Borderline Psychosis, Invasion of the Body Snatchers Edition- Gunmen Steal Corpse of Slain Zetas Leader; Friendly Fire Likely Behind Border Patrol Agent's Death

COAHUILA- Mexican Marines reportedly shot and killed the leader of the infamous paramilitary Zetas cartel during a firefight in the town of Progreso on Sunday. However, in a bizarre development the body of Zetas boss Heriberto Lazcano was stolen from a nearby mortuary at gunpoint in the early morning hours of Monday morning.

According to Mexico's Secretariat of National Defense, the Marines were responding to reports of armed men gathered outside of a baseball stadium in Progreso. When they arrived, gunmen moving in a small convoy threw grenades at them before the Marines returned fire, killing two of the gunmen.

Rear Admiral Jose Luis Vergara stated that the Marines had assumed that they had killed two low-level sicarios in the skirmish. Authorties took pictures of the two dead gunmen as well as fingerprints.

What reportedly happened next is a truly bizarre development. According to Coahuila Attorney General Homero Ramos, armed men broke into the funeral home in the early morning hours of Monday morning and stole the corpse of Lazcano and one of his accomplices.

The theft of the two bodies quickly turned what should have been a moment of triumph for outgoing Mexican president Felipe Calderon into an embarassment that casts doubt on the official version of events in a nation that has grown increasingly skeptical of both the police and media.

While the cult-like and largely dismantled La Familia Michoacana was sometimes known to take their dead with them while retreating from a firefight, there were no reports of them actively breaking into funeral homes or mortuaries to retrieve their associate's bodies.

The Zetas had been rocked by prolonged infighting in recent months- after splitting with the enforcers-turned-cartel earlier this year, former high ranking Zeta Ivan 'El Taliban' Velazquez Caballero was tracked down and arrested by Mexican federal police last month.

Miguel Angel Trevino- who also goes by the monicker Z-40- is said to be the heir apparent to the Zetas. In June, his brother was arrested by the DEA in a multi-state raid where he and others were accused of laundering millions in drug money through the purchase and training of racehorses.

Francisco Kjolseth / Salt Lake Tribune photo

ARIZONA- A preliminary investigation into the shooting death of a US Border Patrol agent has found that friendly fire was likely responsible. Agent Nicholas Ivie was killed on October 2nd as he and another agent were responding to a sensor along the border in rural Cochise County, AZ that was tripped in the predawn hours.

“There are strong preliminary indications that the death of United States Border Patrol Agent Nicholas J. Ivie and the injury to a second agent was the result of an accidental shooting incident involving only the agents,” FBI Special Agent in Charge James L. Turgal Jr. said in a statement.

Turgal didn’t elaborate on the agency’s conclusions but said the FBI is using “all necessary investigative, forensic and analytical resources” as it investigates the Tuesday shooting about five miles north of the border near Bisbee.

One of the other agents was shot in the ankle and buttocks, but was released from the hospital after surgery. The third agent was uninjured.

The Cochise County Sheriff’s Office, which is assisting the FBI in the probe, said federal investigators used ballistic testing to determine the shootings likely were the result of so-called friendly fire among the agents.

While federal authorities declined to offer details of the shooting, George McCubbin, president of the National Border Patrol Council, said the three agents split up as they investigated the sensor alarm, noting they all fired their weapons.

“Coming in from different angles, that is more than likely how it ended up happening,” McCubbin told The Arizona Republic of the shootings.

Agent Ivie is scheduled to be laid to rest in his Utah hometown on Thursday. Nicholas Ivie is survived by his wife, Christy and daughters, Raigan DeAnn and Presley Delna; his mother, Cheryl Ivie, father Douglas Ivie and step mother, Donetta Ivie; his siblings, Chris Ivie (Michelle), Andrea Davis (Todd), Rick Ivie (Corinne), and Joel Ivie (Anne).

Borderline Psychosis Update- Drug Tunnel Discovered in AZ; Cartels Finding Slick New Way to Skirt Border Patrol? Car Bomb in Tamaulipas Kills Two

ARIZONA- Investigators in Arizona keeping a warehouse in the southwestern border town of San Luis under surveillance had discovered this month a recently completed drug tunnel connecting it with San Luis Rio Colorado on the Mexican side of the border.

Engineered with 4-by-6 beams, plywood walls, ceilings and floors, and a lighting and ventilation system, the fully operational tunnel was used to smuggle methamphetamine and possibly other drugs, the DEA said.

"From what I've heard and in my experience, this is probably the most sophisticated tunnel that they've probably found in Arizona," said Doug Coleman, special agent in charge of the DEA's Phoenix field office.

"It's really a piece of work," he said. "It looks like it was designed to be on a pulley system where you could just download the drugs in San Luis (Rio Colorado, Sonora) and use a pull cart to pull them all the way through and then pop them up on this side."

Coleman said he does not believe the tunnel was in operation for more than a week, based on the "pristine" condition of the shaft and the fact that drums filled with dirt removed from the tunnel were on pallets still inside the building. "I think it was very new," he said.

According to the DEA and Arizona Department of Public Safety, on July 6th, an Arizona State Trooper pulled over a Ford F-150 on US Route 95 in the Yuma, AZ area. A search of the vehicle turned up nearly 40 pounds of methamphetamine wrapped up in packaging in the bed of the truck.

After contacting the DEA, a search warrant was obtained for the warehouse in San Luis where the tunnel was discovered. The tunnel reportedly led to a recently-constructed ice distribution warehouse on the Mexican side of the border.

MEXICO- Police in the outskirts of Mexico City have arrested a number of men who were accused in attacking and robbing more than 90 youths from a church group who were on a camping retreat at an ecological preserve at the base of the Popocatepetl volcano. Even in nation that has grown increasingly jaded over brazen acts of murder committed in broad daylight, the crime shocked Mexico's general public.

Police arrested 17 men Wednesday on suspicion of attacking youths and raping five women and girls who were on a church camping trip outside Mexico City, a brutal assault that shocked much of the country.

The attorney general for the State of Mexico, Alfredo Castillo, said 11 of the gang members were identified by some of the victims. In interrogation videos played for reporters, three of the suspects confessed that they sexually abused the women and girls because fellow attackers told them to.

Two of the suspects were local police officers and another had served in the military, Castillo said, speaking two days after authorities announced the arrest of a man who was described as not directly involved in the assault on the camp-out but who allegedly provided information to the assailants.

The attacks, robberies, assaults and rapes took place over a period of several hours on Friday the 13th in the park which straddles the border of the states of Mexico and Puebla. At least 7 girls in the church group were sexually assaulted before their assailants left in stolen vehicles.

According to Mexico's state prosecutor, 12 of the 17 men in custody were identified by the victims as taking part in the assaults and robberies. Reportedly, none of the men in custody have any ties to the major organized crime organizations that have been locked in an ongoing bloody turf-wars since 2006.

DISTRITO FEDERAL- Authorities in Mexico's capitol city say they have arrested one of three Federal fugitive policemen who are wanted in the connection with a shootout where they killed three colleagues at Mexico City's international airport in late June. Mexican authorities say they've captured one of three rogue federal police officers who allegedly took part in a June 25 shootout that killed three of their colleagues at Mexico City's international airport.

Federal Police regional security chief Luis Cardenas Palomino says suspect Bogard Felipe Lugo de Leon was caught at a Mexico City apartment after police received a tip.

Cardenas Palomino says Lugo de Leon confirmed that one of the two officers who opened fire on their colleagues was about to be handcuffed for purportedly trafficking drugs through the terminal.

He says the bust was not pre-planned, but occurred when one of the rogue officers was caught in the act.

However, many in the Mexican press have questioned the official version of events leading up to the June 25th deadly shootout at Benito Juarez International Airport.

Mexican media have begun to question the official account, asking whether the gunfight could have been the result of a falling-out among co-conspirators. If it was an operation to capture traffickers in the act, some said, why did it take 20 minutes for additional police officers to appear after the shooting began? Why were only three police officers sent to arrest two armed fellow officers in a crowded airport?

“Tricks, lies, inventions!” the columnist Manuel J. Jauregui wrote in the Reforma newspaper Wednesday, adding that the operation was an embarrassment and that federal authorities were scrambling to get their stories straight. “They don’t even know who were the good guys and who were the bad guys,” Jauregui wrote.

Two other Federal Police officers are wanted for their role in the airport terminal shooting.

TAMAULLIPAS- Two police officers were killed and another 7 people were wounded when a powerful car bomb was detonated outside of the home of the top police official in Tamaulipas earlier this month.

Tamaulipas state Interior Secretary Morelos Canseco said Public Safety Secretary Rafael Lomeli wasn't injured in the blast, but that three neighbors were injured by glass fragments from shattered windows.

Canseco said the bomb was detonated with a cellphone soon after Lomeli arrived at his home. He said the car bomb showed an increased sophistication, both in the detonator and explosives used. It apparently exploded in a car parked just outside a security barrier on a street on which the official's home is located.

The bomb went off just outside a security checkpoint in the capital city of Tamaulipas. No organization has claimed responsibility for the bomb. Two years ago, a car bomb killed three police officers in Ciudad Juarez across the border from El Paso, TX.

TEXAS- Drug traffickers may be taking advantage of a boom in natural gas drilling in the Lone Star state to help move their product and circumvent Border Patrol checkpoints around the Eagle Ford shale in South Texas.

Map courtesey of Houston Chronicle

Drug traffickers have discovered that private roads sturdy enough to accomodate tractor-trailer and heavy duty pickup traffic serving drilling sites for companies like Exxon Mobil [NYSE- XOM], Halcon Resources [NYSE- HK] or Apache [NYSE- APA] can accomodate their vehicles and payload of contraband. Moreover, many of these private roads also bypass fixed Border Patrol checkpoints in South Texas.

Hefty roads running through once-remote ranchlands now enable loaded-down tractor-trailers and pickups to avoid Border Patrol highway checkpoints that have long been the last line of defense for stopping all traffic headed farther into the United States.

Traffickers are seeking to use the southwest-most stretches of the massive Eagle Ford shale formation, which stretches from Mexico all the way to East Texas, to their advantage by trying to corrupt truck drivers, contractors and gate personnel. Authorities also speculate that they are trying to make "cloned" copies of legitimate trucks and use contractor-like vehicles to avoid standing out among fleets of oil-field service vehicles working for energy companies. In some cases, vehicles have been stolen and believed to have been used by smugglers.

"They are using those roads to transport drugs, guns, ammo, you name it," said Albert DeLeon, chief deputy of the Dimmit County sheriff's office.

"Our biggest concern is how law enforcement is going to attack the threat. We cannot move Border Patrol checkpoints into those positions," said Tony Garcia, director for the South Texas HIDTA [High Intensity Drug Trafficking Area- NANESB!]. "It is pretty much up to your imagination what they could be moving through there. ... It is a bit of a dicey situation for us to deal with. We are putting our heads together."

For energy companies, the roads are critical to moving heavy drilling and related equipment in and out of the ranchlands where the work is done.

"Once they get past the checkpoints, they are pretty much free," said Javier Pena, head of the Drug Enforcement Administration's Houston division, which includes San Antonio and reaches to the Mexican border.

"It is very much on our radar," Pena said of smugglers. "We have been gearing up for it."

He declined to discuss the use of sensors, cameras or other tactics to monitor possible narcotics routes. Authorities also suspect that gate guards, drivers or other workers might succumb to bribes.

On a weekday morning in early March, 18,665 pounds of marijuana were caught being smuggled aboard two trucks, one a flatbed, the other a tanker truck driving through the Briscoe Ranch on a road that circumvents a Border Patrol checkpoint.

They were on a private road leased to energy companies and carrying what looked like supplies typically used in oil field operations but were instead loaded with marijuana. The two trucks yielded the most pot ever caught in one day by the Border Patrol's Del Rio Sector.

One of the truck drivers, who was not an employee of the energy industry, later admitted to agents that he was to be paid $7,500 to deliver the load, according to an affidavit at the federal courthouse in Del Rio.

Other big South Texas catches came in July last year when Border Patrol agents stopped a bogus oil field truck carrying 1,373 pounds of marijuana, and in June when they found 3,529 pounds of the drug stashed in a truck driven by an energy company worker.

In some boder areas in the USA, the Border Patrol sets up additional checkpoints along highways further away from the Mexican border where they can stop and inspect passing vehicles. On some maps, the private roads bypass some of these checkpoints where the contraband can continue on to the interstate highway system and metropolitan areas like Dallas or Houston.

Borderline Psychosis Update: Gunboat Diplomacy- Texas Style; Police Chief Slain in Sinaloa; Texas Deputies Plead Guilty in Cocaine Delivery Sting; Mexico to Take a Page From Colombian Counternarcotics Strategy?

TEXAS- The Texas Department of Public Safety has taken to the waters of the Rio Grande and Intercoastal waterways in heavily armoured 34-foot shallow water boats to interdict drug smugglers in waters along the US-Mexico Border.

Texas now has a small navy of gunboats patrolling the Rio Grande and the Intercoastal Waterway. Each of the boats, equipped with armor-plating, night vision equipment and a small arsenal of weaponry, costs about $580,000 in state and federal funds. Troopers patrolling the border say the expense is justified, considering the ruthless nature of their adversaries in the Mexican drug cartels. What they fear, more than anything else, is the prospect of an ambush. "They’ve got radios, they’ve got their telephones, there’s somebody right here in this abandoned house right here," Goble says, gesturing to people hanging around on the Mexican side of the Rio Grande. "There’s somebody there now. They’re watching what we’re doing."　 They’re watching, troopers explain, mainly because they’re providing real-time intelligence to smugglers who dump bales of drugs into the river and let the current carry them to the U.S. shoreline. Smugglers typically steal trucks in south Texas, load them up with drugs on the river and drive inland.　 If they’re caught close to the border, many of the smugglers make a run back to the river, speeding down the dusty roads and crashing their trucks into the water. Then they climb out of their vehicles and quickly unload their contraband cargo, helped by confederates splashing into the river from the Mexican side. They haul their bales of dope back onto the dry land in Mexico, ready to try again another day. "They fear Texas law enforcement, but not as much as they fear going back and saying they’ve lost their load," Goble says. "Everything’s at stake. They will go to any extreme to get away from law enforcement and to get the contraband back to the owner." The desperate flights back to the river happen so often, troopers have nicknamed them "splashdowns." Law enforcement authorities have recorded more than 60 of these escapes in the last three years. Troopers point out rusting hulks of abandoned trucks on the U.S. shore where fleeing smugglers have abandoned their stolen vehicles

Each of the boats are equipped with six M-240 belt-fed machine guns capable of firing 900 rounds per minute- hardly overkill on the part of the Texas DPS considering the kind of firepower the cartels have availed themselves of. Last month, a police station and studios for the Televisa network were targeted in multiple grenade attacks in Matamoros, across the Rio Grande from Brownsville, TX. Two years ago, 29 gunmen purportedly working with the Sinaloa cartel were killed when the convoy they were travelling in came under fire from a carefully coordinated ambush with heavy weaponry less than 12 miles south of the border crossing at Sasabe, AZ. Currently, the Texas DPS has four of these gunboats in service, but the fleet is expected to grow to six total.

ELSEWHERE IN TEXAS- Two Bexar County Sheriff's Deputies pleaded guilty to protecting conspiracy and attempting to distribute cocaine after agreeing to protect drug shipments on multiple occasions between 2008 and 2010 after meeting with an informant and an undercover FBI agent.

The first meeting took place July 3, 2008, in the parking lot of a Hondo Wal-Mart. [Duputy Jose Angel] Cordero, in full uniform with his service weapon, agreed to transport about 9 pounds of what he thought was cocaine to the Omni Hotel in San Antonio. [Deputy Hector] Franco rode with Cordero to the Wal-Mart parking lot and then to the Omni. The agent paid Cordero $1,500, and Cordero later paid Franco $500. The second meeting took place December 17, 2009, at the Airport Hilton. The same undercover agent — accompanied by an FBI informant — struck a deal with the two deputies to escort a shipment of about 15.5 pounds of cocaine from San Antonio to New Braunfels. This time the FBI agent paid the men, who both arrived in full uniform with their service handguns, $1,200 each for their efforts. The third meeting took place March 23, 2010, at a high-end San Antonio steakhouse, where the deputies told the agent and his informant they'd be willing to transport cocaine to Dallas.

The terms of Cordero's plea agreement with prosecutors remains under seasl, although he did plead guilty to one charge of conspiracy. The county seat for Bexar County is San Antonio.

MEXICO- The counternarcotics strategy of Mexico's incoming Nieto presidency is starting to take shape with the hiring of Colombia's recently-retired National police commander as an adviser.

The proposal newly retired Colombian police director Gen. Oscar Naranjo explained in an interview with The Associated Press offers a glimpse of how President-elect Enrique Pena Nieto might fulfill his promise to slash the number of murders and kidnappings by 50 percent during his six years in office. Similar to the approach that Naranjo employed against Colombian traffickers, the proposal raises the question of whether the widely respected general can reproduce his success in a very different country. Pena Nieto has discussed a new offensive against the smaller, local gangs that have cropped up in many Mexican states and earn money through kidnapping and extortion in addition to drug dealing. Naranjo's proposal of small elite units dovetails with that idea. Such units have specific goals and typically work in isolation. The better a unit performs, the more resources it gets. Information is compartmentalized to prevent leaks. The model worked in Colombia and Naranjo said it could also be effective in Mexico. Such units, which Naranjo said could be comprised in Mexico of the Army, Navy and police, should pursue not just of "high-value targets" such as Sinaloa and Zeta cartel bosses, said Naranjo, who retired June 12 after five years atop his country's 170,000-member police. "In the first 100 days (of Pena Nieto's government) the goal should be set for reducing violence. It could go badly. It could go well. But it should be put in play," he said. "I think it's possible to tell the Mexicans, 'Look, in 100 days we want to cut the violence we have in half." It's feasible, he said, because Mexico's violence "is really concentrated. If you look at the map of violence there it's in six places. It's impossible that in six cities you can't have some control."

Naranjo, who had recently retired from his 36 year police career, had also consulted with Calderon's government [Naranjo pointedly mentions he was against Calderon's deploying the military to Juarez- NANESB!]. The 55 year old Naranjo is credited with forming the Colombian task force who [with the aid of intelligence and surveillance from the DEA] was eventually able to locate and kill Medellin Cartel chief Pablo Escobar in 1993. The elusive Escobar and his cartel had waged a war of attrition against the Colombian government throughout most of the 1980s, assasinating presidential candidates, judges and policemen and bombing an Avianca flight and multiple truck bombings in Bogata and Cali.

NUEVO LEON- An individual described as the Zetas 'piracy czar' was arrested by Mexican troops near the industrial center of Monterrey last month.

[Gregorio Villanueva Salas]- Considered one of the main operators working for [Zetas leader Heriberto] Lazcano, he told military interrogators before being paraded in Mexico City that 14 men found dead last week in a vehicle in Ciudad Mante in Tamaulipas belonged to his outfit. Mexican officials announced on Wednesday that more than 50 alleged members of the feared Zetas drug cartel, including two active duty policemen, women and children, had been arrested in the northern state of Nuevo Leon. The arrests came on the heels of the indictment on Tuesday of the man believed to be the drug cartel's second in command, Miguel Angel Trevino Morales, along with 13 others in the United States. Trevino, who is still at large in Mexico, is accused of presiding over a vast money laundering operation that hid millions of dollars of drug proceeds in an American horse racing and breeding syndicate.

Gregorio Villanueva Salas also said that he carried out attacks on schools, newspaper offices and military installations at Lazcano's request. In recent years, cartels have expanded their operations from drug trafficking and cultivation of marijuana and opium poppies or manufacture of methamphetamine to human trafficking, video and software piracy or illegal logging.

SINALOA- The police chief in the northern Sinaloa town of Choix was shot and killed by gunmen during an event marking Police Day last weekend. Chief Hector Echavarria was killed while Mayor Juan Carlos Estrada emerged from the attack unharmed. The attack came just days after locals discovered six bodies in a clandestine gravesite in the remote hills in the northern part of Sinaloa near Copper Canyon. The bodies are thought to have been from two seperate shootout between cartel gunmen and security forces in April near the city of Choix.

Although the territory is controlled by fugitive billionaire drug lord Joaquin 'El Chapo' Guzman, organizations such as Los Zetas or La Linea have attempted to encroach on remote territory considered ideal for cultivating opium poppies or marijuana. The Borderland Beat blog is reporting that scores of ranchers and rural families have been displaced by the ongoing fighting in the mountainous regions of Sinaloa.

ARIZONA- Police and Federal agents in Arizona announced the arrest of 20 drug trafickers alleged to have ties to the Sinaloa cartel and the seizure of weapons, and airplane, 30 pounds of methamphetamine and 3 tons of marijuana. The operation reportedly smuggled the drugs across the border from Mexico in hidden compartments of tractor trailers and were warehoused in the Phoenix area before being distributed to New York, Los Angeles or Alabama. The DEA dubbed the operation 'Nayarit Stampede'.

Quickie Borderline Psychosis Upate- Caracas Connection? Fugitive Venezuelan Judge Talking to DEA; Cartels Blamed for Michoacan Arson Attacks

VENEZUELA- A fugitive judge who was dismissed from Venezuela's Supreme Court on charges of corruption and ties to Colombian drug cartels has fled the country and is reportedly talking to the DEA while in hiding.

Eladio Aponte, a former justice on Venezuela's supreme court, has been accused of giving lenient sentences to drug traffickers and ties to Venezuelan drug kingpin Walid Makled [aka 'The Turk']. Makled was arrested in Colombia and in 2011 was extradited to stand trial in Venezuela. The reputed kingpin claimed before his trial that he could provide conclusive evidence that members of Venezuelan president Hugo Chavez's inner circle were involved in drug smuggling, but would only talk to American prosecutors.

In recent years, the United States has accused the Chavez regime of turning a blind eye to the drug smuggling that takes place in Venezuela. However, detailed testimony from Aponte could pave the way for a number of indictments against Hugo Chavez's domestic allies.

Aponte is one of six special witnesses cooperating with the DEA in its investigation of Venezuelan government ties to trafficking, said a former U.S. government official familiar with the situation.

The case is being handled by Group 959, a unit of DEA's Special Operations Division, according to sources with direct knowledge of the case including a former law enforcement source.

Group 959, known as the Bilateral Investigations Unit, was set up to target traffickers overseas plotting to import cocaine to the United States, even if no shipments actually arrive.

David Tinsley, a retired DEA veteran who now runs his own private intelligence agency, said Group 959 would only be involved in the Aponte case if the government felt he could deliver strong evidence.

"In the hands of 959, he would become a very effective tool," he said. "They must have wanted Aponte bad. (The division) doesn't go on fishing expeditions, they are very surgical. They know who they are going after and why."

Although Aponte has reportedly been tied to Makled, another judge who left Venezuela after a dispute with Chavez's allies in 2006 backed Aponte's claims of a judicial system pressured to give lenient sentences to criminals portected by the regime. Aponte reportedly fled to Costa Rica where he met with DEA agents before arriving in the USA on a chartered government flight in April.

Cocaine grown in Colombia is often refined and smuggled to Venezuela en route to Europe and West Africa. A number of airstrips used by drug smuggling flights in Venezuela are reportedly under military protection.

There are reports of a new cartel, dubbed the "Cartel of the Suns", after the stars worn by the Venezuelan generals who are thought to be complicit in the trade.

Colombian intelligence learned of the cartel from Feris Farid Dominguez, who was deported from Venezuela in January to face charges of drug trafficking. He told how he met senior figures in President Hugo Chavez's security forces to arrange drug shipments through Venezuela.

"The reason that some military men have become involved in drugs trafficking is because they have not succeeded in getting into Chavez's close circle so as to rob the state," read extracts from Feris's statement. "They have found their extra money in drugs trafficking."

The most senior Colombian drugs baron now in custody, awaiting extradition to America, has told investigators that Venezuela offers smugglers relative immunity.

"Venezuela is a temple of drugs smuggling," said Hernando Gomez Bustamante, alias "Scratch", who had a $5 million bounty on his head.

British officials believe that Venezuelan air force bases are being used by aircraft carrying drugs. Small planes are typically used to carry consignments on the relatively short journey from Colombia.

If they weren't Flaming Hot Cheetos before, they sure are now!

MICHOACAN- An underboss for the Caballeros Templar [i.e. Knights Templar] cartel is in custody after a number of warehouses belonging to PepsiCo's [NYSE- PEP] Mexican subsidiary were torched in central Mexico last week.

Five Sabritas warehouses and vehicle lots were attacked Friday and Saturday in the Mexican states of Michoacan and Guanajuato. Witnesses in one case described armed, masked men who tossed firebombs and torched dozens of the company's distribution trucks and some warehouses.

According to the president of Mexico's Business Coordinating Council, the firebombings represent a step up for the cartels who normally target much smaller local businesses throughout Mexico for extortion. Although some business leaders in Mexico claim that Friday's arson attacks are the first such attacks directed at a multinational corporation by the cartels since President Felipe Calderon deployed the Mexican military to crack down on the drug cartels.

Alejandro Hope, a security analyst and former official in Mexico's CISEN intelligence agency, said it was the first attack he could recall against a transnational company in Mexico. Even in Mexico's most violent city, Ciudad Juarez, the warring drug gangs have largely left alone the many foreign-operated assembly plants known as maquiladoras.

"In Ciudad Juarez, they practically never tried to blackmail the maquiladoras," Hope said. "They focused more on small businesses ... they are easier targets, and with an industrial firm, one doesn't know exactly who to blackmail. It's not as clear who signed the checks or controls the checkbook."

In a statement issued Sunday, PepsiCo said five distribution centers were damaged, but no one was injured in the attacks and the amount of the damages had not been calculated.

The company appeared to respond to emails that circulated in Michoacan, home of the Knights Templar drug cartel, suggesting the attacks were revenge for the unproven allegation that prosecutors used Sabritas' extensive fleet of delivery trucks to gather intelligence.

"We repeat that in accordance with our code of conduct, all of our operations are carried out in the current regulatory framework and our vehicles and facilities are used exclusively to carry our products to our customer and clients," the company said. The company would not say whether that statement responded to the spying allegations.

Hope said such a spying scenario sounded unlikely, if not impossible. Sabritas employs more than 70,000 people and has a nationwide delivery fleet of about 14,500 trucks that are a common sight even in the most dangerous and remote parts of Mexico.

Hope said the attacks may not represent a new stage in drug gang extortions, but rather stem from the peculiar characteristics of the Knights Templar, a pseudo-religious cartel that split from Michoacan's La Familia cartel in 2011.

Started in 1943, Sabritas distributes soda, juice and snacks throughout Mexico. By the late 1960s, the company was brought out by PepsiCo. An April 2011 Reuters article highlighted the difficulties that some mining companies have had operating south of the border in cartel-held territory, with gunmen raiding remote mining sites for equipment and ore. In recent years, well organized criminal gangs have also taken to raiding tractor trailers and freight trains. However, in those instances the theives appeared to be more interested in helping themselves to the goods from the mines, railways and tractor trailers than extorting money from the companies involved.

The Caballeros Templar was formed in late 2011 after the senior leadership of the La Familia Michoacana cartel were killed or arrested by the Mexican government after a series of raids on La Familia strongholds. Within weeks, some of the remaining members of a now fragmented La Familia reconstituted themselves as the Knights Templar and moved into territory that had been previously operated by La Familia.

Borderline Psychosis Update- Deadly Prison Riot in Nuevo Leon Kills 44; DEA Arrests El Paso, TX County Comissioner;

Forensics team seen arriving at Apodaca Prison in Nuevo Leon after 44 inmates were killed in a prison riot which was used as a distraction for incarcerated cartel members to escape. Reuters Photo

NUEVO LEON- Thirty inmates- all of them believed to be members of Mexico's Zeta cartel- are missing after a deadly riot in Apodaca Prison outside of Monterrey killed 44 inmates. Within a day of the clashes, officials suspected the rioting was a diversion to draw attention away from the escape attempt.

"Without a doubt there was premeditation," said [Nuevo León Gov. Rodrigo] Medina, speaking at a news conference. "This was planned."

Mr. Medina said all the dead prisoners were members of the rival Gulf Cartel. The Zetas and the Gulf Cartel have been warring for two years for control of drug routes and lucrative drug markets, especially in the northeastern Mexican states of Nuevo León and Tamaulipas.

Mr. Medina said prison personnel appeared to have been involved in the massacre and escapes.

The warden for Apodaca prison was dismissed from his post while
nine guards have confessed to helping inmates escape. As many as 18 guards from Apodaca have been detained as suspects in aiding in the jailbreak and subsequent riot.

Nuevo Leon state public security spokesman Jorge Domene Zambrano said nine of the guards confessed to aiding the escape. He said it appeared the breakout happened before the deadly fight.

The massacre in this northern state was one of the worst prison killings in Mexico in at least a quarter-century and exposed another weak institution that President Felipe Calderon is relying on to fight his drug war.

Mexico has only six federal prisons, and so sends many of its dangerous cartel suspects and inmates to ill-prepared, overcrowded state penitentiaries. Drug trafficking, weapons possession and money laundering are all considered federal crimes in Mexico.

Nuevo Leon's governor said earlier Monday that the breakout would have been hard or impossible to stage without the help of prison authorities. Medina said no holes had been found in the perimeter walls of the prison in Apodaca, outside the northern city of Monterrey, and no armed gang had burst in to spring them.

No firearms were used in the escape or subsequent riot- the 44 victims were reportedly stabbed, strangled or bludgeoned to death. A reward of up to US$775,000 for information leading to the recapture of the escaped inmates is reportedly being offered.

Within a few days of the riot and jailbreak, gunmen wielding AK47-style rifles and 9mm pistols killed 5 men in a home in the Monterrey suburb of Apodaca- although the shooting is thought to be unrelated to the jailbreak in the same town.

TEXAS- On Feb 24th, the DEA arrested El Paso County Comissioner Willie Gandara Jr on charges of drug trafficking and money laundering.

Gandara had also recently filed papers to run as a Democrat for Texas State House District 75. The arrest would not automatically disqualify him for running for the state office, according to El Paso County Democrat Party chairman Danny Anchondo.

On Tuesday, Federal prosecutors introduced incriminating evidence against the younger Gandara during his bond hearing.

The evidence, including surveillance video and audio taken from Gandara's wiretapped cellphone, was introduced during a bond hearing for Gandara and his co-defendant, Juan Canales. Both men have pleaded not guilty.

U.S. Magistrate Judge David Guaderrama set Gandara's bond at $50,000, and Canales' bond at $20,000, after viewing the video and listening to the audio evidence and testimony from Special Agent Larry Wooten of the U.S. Drug Enforcement Administration.

Guaderrama said that although the "weight of the evidence" presented was strong, he believed that the commissioner was neither a flight risk nor a danger to the community based on the totality of his history of community service and lack of a criminal record.

Wooten testified during the hearing that DEA agents were tipped off to Gandara's alleged drug activity by the confidential informant in November 2010.

"He stated Mr. Gandara was involved in drug trafficking and warehousing, and selling stolen goods" including copper items, Wooten testified.

On June 27, 2011, the confidential source arranged to meet with Gandara at his home to "confirm or deny those allegations," Wooten said in court.

Assistant U.S. Attorney Antonio Franco then played parts of a hidden-camera video taken of Gandara and the informant in the informant's vehicle, which was allegedly parked outside of Gandara's home.

In the video, the source tells Gandara he has a large amount of marijuana to unload, and that it would take 15 to 20 minutes. Gandara mentions to the source a ranch "where I have the horses," referring to a ranch at 720 Worsham Road in Socorro, where the source can transfer his marijuana load.

The source is then heard offering Gandara between $5,000 and $10,000 in payment for using the site to unload the drugs.

Wooten also testified that during a recorded conversation with the source, Gandara allegedly bragged about running a drug-trafficking organization with a pipeline from El Paso County to Oklahoma and Chicago. He also bragged about making $1,200 per pound of marijuana sold in Chicago, and typically running 150 pounds of the drug per trip.

On Sept. 9, 2011, the confidential source allegedly arranged for another offload transaction at Gandara's scrap yard on Coker Road in Socorro. During the transaction, which was also videotaped, the source and an undercover DEA agent are seen transferring packages filled with marijuana from one vehicle into a truck close Gandara stands close by.

In one part of the video, the source is seen showing Gandara a bundle and some marijuana that came out of the bundle. Out of view, Gandara allegedly asks the informant for "a sample," but the source declines to leave Gandara one of the marijuana bundles.

"The confidential source was not allowed to give him the bundle, so he withheld it and said there may be more available in the future," Wooten said.

On Oct. 22, 2011, Border Patrol agents seized a large amount of marijuana from a tractor-trailer traveling through the Sierra Blanca checkpoint. The truck, allegedly driven by Javier Betancourt, apparently originated from one of Gandara's properties, Wooten testified.

The day before the seizure, DEA agents recorded a conversation, allegedly between Gandara and Betancourt, discussing the load. During the conversation, Betancourt is heard telling Gandara he needs to leave earlier than planned in order to drive through the checkpoint during shift change and when a Greyhound bus was expected to pass through the checkpoint. Both events would create a distraction for agents, Betancourt tells Gandara.

Gandara, who also owns Soccoro Iron & Metal, comes from a politically active family. Willie Gandara Sr was mayor of Soccoro, TX and in 2010, the elder Gandara and 10 others were charged with racketeering, mail fraid, wire fraid and conspiracy in a 27 count indictment. By May 2011, the elder Gandara was recalled as mayor of Soccoro- the first elected official to be recalled in El Paso county.

ARIZONA- Portions of what's been called The Most Dangerous National Park in America have reopened to the public this month.

On a hot desert morning last week, a group of 20 tourists gathered in the visitor center in Arizona’s Organ Pipe Cactus National Monument to attend a mandatory safety briefing before taking a guarded van tour to Quitobaquito springs. The springs is part of the 69 percent of the remote border park west of Tucson that has been closed to the public since Kris Eggle, a 28-year-old law enforcement park ranger, was shot and killed while pursuing drug runners armed with AK-47s in 2002.

Organ Pipe was named “the most dangerous national park” that year and also in 2003 by the U.S. Park Rangers Lodge of the Fraternal Order of Police, before the group discontinued the series. The drastic increase of drug activity on Arizona’s southern border since the 1990s has turned Organ Pipe rangers into de factor Border Patrol agents.

Since 2009, the park has offered van tours to the springs, as long as rangers armed with assault rifles go along to protect the visitors. Now, ten years after Eggle’s murder, the park’s leadership has decided to open up a portion of the closed areas to the public in March, citing improved safety conditions and a big increase in Border Patrol agents in the area.

Ken Hires, an unflaggingly cheerful park ranger dressed in reassuringly normal-looking tan ranger clothes, bounded to the front of the room. Hires is what’s called an interpretive ranger, which means he has no law enforcement duties and does not carry a weapon. (“I spent my five years in Vietnam. Enough shooting,” he said later.) Hires explained that some law enforcement officers would be hiding in the hills and closely watching the two-hour nature hike, while another pair of armed rangers would follow the tourists closely from the ground. “They’ll have M-14s at hand,” he told the group. “Don’t be worried.”

Organ Pipe Cactus National Monument is located in the remote desert area to the south and west of Tuscon, AZ adjacent to the Mexican border and Tohono O'Odham Indian Reservation.

Borderline Psychosis Update- Mexican Troops Seize Record Amount of Meth in Jalisco; Elderly American Couple Slain in Nuevo Leon, Follow the Money

JALISCO- Responding to a series of anonymous tips, Mexican soldiers discovered nearly 15 tons of methamphetamine at a ranch outside the western city of Guadalajara this week. The sheer quantity of meth discovered inside blue plastic barrels at the ranch is estimated to have a street value of nearly US$4 billion and is equal in scope to half the amount of meth seized worldwide in 2009.

A Mexican Army spokesman said that the product appeared ready for packaging and shipment but provided no information on where the meth was likely heading. There was nobody present at the ranch when the Army showed up, but investigators believed the size of the massive cooking operation would require anywhere from 10-15 people to run it.

Although officials said they hadn't determined who the clandestine lab and methamphetamine belonged to, law enforcement on both sides of the border believe that the industrial scale of the operation along with the Jalisco location indicate that it was part of fugitive Sinaloa cartel head Joaquin 'El Chapo' Guzman's operation.

The Sinaloa cartel, headed by Joaquin "El Chapo" Guzman, is equipped to produce and distribute drugs "for the global village," said Antonio Mazzitelli, the regional representative of the U.N. Office on Drugs and Crime.

"Such large-scale production could suggest an expansion ... into Latin American and Asian markets," Mazzitelli said. But he also noted, "it may be a product that hasn't been able to be sold, and like any business, when the market is depressed, stockpiles build up."

An unnamed police official speculated that the Sinaloa cartel could be moving away from relying on cocaine trafficked in from Colombia by saturating the market with methamphetamine produced on an industrial scale in superlabs.

Prior to this week, the largest bust announced by the Mexican military was a June 2010 raid in Queretaro on three interconnected warehouses that netted nearly 3 and ½ tons along with hundreds of tons of precursor chemicals.

Police on the American side of the border said that the sheer size of the Jalisco seizure may lead to an increase in small-scale clandestine meth labs on the USA side of the border to fill in whatever shortfalls there are in the supply.

[When the sheer numbers behind this raid were being bandied about, that got the little wheels in my noggin turning. If this superlab the Mexican Army raided belonged to 'El Chapo', could the fugitive billionaire afford it? Perhaps Guzman wanted police and the military to find it because he felt there was no way he could move such massive quantities with a declining market. Then when word got out about the massive amounts of meth being confiscated and a massive chunk ripped out of the supply chain, that would drive up the value of his organization's remaining inventory. Just a theory- NANESB!]


NUEVO LEON- An elderly north Texas couple was found murdered in their home outside the city of Monterrey earlier this month.

John and Wanda Casias were found strangled to death in their Santiago, Nuevo leon home by John's brother Shawn on February 1st. The couple's Chevy Suburban was missing along with a wall safe, a plasma screen TV and some computers.

The couple moved down to the village of El Cercado, about an hour south of Monterrey, in the early 1980s and ran the First Fundamentalist Independent Baptist Church. There, they would collect clothes and shoes and provide services for the poor. After a funeral in their own church, the two were laid to rest a few days later.

According to the Attorney General for Nuevo Leon, the nature of the crime and the missing items indicates that John, 76, and Wanda, 67, were assaulted and robbed by somebody they knew.

TAMAULIPAS: According to a filing in a US District Court in San Antonio, TX, the DEA has obtained ledgers detailing payments the Gulf Cartel and Los Zetas made to members of the Institutional Revolutionary Party (PRI) in exchange for protection and influence in the state of Tamaulipas since 1999. The findings could have an effect on the outcome of Mexico's presidential elections in July.

Confidential informants told Drug Enforcement Administration investigators that leaders of the Zetas and Gulf cartels made payments to Institutional Revolutionary Party members including Tomas Yarrington, who served as governor of Tamaulipas state in 1999-2004, according to the complaint filed in U.S. District Court in San Antonio, Texas.

The affidavit says the DEA also has obtained ledgers documenting millions of dollars in payments to Yarrington's representatives.

The 13-page affidavit lays out in detail the DEA's case against Antonio Pena-Arguelles, an alleged cartel money-launderer who was arrested Wednesday in San Antonio.

It accuses him of using U.S. bank accounts to funnel millions to Yarrington from leaders of the Gulf and the Zetas. In 2004-2005 alone, it says, he and his brother received $4.5 million from the No. 2 leader of the Zetas, Miguel-Angel Trevino Morales.

One of the DEA's four informants told investigators that "during early 2000, Antonio Pena-Arguelles began receiving large amounts of drug proceeds on behalf of Osiel Cardenas, head of the Gulf Cartel, in exchange for political influence within the government in Tamaulipas," the complaint says.

Mexican prosecutors said late last month that they were investigating former Tamaulipas officials in connection with unspecified federal crimes, a category that includes money-laundering and drug-related crimes. Yarrington and two other former PRI governors, Manuel Cavazos, who served until 1999, and Eugenio Hernandez, who left office in 2010, publicly acknowledged that they were subjects of the probe but denied any links to crime.

Cavazos is now running for a seat in the Mexican Senate while President Calderon's National Action Party (PAN) seized on the DEA filings as evidence the PRI party has extensive links to organized crime.

The PRI was the dominant political party in Mexico until the 2000 Presidential elections.

Borderline Psychosis Update- Life Imitates Breaking Bad in NM; Key El Chapo Aide Killed in Durango Raid; Arrest Made in Tamaulipas Bus Slayings

Breaking Bad- Not just for Albuquerque high school chemistry teachers anymore!

NEW MEXICO: In a development that seemed like all it was missing was Agent Hank Schrader, the Albuquerque, NM office of the DEA announced a series of arrests in New Mexico stemming from an alleged marijuana, cocaine and methamphetamine distribution network that included an Albuquerque fireman and two pecan farmers in Southern New Mexico.

[A]uthorities arrested nine people, including the owners of a southern New Mexico pecan farm, in connection with a trafficking and money laundering ring that involved cocaine and heroin.

Prosecutors said the owners and operators of Pettit Farms and Nursery in Anthony, N.M., and their two sons were among those arrested Thursday. They were identified as Oscar Portillo Sr., his wife Sandra Portillo and sons Matthew Portillo and Oscar Portillo Jr.

According to a 24-count indictment, the farm was used as a place to store and sell drugs.

A team of federal, state and local law enforcement officers arrested the defendants Thursday and executed four search warrants, including one at the farm and three others at residences in El Paso, Texas.

Federal prosecutors said the Portillos allegedly sold drugs to an undercover agent on five separate occasions.

The indictment claims the couple asked the undercover agent to pay for the drugs with money orders which they subsequently cashed and deposited into bank accounts in the name of the farm. The agent was provided with invoices asserting that the agent had purchased pecan trees.

Officials with the Drug Enforcement Administration said the investigation targeted a ring that agents believed was responsible for the transportation of cocaine and marijuana shipments from Chihuahua, Mexico, to the U.S.

Meanwhile, a 7 year veteran of the Albuquerque Fire Department was ordered to remain jailed until trial after being arrested by Federal Agents.

ALBUQUERQUE (KRQE) - An Albuquerque firefighter charged as part of a ring dealing drugs and laundering money with connections to a Mexican drug cartel will stay behind bars until he goes to trial

Drug Enforcement Administration agents arrested Steve Chavez last week along with 10 others in a major drug trafficking and money laundering operation.

The indictment alleges Chavez's role included shuffling nearly $350,000 in drug money in and out of bank accounts over several weeks last summer.

The feds searched his home where they said they found several loaded guns in the attic. They also reported finding an Uzi-style gun in Chavez's car along with an ounce of cocaine.

The feds added Chavez was dealing because he tested negative for drugs.

The judge said he was concerned about the drugs and types of guns found.

He was also worried that Chavez and other defendants had been spying on DEA at their offices.

A DEA agent testified Tuesday that Chavez talked about that after he was taken in for questioning

Chavez's alleged double-life brings to mind the fictitious Walter White from the AMC TV show Breaking Bad. In that series, Bryan Cranston portrays a mild-mannered high school chemistry teacher in Albuquerque who begins cooking methamphetamine with one of his former students as a quick means of leaving money behind for his family after being diagnosed with lung cancer.


DURANGO: A top aide to fugitive Sinaloa cartel boss Joaquin 'El Chapo' Guzman was shot and killed when a Special Operations unit of the Mexican Army raided a ranch in the state of Durango last week.

Mexican officials say members of an army special forces unit fatally shot a high-ranking aide to the country's most-wanted drug dealer in a gunfight in the northern state of Durango.

Army spokesman Gen. Ricardo Trevilla said Monday Luis Alberto Cabrera Sarabia was responsible for the operations of Guzman's Sinaloa Cartel in Durango and part of the neighboring state of Chihuahua.

The army says Sarabia is know as "The Architect," and was named to the role after the December arrest of his brother Felipe Cabrera Sarabia, or "The Engineer."

Sinaloa gunmen traded fire with troops during the operation to arrest Luis Cabrera Sarabia on Friday. One of the gunmen was slain and 11 others were captured. Four soldiers were hurt in the gunfight.

Guzman, who remains at large, also landed near the top the Forbes magazine 'Wealthiest People in the World' list.

Mass grave in Tamaulipas being unearthed last year.

TAMAULIPAS: Police in northern Mexico have arrested a member of Los Zetas who had reportedly confessed to murdering nearly 75 people in the northeastern state. Officials said the arrest was made on January 20, but authorities waited more than a week to make the announcement while details of Enrique Elizondo Flores' confession were being corroborated.

Nuevo Leon state security spokesman Jorge Domene said that Elizondo also admitted to killing at least 36 passengers who were pulled off of buses at gunpoint by masked gunmen last year.

Domene said the 35-year-old suspect told investigators he had been working in the area at least three years and that he was in charge of killing members of the rival Gulf drug cartel heading to the towns of Cerralvo and General Trevino. He and other gunmen last January began pulling passengers off of buses as they arrived at Cerralvo's bus station, Domene said.

They are among at least 92 bus passengers that the Zetas are accused of killing in three attacks in January and March 2011. Many the victims were originally from the central state of Guanajuato and had arrived in Cerralvo from the border city of Reynosa, Domene said.

Elizondo distinguished himself ``for torturing, maiming and then killing his victims,'' Domene said.

Last year, Mexican investigators unearthed mass graves near the town of San Fernando, Tamaulipas containing more than 190 bodies- many of them identified as passengers pulled off of buses travelling through Tamaulipas between January and April 2011. Prosecutors say a motive for the mass abductions and killings remains unclear, although they believe that some of the abductions were an attempt to forcibly recruit new members by the Zetas.

A number of police officers from the town of San Fernando were also arrested on suspicion that they were working for the Zetas and complicit in the mass abductions and killings.

ELSEWHERE IN TAMAULIPAS: Federal prosecutors in Mexico said they have launched an investigation of high-ranking officials in the volatile border state.

The probe came to light after it was learned prosecutors asked transportation officials to keep track of when the officials entered or left the country and advise the Federal prosecutors office of their activities. One airport official in Tamaulipas reportedly overstepped his authority and drafted a memo instructing that the targets of the investigation not be allowed to leave the country.

Although the Attorney General's office declined to name the specific individuals under investigation, three former governors of the state of Tamaulipas came forward and told the media they believed they were the ones under scrutiny.

Eugenio Hernandez, who left office in 2010, told local media he did not know why he was under investigation, and denied any links to organized crime.

Tomas Yarrington, whose term ended in 2004, wrote in a Twitter account linked to his website that he had learned he had been named in the case, and said he hoped authorities would explain why.

Manuel Cavazos, who left office in 1999, called the investigation "suspicious ... coming in an election campaign," and suggested it might have political overtones. He denied any wrongdoing.

All the former governors are members of the Institutional Revolutionary Party, or PRI, which held Mexico's presidency for 71 years until President Felipe Calderon's National Action Party won the 2000 presidential elections.

The PRI's de-facto presidential candidate, Enrique Pena Nieto, currently leads in polls ahead of the July 1 elections.

Cavazos said "it would not be the first time that law enforcement has been used for political purposes, that has been done since 2000."

Cavazos is running for a seat in the Senate, and Pena Nieto was scheduled to visit Tamaulipas on Feb. 2, according to the PRI

In 2009, Federal officials arrested 12 mayors and 23 other public officials in the western state of Michoacan and charged them with protecting the La Familia cartel. All 35 were later acquited and released.

TEXAS: A Baytown, TX man received an 8-year Federal Prison sentence after being found guilty of selling weapons to the Zetas cartel, including an AK-47 variant that was recovered from the scene of the Feb 15th 2011 killing of US Customs and Immigration Enforcement Officer Jaime Zapata in San Luis Potosi, Mexico.

Manuel Gomez Barba, a 30-year-old U.S. citizen, pleaded guilty. Barba admitting that he had an intermediary buy the gun from a Beaumont pawn shop, and he had the serial number obliterated before it was sneaked south of the border.

According to the plea agreement in Houston, Barba recruited "straw purchasers" to buy Century Arms WASR-10 semi-automatic rifles.

Buyers would hand the guns to Barba, who told them they would not be traced back to them because serial numbers were being removed. Barba was not able to legally purchase the guns because he was under deferred adjudication for felony drug charges in Harris County.

It was not disclosed if the rifles that Barba illegally sent to Mexico were part of the BATF's ill-advised Operation Fast & Furious, which involved field-level agents being ordered to let the weapons 'walk' to Mexico while under surveillance.

NEW YORK: A Texas perfume retailer has been convicted of laundering drug money for the Sinaloa cartel in Manhattan Federal Court earlier this month.

Vikram Datta, 51, an immigrant from India who started his perfume business in Manhattan, showed no emotion as the sentence was meted out by Judge Lewis Kaplan.

“The defendant has shown little or no contrition,” said Kaplan, who also ordered Datta to forfeit property and $40 million.

A jury found Datta guilty of using his La Versailles Fragance company to launder narcotics proceeds for the Sinaola Cartel.

“This was a successful businessman taking in a ludicrous amount of cash, tens of thousands of dollars, if not hundreds of thousands of dollars, a day,” said prosecutor Peter Skinner.

Datta laundered Sinaloa drug money through what is known as the Black Market Peso Exchange, which became a favorite of Colombian cartels and traffickers beginning in the 1980s.

Even before the ascendancy of Pablo Escobar and the Colombian cartels, the Black Market Peso Exchange had been around for decades as a way to circumvent Colombian taxes and controls on foreign currency. Buying and selling dollars at the state-run banks in Colombia meant inviting several unwelcome questions on how those dollars were obtained or how they would be spent. The majority of the Colombian cartels' drugs were purchased in dollars, while the higher-ranking members of the cartels preferred to remain in Colombia- thus needing to conduct most business with Colombian pesos- the cartels and drug traffickers needed to find a way around these controls.

The cartels would eventually start selling the US Dollar-denominated drug money to various black market peso brokers at a discount. The broker would then take the dollars to a wholesaler in the USA and purchase quantities of electronics, appliances, cigarettes, liquor or luxury goods and import them to Colombia for the cartels. After the peso broker gets a cut for arranging the purchase and shipment of goods, the cartels then sell off the items at a slight markup in pesos, effectively laundering their drug proceeds and giving them the pesos they need to continue doing business in Colombia.

While Mexico doesn't have the strict control on foreign currencies that Colombia does, the cartels have adapted the methods of the Black Market Peso Exchange to launder their drug money.

Besides locations in Arizona, California and New York City, Vikram Datta sold perfume in the Texas border town of Laredo beginning in 2000. By 2009, Federal prosecutors allege that he was an experienced money launderer for the Sinaloa cartel. In 2010, Datta was introduced to a man who was identified as a perfume retailer in Baja California Sur but was actually an undercover Federal Agent.

Datta’s illegal transactions started slowly but quickly increased, court documents indicate. Transcripts from wiretaps over the next six months, which were admitted at trial, indicate that Datta accepted a $40,000 infusion to one of his stores in California and later agreed to wire $100,000 to customers in New York. According to court documents, over the course of a two-year government sting, he and other co-conspirators deposited more than $25 million of American currency in dozens of bank accounts.

At one point, prosecutors said, Datta told an undercover agent, posing as a perfume vendor, that his business was “just washing the whole money.” In a conversation that he had with the agent in New York in December 2010, captured on wiretap, Datta said that “a lot of cash is coming to me” and that he was “90 percent sure” that it was “all Sinaloa money.”

Datta was arrested in New York City in January 2011 while on his way to meet with the undercover agent. So far, 29 people have been charged in the Black Market Peso Exchange investigation- 20 have been convicted.

Quickie Borderline Psychosis Update- Arms Sold to Mexican Police & Military Arming Cartels; Holder Appears Before House; DEA Laundering Drug Money?

Convoy of Mexican Federal Judicial Police Outside of Juarez

A CBS report has indicated that American firearms sold to the Mexican military and law enforcement in transactions approved by both the US State Department and Mexico's Secretariat of National Defense are ending up in the hands of drug cartels.

The problem of weapons legally sold to Mexico - then diverted to violent cartels - is becoming more urgent. That's because the U.S. has quietly authorized a massive escalation in the number of guns sold to Mexico through "direct commercial sales." It's a way foreign countries can acquire firearms faster and with less disclosure than going through the Pentagon.

Here's how it works: A foreign government fills out an application to buy weapons from private gun manufacturers in the U.S. Then the State Department decides whether to approve.

And it did approve 2,476 guns to be sold to Mexico in 2006. In 2009, that number was up nearly 10 times, to 18,709. The State Department has since stopped disclosing numbers of guns it approves, and wouldn't give CBS News figures for 2010 or 2011.

One weapon - an AR-15-type semi-automatic rifle - tells the story. In 2006, this same kind of rifle - tracked by serial number - is legally sold by a U.S. manufacturer to the Mexican military.

Three years later - it's found in a criminal stash in a region wracked by Mexican drug cartel violence.

That prompted a "sensitive" cable, uncovered by WikiLeaks, dated June 4, 2009, in which the U.S. State Department asked Mexico "how the AR-15" - meant only for the military or police - was "diverted" into criminal hands.

And, more importantly, where the other rifles from the same shipment went: "Please account for the current location of the 1,030 AR-15 type rifles," reads the cable.

There's no response in the record.

The State Department's Direct Commercial Sales program would be completely separate from the ATF's Operation 'Fast & Furious', where field agents were ordered to allow weapons obtained in the USA by straw purchasers to cross the border into Mexico, where they would later turn up at crime scenes.

However, corruption and incompetence on the part of Mexican officials seems to have been pivotal in organized crime obtaining military and police-issue weapons.

Two years before I even started this blog, in response to gun control advocates using the increasing violence in Mexico as an excuse to further restrict the rights of law-abiding gun owners in the USA, I stated that a significant number of arms from military and police armories in Mexico were likely among the missing and arming cartel enforcers as police armorers or military quartermasters looked the other way. Cartels like Los Zetas- consisting largely of deserters from Mexico's special forces units- have likely used their military backgrounds to cultivate connections with the international arms markets as well as the black market. The Zetas have demonstrated in recent years that they are able to clean out entire arms depots in Central America.

WASHINGTON D.C.- In a House Judiciary hearing this week, Attorney General Eric Holder admitted that weapons allowed to 'walk' into Mexico would likely be turning up at crime scenes on both sides of the border for years to come.

"Although the department has taken steps to ensure that such tactics are never used again, it is an unfortunate reality that we will continue to feel the effects of this flawed operation for years to come," he said. "Guns lost during this operation will continue to show up at crime scenes on both sides of the border."

Holder faced the ire of skeptical lawmakers who are demanding accountability. Wisconsin Republican Rep. Jim Sensenbrenner told Holder Thursday that he considers impeachment on the table if Holder doesn't figure out who's responsible.

A day before the House Judiciary Hearings, Senator Chuck Grassley (R-IA) had called for the resignation of resignation of Assistant Attorney General Lanny Breuer after recently disclosed e-mails showed that he was giving contradictory testimony before a previous Congressional committee.

Holder, for his part, vows that he won't be stepping down in the wake of Fast & Furious. Democrats in the House and Senate have also given the appearance of circling the wagons around Holder, using the Fast & Furious debacle to reiterate their calls for additional gun control laws or lavish praise on the Attorney General Holder for halting the ill-conceived program.

In fact, e-mails from ATF officials obtained by CBS news indicate that they were looking to use the gunwalking from Fast & Furious to make the case for stricter gun control regulations- particularly in border states.

The e-mails from July 2010 between the ATF's Phoenix office and the agency's headquarters discuss using the statistics from border states like Arizona to justify a regulation called 'Demand Letter 3', which would require licenced FFL dealers in California, New Mexico, Arizona and Texas to report to the ATF any transaction in which more than one long gun bigger than .22 caliber was purchased.

On July 14, 2010 after ATF headquarters in Washington D.C. received an update on Fast and Furious, ATF Field Ops Assistant Director Mark Chait emailed Bill Newell, ATF's Phoenix Special Agent in Charge of Fast and Furious:

"Bill - can you see if these guns were all purchased from the same (licensed gun dealer) and at one time. We are looking at anecdotal cases to support a demand letter on long gun multiple sales. Thanks."

The request for the demand letter came after the ATF encouraged liscenced dealers to go ahead with transactions to customers the dealer thought were suspect. The correspondence showed that the agency also sought to minimize or completely conceal their own role in facilitating straw purchasers obtaining the weapons.

DEA- A New York Times report last week alleges that the DEA is engaged in what some are saying is the money-laundering equivalent to Operation Fast & Furious.

Anonymous officials described an effort by U.S. agents to launder or smuggle "millions of dollars" in drug money in order to monitor the flow of cash to and from the cartels in Mexico. One official told the Times there was "close supervision." Another official said the Americans worked with Mexican agents on the investigation. Officials told the newspaper that the DEA tried to seize as much as they laundered, in part through arrests at pickup locations.

The article also described how officials had to obtain Justice Department clearance to launder more than $10 million at a time, something that was approved many times.

The DEA issued a statement Tuesday defending its operations.

"The DEA has well-established mechanisms for coordinating and approving activities associated with the fight against money laundering," the DEA said. "As a result of this cooperation, DEA has seized illicit transnational criminal organization money all around the world through our partnership with law enforcement."

The DEA said it had been working "collaboratively" with Mexico to fight money laundering "for years."

"As part of that collaboration, DEA works with Mexican authorities to gather and use information about these criminal organizations to counter the threats they pose to both of our countries," the DEA said, adding that the joint investigations "have led to important advances and detentions in each country. The cooperation between the United States and Mexico is based on principles of shared responsibility, mutual trust and respect for the jurisdiction of each country."

According to the New York Times article that ran on December 3rd, the DEA has successfully used similar tactics in other countries such as Colombia, but has only started to expand its use in Mexico over the past few years.

Feds Disrupt Iranian-Backed Plot to Bomb Israeli Embassy, Assasinate Saudi Envoy to USA

Agents from the FBI and DEA have reportedly disrupted a terror plot liked directly to Iran's Quds force that involved simultaneous attacks against the Israeli and Saudi embassies in Washington D.C.

Federal investigatos allege that an Iranian American identified as 56 year old Mansour Arbabsiar, a Corpus Christi TX used car salesman as the man who approached what he thought was a member of the Los Zetas cartel with a proposal to kill the Saudi ambassador to the USA and bomb the Israeli embassy in Washington D.C. in exchange for $1.5 million and an undisclosed amount of opium.

Arbabsiar and the informant met twice in Reynosa in the northern Mexican state of Tamaulipas, across the border from McAllen, TX [interestingly, observers note that Reynosa is in territory still under control of the Gulf Cartel, but the accused was meeting with what he thought was an enforcer from the archrival Los Zetas- NANESB!] where Arbabsiar bragged that he had a cousin who was a high-ranking member of the Quds force of Iran's Revolutionary Guard and that they were being directed by senior-level officials of the Iranian regime.

The five count criminal complaint names Gohlam Shakuri, an Iranian based member of the Quds force still at large in Iran, as a co-conspirator in the plot. Arbabsiar and the informant negotiated a $1.5 million payment to carry out the attacks, with the accused wiring two seperate payments of $49,960 into a dummy FBI bank account. Arbabsiar also told the informant that his contacts in Iran couild provide Los Zetas with 'tons' of opium if they were interested.

Federal agents said they recorded a number of phone calls and meeting with the informant and Arbabsiar, some of the calls coming from Iran. In late September, when Arbabsiar was flying to Mexico City from Iran via Frankfurt, he was refused entry into Mexico by immigration officers at Arturo Beneitez international airport and was put on a flight to New York where he was taken into custody.

Not surprisingly, Iran has denied the charges against their regime, claiming the case is a 'prefabricated scenario' and propaganda against the Islamic regime.

Interestingly, even though Arbabsiar was taken into custody nearly two weeks ago, Attorney General Eric Holder's press conference announcing the disruption of the plot came a day before House Oversight and Government Reform Committee chariman, Darrell Issa (R- CA49) issued Holder a subpoena in regards to their ongoing Fast & Furious probe in which the ATF allowed firearms to be trafficked from the USA to Mexican drug cartels. In fact, one of the reporters brought up Fast & Furious during the press conference, only to have Holder dismiss it with a boilerplate statement about turning over the relelvant documents before walking out.

There is precedent for Iranian-backed groups co-ordinating attacks out of Latin America. In 1992, 29 people were killed when a truck bomb exploded outside the Israeli embassy in Buenos Aires. A group with links to the Iranian back Hezbollah terrorist group and Iran called the Islamic Jihad organization claimed responsibility. The Isreali Embassy attacks were followed up by the 1994 bombing of the AMIA (Asociación Mutual Israelita Argentina) building in Buenos Aires, which killed 85 people. Argentine investigators believe that both operations were planned and financed in the Tri-Border area where the boundaries of Paraguay, Argentina and Brazil meet near Iguazu Falls and where Hezbollah has been active over the last two decades. More recently, Mexican intelligence has been aware of a Hezbollah presence in Tijuana and Durango.

Borderline Psychosis Complete W/ Alligator Filled Moats- Ranch Hands Massacred in Guatemala; Gulf Cartel Underboss Arrested; Cartel's AZ 'Expressway'

TEXAS: I find it noteworthy that while President Obama was telling us on how secure America's southern borders are between one-liners during a campaign stop in El Paso earlier this month, the brass casings were still hot from a bloody shootout between the Mexican Marines and drug traffickers in which 13 were killed (most of them suspected Zetas) on an island in a lake straddling the USA/Mexico border.

The Mexican naval secretariat confirmed the shootout at a Zeta encampment on an island on the reservoir used by the Zetas to stage marijuana loads to be transported by boat into the United States. The island is located less than two miles northeast of Nueva Ciudad Guerrero, Tamps., across the border from Falcon Dam.

The bloody fight ensued on Mother’s Day when marines were patrolling the area in boats when they found the camp, officials said in a statement released Monday.

Upon seeing the marines, Zeta gunmen opened fire. A dozen cartel members were killed in the battle. One marine died, as well.

Officials noted no arrests after the shootout, but said they seized 19 firearms, including a Barrett .50-caliber sniper rifle and a 5.56 mm machine gun. Marines also seized gun magazines, ammunition, protective vests and other field equipment that was transferred to Reynosa.

Zapata County Sheriff Sigifredo Gonzalez said he learned of the deadly shootout when member of the local media contacted him late Monday morning. Had Mexican officials alerted their U.S. counterparts to the shootout, Gonzalez’s deputies would have been able “to react accordingly,”

The shootout capped a busy week along the northern Tamaulipas border for Mexican marines, who killed two suspected cartel gunmen Saturday afternoon in Valle Hermoso, about 25 miles south of Brownsville. Marines also seized weapons and a vehicle Thursday in Matamoros, and rescued a kidnap victim Wednesday in Camargo, across the border from Rio Grande City.

ELSEWHERE IN TEXAS: Border Patrol agents in rural Starr County found nearly 3000 pounds of marijuana in a van with Dish Network markings that they stopped and searched.

U.S. Border Patrol agents reported tha the seizure happened in the rural Starr County community of La Casita on Wednesday, April 20th.

Court records were not immediately available but Border Patrol agents reportedly spotted a Dish Network van exiting a brushy area near the Rio Grande River.

Working on a tip that are drug smugglers are now using counterfeit vehicles from well-known companies as a cover, Border Patrol stopped the van.

Border Patrol agents reported immediately noticing a strong odor of marijuana.

Investigators looked inside and found 100 bundles with close to 3,000 pounds of marijuana worth $2.3 million dollars inside.

Vehicles with counterfeit commercial markings have become increasingly popular with smugglers over the past few years, leading to the occasional moments of hilarity such as this:

In another case, a truck painted with DirecTV and other markings was pulled over in a routine traffic stop in Mississippi and discovered to be carrying 786 pounds of cocaine.

Police said they became suspicious because the truck carried the markings of DirecTV and several of its rivals. An 800 number on the truck's rear to report bad driving referred callers to an adult sex chat line.

Of course, there are concerns that more competently 'cloned' vehicles with EMS, fire or law enforcement markings could be used by smugglers to evade scrutiny from police and the Border Patrol or terrorists to gain access to otherwise secure areas.

CALIFORNIA: A former US Intelligence agent told An ABC affiliate in San Diego that the Shi'a Muslim terrorist group Hezbollah is setting up shop across the border in Mexico.

The former agent, referring to Shi'a Muslim terrorist group Hezbollah, added, "They certainly have had successes in big-ticket bombings."

Some of the group's bombings include the U.S. embassy in Beirut and Israeli embassy in Argentina.

However, the group is now active much closer to San Diego.

"We are looking at 15 or 20 years that Hezbollah has been setting up shop in Mexico," the agent told 10News.

Since the Sept. 11, 2001, terrorist attacks, U.S. policy has focused on al-Qaida and its offshoots.

"They are more shooters than thinkers … it's a lot of muscles, courage, desire but not a lot of training," the agent said, referring to al-Qaida.

Hezbollah, he said, is far more advanced.

"Their operators are far more skilled … they are the equals of Russians, Chinese or Cubans," he said. "I consider Hezbollah much more dangerous in that sense because of strategic thinking; they think more long-term."

Hezbolah has operated in South America for decades and then Central America, along with their sometime rival, sometime ally Hamas.

Now, the group is blending into Shi'a Muslim communities in Mexico, including Tijuana. Other pockets along the U.S.-Mexico border region remain largely unidentified as U.S. intelligence agencies are focused on the drug trade.

"They have had clandestine training in how to live in foreign hostile territories," the agent said.

The agent, who has spent years deep undercover in Mexico, said Hezbollah is partnering with drug organizations, but which ones is not clear at this time.

He told 10News the group receives cartel cash and protection in exchange for Hezbollah expertise.

"From money laundering to firearms training and explosives training," the agent said.

For example, he tracked, along with Mexican intelligence, two Hezbollah operatives in safe houses in Tijuana and Durango.

Hezbollah has already established a presence in the tri-border region of South America, where the borders of Argentina, Brazil and Paraguay converge around Iguazu Falls. Mexico has also been home to a number of Lebanese migrants for the past century- some of whom have alerted Mexican and American intelligence to the possibility of Hezbollah operating in Mexico.

In recent years, the DEA has claimed that Hezbollah has utilized the same network of drug traffickers, gun runners and document forgers that the Mexican cartels use.

ARIZONA: An 18-month investigation by the DEA, Arizona Department of Public Safety and Tribal Police has resulted in 25 arrests and highlighting the scope of the Sinaloa cartel's operations along the Mexican border in Arizona's Tohono O'Odham Indian Reservation southwest of Tuscon.

The vast Sonoran desert is the expressway for drug smugglers to get their goods into the U.S.

DEA agent, Todd Scott says, "You've got a clear line of sight all the way here to the roads that they coordinate with smuggling loads on. Continue that way a little further that way and you've got Mexico."

Scott stood on a spot known as a spider hole. It's on the Tohono O'odham Nation where you can easily see 10 miles out on a clear day, "It allows you to observe law enforcement whether it's border patrol or TOPD , DEA anybody operating in this area from this position," says Scott.

This is where Mexico's Sinaloa drug cartel hides surveillance teams. People live there 30 to 60 days at a time.

Scott says they act as air traffic controllers, "The smuggling loads come across in either human mule trains or vehicles and the scouts here use night vision goggles or binoculars coordinate those movements of those loads with the radios."

AP Photo/ Matt York

ELSEWHERE IN ARIZONA- *GILA BEND*: Two Border Patrol agents were killed in Gila Bend earlier this month when their vehicle collided with a Union Pacific freight train while pursuing suspected drug traffickers.

Early Thursday, U.S. Border Patrol agents Edward Rojas Jr. and Hector Clark were stationed near Gila Bend, on assignment with a task force, when they got a call about marijuana smugglers moving toward Interstate 8.

Even veteran officers talk about the adrenaline rush that comes with such a call, which causes a sort of tunnel vision. Rojas and Clark sped west on a frontage road parallel to railroad tracks, slightly ahead of a freight train going in the same direction at over 60 mph.

The conductor and engineer would later tell investigators that they sounded the locomotive whistle several times. Suddenly, the agents' vehicle turned left onto a private rail crossing, immediately in front of the 4,600-ton train.

Agents Clark and Rojas were the first Border Patrol agents killed in the line of duty since the December 2010 shooting of Brian Terry outside of Nogales, AZ. After the wreck, deputies from the Maricopa County Sheriff's Office recovered 300 pounds of marijuana and detained eight suspects a few hundred yards from the crash site.

*PHOENIX*: The DEA is refusing to turn over a cache of semiautomatic rifles seized in a raid earlier this month to the Bureau of Alcohol, Tobacco and Firearms when a routine check on some of the weapons revealed that they were obtained under the ATF's watch as part of Operation Fast & Furious.

The federal drug agents discovered the AK-47-type assault rifles wrapped in cellophane and hidden inside two giant trash barrels. Agents believe the confiscated weapons were heading to drug cartels in Mexico. Problem is, a serial number on at least one of the weapons traces back to the ATF.

The DEA arrests took place on April 13 and the DEA has expressed an interest in keeping the seized weapons as evidence in their own case and separate from the now infamous Fast and Furious investigation.

Agencia Guatemalteca Noticias Photo

GUATEMALA: At least 27 people were massacred at a ranch in the restive northern Peten province along the borders with Mexico and Belize last weekend.

The massacre, which stretched from Saturday into Sunday, took place on a coconut farm in the lawless region of Peten province, a porous region on the Mexican border known as a gateway for drug trafficking.

It was one of the worst mass killings since the end of Guatemala's 36-year civil war in 1996, authorities said.

Police were investigating a link between the ranch killings and the murder of Haroldo Leon, the brother of one of Guatemala's biggest drug kingpins, Juan Jose "Juancho" Leon, who was killed in 2008.

Local reports said the ranch belonged to Haroldo Leon, who was gunned down with three of his body guards in another part of Peten early Saturday.

Hours later, heavily armed members of Mexico's Los Zetas drug gang raided the ranch, tying up their victims before killing them and then writing in blood threatening messages on the walls of the house, cops said.

One of the messages read, "Salguero, we're coming for you." Police did not say who Salguero was.

Police said that the victims - including two women and children - worked at the farm.

Late Sunday, authorities said they found one survivor of the massacre, who had pretended to be dead. Cops didn't release any other details about the survivor.

Authorities in Guatemala arrested a former member of the Kaibiles, a special operations unit of the Guatemalan Army, in neighboring Alta Verapaz province after coming across information left behind in a recently abandoned Zetas encampment in the same province where the ranch massacre took place. Hugo Gomez Vazquez was arraigned in court and charged with obstruction of justice, kidnapping, extortion and accesory to murder. The prosecution presented a recording of a telephone conversation where Vazquez was apparently negotiating a ransom after the abduction of a relative of the ranch's owner who was later killed and decapitated prior to last weekend's massacre.

Three other Guatemalan nationals suspected of involvement in the massacre were arrested in the city of Quetzalenango on Saturday.

Investigators are also looking into ties between the owner of the ranch, Otto Salguiero, and Mexico's Gulf Cartel. Peten's location along the porous borders with Mexico and Belieze make it an attractive venue for smugglers. Guatemala's president declared a state of siege in nearby Alta Verapaz province in late 2010 after the Zetas began infiltrating the region and setting up staging areas and clandestine airstrips.

AP Photo, Marco Ugarte

TAMAULIPAS: Mexican federal police arrested a leading member of the Gulf cartel after raiding his birthday party at a ranch in Reynosa, Tamaulipas.

Gilberto Barragan Balderas "is considered one of the main leaders of the Gulf Cartel" and is the subject of a $5 million reward by the U.S. Drug Enforcement Administration, said Ramon Pequeno, head of anti-drug operations for the federal police.

Barragan Balderas was allegedly in charge of the cartel's operations in Miguel Aleman, across the border from Roma, Texas. Police captured him at a party at a ranch near another border city, Reynosa, which is across from McAllen, Texas.

Police said the party was apparently in honor of Barragan Balderas' May 19 birthday. Two alleged associates were also arrested in the raid, which also netted an assault rifle and three pistols.

According to the DEA, Balderas' duties included obtaining advanced information regarding military and state police patrols and mobile checkpoints in order to protect drug shipments for both the Zetas and the Gulf cartel prior to the organizations violent 2010 split. Since then, he was supposedly tasked with defending the territory from any Zetas incursion.

The fact that the DEA has a US$5 million reward out for Balderas is a pretty good indicator that he wasn't exactly a small fry in the Gulf organization.

ELSEWHERE IN MEXICO: Not surprisingly, human trafficking continues to be a lucrative side business for many of the drug cartels.

Smuggling in decades past was the business of small independent operators who helped migrants cross once they reached the U.S. border. But evading U.S. authorities has become much more difficult with increased border enforcement in recent years. At the same time, Mexico's migrant routes have become much more dangerous, controlled by drug gangs that see new moneymaking opportunities in kidnapping and extorting those who cross their territory.

The harder the trip, the higher the price. Guatemalan officials, who estimate 300 to 500 undocumented nationals cross the border each day into Mexico, say those migrants are paying double what they did two years ago, as much as $10,000 for the hope of gaining work in the United States.

Unlike those running drugs, guns or other contraband, people smugglers lose virtually no upfront costs when migrants are intercepted by authorities or escape.

In the case of Mexico's southern border, no one can say exactly who the organized smuggling groups are. Some say that large transport rings operate separately from Mexico's brutal drug gangs, such as the Zetas or the Gulf Cartel, who stick to kidnapping and extortion.

Some say they are all in collusion, including authorities. Both local police and federal immigration agents have been arrested in recent raids on kidnapping operations in Reynosa, across the border from McAllen, Texas.

"It's clear that they're immigration agents, federal police, Zetas, maras, the whole gamut, along with local crime groups," said the Rev. Alejandro Solalinde, a Catholic priest who runs a migrant shelter in Oaxaca. "Those who make money off migrants are all part of the same mafia."

Added to all this is the fact that organizations like the Zetas or Gulf cartel will target the migrants transiting through territory controlled by them and extort them, hold them for ransom or press them into service as drug mules.