The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has named two Mexico-based entities, as well as six individuals as Specially Designated Narcotics Traffickers (SDNT) for their ties to Productos Farmaceuticos Collins (Collins). Collins is a pharmaceutical company in Jalisco, Mexico which was designated under the Foreign Narcotics Kingpin Designations Act (Kingpin Act) as an SDNT in 2008.

Pursuant to the Kingpin Act the designation has the effect of freezing any assets belonging to the designees which fall under U.S. jurisdiction. Furthermore, U.S. persons are prohibited from conducting commercial transactions with these individuals and entities.

According to the Department of Treasury’s Press Release:

“Today’s action targets Collins executives and family members of Collins owner Telesforo Baltazar Tirado Escamilla for assisting the company in attempting to evade sanctions. Collins officers Felipe de Jesus Espinosa de los Monteros Rico and Aurora Brambila Martinez and companies Insumos Ecologicos de Oriente and Alimentos Selectos San Francisco have actively assisted Collins in attempting to evade sanctions. Additionally, Maria Teresa Diaz Castro, Baltazar Tirado Diaz, Maria Teresa Tirado Diaz, and Liliana Guadalupe Tirado Diaz serve as key front individuals for Collins and its owner, Telesforo Baltazar Tirado Escamilla.”

OFAC Director Adam J. Szubin also sent a message to Mexican drug cartels stating, “Our message to the Amezcua Contreras Organization and other Mexican drug cartels is clear. Your money is not safe, and those who help to conceal it will pay a heavy price.”

Collins is alleged to be part of a pseudoephedrine diversion network that supports the Amezcua Contreras Organization. OFAC believes that the Amezcua Contreras Organization uses the diverted pseudoephedrine as a precursor for methamphetamine production.

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.

Director Szubin hit the nail on the head when he said that the drug cartels’ money is not safe; at least that money under U.S. jurisdiction. However, having worked on a few Kingpin Act removal cases where alleged money laundering took place on behalf of the cartels, I can say that the evidence that leads to such designations is not always very strong. That’s not to say that the designations here are not warranted, however, from an outsider’s prespective it seems OFAC is being very broad in their actions to take down the Amezcua Contreras Organization.