Borderline Psychosis Update- Dutch Cops Nab Top Sinaloa Enforcer; Cartels, Law Enforcement Take Wait and See Approach to Colorado's Legalized Pot Sales;

THE NETHERLANDS- A Sinaloa Cartel enforcer by the name of El Chino Antrax was arrested by Dutch authorities on drug trafficking charges on Jan 3rd. Jose Rodrigo Arechiga Gamboa is believed to be the leader of a group of Sinaloa cartel hitmen known as 'Anthrax' and is wanted on charges of trafficking methamphetamine, cocaine and marijuana by US Officials.

The suspect, Jose Rodrigo Arechiga Gamboa, was captured Monday in Amsterdam's Airport Schiphol. He is accused of trafficking methamphetamines, cocaine and marijuana.

Arechiga is presumably a top enforcer for Ismael Zambada, who co-heads the Sinaloa drug organization along with Joaquin "El Chapo" Guzman.

Dutch police arrested the Mexican man at the request of U.S. authorities after he landed under a different name on a flight from Mexico City. The U.S. government had asked Interpol for help with his arrest.

The man is being held in a Dutch jail, while the U.S. Attorney is seeking his extradition to face charges in a federal court in San Diego.

The Mexican Embassy in the Netherlands said it was aware of the detention of a Mexican citizen and that it was willing to offer consular assistance if he requested help. It did not specifically say it was referring to Arechiga's arrest.

According to local media, Arechiga is also known as "El Chino Antrax," one of the two leaders of a group of hit men who call themselves the Anthrax, like the deadly disease.

Authorities have blamed the cell for a series of murders, including the killings of three men who were hung off a bridge in 2011, which were seen as revenge attacks after one of their leaders was murdered. The Anthrax helped the Sinaloa organization as it engaged in a bloody war with the Beltran Leyva cartel, when the latter decided to splinter in 2008.

El Chino Antrax has been reportedly celebrated and mentioned by name in narcocorridos- popular folk corrido ballads whose lyrics romanticize outlaws and drug traffickers.



CALIFORNIA- A Mexican national is in custody in central California's Madera County after allegedly shooting two men while posing as a police officer. The victims were reportedly carrying a sizable quantity of crystal meth.

The case is "highly unusual" for Madera County because of the amount of "crank" and police regalia found in connection with the crime, Madera County Sheriff John Anderson said Tuesday.

One suspect was arrested for attempted murder -- Elias Lopez-Martinez, 25, of Mexico. A second suspect has not yet been found.

During a news conference, Anderson summed up the Dec. 30 incident by pointing to two vehicles on display for reporters.

"Semi-bad guys," Anderson said, pointing to a car driven by alleged drug-runners. Then, pointing to the suspects' truck: "Really bad guys."

"These guys are dopers -- these guys are shooters," he said, continuing the comparison, "... coming out to the dope exchange, they didn't bring money, they brought guns. That simple."

Those allegedly transporting the meth initially told authorities they were on back roads near Chowchilla because they were going to "buy a horse," Anderson said, but later admitted "we were kind of out there to do a drug deal."

Anderson gave the following account :

The victims said they pulled over near Avenue 18 1/2 and Road 10 because they thought the truck behind them was police, seeing its blue lights. Once pulled over, two men reportedly ordered the three young men inside to lay on the ground, and then shots were fired.

A 17-year-old from Madera was shot in the liver and remained in critical condition at Community Regional Medical Center in Fresno as of Tuesday. A 22-year-old from Chowchilla was shot in the face, breaking his jaw and most of his teeth. A third passenger, also 17 and from Madera, was unharmed. Names of the victims were not released.

The 22-year-old drove away from the scene and was found about eight miles away after he called 9-1-1.

Detectives followed a blood trail from the scene, to a bloodied dog food bag containing nine pounds of crystal meth worth $45,000. It was hidden beneath a bridge.

"The way this (meth) is wrapped we know it came from Mexico," Anderson said, "which involved Mexican drug cartels."

Anderson said the driver told detectives he picked up the illegal drug in Los Angeles and "my job was to get it up here and get it sold."

The day after the shooting, detectives found the suspects' truck at a gas station on Highway 145 and Avenue 13 in Madera and arrested Lopez-Martinez.

Based on evidence gathered by investigators, a multiagency SWAT team later searched an apartment near Madera South High School, believed to be used by the suspects as a storing place. One pound of crystal meth was found with weapons, ammunition, more than two pounds of marijuana, $2,500, and law enforcement equipment, including tactical gear and body armor, along with fake badges and clothing donning words like "police" and "U.S. Marshals."

Posing as police officers is a common tactic for 'rip crews'- armed robbers who actively seek out and rob drug couriers and storehouses- along the Mexican border in Texas' Rio Grande Valley, but as Sheriff Anderson stated, is quite unusual for California's Central Valley.


COLORADO- Although Mexican drug cartels had a presence in Colorado before this year's legalization of marijuana, officials believe it's only a matter of time before organized crime adapts and take advantage of the situation.

Taking over a trade once ruled by drug cartels and turning it into an all-cash business could make pot shops prime targets for extortion, black-market competition and robbery. One veteran border narcotics agent told FoxNews.com Colorado's legal pot industry will find it hard to keep the criminals from horning in on a lucrative business they once controlled.

"Mexico is already in Colorado without the risks," the agent, who requested anonymity, said of the state's heavy pre-existing cartel presence. "Legal businesses will likely see a rise in extortion attempts while law enforcement will see a lot of backdoor deals being made."

Violent cartels could force their way in as black market wholesalers or simply rob pot dispensaries, which take only cash and have not been able to establish accounts with banks because of lenders' fears of violating federal laws. But the general consensus is that the Mexican cartels will not quietly relinquish the Denver market.

A 2012 report from the Mexican Competitive Institute estimated that Mexican drug trafficking organizations could lose as much as $1.4 billion dollars with legalized pot in the Denver market. Law enforcement believes that the cartels could extort owners of the newly legal pot dispensaries or set up legal shops of their own using straw buyers with clean backgrounds.

TAMAULIPAS- A former governor for the border state of Tamaulipas has been indicted by the US on charges of corruption and drug trafficking. According to the unsealed indictment last month, Tomas Yarrington served as governor of the Mexican state across the Rio Grande from the southern tip of Texas between 1999 and 2004 and took bribes from the Gulf Cartel and laundered drug money into campaign coffers in exchange for turning a blind eye to cartel activity.

In the indictment unsealed Monday, Yarrington is portrayed as an old-style PRI politician, for whom being cozy with drug traffickers was the way to do business.

Starting in 1998, “Yarrington received large bribes from major drug traffickers” in Tamaulipas, including the then-dominant Gulf Cartel, the U.S. attorney’s office of southern Texas said in a statement. The bribes began as he campaigned for governor, continued through his six-year term and afterward, the statement says.

In return, prosecutors allege, Yarrington “allowed them to operate their large-scale, multi-ton enterprises freely, which included the smuggling of large quantities of drugs to the United States for distribution.”

The indictment also alleges that Yarrington, 56, took bribes from local businesses and skimmed public money as well to pad his private accounts.

With suspected accomplice Fernando Cano, a builder, Yarrington then acquired numerous “valuable assets,” mostly across Texas, including homes, airplanes, bank accounts, vehicles and other real estate, worth around $7 million, the indictment states.

The 11-count indictment was returned in May, but for reasons not explained, was not opened until this week. It says Yarrington eventually became involved in the smuggling of drugs.

Like many politicians in Tamaulipas, Yarrington “abetted, enabled and profited from a symbiotic relationship with the Gulf Cartel,” said George Grayson, a Mexico expert at Virginia’s College of William & Mary.

Yarrington’s whereabouts are unknown, although his attorneys insisted this week that he is not a fugitive. The U.S. government has not yet formally sought his extradition. Mexican Atty. Gen. Jesus Murillo Karam said: “Whoever they ask us to look for, we will. They have had and will continue to have our cooperation.”

Yarrington’s Houston-based attorney, Joel Androphy, said in a news conference this week in Mexico City that the allegations against Yarrington were bogus and based on “false witnesses and testimony” by people attempting to make deals with the prosecution.

He refused to disclose Yarrington’s current location, except to repeat that he was in the United States a year ago when asked to leave because his visa had expired.

Accusations that Yarrington was receiving drug money first surfaced early last year, in connection with a U.S. case involving an associate, and then in a Mexican investigation. The PRI, in the middle of an election campaign, suspended him. Then-Atty. Gen. Marisela Morales ordered him arrested. But he managed to secure an injunction that left him free, and he threatened to take on the attorney general.

Yarrington was elected as a member of the PRI- the same political party that recently elected Mexican president Enrique Peña Nieto. During the 2012 election, the PRI party sought to distance itself from Yarrington and other corrupt politicians in Tamaulipas. Since 2006, the situation has become much more dire in Tamaulipas, with mass graves and the remnants of the Gulf Cartel fighting with their former allies, Los Zetas.

Borderline Psychosis Update- Mexican Marines Nab Fugitive Zetas Capo in Border Town; The Deer Hunter(s); Gunmen In Chihuahua Resort to Chasing Ambulances

TAMAULIPAS- Officials south of the border confirmed on Tuesday that Mexican Marines had captured fugitive Zetas leader Miguel Angel Treviño Morales- also known as "Z-40".

Even in a nation jaded by years of violence stemming from ongoing narco violence, Z-40 had earned a reputation for ferocity and depravity on both sides of the border. While not actually pulling the trigger, he is believed to have ordered the 2010 massacre of more than 70 Central American immigrants, a 2010 arson attack on a Monterrey casino that led to the deaths of 52 patrons, the death and disappearance of more than 200 people in Tamaulipas after gunmen abducted passengers off of intercity buses and a 2012 prison riot in Nuevo Leon that killed 44 and was used as cover for a jailbreak.

However, after years of aggressive incursions into territory controlled by the rival Gulf, Sinaloa and La Familia Michoacána cartels, the Zetas began suffering a number of setbacks recently. In June 2012, a federal judge in Texas ordered the seizure of more than 400 racehorses stabled in New Mexico's Ruidoso Downs racetrack as part of a money-laundering investigation against Jose Treviño Moreals- Miguel's brother.

Around the same time, Mexican troops arrested the Zetas "piracy czar" in Nuevo Leon. Gregorio Villanueva Salas oversaw the lucrative video, music and software piracy arm of the Zetas and was said to be involved in a number of grenade attacks.

In October 2012, Mexican Marines shot and killed then-Zetas leader Heriberto Lazcano outside a ballpark in Coahuila- although at the time the Mexican military initially thought they had simply encountered some low-level sicarrios. However, in a bizarre development a group of men broke into a funeral home and stole Lazcano's body the following day.

Despite the Zetas fearsome reputation, Treviño and two associates- a bodyguard and accountant- were apprehended without firing a shot. A Blackhawk helicopter from the Mexican Navy was used to cut off Z-40's escape route and after a brief foot chase in which he reportedly fell into heavy brush, he was captured.

The Zetas had originally started out as enforcers for the Gulf Cartel recruited from the ranks of the Mexican army or various police departments. However, after the 2003 arrest of Gulf Cartel capo Osiel Cardenas, the Zetas broke away from the Gulf cartel and usurped much of their territory, leaving the remnants of the Gulf Cartel a sliver of territory in Tamaulipas while they aggressively expanded into territory controlled by the Sinaloa and La Familia Michoacána (later the Knights Templar) cartels. Like other criminal organizations, the successfully managed to intimidate police, journalists and prosecutors into compliance with a high-profile campaign of arson and murders- often leaving the bodies of their victims mutilated and on display in public along with a warning written on a banner hung nearby.

However, the Zetas were able to separate themselves from others for random attacks on civilians not involved in the drug trade, forcibly conscripting illegal immigrants transiting through Mexico to become drug mules (or executing them if they refused), armed themselves with military grade weaponry from armories in Central America and even began recruiting members of the Guatemalan Army's elite Kabiles special operation unit as they expanded their operations in Central America.

MICHOACAN- The uprising in Guererro that has seen armed civilians in small villages oust public officials accused of co-operating with drug traffickers has spread to the mountainous state of Michoacán. Once home to the enigmatic and cult-like La Familia Michoacána cartel, the state had mostly fallen into the hands of the Knights Templar cartel- an offshoot of La Familia when much of their leadership was killed or arrested in late 2010.

Despite the apparent demise of La Familia, Michoacán remains prime real-estate for organized crime with arable land to grow export-grade marijuana and opium poppies as well as the port of Lazaro Cardenas, which can be used to import cocaine from South America or precursor chemicals for methamphetamine from Asia.

“The problem started when they began messing with the population: extortion, rapes, killings," Mayor Rafael Garcia, 42, says of the Knights Templar, the fancifully named cartel of thugs who control many of western Michoacan state's 113 counties. "We were terrified. We are still terrified.”

“We are a very small town raising its voice,” he says. “Hopefully it will have an impact.”

Following the lead of two nearby counties, Coalcoman's people two weeks ago armed a makeshift militia with assault rifles and shotguns and drove the Templars out.

The gangsters responded by besieging the town from its outskirts. They set fire to trucks and cars trying to leave and attacked men working the forests and ranches.

Wielding a quasi-religious code of conduct and a cynical vow to defend communities against outsiders, the Templars are Michoacan's latest incarnation of a deeply rooted and politically protected criminal culture.

But this latest threat of impending slaughter proved a watershed, forcing President Enrique Peña Nieto to backtrack on vows to demilitarize Mexico's fight against its heavily armed and murder-minded gangsters.

He named an army general on May 16 to take control of Michoacan's public security and deployed as many as 6,000 soldiers to the state with orders to disarm the militias and force the Templars to retreat.

“I still don't understand how the government let this go on so long," Garcia says. "They didn't imagine the town would take up arms. The army is here because the people rose up."

Coalcoman joins a spreading movement across violence-plagued Michoacan and neighboring Guerrero state, where towns and villages have formed volunteer “community police” to depose corrupt local police and draw a line in the dirt against the gangs.

Similar but more poorly armed militias formed in late February in the towns of Buenavista Tomatlan and Tepalcatepec, forcing the mayors of both towns to flee and sparked deadly clashes with the Templars.

"It's not possible to continue living this way," Michoacan's five Roman Catholic bishops declared in a call to action two weeks ago. "There is a permanent feeling of defenselessness and desperation. To that is added anger and fear because of the forced or voluntary complicity between authorities and organized crime."

Mexico's civil-war-like criminal violence began in Michoacan more than six years ago when then-President Felipe Calderon sent in the army to subdue La Familia Michoacana drug cartel.

The troops didn't stay long and the gangsters waited them out, returning stronger than ever. By one estimate, the Templars — who emerged several years ago as a breakaway faction of La Familia — now hold sway in nearly three-quarters of the state's counties.

The Knights Templar has become the state’s leading crime syndicate.

As long as they stuck with the drug trade the Templars were tolerated and even admired by many here. But in recent years the gang's local cells began heavily extorting communities and business people, reportedly raping women at will and killing on a whim.

Local officials and police either cooperated openly with the Templars or felt themselves powerless to oppose them. State and federal officials reacted sporadically, their operations often sparking open combat and gangsters blockading towns and cities.

Extortion fees were collected as taxes, just as formalized but far more hazardous to evade, the Coalcoman mayor and other residents say. The Templars took 10 percent of municipal budgets, and similar cuts from cattle, lumber and lime producers. They levied taxes on meat, tortillas and other groceries and charged “protection quotas” from anybody they came across.

Residents and companies refusing to pay face the Templars’ wrath.

Lumber yards, and fruit packing sheds and delivery trucks have been burned down, workers and citizens murdered. In April, gunmen twice attacked a convoy of lime growers and pickers who had traveled to complain to state officials about the extortion, killing 10 people.

For now the troops serve as peacekeepers, keeping Templars and militias separated but not really moving against either. The gangsters stay scarce, the militias keep their weapons out of sight but handy.

Most everyone expects the federal forces to pull out sooner rather than later. Then the troubles will begin anew.

"We are very aware that they can return at any time,” said the leader of unarmed militiamen manning the checkpoint on the highway entrance to Buenavista Tomatlan. “We know lives will be lost, but we are ready for that. The people don't want any more gangsters in this area."

The Templars and some federal officials have accused the militias of taking weapons and other support from a criminal cartel in neighboring Jalisco state, pointing to the assault weapons carried by many of the volunteers.

But Mayor Garcia in Coalcoman says local businessmen bought the weapons, though he won't say from whom.

"How are you going to fight these people, with slingshots?" Garcia asked in an interview Tuesday.

A sprawling county of just 10,000 souls, Coalcoman huddles near the Pacific coast in a valley surrounded by forested mountains a six-hour drive from Morelia, the state capital.

The area's independent-minded people work mines, cattle ranches and lumber mills. Coalcoman’s people long have had little use, or regard, for state and federal government.

Coalcoman earned a footnote in history for its fierce guerrilla resistance against occupying French soldiers in the mid-19th century.

A leftist guerrilla movement sprang up near here in the 1970s. Well-armed militias here again have set nerves on edge in Morelia and Mexico City.

“We are living this, we are fighting this in perhaps an old fashioned way," said rancher Misael Gonzalez, 48, a leader of Coalcoman's community police. "We are a grain of rice, but we are doing what we can."

Things are peaceful for now. Hundreds of soldiers and federal police man checkpoints on the highway leading to Coalcoman through Buenavista and Tepalcatepec. Armored troop convoys are about the only traffic on the road. Two propeller driven air force attack planes overflew the area last week in a show of force.

“Our fear is that days and months will pass and they will be here without finishing off the Templars," Mayor Garcia says of the troops.

“They haven't managed a single capture. We are not going to put down our arms. We are not going to drop our guard until this is resolved."

Meanwhile Garcia and his townspeople hunker down. The mayor says he sleeps in different houses every night, and doesn't dare leave town.

Should the Templars return, he says half jokingly, he might be forced to seek asylum in the United States. But Garcia stresses that he has few regrets about leading his town in confronting the gangsters.

"It's not about money any more. We were used to paying money,” he says of the Templars endemic extortion. “This is about honor and dignity.

“Either you serve God or you serve the Devil," Garcia says. "I am with the people.”

Despite campaign promises to the contrary, the newly-sworn in government of Enrique Peña Nieto sent Mexican troops to intervene in the mountainous regions of Michoacán and Guererro. Some government officials have expressed concerns that rival cartels may be manipulating anti-government to oust the Knights Templar from some of the territory they hold.


CHIHUAHUA- An ambulance carrying individuals wounded in a shootout was intercepted by gunmen in southern Chihuahua last week. The abductors reportedly abducted four men from paramedics at gunpoint and bundled them into a dark SUV before driving off.

The four patients, who had been wounded in a firefight pitting two groups of gunmen in the town of Guadalupe y Calvo, were being rushed to a hospital when they were forced off the ambulance Thursday night in the town of Parral and taken away in an SUV, Carlos González, spokesman for the Chihuahua state Attorney General's Office, told Efe.

TEXAS- A group of east Texas hunters setting up blinds for the upcoming deer season stumbled across more than 18,000 marijuana plants in rural Madison County this week.

Madison County Sheriff Travis Neeley says a group of hunters were setting up deer blinds when they discovered the plants on Friday. The sheriff's office eventually confiscated 18,400 marijuana plants with an estimated street value of $9 million.

Authorities say they also found 13 bags of fertilizer, 3,000 feet of irrigation piping and a generator. Neeley says hygiene products, tents and batteries were also found at a nearby campsite

While no arrests have been made, local police believe the operation has been in use for the past three or four years and was likely funded by one of the Mexican cartels.

Borderline Psychosis Update- Vigilante Groups Challenge Cartels, Government; Coast Guardsman Killed by Drug Smugglers; Nuevo Laredo Police Chief Missing As Brothers Found Murdered

I don't think I've done one of these since Enrique Nieto was sworn in as President of Mexico back in December, so it looks like I have some catching up to do.

Mexican vigilantes thumb through the newspaper- possibly in search of articles about themselves. Photo/Dario Lopez-Mills

GUERRERO- Gunmen toting rifles and wearing masks have set up roadblocks at dozens of rural villages throughout the southern Mexican state of Guerrero in recent weeks. But these men, usually armed with antique revolvers or single-shot hunting rifles, are not affiliated with any cartel or military unit.

Instead, these men are local ranchers and farmers who have decided to take up arms against robbers and drug traffickers that have been plaguing their villages in Mexico's ongoing narcoinsurgency.

A dozen villages in the area have risen up in armed revolt against local drug traffickers that have terrorized the region and a government that residents say is incapable of protecting them from organized crime.

The villages in the hilly southern Mexican state of Guerrero now forbid the Mexican army and state and federal police from entering. Ragtag militias carrying a motley arsenal of machetes, old hunting rifles and the occasional AR-15 semiautomatic rifle control the towns. Strangers aren't allowed entry. There is a 10 p.m. curfew. More than 50 prisoners, accused of being in drug gangs, sit in makeshift jails. Their fates hinge on public trials that began Thursday when the accused were arraigned before villagers, who will act as judge and jury.

Crime is way down—for the moment, at least. Residents say kidnapping ceased when the militias took charge, as did the extortions that had become the scourge of businessmen and farmers alike. The leader of one militia group, who uses the code name G-1 but was identified by his compatriots as Gonzalo Torres, puts it this way: "We brought order back to a place where there had been chaos. We were able to do in 15 days what the government was not able to do in years."

The uprising around Ayutla, a two-hour drive from the resort city of Acapulco, differs from the others because it has started to spread locally. In the two weeks, bands in six other towns in Guerrero state have declared vigilante rule, including in Iguala, a city of 140,000. In the nearby Jalisco state, groups say they are considering similar action.

Ayutla's mayor, Severo Castro, says he welcomes the new groups. On a recent evening, he pointed toward a checkpoint blocks away and said the town is nearly crime-free for the first time in years.

"There are two police departments now," he said. "The ones in uniform and another masked one, which is much more brave."

That sentiment seems to be shared even among local police, who are still technically on duty but who now seem limited to the role of directing traffic around the central square, leaving the rest of the patrolling and police work to the militias.

Police Commander Juan Venancio, a broad-faced middle-aged man with a mustache, said local police are too afraid of organized crime to make arrests.

"We could arrest a gangster for extortion, but if we couldn't prove it, we'd have to let him go," he said. "But then what about our families? Do you think we're not scared they will take revenge on us if they are out? Of course we are scared."

In some ways, life is getting back to normal here after years of insecurity. Village rodeos attract young cowboys and girls in traditional dresses, and weddings stretch late into the evening. The same townspeople who were once extorted by drug gangs now bring melons and tamales to the militiamen standing guard at checkpoints.

By 2006, Mexico's drug war had begun to weaken its already-troubled institutions. Areas like Mexico City remained under tight control, but the power of the state in rural areas diminished. Some 65,000 Mexicans have been killed since 2006, but only a fraction of the killings have been solved—or even investigated, according to the government and legal experts.

"Mexico has a 2% conviction rate, and Mexicans have taken note of that," says Sergio Pastrana, a sociology professor at the College of Guerrero who has studied rural regions. "It's caused unrest and a determination among some to take the reins themselves."

Villagers in Ayutla say the town was never crime-free—bandits sometimes robbed horsemen riding the road, for example—but the specter of organized crime was something new.

Several years ago, a group known by villagers as Los Pelones—literally, the Bald Ones—entered Ayutla and began a racket which included both drugs and other crime, people here say.

Mr. Castro, the mayor, says his 19-year-old daughter was kidnapped two years ago and he paid a "large sum" for her release. Last July, the body of the town's police chief Óscar Suástegui was found in a garbage dump outside town. He had been shot 13 times. Authorities said it looked like the work of a criminal group. No arrests were made in either case.

Townspeople say Los Pelones moved into extortions last year, demanding protection money from those who ran stalls in the market adjoining Ayutla's central plaza. The payments were usually 500 pesos, or $40, a month per stall, according to several vendors, a large sum in the impoverished town.

As harvest season approached last fall, the group fanned out into the countryside, demanding monthly payments of 200 pesos, about $16, for each animal that farmers owned. Several farmers say the gang made a list of those who had agreed to pay and those who had not.

In November, a spate of kidnappings began. Gunmen in the village of Plan de Gatica captured the village commissioner, a kind of locally elected mayor, along with a priest in a nearby village who had refused to pay extortion fees for his church. A second commissioner was kidnapped in the village of Ahuacachahue in December. The three men eventually were released after ransoms were paid, villagers say.

When a village commissioner named Eusebio García was captured on Jan. 5, several dozen villagers from Rancho Nuevo grabbed weapons and formed a search party. The next morning, they found Mr. García in a nearby house with his kidnappers, who were arrested and jailed, say the militiamen.

"This was the turning point, the moment everything exploded here," says Bruno Placido, one of the leaders of the armed groups. "We had shown the power armed people have over organized-crime groups."

As word spread of Mr. García's release, farmers in villages around Ayutla also took up arms. Their plan: to descend into Ayutla, where they believed the rest of the Los Pelones gang was based. That night they raided numerous homes throughout Ayutla, arresting people they believed to be lookouts, drug dealers, kidnappers and hit men, and brought them to makeshift jails. Other villagers set up checkpoints across the town.

The vigilantes were now in charge. They instituted the curfew and declared that state and federal authorities would be turned away at checkpoints. Villagers were allowed to make accusations against others, anonymously, at the homes of militiamen.

The group ordered most schools shut down, saying Los Pelones might try to take children hostage in exchange for prisoners detained by the vigilantes.

"I hadn't seen anything quite like this before," says state Education Secretary Silvia Romero, who traveled to Ayutla after the initial uprising to negotiate for classes to resume. Some teachers agreed that suspending school was necessary until all top gang leaders were under lock and key. "The students were an easy target for the criminals," says teacher Ignacio Vargas.

Many schools have since reopened. The army, after negotiations, set up a checkpoint at the entrance to the region. Beyond that, the militiamen remain in control and no state or federal officials are permitted to enter the villages around Ayutla.

Townspeople interviewed recently said the masked men are ordinary farmers and businessmen, not rival criminals looking to oust Los Pelones. The mayor agrees. Still, Mr. Torres, the lead militiaman in Ayutla, acknowledged the risk of "spies from organized crime coming into our ranks." He said he encourages his men to turn in anyone seeking to join the vigilantes who might be linked to crime groups.

A makeshift detention center run by villagers in El Mezón is home to two dozen men and women accused of being with Los Pelones. There is no budget to run the prison, villagers say. The prisoners eat donated tortillas and rice and sleep on cardboard on the floor. On a recent afternoon, seven men were clustered behind bars in a tiny, dark room that smelled of urine. It was hot and dirty. There were no visible signs of physical abuse.

The masked commander of the facility, who wouldn't give his name and declined to allow interviews with the prisoners, said the men are being treated well and will be given a chance to defend themselves in a public trial in the village. They won't be allowed lawyers, he said, and villagers will decide their sentences by a consensus vote.

Possible punishments include hard labor constructing roads and bridges in chain gangs, he said, although it will be up to the villagers, not the militia, to decide. He added that executions, which are not permitted under Mexican law even in murder cases, were not on the table.

"The village will be their judge," he said. "If the village saves you, you will be free. If not, then you are condemned."

Nightly raids of suspected drug traffickers have provided the militiamen with a clutch of high-powered weapons, including AR-15 rifles. It isn't clear how the men will be trained to use the weapons.

While the federal government has expressed alarm at the spread of vigilante groups in the rural villages, state officials in Guerrero seem more sympathetic to the situation faced by villages like Ayutla. In fact, a 1996 state law allows towns to form their own "community police" organizations. One state official has even proposed buying the armed ranchers and farmers uniforms so they won't be mistaken for highway robbers or cartel enforcers.

In 2011, the Michoacan village of Cheran ran out local police and seized the armory after accusing the police department of acting in collusion with illegal loggers and cartel sicarios acting as their protection and brokers before the natives blockaded the rural village from the rest of Mexico.

ELSEWHERE IN GUERRERO- Six men have been arrested in connection with the brutal rape and robbery of a group of tourists in the resort town of Acapulco earlier this month.

The gunmen burst into a rented beach house on Monday, tied up and held at gunpoint six Spanish men as they attacked the women for several hours.

A seventh woman escaped after telling the attackers she was a Mexican.

Most of the Spanish women are reported to be residents of Mexico who had travelled to Acapulco, on the Pacific coast, for a weekend break.

Attorney General Jesus Murillo Karam said the suspects had confessed.

The police said they were looking for one more suspect. Acapulco is one of Mexico's most famous beach resorts, but it has recently suffered from drug-related violence.

News of the gang-rape came as Mexico is trying to once again marketing itself as a safe destination for tourists under the new administration of President Enrique Nieto.

TAMAULIPAS- The police chief for the border city of Nuevo Laredo has reportedly been missing for nearly a week. Local officials and media has remained curiously silent on chief Roberto Balmori Garza's disappearance even after two of his brothers were found murdered in a parked car in neighboring Nuevo Leon state- one of his brothers was an agent for the federal prosecutor's office.

Interestingly, Garza had no officers at his command for nearly two years. Patrol cars sat idle behind a locked gate at the police department's motor pool and bicycles once ridden by the city's Tourist Police remain in a cage locked inside City Hall. The municipal police force in Nuevo Laredo was disbanded after allegations of corruption in 2011. Since then, the streets have been patrolled by soldiers and state police officers typically travelling in three vehicle convoys.

Manuel Farfan, a 55 year old retired brigadier general in the Mexican Army, was Garza's predecessor and shot dead along with two of his bodyguards in February 2011- after barely a month as police chief in Neuvo Laredo.

After a lengthy and protracted battle with their former benefactors in the Gulf Cartel, the Los Zetas managed to secure territory throughout the state of Tamaulipas- including Nuevo Laredo- to expand their lucrative drug smuggling operations. Reportedly, the Zetas are being challenged by the Sinaloa cartel as well as elements of the Gulf Cartel and Caballeros Templar for control of Nuevo Laredo.

US Coast Guard Senior Chief Petty Officer Terrell Horne III- killed by drug traffickers in November

CALIFORNIA- A US Coast Guardsman was killed in December after the landing craft he was aboard was rammed by drug smugglers in a panga boat near the Channel Islands, off the coast from Santa Barbara, CA.

Officials say a Coast Guard maritime patrol aircraft detected the panga boat, and sent the Coast Guard Cutter Halibut out to investigate.

They say the cutter then sent its small boat out, which was operating without any type of running lights.

They say when it approached the panga boat, it turned on its blue law enforcement light and the suspects' vessel sped toward the Coast Guard's smaller boat, hitting it before taking off.

Officials say the two Coast Guard members were thrown into the water after the crash, and were immediately picked up by the Coast Guard's boat.

Officials with the Ventura County Medical Examiner's Office tell KSBY 34-year-old Terrell Horne III, 34 from Redondo Beach, was killed.

Santa Cruz Island is uninhabited and part of the Channel Islands National Park. The remote nature of the island has made it fairly popular with smugglers since the days of Spanish colonization.

The two Mexican nationals, Jose Meija-Leyva and Manuel Beltran-Higuera, were charged in the killing and were arraigned in federal court in Los Angeles on Dec 21st.

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- 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.

Borderline Psychosis Update- Mexico Makes Arrests in Beheadings; Zetas Bomb Hotel in Border Town; Senior Mexican Generals, Governors Accused of Cartel Ties

NUEVO LEON- Mexican authorities have arrested a Zetas underboss last week for his suspected role in dumping 49 mutilated corpses in the town of San Juan, Nuevo Leon that were discovered by the side of the highway on May 13.

According to officials, Daniel Jesus Elizondo Ramírez was tasked by his Zetas superiors with dumping the bodies and then hanging up a series of naro-banners throughout the region denying the Zetas involvement with the act spectacle in the following days. Ramírez was reportedly supposed to dump the hacked bodies in the town square, but got nervous and at the last minute disposed of the corpses by the side of Federal Highway 40- the main non-toll road between Monterrey and the border town of Reynosa.

A video posted at a Mexican website that covers drug crimes purportedly was filmed by an accomplice of Ramírez and shows him unloading dozens of bodies and unfurling a narco-banner nearby claiming responsibility. The stone archway just outside the village was marked with graffiti that read '100% Zetas'. The cameraman is said to be an accomplice who is still at large.

The banners hung up by Ramírez and other Zetas accomplices were said to be part of a ploy to distract police and the public. Ramírez is under house arrest while prosecutors are building up a case against him for the murder of those discovered outside of San Juan as well as the recent killings of members of the rival Gulf Cartel whose bodies were discovered elsewhere.

TAMAULIPAS- A hotel in the border town of Nuevo Laredo that was being used as temporary police barracks was under fire from suspected Zetas gunmen and then firebombed on Thursday, wounding 8 officers.

A Tamaulipas state official said authorities believed the Zetas cartel, one of Mexico's two most powerful criminal organizations, carried out the attack on the Hotel Santa Cecilia in Nuevo Laredo, a city across the border from Laredo, Texas.

The Zetas, founded by Mexican special forces defectors, have carried out a number of sophisticated attacks, but Thursday's assault appeared to be one of the most elaborate. It also appeared to be the first attack directed against Tamaulipas' new state police force, which took over a year ago from a municipal police force in Nuevo Laredo that was accused of ineffectiveness and corruption.

The newly commissioned officers, who hail from around the state, were staying in the hotel until permanent barracks were built. Mexican police frequently requisition hotels in the absence of official barracks, or when threats make it unsafe for them to live at home.

The attack on the hotel took place around 7:15 a.m. on one of the main streets in Nuevo Laredo, less than four hours after unknown gunmen hurled gasoline bombss at the Maranho, one of the city's most popular nightclubs. The club, which was closed at the time, was badly damaged by fire but there were no injuries, authorities said.

Minutes after the hotel attack, gunmen opened fire on the Nuevo Laredo Institute of Technology, a science-focused university.

The attacks came about a week after Federal Police and Mexican troops arrested Daniel Jesus Elizondo Ramirez on charges stemming from the dumping of 49 mutilated bodies by the side of the highway in Nuevo Leon.

ELSEWHERE IN TAMAULIPAS- Officials from Mexico's Institutional Revolutionary Party (PRI) have announced that they have suspended the membership of former governor Tomas Yarrington this week.

Although Yarrington hasn't been formally charged with any crime, US Prosecutors have filed two civil forfeiture cases aimed at confiscating poperties he holds in both Mexico and Texas. Yarrington is suspected of accepting substantial payoffs from drug cartels and investing some of the funds into real estate.

The PRI's Enrique Peña Nieto currently leads polling in the Mexican presidential elections, but the issue of crime and corruption may be an achilles heel for the PRI. The last three governors of Tamaulipas- all three of them from the PRI- are accused of recieving payoffs from the Gulf Cartel.

MEXICO CITY- Last week, a Mexican judge issued preliminary detention orders against four high-ranking retired and active duty officers in the Mexican military- including the second-ranking official in the Defense Ministry- stemming from evidence obtained by military prosecutors and the Attorney General's Office.

Officials haven't said why the men are being held. But according to the men's relatives, a person familiar with the legal proceedings and media accounts citing unnamed sources in the Attorney General's Office, the four are being questioned over allegations they were in the pay of one of Mexico's leading organized crime groups, the Beltran Leyva cartel.

"I regret and condemn that a few individual members [of the armed forces], according to evidence found by the Attorney General's Office and the military prosecutors, have taken part in illicit acts," President Felipe Calderon said this week. "The only thing that is clear here is that my government won't tolerate illegal acts, regardless of who commits them."

It is the biggest drug-related scandal since Mr. Calderon took office in December 2006 and deployed roughly 45,000 soldiers to different parts of the country to take on the drug gangs.

The highest-profile detainee is Gen. Tomas Angeles, whom Mr. Calderon appointed the second-ranking official in the Defense Ministry in 2006. Gen. Angeles served until he retired in 2008.

The detentions come just two months before presidential elections in July, spurring speculation in Mexico's press and among many analysts that the detentions may have to do with presidential or barracks politics.

Gen. Angeles, who served as Mexico's military attaché in Washington, was considered to be angling for a top security job if Enrique Peña Nieto, the candidate of the former ruling Institutional Revolutionary Party, or PRI, wins the presidency.

Angeles is reportedly very popular among his subordinates in the military, and the families of the accused back claims that the detentions are politically motivated.

Linking Gen. Angeles to a drug cartel makes little sense given his ambitions of becoming secretary of defense, said Raúl Benitez, a security analyst at Mexico's National Autonomous University. Such aspirations would have put the general in the position of being closely watched by both U.S. and Mexican intelligence services, making it likely that the general would have taken care not to associate with drug traffickers, Mr. Benitez said.

"If you are ambitious, the last thing you do is mess with narcos," he said. "It's suicide."

Another accused general is Brigadier Gen. Roberto Dawe, who until recently was part of President Felipe Calderon's security detail before being reassigned as a military commander whose jurisdiction included the Pacific Coast state of Colima.

According to a 2009 US Diplomatic cable released by Wikileaks, the State Department suspected a Mexican Army officer who was part of Felipe Calderon's security detail of leaking military intelligence to the cartels as well as training hitmen and facilitating the transfer of arms.

In April of this year, a retired Mexican general who had previously been convicted of having ties to the Juarez cartel was shot dead by unkonwn assailants in Mexico City. Gen Mario Arturo Acosta was convicted in 2000 of having ties the Juarez cartel and recieved a sentence of 16 years in prison in 2002. However, Acosta was exonerated five years later and in 2010 survived an attempt on his life.

COAHUILA- Acting on an anonymous tip, Mexican Marines raided a clandestine factory in the border city of Piedras Negras that made counterfeit military uniforms on Thursday.

They seized hundreds of combat trousers and shirts, as well as body armour, some with the Marine logo.

A Navy spokesman said the find showed "criminal groups wanted to discredit the Navy" by wearing their uniforms while committing crimes.

Over the past months, the security forces have arrested a number of alleged cartel hitmen wearing counterfeit uniforms.

Officials said the uniforms were used by Mexican drug cartels to set up road blocks and carry out kidnappings.

They said the uniforms made it easier for criminals to approach their victims, who did not realise they were being targeted until it was too late.

Marines found the workshop in the northern town of Piedras Negras across the border from Eagle Pass, Texas, after receiving an anonymous tip-off.

Zetas sicarios thought to be behind the disappearence and murder of hundreds of bus passengers in and around the village of San Fernando, Tamaulipas were reportedly wearing military-style fatigues when they pulled their victims off of intercity buses.

Borderline Psychosis Update- 49 Headless Corpses Dumped by Highway; Gunmen Open Fire on Tamaulipas Newspaper; Mexican Official Arrested in Texas

NUEVO LEON- Authorities in the Nuevo Leon town of San Juan made a gruesome discovery early Sunday morning as 49 mutilated and headless corpses were found strewn along the highway linking Monterrey and the Texas border. Every one of the bodies- 43 men and 6 women- also had their extremities hacked off while some of the corpses reportedly had tattoos of Santa Muerte [Holy Death], a venerated figure in Mexico's criminal underworld.

The bodies of the 43 men and six women were found in the town of San Juan on the non-toll highway to the border city of Reynosa at about 4 a.m. (5 a.m. EDT), forcing police and troops to close off the highway. Nuevo Leon state security spokesman Jorge Domene said at a news conference that a banner left at the site bore a message with the Zetas drug cartel taking responsibility for the massacre.

Domene said the fact the bodies were found with the heads, hands and feet cut off will make identification difficult. The bodies were being taken to Monterrey for DNA tests.

De la Garza said the victims could have been killed as long as two days ago at another location, then transported to San Juan, a town in Cadereyta municipality, about 105 miles west-southwest of McAllen, Texas, or 75 miles southwest of the Roma, Texas, border crossing.

On a nearby archway, was graffiti that reportedly read '100% Zetas'. Cartels have been leaving mutilated corpses of slain rivals in public places in an attempt to intimidate competing cartels, police and the public. In September 2011, masked gunmen held up rush hour traffic outside of Veracruz as 35 corpses were pulled from a truck and dumped in the highway.

The bloody scene in Nuevo Leon comes less than 10 days after 23 bodies were hung from overpasses or stuffed in garbage bags and iceboxes in the Tamaulipas border town of Nuevo Laredo, across the Rio Grande from Laredo, TX. Last month, fugitive billionaire Joaquin 'El Chapo' Guzman reportedly announced an agreement with the Gulf Cartel to go after the Zetas- themselves former paramilitary enforcers for the Gulf cartel- who were staedily encroaching on territory previously held by both the Gulf cartel and Guzman's Sinaloa cartel.

Some have speculated that the public will see an escalation of these gruesome narco-slayings and displays in the weeks leading up to the July 1st Mexican Presidential election in an attempt to affect the outcome. Since taking office in 2006, Mexican President Felipe Calderon has committed to using Mexico's military to go after the various drug cartels. However, with more than 50,000 casualties since he took office, public support for Calderon's campaign has waned and his PAN political party is currently trailing in polls.

TAMAULIPAS- The offices of Nuevo Laredo's El Mañana were raked by heavy caliber gunfire and a grenade on Friday night.

Staffers at El Mañana in Nuevo Laredo were working late Friday night when gunmen sprayed the building with high-caliber ammunition and tossed a homemade grenade at the building. No injuries were reported, said co-owner Ramon Cantu Deandar, and the staff was able to finish the edition and returned to work Saturday, stoically though terrified.

"I'm honored to work alongside brave men and women who are an example of how we won't allow ourselves to be intimidated," he said.

In 2006, El Mañana made a public vow to censor itself following a similar attack on its building that partially paralyzed a reporter. Before that incident, the city editor was stabbed to death. The newspaper has largely kept its pledge not to report on cartel crime.

Mexico has become one of the world's most dangerous countries for journalists, with at least 51 killed in the past two years. Four were killed in the last two weeks, all in the state of Veracruz, including investigative journalist Regina Martinez of the newsmagazine Proceso.

Since the escalation of Mexico's narcoinsurgency in the last decade, reporters and editors have been targeted by the cartel's sicarios in an attempt to silence them from reporting on any cartel activities.

COAHUILA- Mexican Marines arrested two suspected members of the Zetas cartel and rescured 18 migrants in the city of Piedras Negras.

Antonio Camacho Soria and Martin Molina Vazquez were arrested on May 5 on charges that they were holding the migrants hostage, the secretariat said.

Marines seized firearms, marijuana, a substance that could be cocaine, cash and communications gear in the operation.

Camacho Soria and Molina Vazquez confessed that they were holding several illegal immigrants at a house.

The marines went to the house and found the migrants there, the secretariat said.

The migrants, whose nationalities were not released, were handed over to federal prosecutors in Piedras Negras, the secretariat said.

Heriberto Lazcano Lazcano, known as “El Lazca,” deserted from the Mexican army in 1999 and formed Los Zetas with three other soldiers, all members of an elite special operations unit, becoming the armed wing of the Gulf drug cartel.

In recent years the Zetas have diversified their operations from drug trafficking to human trafficking and collecting fees from migrants and smugglers who operate through territory controlled by them. The Zetas are thought to be responsible for the August 2010 massacre of 72 migrants and the 2011 mass abduction and murder of bus passengers in the northeastern state of Tamaulipas.

TEXAS- US Authorities have arrested a commander in the Tamaulipas State Police and cousin of the state's former governor. Gilberto Lerma Plata was named in a sealed indictment filed in Washington DC last year that accused him of consipiring to smuggle cocaine and marijuana into the USA.

Gilberto Lerma Plata, 50, was arrested as he attempted to cross the Hidalgo-Reynosa International Bridge late Friday night, a former federal agent confirmed Tuesday.

Lerma, who has U.S. citizenship, is not formally tied to any Mexican drug cartel in a federal indictment unsealed Monday. But he reportedly has had ties to the Gulf Cartel at least since 2002, when a Mexican newspaper quoted Mexican intelligence reports that stated he provided criminals with information on police movements.

Lerma had been serving as the Tamaulipas State Police commander in Miguel Alemán, across the Rio Grande from Roma, upon his arrest, the former agent said. Lerma previously served in the same capacity in Reynosa.

Lerma is the cousin of former Tamaulipas governor Manuel Cavazos Lerma, an Institutional Revolutionary Party, or PRI, politician who served from 1993 to 1999 and candidate for senator from Tamaulipas in Mexico's upcoming federal elections.

Lerma joined the Tamaulipas State Police after his cousin was first elected governor in the state.

A 2002 report in El Universal newspaper named Lerma as a Gulf Cartel member who used his police ties to provide information on police movements against the cartel. The report outlined how Osiel Cárdenas Guillén, the former Gulf Cartel leader now serving a federal prison sentence in the U.S., had direct contact with commanders of state and federal law enforcement in many of Tamaulipas’ major municipalities.

Lerma's arrest comes less than two months after another person linked to a former Tamaulipas governor has been the focus of a federal investigation in the United States.

Federal authorities arrested Antonio Peña Arguelles in February in Laredo. In a criminal complaint filed in federal court in San Antonio, Peña is accused of funneling cash from the Zetas drug cartel to former Tamaulipas governor Tomas Yarrington, a PRI member who served from 1999 to 2004.

Three of Tamaulipas' former governors are being investigated for corruption and aiding and abetting drug cartels in the state.

ELSEWHERE IN TEXAS- Thanks to a guilty plea for extortion and money laundering in federal court, the US Government may become stakeholders in a proposed prequel to Mel Gibson's 2004 blockbuster The Passion of the Christ.

In a real-life case of drugs and extortion that could itself make a pretty good screenplay, federal prosecutors have forced a Mexican drug trafficker to turn over his stake in a planned prequel to Mel Gibson's 2004 blockbuster "The Passion of the Christ."

If the movie gets made, the U.S. government will receive a cut of the profits.

Some of the big names behind the Hollywood project include megachurch pastor Joel Osteen, who had no idea about the script's unsavory backstory.

"When you get a script, you just don't think to say 'Hey, was this script ever tied to a Mexican cartel?'" said Donald Iloff, a spokesman for Osteen's Lakewood Church in Houston. The script was already being handled by a legitimate production company when Osteen got involved.

Jorge Vazquez Sanchez pleaded guilty this week in federal court to extortion and money laundering in a deal that required him to give up a 10 percent stake in future profits of "Mary, Mother of Christ," which is scheduled to begin production this year and includes Osteen as an executive producer.

The script was written by the same person behind "The Passion of the Christ," which became a worldwide smash and earned more than $611 million.

Aloe Entertainment, the Los Angeles-based production company that paid more than $900,000 for the script, said it knew nothing about Vazquez, who was sentenced to seven years in prison.

Had Vazquez kept his stake, "we don't know what would have happened," the company said in a statement. "We have assembled an amazing team to bring it to the big screen. Now the American taxpayers can be part of this incredible project."

The screenwriter, Benedict Fitzgerald, had to give control of the script to a company called Macri Inc. after it foreclosed on a loan to Fitzgerald, said Richard Rosenthal, attorney for Aloe.

Then Vazquez and one of his co-defendants extorted Macri's owner, a San Antonio businessman named Arturo Madrigal, to wrest the script away. At one point, the conspirators even kidnapped Madrigal's brother in Guadalajara, Mexico, according to court documents.

Vazquez, a Mexican citizen identified in court documents as a drug trafficker who laundered money, acquired the screenplay in 2008.

Aloe, known at the time as Proud Mary Entertainment, then paid one of Vazquez's co-defendants $925,000 for the script, believing it was held by a San Antonio real estate mogul.

Before the company issued a payment, Aloe executives hired an entertainment copyright attorney who spent more than three months researching the screenplay's origins. Federal prosecutors contacted them last year seeking documents for the transaction.

When prosecutors moved to seize Vazquez's assets, the stake he had retained in the film's profits was included. Vazquez's lawyer, Donald Flanary, said his client did not contest the forfeiture.

If the movie becomes a reality, it will probably be "the first time that a major motion picture was made in which 10 percent of the profits went to the American taxpayers," Rosenthal said. "It would be an incredibly unique story."

The film Mary, Mother of Christ is already listed on the Internet Movie Database as having a 2013 release date.