What does an upmarket clinic for vaginal surgery in the Mexican city of Guadalajara have in common with a luxury beach hotel frequented by major Hollywood stars?
Both have been used to launder illicit profits on behalf of two of Mexico’s wealthiest and most powerful drug cartels, according to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
Julia Roberts, Sandra Bullock, Gary Oldham and Blake Lively are among the celebrities who may have inadvertently given their money to violent drug traffickers, according to reports that they stayed at the secluded Hotelito Desconocido on Mexico’s Pacific coast.
Likewise, the women who paid for vaginal rejuvenation or g-spot augmentation at Dilava, a gynaecological clinic located in one of Guadalajara’s most expensive private hospitals, may also have unknowingly helped criminal gangs to launder drug money.
The Kingpin Act
OFAC blacklisted both businesses along with 13 other enterprises and six individuals under the Foreign Narcotics Kingpin Designation Act last month. They are all accused of ties to the Jalisco New Generation Cartel (CJNG by its initials in Spanish) and its sister organization Los Cuinis.
Both Hotelito Desconocido and Dilava are located in the western state of Jalisco, an area considered the two cartels’ base of operations. OFAC had previously blacklisted the CJNG boss, Nemesio Oseguera Cervantes, and his brother-in-law, Abigail González Valencia, the head of Los Cuinis, in April, but this is the first time U.S. authorities have gone after businesses related to either group.
Designation under the Kingpin Act means any assets the blacklisted individuals or entities hold in the United States can be frozen, while U.S. citizens are forbidden from doing business with them. The individuals sanctioned include Wendy Amaral Arevalo, the manager of Hotel Desconocido, and Dr. María Elena Márquez-Gallegos, who runs Dilava.
Cartels on the rise
Founded as an offshoot of the larger Sinaloa Cartel in 2010, the CJNG is thought to be responsible for assassinating high-ranking state and federal officials, ambushing police patrols, burning dozens of vehicles to form coordinated blockades across western Mexico, and even shooting down an army helicopter.
The cartel had kept a relatively low profile until earlier this year but it is now widely considered one of Mexico’s most powerful and violent criminal organizations.
Los Cuinis, a group believed to be responsible for managing CJNG’s finances, have kept an even lower profile, although one DEA agent reportedly described them — perhaps hyperbolically — as “the world’s richest cartel” earlier this year.
Los Cuinis’ financial weight and their obsession for keeping a low profile were illustrated in February, when marines arrested their leader González Valencia in the popular beach resort of Puerto Vallarta. The previously unknown kingpin reportedly offered his captors 50 million pesos ($3 million) to not parade him before the press, as is the norm with high-profile detainees in Mexico. The offer was apparently rejected, although his capture was still largely overlooked by the Mexican media.
Upon announcing the latest sanctions last month, OFAC’s acting director, John E. Smith, described Los Cuinis as “one of the most powerful and violent drug cartels in Mexico” and hailed its designation as “the first step in dismantling its significant business network.”
Mexico’s mixed response
Smith added that “these businesses and individuals will no longer be able to operate under the veil of legitimacy.”
This proved the case with the Hotelito Desconocido, an expensive but highly rated boutique hotel comprised of 27 luxury wooden cabins overlooking the Pacific Ocean in the remote coastal region of Tomatlán.
However, the Mexican government seems to have not taken action against several other designated businesses.
When contacted by Latin Correspondent, Dilava employees denied any relation to organized crime and confirmed they were still operating as normal almost two weeks after being blacklisted.
“I think there’s been some mistake. This is a gynaecological medical clinic,” a member of staff said.
The businesses that rent space in Guadalajara’s Plaza Tules shopping center, another of the blacklisted entities, were also still running as normal at the time of publication.
Mexico’s second biggest city, Guadalajara is home to more businesses blacklisted for money laundering than any other city in the country.
Some have closed down but many continue to operate, sometimes under different names, while other blacklisted businesses, including certain Pemex gas stations, still have valid concessions from the Mexican government.
While following the money may be the best way to hit the cartels where it hurts, it seems this is still not a priority for Mexico’s authorities.
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