America Loves Cocaine Again—Mexico’s New Drug King Cashes In

From a heavily guarded mountain hideout in the heart of the Sierra Madre, 59-year-old Nemesio “Mencho” Oseguera reigns as the new drug king of Mexico, aided in his ascendance by America's resurging love of cocaine and the Trump administration's escalating war on fentanyl.

Oseguera spent decades building his Jalisco New Generation Cartel into a transnational criminal organization fierce enough to forge a new underworld order in Mexico, displacing the Sinaloa cartel, torn by warring factions, as the world's biggest drug pusher.

The Sinaloans, Mexico's top fentanyl traffickers, got caught in the crosshairs of the Trump administration, which promised to eradicate the synthetic opioid. The crackdown has left an open field for Jalisco and its lucrative cocaine trade, elevating Oseguera to No. 1.

“‘Mencho' is the most powerful drug trafficker operating in the world,” said Derek Maltz, who served this year as interim chief of the Drug Enforcement Administration. “What is happening now is a pivot to much more cocaine distribution in America.”

Cocaine sold in the U.S. is cheaper and as pure as ever for retail buyers. Consumption in the western U.S. has increased 154% since 2019 and is up 19% during the same period in the eastern part of the country, according to the drug-testing company Millennium Health. In contrast, Fentanyl use in the U.S. began to drop in mid-2023 and has been declining since, according to data from the Centers for Disease Control and Prevention.

For new users, cocaine doesn't carry the stigma of fentanyl addiction. Middle-class addicts and the tragic spectacle of homeless crack-cocaine users in the 1990s helped put a lid on America's last cocaine epidemic.

Oseguera, who grew up poor selling avocados, is making a killing from cocaine buyers in the U.S. His cartel transports the addictive powder by the ton from Colombia to Ecuador and then north to Mexico's Pacific coast via speedboats and so-called narco subs.

U.S. forces in the Caribbean recently blew up two speedboats, including one this week, that President Trump alleged were ferrying cocaine and fentanyl from Venezuela to the U.S. Fentanyl is largely produced in Mexico, and most cocaine ships through the Pacific. All those aboard the two vessels were killed.

The president also has threatened military action against Mexican drug cartels.

The U.S. has a $15 million bounty on Oseguera, but he rarely leaves his mountain compound, according to authorities. Few photos of him circulate. The cadre of men protecting Oseguera, known as the Special Force of the High Command, carry RPG 7 heat-seeking, shoulder-fired rocket launchers capable of piercing a tank, people familiar with cartel operations said.

Visitors to the drug lord's stronghold are hooded before they embark on the six-hour car trip through terrain sown with land mines, those people said. Locations of the pressure-activated explosives are known only by members of Oseguera's inner circle.

Oseguera's fortunes rose after the U.S. pressured Mexico to crack down on the Sinaloa cartel, where Oseguera got his start in the trade. The Sinaloans pioneered the manufacturing and smuggling of fentanyl, an industry breakthrough that sent cartel revenue soaring and drove up the number of fatal overdoses in the U.S.

For the Sinaloans, landing in the administration's spotlight couldn't come at a worse time.

The capture of Sinaloa cartel leader Joaquín “El Chapo” Guzmán in January 2016 and his extradition to the U.S. a year later, set in motion a precipitous decline. Guzmán's four sons inherited their father's empire, highly valued for its network of smuggling tunnels beneath the U.S.-Mexico border, used for moving cocaine, fentanyl and other contraband.

The sons, known collectively as the little Chapos, or “Chapitos,” shifted production resources to fentanyl, which compared with the heroin their father had brought into the U.S. by the ton is easier to smuggle and costs just a fraction to produce.

The Chapitos triggered an internecine war last year as a result of a plot against Ismael “El Mayo” Zambada, the 70-something co-founder of the Sinaloa Cartel. Zambada was forced aboard a private plane bound for the U.S. by Joaquin Guzmán, one of El Chapo's sons, who hoped for leniency from U.S. prosecutors.

Both men were taken into U.S. custody when they landed outside of El Paso, Texas. Zambada pleaded guilty to drug-trafficking charges last month and faces a possible life sentence. Guzmán, still in custody, pleaded not guilty to trafficking charges.

Zambada's capture led to a violent split between men loyal to Zambada's son, Ismael “Mayito Flaco” Zambada, and those allied with the Chapitos. An estimated 5,000 people from both camps have been killed or gone missing in the conflict, along with bystanders caught in the crossfire. Mexico has sent 10,000 federal troops in the past year to the state of Sinaloa, where the federal government has been largely helpless to end the fighting.

Hemmed in by U.S. and Mexican authorities on one front, and Zambada's men on the other, the Chapitos swallowed their pride and sought the help of Oseguera, once a sworn enemy.

Each side had something the other wanted. Oseguera agreed to meet, looking to a future where he and his Jalisco cartel would rule as Mexico's dominant criminal enterprise.

In December, Oseguera sat down with a top lieutenant of Iván Archivaldo Guzmán, who leads Sinaloa's Chapito faction. At the meeting in Mexico's western state of Nayarit, Oseguera, who was operating from a position of strength, agreed to supply the Chapitos with weapons, cash and fighters.

In exchange, the Sinaloans opened their smuggling routes and border tunnels into the U.S., said people familiar with the meeting. The Jalisco cartel previously paid hefty fees to use the tunnels to move drugs beneath the U.S.-Mexico border, people familiar with its operations said.

The agreement also divvied up the U.S. trafficking trade, these people said: The Chapitos would keep their focus on serving American fentanyl addicts. Oseguera would concentrate on cocaine and its down-market cousin, methamphetamine. The Jalisco cartel now ferries tons of cocaine and record amounts of methamphetamine into the U.S. through Sinaloan-built tunnels, as well as fentanyl, the people familiar with cartel operations said.

The Sinaloa-Jalisco agreement was “an unprecedented event in the balance of organized crime,” Mexico's attorney general's office said in a July report. The Jalisco cartel compares with the Sinaloa cartel at the height of its power before El Chapo's arrest, according to the DEA's latest drug-threat assessment.

Oseguera caught another break from the Trump administration. The president's campaign to deport immigrants in the U.S. illegally has taken federal agents away from drug-traffic interdiction. In Arizona, two Customs and Border Protection checkpoints along a main fentanyl-smuggling corridor from Mexico have been left unstaffed. Officers stationed there were sent to process detained migrants. A senior administration official said the U.S. border is more secure than it has ever been.

Colombia is producing records amounts of cocaine, and the volume of the drug arriving in the U.S. is driving down prices, the people familiar with cartel operations said.

Cocaine prices have fallen by nearly half to around $60 to $75 a gram compared with five years ago, said Morgan Godvin, a researcher with the community organization Drug Checking Los Angeles. “The price of pure cocaine has plummeted,” Godvin said.

The Jalisco cartel also draws steady revenue from diverse sources outside narcotics.

The cartel acts as a parallel government in the southwestern state of Jalisco and other parts of Mexico, taxing such goods as tortillas, chicken, cigarettes and beer, security experts said. It controls construction companies that build roads, schools and sewers for the municipal governments under cartel control.

A booming black market for fuel is another cash cow. Gasoline and diesel stolen from Mexican refineries and pipelines—or smuggled into Mexico from the U.S. without paying taxes—is sold at below market prices to small and large businesses. U.S. officials estimate as much as a third of the fuel sold in Mexico is illicit. The head of the Jalisco cartel's fuel division is nicknamed “Tank” for his prowess at stealing and storing millions of gallons of fuel.

The cartel profited from the passage of migrants bound for the U.S., charging them thousands of dollars each to pass through territory it controls. And in recent years, the cartel has operated more than two dozen call centers to scam senior citizens out of hundreds of millions of dollars in a vacation-timeshare fraud, according to the Treasury Department.

Oseguera, celebrated as “El Señor Mencho” in narco-ballads, is viewed as an altruistic patriarch by some poor Mexicans living in areas controlled by the cartel, which organizes town fiestas and hands out food, medicine and toys.

In 1994, Oseguera was convicted of dealing heroin and served nearly three years in a California prison. He was deported to Mexico, where he married the daughter of the boss of a Sinaloa-affiliated gang. By 2011, he was leading his own organization based in Jalisco state.

Jalisco gunmen stormed a Puerto Vallarta restaurant in 2016 and kidnapped two Chapitos—Iván Archivaldo and Jesús Alfredo—who were celebrating Iván's birthday. Oseguera released them after an intervention by “El Mayo” Zambada, who later became a target of the Chapitos.

Like many of Mexico's cartels, Jalisco is largely a family business. One of Oseguera's brothers, Antonio, known as Tony Montana after the Al Pacino character in the movie “Scarface,” was in charge of acquiring heavy weapons, the attorney general's report said. The brother was arrested in 2022, and in February he was among 29 drug bosses Mexico expelled to the U.S., hoping to address Trump's demands.

Oseguera's son, who served as a top leader in the cartel, was sentenced in Washington, D.C., this year to life in prison for drug trafficking.

Hundreds of gunmen trained by former Colombian special forces work for Oseguera, according to Mexican officials. He travels through his territory in a small convoy of armored vehicles with a team equipped to fight off aggressors until reinforcements arrive. He had a specialized medical unit built near his mountain hideout to care for his advanced kidney disease, according to people familiar with the matter.

Two cartel accountants arrested by Mexican authorities said they were required to leave behind smartphones, Apple Watches and any device with GPS signal before traveling to meet with Oseguera, a precaution against electronic surveillance or tracking, according to the people familiar with the cartel's operations.

Oseguera has a team that manages more than 50 phones of top cartel lieutenants, people familiar with the operations said. Every week, cartel operatives gather and review phone call logs to ensure the men haven't been speaking with enemies, security experts said. Afterward, the men get new phones.

In 2020, more than two dozen gunmen fired more than 400 rounds at the armored car ferrying Omar García Harfuch, then Mexico City's security chief, on the capital's Paseo de la Reforma. García Harfuch was hit three times but survived. Two of his bodyguards and a woman headed to work were killed.

García Harfuch now serves as security minister for Mexico President Claudia Sheinbaum. He is overseeing the law-enforcement offensive, backed by U.S. intelligence, that has crippled the Chapitos.

Oseguera's subsequent rise to Mexico's top drug trafficker puts him in a very dangerous spot, according to a senior Trump administration official.

Write to José de Córdoba at jose.decordoba@wsj.com and Santiago Pérez at santiago.perez@wsj.com

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Source: Hindustan Times
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