Rafael Caro Quintero hasn’t been out of jail for three (3) months, and yet the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) is already back on the case. Caro Quintero was designated pursuant to the Foreign Narcotics Trafficking Kingpin Designation Act (“Kingpin Act”) in 2000, making him one of the first individuals designated pursuant to that Act which was passed in December of 1999. Today, OFAC designated twenty (20) entities and one (1) individual linked to Caro Quintero. The entities designated are alleged to be either owned or controlled by one or more individuals previously designated because of their connections with Caro Quintero. As readers of this blog will know, U.S. persons are prohibited from engaging in almost all transactions with any individual or entity designated pursuant to the Kingpin Act. In addition, any assets owned or controlled by parties designated pursuant to the Kingpin Act which are under U.S. jurisdiction are to be blocked.

On August 9, 2013, Caro Quintero was released from a Mexican prison with twelve (12) years remaining on his sentence stemming from a conviction for murder of a Drug Enforcement Administration (DEA) agent. He is also currently a fugitive from U.S. law enforcement as there is an indictment pending against him in the Central District of California. But even prior to his release, OFAC was still going after Caro Quintero. In June of this year, the agency designated eighteen (18) individuals and fifteen (15) entities with alleged ties to Caro Quintero.

According to the Treasury press release, the companies designated today are, “primarily located in or near Guadalajara. Several of these companies are engaged in real estate activities, including Arrendadora Turin, Barsat, and Villas del Colli. Others are gasoline retailers or engaged in agricultural activities, including Petro London, Servicio y Operadora Santa Ana, and Minerales Nueva Era, which produces and sells an organic fertilizer known as Diatomag as well as an organic pesticide known as Diatomkill.” In addition to the companies designated, OFAC designated Juan Carlos Soto Ruiz, a Guadalajaran native who is believed to hold a key management role over a number of the designated companies, including Arrendadora Turin and Servicio y Operadora Santa Ana, as well as three of the companies designated on June 12, 2013, including Pronto Shoes (a.k.a. CX-Shoes).

In the past thirteen (13) years, the President has identified 103 Tier I drug kingpins, and OFAC has designated more than 1,300 businesses and individuals as Tier II Kingpins under the Kingpin Act. Many Tier II designations are removed once parties contest them and can prove a case of mistaken identity or changed circumstances. However, the Tier I Kingpins are harder to remove. Indeed, I am not familiar with many Tier I’s that have been removed. As such, while those parties designated by OFAC over the last six (6) months due to their connections with Caro Quintero have a decent shot at being removed from the SDN List if they cut ties with him, the likelihood of Caro Quintero being removed from the SDN List are very slim.

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