug Enforcement Administration arrested Ye Gon in Wheaton, Md., on Monday night, about four months after police entered his Mexico City mansion on suspicion that he was running a methamphetamine production ring.
With its massive haul of cash, involving more than 2 tons of U.S. $100 bills, and allegations of official complicity, the case has come to symbolize the wealth and power behind the international trade in illicit drugs.
A 44-year-old naturalized Mexican of Chinese descent, Ye Gon was arraigned Tuesday in U.S. District Court in Washington on drug-trafficking charges. Mexican authorities alerted their U.S. counterparts last month that they thought Ye Gon was in the United States.
Mexican authorities have said they will request Ye Gon's extradition on a variety of drug-trafficking charges. If convicted in Mexico, he faces up to 73 years in prison.
U.S. authorities filed their own charges against Ye Gon last month.
On Tuesday, U.S. officials released an affidavit by a DEA agent in Mexico with new details on the scale of Ye Gon's alleged operation. He is said to have imported enough chemicals to produce methamphetamine worth $724 million on the street.
A note discovered at Ye Gon's home refers to apparent assistance from corrupt Mexican customs officials, the affidavit said.
Ye Gon traveled often to Las Vegas to launder drug money and to gamble, the affidavit said. Between 2004 and 2007, records from Las Vegas hotels and casinos show, Ye Gon had gambling losses of $125.9 million.
The DEA also conducted tests in April at Ye Gon's Mexican pharmaceutical plant and found ephedrine, a stimulant and decongestant used to manufacture methamphetamine.
Martin McMahon, a Washington lawyer representing Ye Gon, told the Associated Press that the charges against his client were "complete nonsense…. He has never had drugs, and he didn't have any drugs on him when he was arrested."
If he is extradited, Ye Gon will not receive a fair trial in Mexico, McMahon said.
"President Calderon has already said he is going to jail," McMahon said. "We will vigorously oppose his extradition."
In statements made before his arrest, Ye Gon said Mexican officials had forced him to store the money in his home. He said the funds were destined for use in Calderon's 2006 presidential campaign and "terrorist" activities. Calderon called the statements a "tall tale."
Ye Gon's arrest comes amid growing concern in Mexico that his alleged drug operation may have flourished thanks to the complicity of corrupt officials.
According to news reports here, an investigation by the Mexican attorney general's office is focusing on the role of drug regulators and of a high-ranking tax and customs official, Luis Roberto Patron Arregui.
The investigation has found that Patron Arregui assisted Ye Gon by providing false documents that allowed Ye Gon's company to import chemicals required to produce pseudoephedrine, also a precursor to methamphetamine.
During the administration of President Vicente Fox, Patron Arregui ran the customs office at the Pacific port of Manzanillo.
After winning the presidency last year, Calderon named Patron Arregui to head the national customs office, but Congress refused to even hold confirmation hearings because of allegations that he was corrupt.
Patron Arregui instead became the No. 2 official in Mexico's tax collection agency. He is related by marriage to the Coppel family, a key backer of Calderon's presidential campaign.
--
hector.tobar@latimes.com



police discovered $207 million at his Mexico City mansion

U.S. agents arrest fugitive in historic drug bust
By Hector Tobar, Times Staff Writer
5:55 PM PDT, July 24, 2007

MEXICO CITY -- A week ago, Zhenli Ye Gon was the toast of the Mexican media.

Speaking by telephone from a hiding place, he told a news conference that he would one day prove that senior officials of the government of President Felipe Calderon were responsible for the $207 million in illicit cash found in his Mexico City home.
Tuesday, Ye Gon was in a U.S. courtroom, having been captured hours earlier at an Asian restaurant in suburban Washington by U.S. agents who traced his cell phone. And Calderon was claiming victory in what was said to be the largest drug-cash seizure in the country's history.
"Today, those who commit crimes should know that my government will not spare any resources or effort to hunt them down wherever they may be, inside or outside our national territory," Calderon said at a speech at his alma mater, the Free School of Law.
Agents of the U.S. Drug Enforcement Administration arrested Ye Gon in Wheaton, Md., Monday night, some four months after Mexican police entered his Mexico City mansion on suspicion that he was running a methamphetamine production ring.
With its massive haul of cash, involving more than 2 tons of U.S. $100 bills, and allegations of official complicity, the case has come to symbolize the great wealth and power behind the international trade in illicit drugs.
A 44-year-old naturalized Mexican of Chinese descent, Ye Gon was arraigned Tuesday in U.S. District Court in Washington on drug-trafficking charges. Mexican authorities alerted their U.S. counterparts last month that they thought Ye Gon was in the United States.
Mexican authorities have said they will request Ye Gon's extradition on a variety of drug-trafficking charges. If convicted in Mexico, he faces up to 73 years in prison.
U.S. authorities filed their own charges against Ye Gon last month.
Tuesday, U.S. officials released an eight-page affidavit by a DEA agent in Mexico City that offers new details on the vast scale of Ye Gon's alleged operation. He is said to have imported enough "precursor chemicals" to produce methamphetamines with a street value of $724 million.
A note discovered at Ye Gon's home refers to apparent assistance from corrupt Mexican customs officials, the affidavit said.
Ye Gon traveled often to Las Vegas to launder drug money and to gamble, the affidavit said. Between 2004 and 2007, records from Las Vegas hotels and casinos show Ye Gon had gambling losses of $125.9 million.
DEA agents conducted tests in April at Ye Gon's Mexican pharmaceutical plant and discovered ephedrine, a stimulant and decongestant that can be used to manufacture methamphetamines.
Martin McMahon, a Washington lawyer representing Ye Gon, told The Associated Press that the charges against his client were "complete nonsense. . . . He has never had drugs, and he didn't have any drugs on him when he was arrested."
If he is extradited, Ye Gon will not receive a fair trial in Mexico, McMahon said. "President Calderon has already said he is going to jail," McMahon said. "We will vigorously oppose his extradition."
In statements made before his arrest, Ye Gon said Mexican officials had forced him to store the money in his home. He said the funds were destined for use in Calderon's 2006 presidential campaign and "terrorist" activities. Calderon called the statements a "tall tale."
Ye Gon's arrest comes amid growing concern in Mexico that his alleged drug operation may have flourished thanks to the cooperation and complicity of corrupt officials.
According to news reports, an investigation by the Mexican attorney general's office is focusing on the role of drug regulators and of a high-ranking tax and customs official, Luis Roberto Patron Arregui.
The investigation has found that Patron Arregui assisted Ye Gon by providing false documents that allowed Ye Gon's company to import chemicals required to produce pseudoephedrine, a precursor to methamphetamine.
During the administration of President Vicente Fox, Patron Arregui ran the customs office at the Pacific port of Manzanillo.
After winning the presidency last year, Calderon named Patron Arregui to head the national customs office, but Mexico's Congress refused to hold confirmation hearings, because of allegations that he was corrupt.
Patron Arregui instead became the No. 2 official in Mexico's tax-collection agency. He is related by marriage to the Coppel family, a key backer of Calderon's presidential campaign.



Authorities Nab Alleged Mexico Drug Kingpin Zhenli Ye Gon in Maryland
Tuesday , July 24, 2007
AP


MEXICO CITY —
U.S. federal agents have arrested a Mexico City businessman wanted in connection with one of the Western Hemisphere's largest trafficking rings for the main chemical ingredient in methamphetamine.
Zhenli Ye Gon was arrested in a Maryland restaurant Monday evening, four months after police discovered $207 million at his Mexico City mansion in what U.S. officials have called the world's biggest seizure of drug cash.
Mexican Attorney General Eduardo Medina Mora called the arrest "magnificent news" and said Mexican officials had 60 days to file their legal arguments for Ye Gon's extradition. The Chinese-Mexican fugitive is wanted on organized crime, drug trafficking and weapons charges.
DEA spokesman Garrison Courtney said Ye Gon was arrested on drug smuggling and money laundering charges, adding that he was tracked down by agents and did not turn himself in.
Medina Mora said the cash seized at Ye Gon's home was connected to one of the hemisphere's largest networks for trafficking pseudoephedrine, the main ingredient in methamphetamines. He said the ring had been operating since 2004, illegally importing the substance and selling it to a drug cartel that mixed it into the crystal form and imported into the United States.
Ye Gon has said the chemicals imported by his company, Unimed Pharm Chem de Mexico SA, were legitimate and intended for use in prescription drugs to be made at a factory he was building in Toluca, just west of the Mexican capital.
Ye Gon also claimed that $150 million of the money belonged to Mexico's ruling party, and that he was forced to store it for party officials in his mansion under threat of death during the 2006 presidential race, which Felipe Calderon narrowly won.
Calderon has called the accusations "pure fiction."
Ye Gon's U.S.-based lawyer, Ning Ye, denounced the "lousy evidence made up by Mexican government" and said Ye Gon would apply for political asylum in the United States.
Ye said DEA agents swarmed a restaurant in Silver Spring, Md., where Ye Gon was dining with another member of his legal team. The agents also raided the house where Ye Gon had been staying. Ye Gon went willingly, he said.
The Mexican Attorney General's office said Ye Gon was arrested in Rockville, Md. The discrepancy could not immediately be explained.
Ye said he was surprised by the arrest because he said he had reached a verbal agreement last week with a DEA agent in Mexico that called for Ye Gon to surrender to U.S. marshals on Thursday. In return, Ye Gon was to be tried in the United States, not Mexico, Ye said.
"Only the United States can provide the most comprehensive procedural safeguards concerning what is happening on the Mexican side," Ye said.
Ye said he will file the first motions in the legal battle at a U.S. district court in Washington early Tuesday.
Medina Mora said Ye Gon's girlfriend Michelle Wong had been detained in Las Vegas and may also face criminal charges.
Rogelio de la Garza, Ye Gon's lawyer in Mexico, said he feared that U.S. authorities may simply deport him to avoid a drawn out battle in a U.S. court.
De la Garza said he will fight for Ye Gon's immediate freedom if he arrives in Mexico, arguing the money was earned legally and that Ye Gon was not found with any narcotics.
U.S. anti-drug officials have praised Calderon's crackdown on Mexican traffickers since taking office. DEA chief Karen Tandy also applauded Mexican agents following the March money seizure.
"This is like law enforcement hitting the ultimate jackpot. But luck had nothing to do with this windfall," Tandy said, calling it "the largest single drug-cash seizure the world has ever seen."