Los Zetas Moves Into Counterfeit Goods Trade

Businessmen, market vendors and mom-and-pop storeowners on both sides of the border with the United States are facing increasing pressure from Mexican crime syndicates, including Los Zetas, to sell counterfeit and pirated goods, from DVDs and perfume to apparel and toys.

Mexican and U.S. law-enforcement agencies have increased their anti-counterfeiting cooperation and over the weekend of April 14th/15th U.S. Immigration and Customs agents launched raids in El Paso, Texas, and seized thousands of counterfeit goods worth nearly a million dollars.

“It’s become such a lucrative business that the drug cartels are now investing in this type of crime,” says Leticia Zamarripa, a spokeswoman for ICE.

Among the items seized were:

8,911 DVDs with a manufacturer’s suggested retail price of $122,210.72;

10,669 CDs with an MSRP of $128,454.76; and

1,728 items, including handbags, NFL merchandise and NIKE-brand sneakers with an MSRP of $648,409.15.

The El Paso raids were a continuation of a cooperative crackdown on both sides of the border over Christmas and the New Year when U.S. and Mexican authorities shared intelligence on the cross-border trade in counterfeit goods and launched a joint operation, called “Humbug Christmas”. A series of raids during the holiday season resulted in the seizure of hundreds of thousands of counterfeit goods worth an estimated $76 million.

The operation involved Mexican and U.S. agents inspecting shops, markets and import-export facilities. In the U.S., agents seized toys, cell phones, leather wallets, videos, perfume, and software and arrested 33 people.

Mexican authorities seized cigarettes, tools, toys, electronics and cell phones, as well as 10 tons of clothing that had entered Mexico illegally from the Far East.

Asked which cartels are involved in the counterfeit trade, Oscar Hagelsieb, assistant special agent in charge of Homeland Security Investigations (HSI) in El Paso, said “the Juarez and Zeta Cartels primarily.”

In an email interview with Agora, Hagelsieb, said, “Los Zetas are involved but mainly in the Mexican states of Nuevo Leon and Coahuila.”

He added that there had been a tremendous growth of cartel involvement in the counterfeit trade. “Historically, intelligence had indicated that cartels were not involved in the counterfeit and pirated goods market. That all changed when the cartels started warring. Cartels sought other rackets to supplement the income lost from fighting. We (Homeland Security Investigations) began to see cartels charging ‘quotas’ for allowing the vendors to operate in their territory. In some instances, the cartels took over the market. The Zetas, for example, run the markets in Monterrey.”

South of the border with Texas, market vendors and storeowners are “receiving threats from the cartels and in many instances have been kidnapped and killed,” says Hagelsieb. The HIS special agent says his agency is coordinating with law enforcement counterparts in Mexico.

“We constantly feed intelligence to our law enforcement agency partners in Mexico.”

The counterfeit trade is taking its toll on legitimate Mexican businesses and traders. The Mexican Institute of Industrial Property estimated that in 2009 alone Mexico might have lost nearly half-a-million jobs because of it. Nine out of ten movies sold in Mexico are believed to be pirated.

Counterfeit merchandise is often substandard and in some cases can pose a risk to health or safety, especially in the case of counterfeit or fake medicines.

It is not just in the border regions that the cartels are pushing pirated and counterfeit goods. The muscling in by the Mexican cartels on the lucrative trade in counterfeit goods and piracy is further evidence of how the major cartels have diversified in recent years their criminal activity — from human trafficking to extortion and kidnapping and on to trading in counterfeit and pirated goods, says Edgardo Buscaglia, a lawyer and economist at ITAM, a Mexico City university.

Based on the sampling of federal and state indictments and cases since 2003, Buscaglia has seen a dramatic shift in the cartels’ focus. “About half of their manpower and resources are now dedicated to other crimes aside from drug trafficking and there has been a major increase in their involvement, for example, in the trade in counterfeit goods,” he says.

According to the PGR, Los Zetas has been highly aggressive in Chiapas, Tabasco, Veracruz and Puebla in forcing traders to sell their fake products. Many of the pirated DVDs and CDs carry the cartel’s brand name “Productions Zeta.”
 In Chiapas, Veracruz and Puebla, Los Zetas have control over piracy, say PGR officials.

The PGR estimates that there has been a huge growth in counterfeit and pirated goods in the country – everything from video games, apparel, accessories, shoes, food, medicines, software and even books. For small manufacturers, the counterfeit trade threatens bankruptcy and it reduces the profits of big business, too.

In February 2011, Microsoft executives revealed at the Global Congress on Combating Counterfeiting and Piracy in Paris that La Familia had been selling counterfeit Microsoft software complete with the cartel’s “FMM” logo.

Cartel logos are often stamped on pirated movies and counterfeit software. Los Zetas uses a “Z” or a bucking bronco and La Familia Michoacana sometimes uses a monarch butterfly.

David Finn, associate general counsel in Microsoft’s anti-piracy unit, said in a blog posting that “drug cartels have developed large scale counterfeiting operations and are selling illegal software to consumers. He added: “These illegal enterprises have generated astronomical profits that the gangs funnel toward violent crimes such as drug trafficking, arms and weapons trafficking, kidnapping and extortion.”

On March 14, two Los Zetas members, Pablo Gonzalez Macedo and Martin Rafael Castañeda Castañeda, were sentenced by a court in Aguascalientes to 20 years and six months and 15 years and nine months respectively for forcing merchants to sell pirated goods.

The case provided a glimpse into how aggressive and determined Los Zetas is prepared to be in imposing their will on businessmen, storeowners and market stallholders.

Federal agents arrested the two Los Zetas members in 2011. In one case, according to court documents, the pair snatched a storeowner in November 2010 while he was having breakfast at an outdoor food stall and then drove him to the neighboring city of Zacatecas. There at a cartel safe house he was threatened and told that if he wanted to live, he had to sell Los Zetas goods.

The terrified man indicated his willingness to submit and was released after he handed over his Ford Expedition and arranged for the transfer of $100,000 in cash. But subsequently he reported the kidnapping to state authorities.

 

 

 

 

 

 

 

And The Cartel Killings Don’t Stop

Just days ahead of the Pope’s arrival in Mexico gunmen in the western part of the country ambushed and killed a dozen policemen and seriously wounded another eleven. The ambushed police officers were attacked as they searched for bodies following the discovery of ten severed heads in Teloloapan, a town near the beach resort of Acapulco.

The March 18 ambush amounted to the worst mass killing of policemen since June 2010 when a dozen officers were slain during an ambush on a police convoy in the central coastal city of Zitacuaro.

The ambush came just hours after security forces were tipped off by an anonymous phone caller about the beheadings. The caller said the heads had been dumped outside the municipal slaughterhouse. According to a statement issued to the press by the state Attorney General’s Office (PGJE) ten severed heads were found subsequently by police and soldiers.

Two narco-messages were found by the severed heads. One read: “This is going to happen to all who keep supporting the FM.”

The abbreviation FM is thought to refer to the cartel La Familia Michoacana, which splintered last year after several of its top leaders were either captured or killed by security forces, including the cartel’s overall leader Nazario Moreno’s, who died in a shootout with federal police in December 2010.

Teloloapan, which has a population of about 20,000, is in a steamy, mountainous area known as Tierra Caliente which cuts across Guerrero and Michoacan states. Tierra Caliente has long been a haven for drug traffickers.

In 2010, nine police officers were kidnapped in Teloloapan. The bodies of eight of the officers were found later, six of who had been had been dismembered. After that incident, federal and state authorities mounted Operation Warrior Insurance, a coordinated law-enforcement effort involving the military and state and local police forces which is still ongoing.

In the last few months, the remnants of La Familia, which was once the largest suppler of methamphetamines to drug dealers in the United States, have been locked in a vicious turf war with rival cartels, notably a faction of former members known as Los Caballeros Templarios.

Last year, Guerrero state saw a dramatic increase in violence and, according to federal Ministry of Public Security figures, between January to March in 2011 there were 170 drug-related slayings in the state 60 percent of which occurred in Acapulco. The first two months of this year and there have been 292 murders in the state.

No Respite

Pope Benedict XVI arrives in Mexico on Friday and hopes had been high that there might be a respite in the drug-related violence in the run-up to his visit and while he’s in the country but gunmen in western Mexico appear to have dashed those hopes over the weekend.

On Sunday evening (March 18) a police convoy was ambushed and a dozen policemen were killed and another 11 seriously wounded. Hundreds of shell casings from AK-47 and AR-15 assault weapons were retrieved at the scene after. The ambush took place on the outskirts of Teloloapan, a town with a population of about 20,000 near the beach resort of Acapulco.

The ambushed police were attacked as they searched for bodies following the discovery of ten severed heads in the town.

The attack on the police amounts to the worst mass killing of policemen since June 2010 when a dozen officers were slain during an ambush on a police convoy in the central coastal city of Zitacuaro.

As for the severed heads, police still have not found the rest of the bodies. Security forces learned about the dumped heads from an anonymous phone caller. When they arrived they found the heads laid out neatly in a row in front of the town’s slaughterhouse. There were two narco-messages as well.

One read: “This is going to happen to all who keep supporting the FM.”

The abbreviation FM refers presumably to the cartel La Familia Michoacana, which splintered last year after several of its top leaders were either captured or killed by security forces.

The area all of this took place in is a steamy, mountainous region known as Tierra Caliente. The region has long been a haven for drug traffickers growing marijuana and opium poppies and a very dangerous place for outsiders and the police.

In 2010, nine police officers were kidnapped in Teloloapan. The bodies of eight of the officers were found later, six of whom had been dismembered.

In the last few months, the remnants of La Familia, which was once the largest supplier of methamphetamines to drug dealers in the United States, have been locked in a vicious turf war with rival cartels, notably a faction of former members known as Los Caballeros Templarios.