US Treasury sanctions Mexican nationals and companies tied to cartel fuel-smuggling network

The US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three Mexican nationals and two companies on May 1, 2025, for their roles in a sprawling fuel theft and crude oil smuggling network tied to the Cartel Jalisco Nueva Generacion (CJNG). The network reportedly generates hundreds of millions of dollars in annual revenue, making it one of the most significant non-drug income streams for Mexican cartels.

Who got sanctioned and why

The three sanctioned individuals are Cesar “Primito” Morfin Morfin, Alvaro Noe Morfin Morfin, and Remigio Morfin Morfin. The two designated entities are Servicios Logisticos Ambientales, SA de CV and Grupo Jala Logistica, SA de CV.

Their alleged crime: orchestrating large-scale theft of fuel and crude oil from Pemex, Mexico’s state-owned petroleum company. Petrochemical theft from Pemex has been a longstanding revenue source for Mexican cartels, and the practice is so common in Mexico it has its own name: huachicol.

This wasn’t the first time OFAC went after CJNG’s fuel operations. A prior round of sanctions on September 10, 2024, targeted nine Mexican nationals and 26 associated entities involved in the same fuel theft network.

The Financial Crimes Enforcement Network (FinCEN) also issued an accompanying alert that outlined common smuggling techniques and financial red flags associated with this type of fuel smuggling, aimed at banks and financial institutions.

The crypto angle, or lack thereof

No cryptocurrency addresses, blockchain wallets, or digital asset connections appeared anywhere in the sanctions designations. In separate actions against the Sinaloa Cartel, OFAC identified six Ethereum addresses allegedly used for money laundering. In the CJNG fuel theft case, the financial infrastructure appears to be entirely traditional: shell companies, logistics firms, and conventional banking channels.

What this means for investors

For investors in the energy and logistics sectors with Mexican exposure, the sanctions signal continued risk. Pemex fuel theft is described as a “cash cow” for Mexican cartels, second only to narcotics trafficking in revenue generation. Any company operating in Mexican petroleum supply chains faces heightened due diligence requirements, and the expanding web of sanctioned entities makes accidental exposure to designated companies a real compliance risk.

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