Navajo Code Talker Tom Jones Jr Passes Away at Age 89

World War II veteran and member of the famed Navajo Code Talkers Tom Jones passed away at age 89 at a medical center in northwestern New Mexico last week. Jones, who worked in the Navajo Mines after his military service, was suffering from pneumonia and admitted to the San Juan Regional Medical Center in Farmington, NM.

Jones enlisted in November 1943 and was honorably discharged in December 1945 after training in California with other members of the Navajo tribe and serving in the Pacific theater. Throughout World War II, the Code Talkers confounded Japanese code-breakers primarily by sending out military communications in their native tongue. The Navajo language was spoken and understood by very few in the United States outside of the Four Corners region of Arizona and New Mexico, let alone anyone working on behalf of the Axis powers.

The Navajo Code Talker program was credited with maintaining secure lines of communication during the most pivotal battles of the Pacific theater. After the war, an estimated 200 Navajo Marines were sworn to secrecy over the Code Talker program to maintain secrecy- likely because the military thought such a program could see continued use during the Cold War with the Soviets. However, in the early 1970s the Code Talker program was eventually declassified and many of the Navajo veterans belatedly received recognition in the 1990s and 2000s for their efforts and unique contribution to the war effort.

The Navajo nation ordered flags flown at half mast in honor of Jones and his family released the following statement.

"Our father was a private, humble, simple, caring and giving father, grandfather, brother, friend and comrade. His heart was caring, his mind was strict, his life was blessed and his soul was graceful"

Although the Navajo tribe donated a house to Jones and other Code Talkers some 40 years ago, the home fell into disrepair and parts of it became nearly inaccessible when Jones was confined to a wheelchair.

More recently, Jones and other Code Talkers were featured in a March 2014 Los Angeles Times article that highlighted the difficult living conditions for some Navajo veterans who still live on the reservation.

Iron Horse Roundup for November/December 2013

Edwin Valero- AP

NEW YORK- At least four people were killed and 70 injured on Sunday morning when a Metro-North commuter train derailed just north of the Spuyten Duyvil station in the Bronx.

Early reports indicate that the train was travelling at speeds in excess of 80 MPH as it headed into a curve along the Harlem river where the maximum speed limit is 30 MPH. The National Transportation Safety Board is leading the investigation and has recovered two event recorders from the crash site. At the time, the train was operating in 'push-pull' mode where the train appears to be running backwards with the locomotive pushing from the rear and controlled by the engineer in a specially equipped enclosure in the 'trailing' car. This is fairly common practice among a number of commuter rail agencies as well as some Amtrak routes.

The NTSB was already investigating a derailment and collision between two Metro-North trains along the Northeast Corridor in Connecticut back in May as well as the crashworthiness of the Kawasaki-built passenger cars involved in the May accident. In July, a northbound CSX garbage train derailed by the Spuyten Duyvil station and snarled commuter traffic overnight. According to officials there were no problems with the condition of the tracks near the depot at the time of Sunday's derailment.

The cellphone records and blood samples of the engineer- who survived the wreck and was released from the hospital- have been taken, but no word on the results from the NTSB yet.

New Mexico State Police handout

NEW MEXICO- Three people were killed over the weekend when a freight train carrying ore derailed and the locomotive fell into a creek in southwestern New Mexico.

New Mexico State Police released the names of the three on board the Southwestern Railroad freight train which was operating between the massive Freeport McMoran open put copper mine in Santa Rita, NM and the Southwestern yards at Hurley, NM. The eight carloads of iron ore the train was hauling remained upright while the locomotive- a former Conrail GP40- landed on its side after falling roughly 50 feet into an arroyo.

Law enforcement previously reported that all three victims were men, however, one of the victims was a woman, Ann Thompson, 50, originally from Paulden, Ariz. The other two victims were Donald White, 38, of Silver City, and Steven Crose, 60, also of Paulden, Ariz.

Crose and White both worked for the railroad. Thompson was Crose's girlfriend, said Wanda Shepard, Crose's cousin. It is also unknown why Thompson was inside the locomotive at the time of the crash as she did not work for Southwestern Railroad, Shepard said. Both Thompson and Crose had recently moved to the Hurley area just three weeks ago for Crose's job.

"They loved being on the train," Shepard said of White and her cousin. "They loved it. It was their calling, and they were really proud of their jobs and what they did."

Although the train was carrying no hazardous materiel, the fire department from nearby Silver City, NM was called in to contain a diesel spill from the derailed locomotive.

A subsidiary of Western Railroad Builders, Inc, the Southwestern operates two disconnected lines in southern New Mexico. In 1990, the railroad purchased a cluster of former Santa Fe lines radiating out of Whitewater, NM to copper mines in Tyrone and Santa Rita in Grant County, NM. By 1994, the line from Whitewater to the then-Southern Pacific interchange in Demming, NM was purchased from the Santa Fe and by 2002, Western Railroad Builders agreed to a lease with BNSF for the line between Demming and Hatch, NM. To the east, the Southwest began operations on more than 200 miles of former BNSF trackage between Clovis and Carlsbad, NM when they entered into a lease agreement with the BNSF in 2004.

Western Railroad builders also operates the 250+ mile Cimarron Valley Railroad in Kansas, Oklahoma and Colorado as well as the 40-mile Arizona Central out of Clarkdale, AZ.

ALBERTA- The Canadian National Railway suffered two derailments in the province of Alberta in the span of a few weeks, one of them prompting the evacuation of a nearby town.

On October 19th, a Canadian National train hauling oil and LPG derailed near the village of Gainsford, AB west of Edmonton at approximately 1 AM local time. Witnesses reported hearing a loud series of crashes before seeing a fireball shoot up into the sky. After evacuating nearby residents and shutting down the Yellowhead Highway which runs parallel to the CN line, emergency crews decided the safest option would be to allow the fire to burn itself out.

In the early morning hours of Nov 3rd, a second Canadian Nation freight train derailed outside the hamlet of Peers, AB- also west of Edmonton. That train was determined to be carrying lumber and sulphur Dioxide, a hazardous material but not as volatile as oil or LPG.

Geoff Hammill- Pocahontas Times

WEST VIRGINIA- At least one person was killed and 42 others were injured when a logging truck slammed into a Durbin and Greenbrier Valley excursion train at a grade crossing in the remote eastern part of the state.

According to the Randolph County Sheriff's Office, the driver of the log truck was the sole fatality of the collision and when they arrived on the scene, the gates and flashing lights on the crossing were functioning.

Randolph County Sheriff Mark Brady said two of the train’s passenger cars flipped on their sides after impact at a rail crossing with a mountain highway, the log truck was rendered a “total loss” and the truck driver was pronounced dead at the scene.

The truck driver was not immediately identified and news photographs from the scene at West Virginia’s Cheat Mountain showed large, heavy logs jumbled beside the two toppled train cars amid a chaotic scene of first responders aiding shaken passengers leaving the train.

Brady said the accident occurred at a train crossing on U.S. Route 250 at a bridge on the mountain. The overturned passenger cars lay beside the tracks, roped off with yellow crime scene tape as police, firefighters and others looked on.

Headquartered in Elkins, WV the West Virginia Central railroad operates more than 130 miles of former Western Maryland trackage in the eastern part of the state. Although it does intermittently haul freight, excursion trains such as the New Tygart Flyer, Durbin Rocket and Cheat Mountain Salamander have proven big draws for the line. Future plans for the line include re-opening a connection with the Cass Scenic Railway, a former logging railroad now a state park and tourist hauler as well as establishing a permanent home for the West Virginia Railroad Museum in Randolph County along the WVCR right-of-way.

Iron Horse Roundup For August/September 2013

Arkansas & Missouri SD70ACe #71 is seen crossing Arkansas route 127 at Garfield, AR with a northbound Monett turn on September 23rd, 2013. Michael Harding photo

ARKANSAS- The formerly all-ALCo Arkansas and Missouri has acquired a trio of EMD SD70ACes for use on their 139-mile ex-Frisco line between Ft Smith, AR and Monett, MO. A&M #70, #71 and #72 were released from Progress Rail's Mayfield, KY paint shop in September sporting the new Arkansas and Missouri livery which included larger, more prominent lettering on the sides of the burly EMD's [and immediately reminded some viewers of the fictional Allegheny & West Virginia from the 2010 movie 'Unstoppable'- NANESB!].

The Arkansas & Missouri is the latest US shortline or regional to purchase new EMD power. In 2005, the Montana Rail Link took delivery of 16 new SD70ACEs from EMD while in 2008, the Iowa Interstate took delivery of fourteen new GE ES44AC 'GEVO' units. Strictly speaking, those units were brand new- the trio of SD70ACes that A&M had acquired had logged considerable time as EMD/Caterpillar Demonstrator units.

Even with the new purchase, the A&M plans on retaining much of their ALCo fleet for use on locals between Springdale and Ft Smith, AR.

Paducah & Louisville GP40-3 #2103 is seen heading southbound with the Vermont Railway's Bennington Turn up the grade outside of Arlington, VT on October 1st, 2013. John Cullinan photo

VERMONT- The Vermont Railway has recently taken delivery of a GP40-3 Slug/mate set, borrowed from Kentucky's Paducah & Louiville railroad for trials throughout the VTR system. While slugs are normally designed to produce additional tractive effort at lower speeds and don't even require a cab in many cases, road slugs retain the cab controls and are paired up with a 'mother' unit so they can operate at track speed.

The GP40-3 'mother' for this particular set started out life on the New York Central in 1967 and was paired with road slug #2108, which started out life as a Southern Pacific GP35. Both were rebuilt by VMV of Paducah in 2001.

In recent years, the Vermont Railway has leased SD9043MACs and Gensets from CIT leasing as well. Starting in 2010, the Vermont Railway began handling overhead movements of ethanol between the Midwest and the Motiva facility in Providence, RI via a Canadian Pacific/Vermont Rail/New England Central/Providence & Worcester routing. The initial movement required nine units and more than 24,000 horsepower to get 80 loaded cars over the summit of the Green Mountains on the former Rutland line between Rutland and Bellows Falls, VT. Subsequent unit ethanol trains have been broken down into two 40-car sets before being moved over the Green Mountain railroad and reassembled in Bellows Falls.

Central Montana GP9 #1809 leads a dinner train over the 1, 698 foot lone Sage Creek Trestle in Danvers, MT in June 2006. Matt Wellborn photo

MONTANA- Sidelined for more than two years, the mostly-dormant Central Montana Railroad will receive federal funding to repair a trestle that was undermined and knocked askew during a 2011 flood. The damaged trestle isolated a number of shippers on the line from the BNSF interchange at Moccasin, MT.

The loss of rail service over the last two grain harvests have cost farmers in Denton and Geraldine an estimated $1 million annually as they've had to move their harvest to elevators some 70 miles further by truck.

While the line couldn't operate freight for the last two years, it still hosts the seasonal Charlie Russell Chew Choo dinner trains based out of nearby Lewiston, MT. In September 2012, a group of railfans chartered a series of photo freights on the undamaged portion of the line, using the line's five unrebuilt GP9s, a caboose and some MofW ballast hoppers.



The line was originally built about 100 years ago by the Milwaukee Road as part of a branch from their Twin Cities to Seattle transcontinental line. However, by 1980 the bulk of the Milwaukee Road's transcontinental line was abandoned, as well as the branchlines around Lewiston. In 1985, the non-profit Central Montana was formed to operate some 63 miles of the former Milwaukee Road branch through Choteau, Fergus and Judith Basin counties as well as another 19 miles of a former Great Northern branch between Moccasin and Kingston Jct.

Santa Fe Southern GP7u #07 is seen trundling along the former Atchison, Topeka & Santa Fe route between Santa Fe and Lamy, NM with a 'mixed freight in March 2012. James E House photo

NEW MEXICO- A shortline whose ownership once included Family Ties actor Michael Gross and was made famous by a particularly tense and dark episode of AMC's Breaking Bad is out of commission.

A message on the Santa Fe Southern website said the railway won't be operating through 2013 and hopes to resume operations by the spring of 2014. The line was also one of the few remaining in the nation to still regularly operate mixed trains [carrying both freight and paying passengers- NANESB!].



The line was also used for filming an episode of the fifth and final season of the critically acclaimed crime drama Breaking Bad in which mild-mannered chemistry teacher turned meth kingpin Walter White along with his partner Jesse Pinkman and ex-cop Mike Ehrmantraut orchestrate a complex heist in which thousands of gallons of methamphetamine precursor chemicals are stolen from a tank car on a stalled freight train. The episode was rated one of the best in the series by critics and the producers thanked the Santa Fe Southern for their considerable assistance in the credits.

Lousiville & Indiana GP38-2s #2003 and #2002 leads a northbound Columbus, IN to Jeffersonville, IN turn across a bridge at Sellersburg, IN in September. Photographer Joe Vittitoe points out that faded Pennsy lettering is still visible on the bridge.

INDIANA- Anacostia Pacific's Louisville & Indiana has acquired a trio of GP38s for service on their southern Indiana line between the two namesake cities.

Besides the EMDs being rebuilt, they were also painted into Pennsylvania Railroad-inspired Tuscan red at mid America Car of Kansas City, MO, joining L&I's all-EMD roster. The Pennsy heritage units arrival coincides with the announcement by Louisville & Indiana officials that they plan on spending $90 million to upgrade approximately 100 miles of rail and replace bridges along the route.

Prior to the 1994 formation of the Louisville & Indiana, the line was previously operated by Conrail, Penn Central and the Pennsylvania railroad.

Milwaukee Road #261 heads southbound on the return leg of a Duluth-Twin Cities excursion over the BNSF Hinckley sub at Askov, MN in May 2013. The trip was the first run of the #261 in more than four years.

MINNESOTA- Just a few months after the Milwaukee Road #261 made its triumphant return to the rails with a mainline excursion from its Minneapolis home to Duluth, MN, the big 4-8-4 is slated to return to the mainline during the second weekend of October.

This time, the 1944-built ALCo will hit the high iron on the BNSF Wayzata Subdivision between the Twin Cities and Willmar, MN on October 12, 2013. The total round trip will be 186 miles and will be followed up by a partial reprise of the May 11-12 excursion between the Twin Cities and the Duluth-Superior Twin Ports area over the BNSF Hinckley sub. The key difference between the May Excursion and this upcoming excursion is that the 261 will turn around at Boylston, WI south of Superior instead of navigating its way through the massive yards, crossings and over the swing bridge between Duluth and Superior.

Tickets for the excursions range from $99 to $359 and are available through the Friends of the 261 homepage.

Newly acquired and repainted Paducah and Louisville SD70ACe #4519 is seen awaiting pickup behind the VMV backshop in Paducah, KY in July. Terry Redeker photo

KENTUCKY- Apparently when they aren't sending off their 4-axle mother/road slug sets to Vermont, Four Rivers Transportation's Paducah & Louisville is in search of bigger and brawnier motive power.

The Paducah & Louisville took delivery fifteen SD70ACes from the CSX earlier this year. All units were purchased new by CSX and repainted at VMV Paducah, KY facility- quite literally in the PAL's backyard- before delivery.

CSX owns roughly 40% of the PAL's parent company- Four Rivers Transportation- and there's speculation that the units could end up in service on one of the PAL's sister railways, namely the Evansville & Western and Allegheny and Ohio. Slumping coal traffic on the CSX along with the Class one's affiliation with the parent company likely resulted in some sort of a deal on the newer units that the PAL felt was too good to pass up.

Union Pacific 4-8-8-4 'Big Boy' #4104 is seen during a special night photography session- complete with smoke- at the Los Angeles County Fairgrounds in Pomona, CA where it has been on static display since 1961. Mike Massee photo

CALIFORNIA- The largest class of steam locomotive in the world may once again be under steam on the high iron thanks to its original owner, the Union Pacific.

In late 2012, there was speculation that the Union Pacific was scouting various museums and parks with the intent of adding one of their 4-8-8-4 ALCo Big Boys to their steam excursion fleet. This included Big Boys on display in St Louis, Cheyenne, Los Angeles, Omaha, Denver, Green Bay, WI and Scranton, PA.

By July, not only did the Union Pacific make it official that they did intend to restore a Big Boy to operating condition, they had chosen former UP #4104 which had been on display at the Los Angeles County Fairgrounds since its 1961 retirement. The railway agreed to purchase the #4104 from the Southern California Railway & Locomotive Historical Society at the end of June with the stipulation that it be moved after the LA County Fair in late September- the delay also gives UP and the RL&HS time to figure out how to best move the slumbering behemoth from its display area to the nearby mainline.

Once out of the Pomona Fairplex, the #4104 will be moved to Cheyenne, WY for restoration. Cheyenne is also home of Union Pacific's two other operable steam locomotives; 1943-built 4-6-6-4 Challenger #3985 and 4-8-4 #844, which holds the distinction of being the only steam locomotive in the USA that was never retired by its original owner.

Most estimates have the #4104 returning to service by 2016 at the earliest. Once it does return to service, it would displace the #3985 as the world's largest operating steam locomotive. The Big Boy's were originally assigned to the Union Pacific mainline out of Cheyenne, WY.

Nebraska Northeastern SD40-3 #127 is seen leading an all EMD 5 unit lashup through Osmond, NE in May 2012. Kenny Thies photo.

NEBRASKA- In something of a reversal, the Burlington Northern-Santa Fe has acquired the Nebraska Northeastern Railway- a 120 mile shortline that was formed in 1996 when the 120 mile line between South Sioux City and O'Neil, NE was sold off by none other than the BNSF.

The line served three major ethanol producers and also hauled popcorn. However, track along parts of the line are in dire need of an upgrade as speeds were restricted to 10 MPH in places and the NENE had the notable disadvantage of having only one interchange partner in South Sioux City- the BNSF. Across the Missouri River in Sioux City, IA, two additional Class 1 carriers (Union Pacific and Canadian National) and the Dakota & Iowa shortline were tantalizingly close but the NENE didn't have any trackage or haulage rights across the river to any of those carriers.

BNSF has promised shippers lower rates since the Nebraska Northeastern takeover would eliminate any interchange between the BNSF and NENE. The massive railroad can carry out much-needed trackwork more efficiently than the NENE. The Nebraska Northeastern was affiliated with the Texas, Gonzalez and Northern Railway prior to the BNSF takeover.

A Class 1 carrier reacquiring trackage that it had spun off years ago is unusual, but not completely unheard of. In 2008, Canadian National took over operations of the 311 mile New Brunswick East Coast and nearly 250 miles of mainline, branchlines and trackage rights from the affiliated Ottawa Central Railway. The NBEC acquisition came almost exactly 10 years after the Canadian National spun off the line in the Maritimes.

Burning wreckage in the immediate aftermath of the July 2013 runaway train in Lac Megantic, Quebec. Sûreté du Québec handout.

MONTREAL, MAINE & ATLANTIC- A federal judge approved a $3 million loan that would keep the beleaguered Montreal, Maine & Atlantic operating through the month of October. In August, Canadian authorities ordered the MM&A to operate their trains carrying hazardous or volatile cargo through Quebec with two man crews after the devastating train wreck and fire killed at least 47 people in the Quebec town of Lac Megantic in July.

The loan is structured as a revolving line of credit up to $3 million and may be used only as working capital, according to court documents. It will be secured by the property and tracks the railroad owns in the U.S. and Canada.

“The loan will ensure that the [MMA] and MMA Canada have adequate working capital to continue operating pending a sale of their assets,” bankruptcy trustee Robert Keach wrote in his motion seeking approval of the loan.

Eight potential suitors have expressed interest in purchasing MMA’s assets, and seven have signed nondisclosure agreements, Keach confirmed Wednesday. Gordian Group, a New York-based investment bank Keach has secured to handle the sale of MMA’s assets, is speaking with the suitors this week, according to Keach. He hopes to begin the auction by the end of November.

Keach also said that the Canadian Transportation Agency’s certificate of fitness, which expires Oct. 18, was dependent upon obtaining operating capital.

The Hermon-based railway has been using a $6 million line of credit, provided by Ohio-based Wheeling & Lake Erie Railway Co., to continue operating since it filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Bangor and Canada on Aug. 7. Keach said Wednesday that it would continue using that cash collateral to fund operations once a new agreement is worked out with Wheeling’s attorneys.

The bankrupt railroad is slated to have their assets sold off to potential buyers in an auction slated to take place in late November or early December. As many as eight potential buyers have reportedly expressed interest, but only one- J.D. Irving's New Brunswick Southern has been identified. A refinery in St Johns, NB- also owned by the Irving Group- was the final destination of the MM&A oil train that fateful July night.


TEXAS- Dramatic video from west Texas has emerged showing a Union Pacific freight train colliding with a stalled tractor trailer at a crossing in Midland.

Officials say that a semi with a flatbed loaded with pipes was stuck by a train at the railroad crossing on County Road 1130 in Midland.

Officials say the train collided with the semi and pushed it a little over half a mile down the tracks.

cials from Union Pacific, the Department of Public Safety and Midland County Sheriff's Office all responded.

One crossing arm was damaged in the crash and 100 gallons of diesel was spilt due to the accident.

The railroad crossing will be closed until the crossing arm has been repaired.

There were no injuries to the crew and the truck driver was clear of the vehicle before the collision.

Last November, four people were killed when a Union Pacific freight train slammed into a tractor-trailer carrying a veteran's parade float in Midland, TX.

Today's Train of Thought- That Loving Feeling, Aug 30th, 2013

Today's train of thought takes us to the Land of Enchantment [or AMC's Breaking Bad- NANESB!] and features a river that has wound its way through Western lore.

In the 19th century, 'West of the Pecos' became shorthand for the Wild West. The river ran some 900 miles from what is now San Miguel county, New Mexico to Seminole Canyon and the Rio Grande in Val Verde County, TX. Late 19th century saloon-keeper, boxing promoter and justice of the peace Roy Bean at one point deemed himself "the law west of the Pecos". Despite the moniker 'Hanging Judge Roy Bean', its believed that Bean had sentenced only two defendants to be hung- and one of them escaped before the sentence could be carried out.

The Pecos also wends its way through the Permian Basin in southwestern Texas and southeastern New Mexico, an oil-rich portion of the Mid Continent Oil Field that's seen renewed activity thanks to new drilling techniques. The area also contains substantial potash deposits, particularly in Eddy County, NM.

Two potash mines- one east of Carlsbad, NM and one east of the town of Loving, NM- are served by the 200-mile Carlsbad division of the Southwestern Railroad [just to make things even more confusing, the Southwest has a separate division out of Demming, NM in the southwestern corner of the state- NANESB!]. The Southwest began operation on the 182 mile line between Loving and Clovis, NM that leased from BNSF beginning in October 2004. This also included two twenty mile spurs serving the respective potash mines east of Loving and Carlsbad.

Here, railpictures.net contributor Fotaugrafee caught Southwestern SD50 #5103 crossing the dry riverbed of the Pecos with train R81 in March 2013 just outside of Loving, NM. The two burly six axle EMDs are still painted for WATCo's Austin & Western and started out life on the Chicago & Northwestern. Reportedly, more SD50s from WATCo, CSX and Union Pacific have also arrived on the Southwestern's Carlsbad Division since this photo was taken.

Iron Horse Update for March 2013

In a scene that won't be repeated anytime soon, Delaware & Hudson painted GP38-2 #7304 is seen rolling along the former Pennsy RR High Line through Philadelphia, PA with a mixed bag of CP and leased SD40s in charge of Train 158-04 in August 2011. Lee King photo

CANADIAN PACIFIC/DELAWARE & HUDSON- The Canadian Pacific railroad announced their pullout from the Philadelphia area effective March 4th. The move comes as something of a surprise as the CP Rail [NYSE- CP] had been seeing increased traffic in the form of dedicated unit crude oil trains between the Bakken formation in North Dakota and refineries in the Northeast- including in the Philadelphia area. In fact, the Carlyle group plans on investing more than $200 Million in a Sunoco [NYSE- SXL] refinery along the Schuykill River.

The Canadian Pacific actually owns no right-of-way around Philadelphia. Instead, the CPR reached the city of Brotherly Love thanks to trackage rights date back to the 1976 formation of Conrail after the bankruptcies of the Penn Central, Lehigh Valley, Reading, Central New Jersey and Erie Lackawana. The Delaware & Hudson was allowed trackage rights into Philadelphia (as well as Newark, NJ Buffalo, NY and Chessie System/CSX's Potomac Yard in Alexandria, VA) to prevent Conrail from monopolizing freight rail service. The trackage rights were included in CP Rail's 1991 purchase of the Delaware & Hudson, but since Conrail's 1996 sale of the former Lehigh Valley mainline between Scranton and Packerton, PA and the 1999 breakup of Conrail itself, the Canadian Pacific has had to negotiate trackage rights over multiple railroads just to reach Philadelphia proper. While CPR still utilizes trackage rights over Norfolk Southern's Southern Tier line to reach Buffalo, the D&H's Potomac Yard service was cut back to Harrisburg, PA in 1989 [while the New York, Susquehanna & Western was the designated operator- NANESB] and the Newark service was cut back to Allentown, PA in 2012.

Canadian Pacific's ceding Philadelphia to CSX and Norfolk Southern reflects a broader trend of cutting back on trackage deemed unprofitable or redundant since the 2011 takeover of the Calgary-based Class 1 carrier by private equity firm Pershing Square Capital. In December 2012, the CPR announced they were seeking buyers for more than 600 miles of former Dakota, Minnesota & Eastern trackage in South Dakota, Wyoming, Minnesota and Nebraska.

CANADIAN PACIFIC/SOO LINE- Fourteen cars of a 94-car southbound Canadian Pacific freight train derailed in Western Minnesota on March 28th. The derailment took place near Parkers Prairie, MN and three of the cars had spilled oil onto the ground. Initial estimates claimed that as much as 30,000 gallons had leaked from one of the ruptured cars, but that figure was later revised downward to less than 15,000 gallons.

No injuries were reported in the derailment, although the cold weather hampered cleanup by giving the oil a thicker, tar-like consistency. The line was reopened within a matter of hours.

SWEDEN- A woman in the Swedish capital was hospitalized and is facing charges of suspicion of reckless endangerment after allegedly stealing an empty commuter train from a depot in Stockholm and crashing it into a house back in January.

Tomas Hedenius, a spokesman for train operator Arriva, said the woman, born in 1990, stole the four-car train at a depot outside Stockholm.

She then drove it about 1.6 kilometres to the end station on the railway line, where it jumped off the tracks, careered for about 25 metres and crashed into a three-story building.

“There were three families inside the apartment building, but no one was injured. At least not physically,” Hedenius said.

The motives of the woman, who worked for a company contracted to carry out cleaning for the train operator, were not immediately clear.

“We have only heard good things about her. We’re investigating how this could happen, and why she did what she did,” Hedenius said.

It is unclear how the woman got the keys to the train, but the Arriva spokesman said that operating the commuter trainsets is pretty straightforward once in the cab.

HOUSATONIC RAILROAD- The Housatonic Railroad suffered its second derailment since November earlier this month. Shortly after midnight on March 15 four cars jumped the rails and tipped over near the entrance of a paper mill in Lee, MA with two high-sided gondola cars spilling construction debris along the banks of the Housatonic River.

Crews spent the weekend cleaning up the derailment and re-opening the line, although a Housatonic spokesman said that the two gondola cars would likely be scrapped on site.

Texas-New Mexico SD9043MAC #113 seen leading a short mixed freight at Hobbs, NM. The 104-mile Iowa Pacific subsidiary is enjoying a revival of oil drilling in the Permian Basin, which straddles the Texas and New Mexico border. JR Leal photo

TEXAS-NEW MEXICO- After spending approximately $25 million dollars on improvements to the right-of-way, Iowa Pacific's Texas-New Mexico Railroad began handling their first unit train of crude oil at the end of January. Ultimately bound for refineries along the Texas Gulf coast, the crude is loaded along the TNMR in Winkler County, TX. Some of the improvements also include a joint Union Pacific/Texas-New Mexico unloading facility for frac sand at the interchange in Monohans, TX that Iowa Pacific chipped in more than $1.5 million towards.

When Iowa Pacific Holdings first acquired the Texas-New Mexico and disconnected sister line West Texas & Lubbock in 2002, there were reportedly only 12 oil rigs operating throughout the Permian Basin. More recent estimates now put the number at 450.

The Texas-New Mexico operates with a motley hodgepodge of motive power, including new SD9043MACs as well as B39-8s from sister railroad San Luis & Rio Grande as well as former Arizona & Eastern GP20s and GP35s.

Before the reinvigoration of drilling the Permian Basin, the TNMR was pretty busy handling fertilizers, LNG, clay, chemicals, aggregates, scrap metal and unit trains loaded with contaminated silt dredged up from the Hudson River in upstate New York and destined for Waste Control Specialists in Andrews County, TX. In addition to those commodities and the new unit oil trains, the TNMR also recieves trainloads of fracking sand and proppants from the upper Midwest at the UP interchange in Monohans.

[Hat tip to Ruckus Rails for the background information on the TNMR- NANESB!]

Borderline Psychosis Update- US Officials Shot, wounded by Mexican police; Off to the Races- Zetas Racehorses Up For Auction; Cartels Trying to Gain Foothold in Sin City;

MORELOS- Mexican prosecutors and US State Department officials are trying to determine what happened after Federal police officers and gunmen in civilian clothes opened fire on US Diplomatic vehicle outside of the resort city of Cuernavaca over the weekend, wounding two Americans attached to the US Embassy in Mexico City and a captain in the Mexican Navy.

The two Americans, attached to the U.S. Embassy in Mexico City, were hospitalized with gunshot wounds and reported in stable condition. A Mexican naval captain traveling with them sustained minor injuries in the Friday attack.

No one disputes that Mexican police opened fire on the Americans' black armored Toyota with diplomatic license plates. The question is why.

The Americans were traveling on the road to Cuernavaca, a popular tourist resort south of Mexico City, when their vehicle was intercepted by a carload of gunmen who gave chase as the Americans attempted to escape, U.S. and Mexican officials said. Federal police in at least three patrol cars joined the chase and opened fire on the Americans until the Mexican military, summoned by the naval captain under fire, intervened.

The carload of gunmen and the federal police reportedly fled the scene at that point.

Pictures of the heavily damaged car showed the front passenger window splattered with bullet holes and most of the tires blown out. More than 30 spent casings reportedly littered the roadway where the crippled vehicle came to a stop.

The Reforma newspaper quoted an unnamed Mexican marine who was part of the rescue effort as saying the police and the first group of gunmen appeared to be working together.

"This was an aggression by the federal police," the marine said, according to the paper. "We don't know who they are working for."

A federal judge in Mexico ordered at least 12 Federal police officers involved in the shooting to be placed under house arrest on Monday. Remnants of the Beltran-Leyva cartel, reconstituting themselves as the Cartel de Pacifico Sur in 2010, are active in the state of Morelos.

In February of 2011, assailants from a local Zetas cell pursued two US Immigration and Customs Enforcement Agents (ICE) in a clearly marked Suburban with US Diplomatic plates and opened fire on the vehicle after running it off the highway in San Luis Potosi. Agent Jamie Zapata was fatally shot by the gunmen and his partner Victor Avila was wounded.

NICARAGUA- A Nicaraguan judge ordered 18 people caught attempting to enter the country from Honduras with more than $9 million in cash placed into 'protective custody' on Saturday.

The detained individuals, which reportedly include a former Mexican police officer, will face a September 5th court date where they will face charges of money laundering. The party was travelling in multiple vehicles bearing the logo of Mexico's Televisa network and claimed they were journalists. Televisa later confirmed that none of the detained individuals were working for their network.

While some speculate that the cash was ultimately destined for Colombia in a deal brokered between the cartels in Mexico and Colombia, the bogus journalists were caught just days before a high profile trial in the capital city of Managua where 24 people stand accused of trafficking Colombian drugs to Guatemala where they would ultimately be handed off to Mexican cartels.

NEW MEXICO- A Federal judge in Texas ruled that more than 400 racehorses seized in June during a coordinated series of raids on horse farms in Oklahoma and New Mexico can be put up for auction. Federal prosecutors allege that high ranking members of the Zetas invested proceeds from their drug trafficking into breeding and training racehorses.

Authorities seized 49 of the most valuable horses and claimed control of the remaining 414. Prosecutors said in court documents that four horses have died. Others have been injured due to overcrowding. Caring for the horses is also expensive.

U.S. District Judge Sam Sparks last week ruled proceeds would be held until the case is resolved. Five horses won't go up for sale.

In a number of instances, its not unusual for bidders of opaque origins to pay large sums of cash for prize racehorses at auction.

According to an affidavit filed in support of the June search warrant, a senior member of the Zetas had bragged about rigging the 2010 American Quarter Horse Association's All American Futurity at New Mexico's Ruidoso Downs.

Just after he watched his quarter horse win almost $1 million at a prestigious race in Ruidoso two years ago, one of the main leaders of the brutal Los Zetas drug cartel boasted that he had fixed the race by bribing the people who held horses in the gates, according to a federal court document.

Another informant said the horse, Mr Piloto, was doped with drugs purchased in Juárez before his long-shot win at the 2010 All American Futurity, the affidavit said.

It's unclear whether the claims are true or just boasts by members of Mexico's macho cartel culture. Seven people were arrested on charges that Los Zetas laundered $20 million since 2009 in U.S. quarter-horse racing -- much of it in Ruidoso.

A federal grand jury sitting in Austin on May 30 indicted Miguel Treviño in connection with the alleged money laundering. Federal prosecutors describe Treviño, 38, as "co-leader" of the Nuevo Laredo-based Zetas, who are known for ruthlessly killing and dismembering scores of victims.

Also indicted was his brother, Oscar Omar Treviño Morales, known as "42," whom the indictment describes as also a member of Los Zetas' leadership. Both brothers are believed to be in Mexico.

Agents on Tuesday arrested a third brother, Jose Treviño Morales, 45, and his wife, Zulema Treviño, 38, in Oklahoma. They ran a company, Tremor Enterprises LLC, that is accused of helping launder drug money by buying, selling and racing quarter horses.

Federal agents searched property used by Jose and Zulema Treviño and Trevor Enterprises in Balch Springs, Texas, on Tuesday. The affidavit, in which claims about race fixing and horse doping are made, supports the warrant to search the property.

U.S. officials have offered a $5 million reward for information leading to the arrest of Miguel Treviño.

The affidavit says he, his brother Oscar, and two confidential informants watched the 2010 All American Futurity on a computer -- presumably in Mexico, where the informants say they met Miguel Treviño.

After the win, which paid Tremor Enterprises $968,440, Miguel Treviño said "he and his associates paid approximately $10,000 to the gate keepers to hold back the horses competing against Mr Piloto," the affidavit quotes the two informants as saying.

Mr Piloto only won the 2010 All American Futurity by a nose over JLS Mr Bigtime, the 2-1 co-favorite.

Darrel Soileau, trainer of JLS Mr Bigtime, wouldn't comment Thursday on claims in the federal affidavit that the race had been fixed and that the winning horse had been doped

The running of the 2010 AQHA All American Futurity at Ruidoso Downs is archived on YouTube- contrary to Treviño Morales' boasts, the video shows no significant delay in the other horses leaving the starting gate. In fact, Mr Piloto is seemingly at a disadvantage at first as the horse veers off towards the railing closest to the crowd before regaining lost ground. The race ended in a 3-way photo finish between Mr Piloto, JLS Mr Bigtime and Dominyun.

NEVADA- The days of mob-run casinos on the Las Vegas strip may be gone, but that's not to say organized crime is no longer interested in Sin City.

Mexican cartels attempting to move product in Clark County or use southern Nevada as a staging area to ship drugs elsewhere are anxious to get a foothold in Las Vegas, according to a recent report from the Las Vegas Sun.

The vast majority of drugs entering the region still come via long-established routes through Phoenix or Southern California and are overseen by middlemen. But with greater frequency, traffickers here are ordering drugs directly from cartels in Mexico, enforcement officers have found.

“There’s no denying that these cartels are slowly inching themselves into our community,” said Lt. Laz Chavez of Metro Police’s narcotics section

The deliveries from Mexico include cocaine, heroin, marijuana and methamphetamine, typically transported by vehicle in hidden compartments.

Last year, task forces seized more than $66 million in drugs in Southern Nevada, more than double the amount seized in 2010, according to authorities.

Authorities suspect Mexican drug cartels are sending splinter groups — associates but not cartel leaders — to the Las Vegas area to, as Chavez puts it, “test the waters.”

They’re purchasing homes and own enough vehicles to operate in the region, all funded by money from the cartels, he said. Chavez said he thinks that as these associates attempt to set up shop, they’re keeping an eye on police activity — in other words, “how much they can get away with.”

There’s not one cartel running Southern Nevada, though. Authorities have come across drug traffickers with direct connection to the Sinaloa, La Familia and the Knights Templar cartels.

Besides the potentially lucrative drug market, cartels could also possibly use the casinos on the Las Vegas Strip to help launder proceeds from their drug trafficking. From a criminal's standpoint, part of the problem with money laundering and large scale black-market transactions is the largest denominated currency typically available is the US $100 bill or Mexican 1000 Peso bill (currently worth US$75 give or take). While some drug traffickers in Europe or South America have gravitated towards the €500 note, some organized crime groups in Canada have been known to transfer high-denomination casino chips between one another in order to launder money. Althugh one is usually limited to redeeming the chips at just the one establishment, some casinos issue chips worth as much as US$500 or $1000, making them easier to handle or transport than the cash equivalent.

Borderline Psychosis- Gunmen Open Fire, Kill 11 at Rehab Center; Police, TV Stations Targets in Matamoros Grenade Attack; Feds Allege Zetas Ponied Up Cash for Oklahoma Horse Ranch; Slain Agent's Family Sues DOJ

COAHUILA- Eleven people were killed and another ten people were wounded after gunmen entered a drug rehabilitation center in Coahuila and opened fire earlier this month. Citing state prosecutors, NotiMex reported that armed men entered the Your Life on the Rock rehab center in Torreon and fired more than 60 rounds at around 10 PM local time before fleeing.

Gangs have frequently targeted rehabilitation centers throughout Mexico since 2009 with at least 66 people killed since then.

The motive for Sunday's shooting was not immediately clear. Several factors have made rehab centers targets, said Edgardo Buscaglia, an expert on organized crime and president of the Mexico-based nonprofit Instituto de Accion Ciudadana (Citizen Action Institute).

"The people who go there are usually involved in buying or selling drugs," he said. "We're talking about urban gangs or youth gangs that are in charge of delivering these drugs to the final consumers in the urban markets."

Some of them may have talked with police, drawing ire from former associates, he said. Others may be targets for rival gangs seeking revenge.

"They kill them because these kids are either witnesses for the authorities or ... some of those kids may be working in the selling of drugs. Adversary groups kill them in the same ways they kill politicians working for the adversary groups," he said. "Once you work for different organized crime groups, it's very hard to get away from it."

By 2010, drug dealing inside rehab centers had become so rampant in northern states like Chihuahua that most of them had simply shut down.

TEXAS- The family of an Immigration and Customs Enforcement agent slain in Mexico last year has filed a wrongful death suit against the DOJ this week.

Two of the weapons recovered at the scene of Zapata's killing and the wounding of his partner, Victor Avilla, were traced back to Texas. A Baytown, TX man was sentenced to 8 years for buying one of the guns- an AK47 variant- through a straw purchaser.

In documents obtained by CBS news, it was learned that the man, 30 year old Manuel Gomez Barba, was under surveillance for 6 months before the weapon turned up at the shooting of Zapata and Avilla.

Documents indicate ATF opened its case against Barba, entitled "Baytown Crew," in June of 2010. During the investigation, court records state Barba recruited straw purchasers and "facilitated the purchase and exportation of at least 44 firearms" including assault rifles. On August 20, 2010 Barba took delivery of the WASR-10 semi-automatic rifle later used in Zapata's murder, obliterated its serial number, and sent it to Mexico with nine others just like it. Nearly two months later, on Oct. 8, 2010, ATF agents recorded a phone call in which Barba "spoke about the final disposition of ... firearms to Mexico and also about the obliterating of the serial numbers before they were trafficked." Barba told straw purchasers the guns were destined for the Zeta drug cartel.

This has led to speculation that there have been ongoing concurrent 'gunwalking' operations similar to Fast & Furious that have been taking place outside of Arizona, although the ATF and Justice Department deny it.



JALISCO- A surveillance video from January of this year showing heavily armed local police officers barging into a hotel and taking away three men was released by Mexican prosecutors last week.

However, instead of making an arrest, the video shows that the police in Lagos de Moreno were carrying out a kidnapping on behalf of one of the drug gangs. The three men being shown taken out of the hotel and stuffed into a police truck later turned up dead, killed by asphyxiation and blunt-force trauma.

Before entering the hotel, the video shows the police truck pulling up in front of the hotel followed by a civilian truck. One of the policemen approaches the civilian vehicle that came in behind the police truck and is given what appears to be a list. Video from the hotel's interior shows the officers approaching the reception desk and asking what room the men on the list are staying in. After handcuffing the men and taking them out of the hotel, the local officers wait patiently as the victims' luggage and vehicle are taken before driving off behind the stolen truck and the truck that followed them to the hotel.

While the kidnapping and murder occurred in January, and the faces of several officers were clearly seen on the videos, the officers were not detained until June 6, when soldiers and state police raided a local police station. And they still have not been formally charged with any crime.

"It took time to obtain the video tapes, to do the investigation, and to get the arrest warrants," said Jalisco state prosecutor's spokesman Lino Gonzalez said Thursday. "We didn't have the information."

Gonzalez said that so far, seven policemen and officials of the municipal police force of Lagos de Moreno have been detained pending charges.

There are still mysteries surrounding the case, including whether the gunmen thought the victims were members of a rival drug cartel. The victims were from the northern state of Coahuila, where the hyperviolent Zetas cartel has been battling the Sinaloa cartel, allies of Jalisco Nueva Generacion.

Gonzalez said the victims, before checking into the hotel, had been briefly detained by police at the local jail for a minor infraction. They paid a fine and were released. But while in custody, "They said something indiscrete," Gonzalez said. "Apparently they said something like 'We're from Coahuila, and we're part of the mafia.'"

It's not unusual in Mexico for detainees to boast about their connections, hoping to press corrupt police to release them.

This time, however, it backfired.

"Apparently, somebody at the jail heard the comment, and reported it to the real criminals," Gonzalez said.

Jalisco state Attorney General Tomas Coronado told local media the men had claimed to be Zetas.

He said it has never been proved the men were gang members. They may have just been in Lagos de Moreno collecting the rent on a ranch, and they are being treated simply as victims.

Investigators believe the gunmen giving police instructions are affiliated with the recently-formed and rapidly expanding New Generation cartel. Since 2009, the New Generation has been engaged in bloody turf battles with Los Zetas, La Familia Michoacan and now the remnants of La Familia that make up the Knights Templar.

Although widespread corruption and complicity on the part of local police throughout Mexico has been alleged by observers in both Mexico and the USA even before the narco-killings began spiraling out of control, this is thought to be one of the first times such clear-cut evidence of local policemen working hand in hand with drug gangs was caught on vide.

TAMAULIPAS- No injuries were reported after a series of grenade attacks rocked the border city of Matamoros over the first weekend in June. Two earlier attacks targeted an auto dealership and a municipal police station. A thrid device was found at the Televisa studios in the southwest side of the city, but authorities managed to clear the area before disposing of the device.

On Monday, El Nuevo Herald reported that two more grenade attacks targeting a high school and college campus took place in the early morning hours of Monday. Eyewitnesses said that classes weren't in session yet and that there were no reports of injuries.

The attacks had prompted state and local police to shift from patrolling with one or two people per vehicle while on patrol to moving about the city in convoys. Matamoros is directly across the border from Brownsville, TX and the US Consulate issued a travel warning to Americans south of the Border shortly after the attacks.

A few days after the Matamoros grenade attacks, 14 dismembered bodies were left in an abandoned bus adorned with a narco banner addressed to Los Zetas outside the city hall in Ciudad Mante, some 250 miles south of Matamoros and the US-Mexico border.

ELSEWHERE IN TAMAULIPAS- Two former state governors are being sought for questioning after federal prosecutors in Mexico issued a detention warrant for the politicians.

Tomás Yarrington Ruvalcaba and Eugenio Hernández Flores are named in a detention warrant in connection with money laundering and organized crime, two officials with the Mexico Attorney General’s Office — known by its Spanish abbreviation PGR — independently confirmed to The Monitor. The officials spoke on condition of anonymity, as they are not authorized to discuss the matter publicly

Although neither individual has been charged with a crime, Mexican law allows for detention and questioning of up to 40 days before charges can be filed.

Although Yarrington has denied any wrongdoing and claims the detention orders are politically motivated, Mexican authorities have arrested one of Yarrington's business associates for laundering bribe money allegedly paid by the Gulf Cartel to look the other way for operations in Tamaulipas. According to Mexican prosecutors and a civil suit filed in Federal Court in Corpus Christi, TX Yarrington and his associates invested in Texas real estate and used a number of shell companies to launder cartel payoffs, including a luxury condo in South Padre Island, TX.

The complaint accuses Yarrington of using ill-gotten money to buy a condo on South Padre Island, using a third party to buy the $450,000 property.

The condo is owned by Napoleon Rodriguez, owner of Ferretera Industrial Rodriguez, a hardware supply company that has been contracted by the city of Matamoros and state of Tamaulipas to supply paint and lights, the complaint states. The upscale, 1,946-square-foot unit is halfway up the 29-story high rise, with sweeping views of the Gulf of Mexico and Laguna Madre.

In late May, charges were filed against fugitive Mexican businessman and contractor Fernando Alejandro Cano Martinez for conspiracy to commit money laundering and conspiracy to commit bank fraud. Although Yarrington denies any ties with Cano, the indictment alleges that Cano facilitated the payment of bribes from the Gulf Cartel to state and local officials in Tamaulipas since 1998.

The accusations against Yarrington- dubbed 'The Yarrington Affair'- and could factor into Mexico's tightly contested Presidential election this summer. Yarrington's membership in the PRI was suspended a few weeks ago.

In 2010, Mexican newspaper Reforma published an article identifying one of then-Tamaulipas state governor Eugenio Hernandez Flores' bodyguards as a reputed member of the Zetas.



OKLAHOMA- Federal agents conducted simultaneous raids on a sprawling horse ranch south of Oklahoma City and New Mexico racetrack earlier this month on suspicion prominent horse owners were using racehorse breeding to launder profits from the los Zetas drug trafficking.

An indictment unsealed Tuesday accused Miguel Angel Trevino Morales, a key figure in the Zetas drug operation, of setting up a horse operation that a younger brother operated from a ranch near Lexington, Okla., south of Oklahoma City. Millions of dollars went through the operation, which bought, trained, bred and raced quarter horses throughout the southwest United States, including the famed Ruidoso Downs track in New Mexico.

“This case is a prime example of the ability of Mexican drug cartels to establish footholds in legitimate U.S. industries and highlights the serious threat money laundering causes to our financial system,” said Richard Weber, the chief of the IRS' criminal investigation unit.

Seven of the 14 people indicted were arrested, including Jose Trevino Morales and his wife, Zulema. Another Trevino brother was also charged.

Prosecutors asked that no bond be set for Trevino fearing he would either flee or intimidate witnesses. Neither Trevino nor his lawyer, Tony Lacy, commented, and a lawyer for Zulema Trevino said he knew little about the case.

The indictment describes how the Trevino brothers and a network quietly arranged to purchase quarter horses with drug money at auction and disguise the source of the funds used to buy them so that the Zetas' involvement would be masked. They would often pay in cash, or use fake names, which helped keep the owners and the money a secret.

Since 2008, the operation racked up millions of dollars in transactions in California, New Mexico, Oklahoma and Texas, prosecutors said.

The operation, Tremor Enterprises LLC, started small, but worked in plain sight. Some horses carried names with drug references, like Coronita Cartel. Over time, the horses and the operation earned a place on some of the most elite stages in the industry. One horse named Mr. Piloto won a $1 million prize at Ruidoso Downs on Labor Day 2010, going off at odds of 22-1. Another named Tempting Dash won the Dash for Cash at Lone Star Park racetrack in Grand Prairie, Texas.

During the raids Tuesday, dozens of federal agents swarmed the New Mexico racetrack, wearing bulletproof vests and collecting evidence. At least two horses were taken away. Shaun Hubbard, general manager of the Ruidoso Downs Race Track and Casino, said the track officials know little about the raid but they are cooperating with federal authorities.

Seizure warrants were issued for 41 horses deemed the operations' most valuable, in an effort to prevent their being taken to Mexico. Among those was Mr. Piloto. The government sought an order to ensure the care of 384 other horses at the ranch, which sits among rolling hills about 40 miles south of Oklahoma City.

The director of the Oklahoma Quarter Horse Racing Association said Jose Trevino showed up a few years ago and quickly earned a reputation for always paying his bills and shelling out handsome prices for some of the top horses in the country.

“They were also recognized for taking care of their business. They paid their bills and didn't cause any trouble. You didn't have a food vendor or veterinarian calling to say they couldn't get these guys to pay their bills. They were good citizens in the horse industry,” Debbie Schauf said.

She said it was common for buyers based out of the country to pay cash for horses, but that several transactions were noteworthy for their value.

“It didn't raise a lot of eyebrows when these guys came to the sales and started paying cash. What raised eyebrows was the quality of the horses they were buying and the amount of money these mares cost,” Schauf said.

A US Magistrate Judge was less than impressed with the prosecution's case against one of the accused, ordering that 20 year old Raul Ramirez be released on $10,000 bond at the federal courthouse in El Paso this week.

In recent years, drug cartels and other criminal enterprises have gotten increasingly creative when it came to laundering the profits from their illegal activity. in addition to at least one former governor of Tamaulipas under investigation for using proxies to launder bribe money from the Gulf cartel through real estate holdings in Texas while others have used perfume sales, pecan farming and even a screenplay for the proposed prequel to The Passion of the Christ.



MEXICO CITY- A panel of Mexican judges approved the extradition of Sandra Avila Beltran to the USA on one of two charges filed against her by the Department of Justice.

Avila Beltran- who is sometimes known in Mexico as 'The Queen of the Pacific' and the niece of incarcerated narco Godfather Miguel Angel Felix Gallardo who is serving a 40 year prison sentence for the 1985 murder of a DEA agent. Avila Beltran's courtship of Colombian Juan Diego Espinoza strengthened ties between her family's Sinaloa cartel and Espinoza's Norte Del Valle cartel.

The three federal appellate judges said Sandra Avila Beltran could be tried outside of Mexico, but only on one of the two charges prosecutors sought.

Avila cannot be tried for the seizure of more than nine tons of U.S.-bound cocaine off a vessel in Mexico's western port of Manzanillo because a Mexican judge acquitted her in that case in December 2010. An appeals court upheld the verdict last August.

Previous requests to extradite the high-profile suspect have been denied twice by a panel and then by a judge, who argued that the confiscation of the nine tons of cocaine would inevitably be part of the foreign trial.

But the judges on Thursday ruled that Beltran has to answer to a charge stemming from several seizures in Chicago in 2001 that amounted to 100 kilograms of cocaine. The 2004 indictment in the Southern District of Florida does not specify Beltran's role in the drug-dealing case.

Mexico's Foreign Relations Department must re-file the extradition request to leave out the charge related to the Manzanillo seizure.

Avila Beltran has been in custody since 2007 and is currently incarcerated in Nayarit where she was being held on separate charges of money laundering. She was transferred to the Pacific coast state last year after it was discovered prison officials were allowing her to get botox treatment while at Mexico City's Santa Martha Acatitla women's lockup. The warden and head doctor were immediately fired over their preferential treatment of La Reina Del Pacifico.

NUEVO LEON- The Mexican Navy is quickly backpedalling from claims that they had the son of fugitive billionaire Sinaloa cartel head Joaquin 'El Chapo' Guzman in custody after arresting 23 year old Felix Beltran Leon in suburban Guadalajara on Thursday.

Guzman, who was paraded before cameras after his arrest, is a used car salesman and his wife, mother and lawyer provided the media voting credentials, a driver's licence and childhood photos of him as proof.

After it was learned Mexican troops had arrested the wrong man, Mexican officials blamed the DEA for providing them with faulty intelligence while the DEA denies the charges. Guzman was also on display before the media in front of a table with bundles of cash worth more than $130,000 and weapons- including grenades- reportedly seized by from his residence.

Ms. Pacheco showed The Associated Press what she said were her husband’s voting credential and driver’s license. The man arrested bears only slight resemblance to a photograph of Mr. Guzman’s son recently issued by the U.S. Treasury Department.

There is total confusion,” said Mr. Beltran Leon’s lawyer Veronica Guerrero,“... which is having a serious effect on their personal and family situation.”

Ms. Pacheco said the couple and their 1-year-old were sleeping in their home in Zapopan, a suburb of the western city of Guadalajara, when marines kicked in the door and arrested her husband and his half-brother, 19-year-old Kevin Daniel Beltran Rios.

Authorities identified Beltran Rios as an alleged member of the Sinaloa Cartel.

The men were found with a grenade launcher and four grenades, two assault rifles, two pistols and $135,000 in cash, the navy said. Pacheco said there were no drugs or guns, but the family did have the cash because of a recent home sale.

Another lawyer, Heriberto Rangel Mendez, said the government planted the weapons.

Ms. Pacheco said her husband works at Autos Pacheco, a used car dealership that gunmen attacked in May, killing one man. The target was a customer looking at cars, not the business, Ms. Pacheco said, though media reports said the dealership owner was killed.

“We’ve never had any links to drug traffickers,” Ms. Pacheco said. “He’s not the person they say he is.”

The blunder could prove costly to Calderon's PAN party in the upcoming Mexican elections. Under Mexico's constitution, the presidency is limited to one 6-year term, so Calderon can't run for re-election. Recent polls show PRI candidate Enrique Pena Nieto extending his lead over PRI candidate Josefina Vazquez Mota and the PRD's Andres Manuel Obrador.

Navajo Code Talker's Association VP Passes Away

Samuel Tso, the vice president of the Navajo Code Talker's Association passed away at the age of 89 this month.

Samuel was born June 22, 1922, at Black Mountain near Many Farms, Ariz., into a poor family. He was Zuni Tachiinii and born for Nakai Dine'e.

As a youth, he helped his family as a sheep herdsman, but also was interested in boxing and pursuing his education.

He attended local schools until going to a nearby boarding school, where the instructors often punished him for speaking his native language.

"Then, the nation called for him to use that same language," said Samuel's son, Ron Tso.

At 17, Samuel enlisted in the United States Marine Corps by claiming he was 21 years old, in order to be eligible for the military. He relocated to Camp Pendleton in Southern California, where he learned to be a code talker.

Samuel watched the original 29 code talkers leave for war while training. He and his unit learned the second version of the code.

"They bounced back between different versions of the code," said Ron.

Samuel loved sharing tales of the code talkers with his family and with audiences nationwide.

One of his favorite stories was when Samuel had reached Iwo Jima, an island that hosted one of the most intense battles between American and Japanese troops.

Samuel's unit reached the island just days before the battle began. While many of his comrades were overcome by fear, Samuel's concern was assuaged by a vision of a Native American maiden who told him he would return home safely.

The next day, a string of juniper beads arrived in the mail in an unaddressed envelope.

"He put [the beads] on and, as a result, he didn't have fear," said Ron.

Samuel returned from the war and went to college to pursue a career as a teacher. He attained a bachelor's degree at Utah State University and a master's degree at Arizona State University before acting as an instructor and involved youth advocate on school boards and committees.

"He advocated for the youth to get their education," said Yvonne Tso, Samuel's daughter.

Sharing the significance of the Navajo language became Samuel's mission up until his final days. His family hopes to honor his legacy by continuing his efforts to build the National Navajo Code Talkers Museum and Veterans Center to be constructed in Window Rock, Ariz.

"When I talked to my dad, I told him I would make his dream a reality," said Yvonne.

The Navajo language was used in the Pacific theater in WWII to confound Japanese codebreakers- throughtout the war, the Japanese were unable to decipher the communications being sent in the Navajo language. So effective were the Code talkers that the program remained classified for another 20 years in the event that a similar cipher program could be used in another armed conflict.

The program was declassified in 1968, and with the program no longer a state secret the Navajo Codel Talker's Association was formed a few years later in the early 1970s. Since then the Navy has even archived the Code Talker's Dictionary online.

Samuel's daughter Yvonne said that he had hoped to live long enough to see the completion of the proposed Navajo Code Talker's Museum and Veteran's Center in Window Rock, AZ completed. Currently, one of the largest exhibits on the Navajo reservation relating to the Code Talkers is presently located at a Burger King run by the son of one of the Code Talkers in Kayenta, AZ.

Donations made on behalf of Samuel Tso for the nascent Code Talker's museum can be made either online at the Code Talker's Association website or by regular mail at P.O. BOX 1266, Window Rock, AZ 86515.

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.