Last week the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) expanded its Specially Designated Nationals (“SDN”) List once again by adding four persons it has designated as Specially Designated Narcotics Trafficking Kingpins (“SDNTKs”). Of these four, two were individuals and two were entities.

The two individuals, Wenceslao Alvarez Alvarez and Ignacio Mejia Guiterrez, are both Mexican citizens who are accused of being tied to La Familia Michaocana; an alleged drug trafficking organization that was designated as an SDN in April of 2009. According to OFAC Director Adam J. Szubin, Mr. Alvarez runs a drug trafficking empire, which moves cocaine and marijuana, spanning from Columbia to Atlanta, Georgia.

Mr. Guiterrez is accused of being Mr. Alvarez’s front man and managing one of his companies: Mega Empacadora de Frutas S.A. de C.V. This company was also designated as an SDNTK by OFAC last week. The other company which was designated was Importaciones y Exportaciones Nobaro S.A. de C.V., another company owned by Alvarez.

Internationally, OFAC has designated more than 700 individuals and entities linked to 87 drug kingpins since June 2000. Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

A designation by OFAC lasts a lifetime if it is not challenged. In order to challenge that designation one must follow the complicated regulatory procedures laid out in the U.S. Federal Code of Regulations. In addition, one must submit arguments and evidence to OFAC to show that the designation was made in error or that the circumstances which originally lead to the designation no longer apply. The process is long and difficult, it truly benefits the designated party challenging the designation to retain counsel experienced in the removal process and knowledge about OFAC administered sanctions programs.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.