US Treasury Sanctions Mexican Nationals and Companies in Cartel Fuel Smuggling Ring

WASHINGTON – The U.S. Department of the Treasury announced on Tuesday, June 30, that it has imposed sanctions on two Mexican nationals and nine companies for their roles in a cross-border fuel smuggling network linked to the Jalisco New Generation Cartel (CJNG).

The action, taken by the Treasury’s Office of Foreign Assets Control (OFAC) in coordination with the Financial Crimes Enforcement Network (FinCEN), targets a scheme that officials say generates tens of millions of dollars annually for the cartel by illicitly moving fuel from the United States into Mexico.

According to the Treasury Department, the network exploits the significant tax differential between the two countries. The smugglers purchase fuel from U.S. refineries and distributors and then transport it into Mexico while evading the country's Special Tax on Production and Services (IEPS). This is achieved through various illicit methods, including falsifying customs documentation to misclassify the fuel, bribing government officials, and utilizing a complex web of front and shell companies on both sides of theborder.

Once the untaxed fuel is in Mexico, it is sold at a steep profit through a network of cartel-controlled gas stations and unregulated roadside stands. Mexico, a major crude oil producer, still relies on fuel imports because its aging domestic refineries cannot meet national demand, creating a lucrative market for such illicit operations.

The sanctions name Oscar Juraidini as a key operator in the scheme. Treasury officials allege Juraidini coordinated the fuel imports, falsified customs papers, and operated shell companies to facilitate the smuggling on behalf of the CJNG. Seven companies owned or controlled by Juraidini were also sanctioned: Centro Cambiario La Peseta, OJ Living Trust, RK Real King, Soma Transporte y Servicios, Ogui Fletes, OF Transportes, and the United Kingdom-based Cucumber Sweet Waves. These entities span the financial services, real estate, and transportation sectors.

The second individual sanctioned is J. Refugio Ruiz Villagomez. The Treasury stated that Ruiz knowingly smuggled fuel into Mexico without the proper permits, paid fees to cartels that control ports of entry, and used the U.S. financial system to conduct tens of millions of dollars in transactions tied to the cartel's fuel theft activities, known as "huachicol."

Two logistics companies linked to Ruiz, Jomadi Logistics & Cargo and Ahavat Logistics Solution, were also designated in the sanctions package. The Treasury noted that complicit U.S. fuel distributors leverage their relationships with major refineries to acquire the fuel before diverting it to the smuggling network. These U.S. entities then launder the proceeds through the purchase of luxury goods, real estate, and other investment assets.

This week’s action is part of a broader U.S. strategy to disrupt the financial lifelines of transnational criminal organizations, which are increasingly diversifying their revenue streams beyond narcotics trafficking. According to officials, this move builds upon previous sanctions in 2024 and 2025 that targeted the CJNG’s crude oil smuggling operations, with Texas remaining a focal point for this cross-border activity.

In addition to the sanctions, the Treasury issued new guidance to help banks and other financial institutions identify and report suspicious activity related to the cross-border fuel trade. This advisory provides financial institutions with red flags to better detect and combat illicit schemes that exploit the U.S. financial system.

These enforcement actions highlight the intricate connections between legitimate commercial sectors, like transportation and logistics, and the illicit activities of criminal organizations. For U.S. businesses engaged in cross-border trade, particularly in the energy sector, these developments underscore the critical importance of robust due diligence and compliance protocols. The expectation from regulators is that companies are actively vetting their partners and supply chains to avoid inadvertently facilitating illicit activities.

In our experience, sanctions like these serve as a stark reminder that international business carries inherent risks that go far beyond typical market fluctuations. The Treasury's new guidance effectively lowers the tolerance for willful blindness, placing a greater burden on U.S. companies to know who they are doing business with, especially in high-risk jurisdictions and industries. A claim of ignorance is no longer a viable defense when a company’s logistics or financial partners are implicated in a cartel’s money laundering scheme. We have seen how quickly a legitimate business can become entangled in a regulatory nightmare due to a single compromised link in its supply chain. This is precisely the kind of complex exposure where our financial risk management services can provide clarity. Business owners concerned about their international partners and supply chain integrity can contact C&S Finance Group LLC at csfinancegroup.com for a comprehensive review.

Looking ahead, financial institutions and American businesses involved in the U.S.-Mexico fuel trade will face heightened scrutiny as they work to implement the new FinCEN guidance. The Treasury Department has signaled its intent to continue targeting the financial infrastructure of cartels, suggesting that further sanctions and enforcement actions against facilitators of these illicit networks are likely.