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.

 

 

 

 

 

 

 

Calderon Pushes Police Reform

 

Modernizing the Mexican Police?

 

With just months to go in office President Felipe Calderon is redoubling his efforts to persuade the country’s state governors to quicken the pace on implementing  the vetting of state police forces and improving law-enforcement training in order to meet a deadline early next year.

His cajoling of Mexico’s governors to accelerate a cleanup that the President sees as crucial for lasting police reform is meeting resistance from some governors, who argue that they don’t have the necessary resources or expertise.

According to a federal government report released in February only eight percent of state police officers had completed a vetting process. The report noted also that states collectively spend just two-thirds of their total security budget allocation.

Since that report there has been some progress. According to federal officials, just under 25 percent of state police have now been vetted. But they worry that vetting will not be completed by January 2013.

President Calderon’s latest push came at meeting in February in the state of Nuevo Leon, where he met governors drawn from the northeast of the country along with local and federal security officials. He argued that rebuilding the police and security institutions will be key in defeating organized crime.

According to Nuevo Leon state public security spokesman, Jorge Domene Zambrano, Calderon urged state officials to make greater progress on the implementation of reform. “The president emphasized the importance of lifting the pace and meeting the deadline,” he says.

President Calderon has been highly aggressive in pushing for reform of the federal, state and local police and while some progress has been made he has faced obstacles and setbacks with, among others problems, legislation becalmed in Congress.

Administration officials and police experts say the mixed record on the progress of reform reflects the difficulties in carrying out effective, lasting police change quickly on the scale Calderon wants. But supporters and critics alike acknowledge that the Calderon administration has laid down a long-term strategy for an effective policing operating within the confines of the law.

“Calderon’s government has made significant and necessary progress in the face of almost overwhelming challenges,” says Martin Edwin Andersen, an expert on Latin American policing and author of the book “The Police: Past, Present and Proposals for the Future.” But he notes there’s a long way to go. “Police forces around the country lack the professional skills needed to contain violence, collect useful intelligence and carry out meaningful investigations.”

Calderon’s reform efforts seek to address those deficiencies. But speaking at a conference at the London School of Economics last month, Mexico’s ambassador in the UK, Eduardo Medina Mora, warned that police reform would take longer than a presidency.

“It will take a generation because you cannot make the changes overnight, it will take time and resources,” he said. The ambassador, a former federal Secretary of Public Safety, added that more needs to be spent on law-enforcement, noting that Mexico spends far less compared to other countries in Latin America.

Under Calderon the money spent on the military, federal, state and municipal police as well as the federal court system has doubled since 2006. But corruption, abuse and ineffectiveness still plague Mexico’s various police departments, say experts such as Andersen.

The biggest progress has been made at the federal level both in terms of numbers and quality of policing. In 2006, there were six thousand federal police officers but now there are 36,000, although Medina Mora believes that number will need to be increased to 100,000, if the size of Mexico and its population is taken into account.

At the federal level as well as the Calderon administration has been highly proactive in combating corruption and poor performance.

In September 2010, the then Federal Police Commissioner Facundo Rosas, announced that a three-month probe had resulted in 3,200 Mexican federal police officers being fired for failing to do their work properly or being linked to corruption. Of those, 465 were charged with crimes. To help ensure dismissed officers don’t try to join state or municipal police departments, their names have been logged in a new computerized public safety database, called Platform Mexico, that can be consulted b police recruiters.

The probe was mounted to kick off new federal police standards, which took effect in May 2010. The new regimen involves officers and future recruits passing lie detector tests, completing financial disclosure statements and undergoing drug testing. The government has sought also to improve the caliber of the federal police by raising salaries and requiring recruits to have college degrees.

Marisela Morales, Mexico’s attorney general, also has kept the pressure up on her department since being appointed in April last year and has fired or investigated more than 700 employees in her short time in the job. She said in a statement in April “purging is fundamental within the Attorney General’s Office,” adding “the Mexico of today requires that those of us in public office act with total commitment and responsibility of service.”

But it has been at the state and municipal level that Calderon has found the going tougher. The President is eager to consolidate Mexico’s 2,400 municipal police departments and there 165,000 officers and to merge them with the 31 state police forces and the police department of the Federal District of Mexico.

The President and his officials argue that consolidating police at the state level will make it easier to oversee professionalization and vetting of officers as well as allowing the harmonization of standards, from operating procedures to recruitment procedures and training.

Further, consolidation would likely improve intelligence sharing.

This huge institutional reform which requires a constitutional amendment, however, has stalled in Congress. State governors support the idea of consolidation, but many mayors who would lose their police departments are opposed.

But not all. Some high-profile mayors and former mayors are supportive.

The former mayor of Ciudad Juarez, one of Mexico’s most dangerous cities, has backed Calderon’s proposal, arguing that municipal police on low wages in small towns are much more vulnerable to the offer of money or lead. 
”The more a police officer knows, the more he becomes known,” Jose Reyes Ferriz told the El Paso Times. “All this makes him more susceptible to criminals.”

While some state governments have been slow on implementing the vetting of state police officers, others are pushing hard on police reform.  Nuevo León is starting to introduce a change as ambitious as Calderon’s.

In May last year, state Governor Rodrigo Medina de la Cruz  announced the plan to fashion a new state police service called “Fuerza Civil” (Civil Force) that will replace all of Nuevo León’s 51 municipal police forces. The new planned department will have 14,000 new officers, almost double the current number of local police,  who will receive twice the current salary, be eligible for bonuses and benefits such as private health care and housing in guarded communities. The new officers will be trained at police academies in Escobedo and in Guadalupe.

Over five years the new force will cost a $1 billion. Hardly surprisingly, at his February meeting in the state Calderon took the opportunity to applaud Nuevo León on the plans for the Civil Force.

Mexican Jails: A Race To Build

They keep on coming – jailhouse massacres and mass breakouts.

The mayhem that left 44 dead started shortly before 2 a.m. when Los Zetas inmates armed with stubby stab knives, clubs and bricks filed into a cellblock housing inmates from a rival crime group, the Gulf cartel, and set about them.

Only hours before most inmates—and many of the guards—had been glued to televisions in the jail watching Santos Laguna, a contender this season for the championship of the Mexican premier soccer league, being held to a one-all draw by Monterrey.

As the jail settled down, though, the pre-dawn assault unfolded in a well-planned well, say Nuevo Leon officials.

Some Gulf members managed to elude initially their attackers by fleeing from their cellblock D and made a dash for the exercise yard at the state prison in Apodaca, 40 kilometers from Monterrey, but even here they were chased, cornered and bludgeoned.

Local residents and TV camera crews alerted to the riot stood outside and saw smoke spew from the jail as inmates added to the confusion by, according to Nuevo Leon state Security Council spokesman Jorge Domene, setting mattresses and other fixtures alight.

For two hours the melee continued until quelled by soldiers dispatched to the prison. A furious Nuevo Leon state governor, Rodrigo Medina, who held a press conference the day after the February 19 riot, said there was at least one beheading.

And a nun, Sister Consuelo Morales, who visits the prison regularly, told Milenio television of horrific injuries . “Some of them no longer had eyes,” she said.

The riot, officials now say, was a diversion that facilitated the escape of 33 Los Zetas inmates, including Oscar Manuel “The Spider” Bernal Soriano, Los Zetas’ boss in Monterrey when he was arrested in October 2010 on a charge of murdering a police chief. Domene told a local radio station that for “15 minutes” of the riot some guards had allowed the escapees to slip out of the jail.

The February 19 Apodaca riot and mass escape comes close on the heels of a similar January 4 battle at a jail in Altamira, near Tampico, in Tamaulipas state that left 31 dead. And on October 13, 2011 seven inmates were killed in a confrontation between inmates in another Nuevo Leon prison in Cadereyta.

Mexican officials acknowledge they are racing the clock now to implement massive prison reforms to try to a halt the riots and mass escapes that are plaguing the country’s penitentiaries.

In July, the federal government blamed corruption and the “avoidance of systematic control measures” for the escape of more than 400 inmates from several Tamaulipas prisons between January 2010 and March 2011.  In December 2010, 141 inmates fled a prison in Nuevo Laredo, Tamaulipas, while another 85 and then 12 escaped from a Reynosa prison in September and July 2010 respectively, and 41 successfully fled from the Matamoros prison in March 2010.

The interior ministry said the escapes were “unacceptable” and were “undermining the work of authorities.”

In July, a riot at a prison in the border city of Juarez left 17 inmates dead. Mexican authorities detained the director and four guards over that brawl as surveillance video showed two inmates opening doors to let armed prisoners into a cellblock. In 2009, 38 inmates were killed in two separate riots at a prison in Gomez Palacio, Durango. Twenty-three people were killed in a prison riot in Durango city in 2010 and 29 inmates lost their lives in prison fights the same year in Mazatlan.

The Mexican government has been struggling to stem jail breakouts and to impose order on a prison system that has seen a huge increase in the numbers incarcerated since President Felipe Calderon launched the “war on drugs” five years ago.

Massive change is in the works for the federal prison system that includes a huge jail-building program, but in the meantime over-crowded and underfunded state penitentiaries where most of Mexico’s approximately 223,000 inmates are housed remains a source of embarrassment and danger.

Only 9,000 inmates are held in federal facilities, although that will change when eight planned federal prisons are completed. The rest are incarcerated in prisons controlled by state authorities, according to the Mexican attorney general’s office.

Experts say that until the overhaul is completed the prison system will remain vulnerable to rioting. They reject the suggestion of one Nuevo Leon mayor that inmates from the cartels should be separated into different prisons as impractical.

“Organized Crime criminals should be housed in federal maximum security prisons,” Alberto Islas Torres, a former adviser in the Zedillo administration. “You can put a violent Zeta member in a state prison but he will break out,” he told Agora.

Prison expert Elena Azaola Garrido, a scholar at Mexico’s Center for Advanced Studies in Social Anthropology, blames the lack of past investment for the crisis in the jails. “Investment has been neglected and the prisons are in very poor condition, putting the inmates and personnel at risk all the time,” she said.

She added: “It also has to do with corruption, that is what explains these jail breakouts.”

Tejada Jorge Montaño, a professor at the Universidad Jesuita de Guadalajara, agrees. “The prisons are overcrowded and where a facility has a prison population of 80 percent higher than it was designed for you are always on the brink of catastrophe because the authorities lack control,” he said.

Since 2006 Mexico is averaging seven major prison riots a year, he adds.

In his press conference on February 20th, the Nuevo Leon governor placed some of the blame for the riot at Apodaca on overcrowded conditions, arguing that more than 8,500 people have been arrested in the past two years in his state. At the time of the riot, there were 2,514 inmates in the Apodaca jail, well above its maximum capacity of 1,522. Sixty percent of the inmates were being held for federal crimes and of the 33 inmates who escaped, 25 were federal prisoners, he said.

Ironically the Friday before the Apodaca riot, a U.N. spokesman, Rupert Colville, had issued a general warning about the “alarming pattern of violence” stemming from the “endemic problem” of over-crowding in prisons in Latin America. His comments were in response to the fire that swept through a jail in February in Honduras in which 359 prisoners died.

But Gov. Medina placed blame also for the riot and escape at Apodaca on some corrupt prison guards, lamenting that “the treason, corruption and complicity of some undermined the service of good police officers, soldiers and marines.”

Medina fired the prison’s warden, his deputy and the state’s director of penitentiaries hours after the riot. And authorities have detained also for questioning 18 guards who were on duty at the time. Nine have been charged.

Medina and federal officials acknowledge that one of the hardest challenges facing the Mexican system is trying to ensure that guards remain honest and reject bribes.  “The most important thing is to make sure that the people working on the inside are on the side of the law, and that they not be corrupted and collaborate with the criminals,” Medina said.

With that in mind, federal authorities have included in their prison overhaul  the recruitment of new guards and far more stringent training and re-training of prison staff.”