A journey into CJNG´s finances

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A journey into CJNG´s finances

redlogarythm
The Cartel Jalisco Nueva Generación has become one of the two main Mexican cartels. Born as an ofshoot of the Sinaloa federation the organization has been able to penetrate a violent market and to diversify itself into an extremely vast portfolio: meth, marijuana, cocaine, heroin, fentanyl, oil theft, kidnapping, bootlegging, alien smuggling, arms trafficking…
Nevertheless, to say that the CJNG has achieved this position by its own means is very far from the real truth. In its way to the top Mencho and the rest CJNG´s bosses have been constantly aided and supported by another organization extremely tied to the cartel but too much silent, richer and, in my opinion, powerful: Los Cuinis. In fact Los Cuinis Organization could be defined as the business/financial branch of CJNG. The cartel obtains the money through its activities and then handles it to Los Cuinis which in turn launder and invest it, destining part of it to reinvesting in CJNG´s operations while the other part follows the misterious path into the international financial arena through restaurants, prostitution rings, music festivals, hotels, car dealerships, gas stations and even newspapers.
Too much has been written about CJNG´s history, leadership, tactics and structure. Nevertheless a quick search on the internet will allow us to discover that the Los Cuini´s organization is far more unknown. Apart from occasional news recounting on some blows ending with the capture of some top leaders and relatives in Mexico, Argentina and Uruguay, the basics of this money laundering and drug trafficking network remains highly ignored. Nevertheless their existence and magnitude is pretty clear if we take into account that CJNG is an organization which is currently involved in the export of nearly 10,000 tons of meth and cocaine per month to the US. Such a magnitude of drugs must generate and incredible amount of cash/revenue which must be picked up, introduced into the financial system, disguised as legitimate profits and reinvested in order to allow the business to continue, thus performing a perfect circle which enables CJNG´s 24/7 activities.
My purpose with this article is to make an introduction into the Los Cuini´s and CJNG´s finances. I´ll first make a brief introduction relating the history of the Milenio cartel (CJNG´s predecessor) which was founded by members of the Valencia clan. Los Cuinis is currently directed by relatives of the early Milenio´s directive. In this article I´ll also analize the initial investments and financial operations of some members of the González Valencia clan. Specifically I´ll tell the story of Hotelito Desconocido, a very famous spa resort in the coast of Jalisco bought by the Valencia´s in 2007 and which became one of CJNG´s top investments until its seizure in 2015. I know there already are some posts in BB Forum about the same case. Nevertheless they don´t have the same amount of information as this article contains.
This is the result of an investigation which lasted 2 months. I´ve been able to find a lot more of information. The data include economic and financial information about CJNG´s/Los Cuini´s offshore societal structure (designed by Panamanian lawyers), accountants, lawyers and legal firms used by the González Valencia family in order to create their financial emporium and a quite detailed investment portfolio. Most of the information has been obtained from the OFAC webpage, Mexican reliable newspapers and magazines, Mexican Gov. public records and my own private notes.
If you want to read more about this topic just ask for it and I´ll be pleased to share it here. Maybe you find this topic not intersting enough, biased or confusing. In that case I´ll center myself in other topics much more popular in this awesome forum.

The Valencia clan and the Milenio Cartel:
The story of the Valencia clan starts as every single Mexican crimanal dinasty does: with a patriarch. In this case it was José Valencia, a rural farmer from the municipality of Aguililla (Michoacán) During the 1970´s José Valencia started in the business of opium and marijuana acting as supplier of other local traffickers. Too little is known about the beginings of the Valencia family in the drug business but for the 1980´s their succes was so obvious that they had to start buying avocado plantations in order to disguise the illicit origin of their assets. In fact the Valencia family became known as the Avocado Kings. It was during this time that the clan started to be referred as the Milenio Cartel.
By the 1990´s the Milenio´s leadership had varied. The founder José Valencia was replaced by Armando Valencia Cornelio (a.k.a. El Maradona) and his cousins, the brothers Luís Valencia Valencia and Ventura Valencia Valencia.
In 2001 the Colombian supplier of The Milenio cartel, a drug trafficker called Gino Brunetti, was captured and revealed the identity of his Mexican clients. As a result Valencia Cornelio (El Maradona) was captured in 2003.
Ventura Valencia Valencia was killed in 2006 and replaced by another cousin: Oscar Nava Valencia (a.k.a. El Lobo (the wolf)) which led the Milenio Cartel with Luis Valencia Valencia until he was arrested in october 2009, being replaced by his brother Juan Nava Valencia (a.k.a. El Tigre)
By this time the Milenio Cartel had changed its operational area. Back in 2003 the emergence of a new organization in Michoacan known as La Familia Michoacana and the arrival of the Osiel Cardena´s Gulf Cartel (which at the time used the Zetas as an enforcer group) turned Michoacan into a very noisy and competitive area. The Valencia´s agreed to move to the much more peaceful State of Jalisco. Nevertheless the new relocation required to partner with the organization which already controlled the area: the Sinaloa Federation.
The Sinaloa Cartel designed Ignacio Nacho Coronel Villareal as the Milenio´s tutor. Under his guidance the Valencia family became involved into the manufacturing of crystal meth. It was Nacho Coronel the one who introduced a Chinese-Mexican businessman called Zenli-Ye-Gon to the Valencias. Ye-Gon´s chemical company Unimed imported little ammounts of Chinese and Hong Kong-made ephedrine and pseudoephedrine to Mexico. Ye-Gon became one of Valencia´s biggest raw material suppliers.
Nacho Coronel was killed by the Mexican Army in july 2010 and was replaced by his nephew Martín Beltrán Coronel as the tutor of the Milenio Cartel. Martín was arrested in May 2011 and his downfall led to an internal turf battle between two Milenio factions which ended up in the formation of what would become known as the CJNG.
The first faction, Los Torcidos (The Traitors), was lead by Erick Valencia Salazar (a.k.a. El 85) He was half brother of Luis and Ventura Valencia Valencia and was supported by a guy not very known at the time called Rubén Oseguera Cervantes. His nickname: El Mencho. Mencho had been Oscar Nava Valencia´s security chief.
The second faction branded itself as La Resistencia (the Resistance). It was lead Ramiro Pozas Gonzalez (a.k.a. El Molca) who supported Elpidio Mojarro Ramírez (a.k.a. El Pilo) which had been Oscar Nava Valencia´s main lieutenant and was the official candidate to the Milenio Cartel´s presidency. In order to fight Los Torcidos, La Resistencia partnered with Los Zetas and La Familia Michoacana.
Maybe it was this alliance or the fact thar La Resistencia started loosing the war the cause for Sinaloa´s support to Los Torcidos. In the end Los Torcidos became known as the new Milenio´s heavy-hitters, at least form Sinaloa´s point of view.
In September 2011, the turf war being battled between El Chapo and Los Zetas for some parts of the State of Veracruz reached a new level when two trailers were left in Boca del Río containing the chopped remains of at least 35 people who according to the perpetrators of the massacre where Zetas. The carnage had been aparently commited by Gente Nueva, an enforcer network also known as Los Chapos created by Guzmán Loera in order to fight his proxy wars (mainly in the State of Chihuahua where they were used against Juarez, La Linea and other gangs) Nevertheless a few days later a video surfaced the internet. It depicted three masked men sitted behing a desk. They referred to themselves as Los Mata Zetas (the Zeta Killers) and said that the Boca del Rio massacre was their doing.
Later it was discovered that the video was produced by Los Torcidos, which at the time (2011/2012) rebranded themselves as Cartel de Jalisco Nueva Generación.
During this early phase the young CJNG was led by Erick Valencia Salazar until his capture in march 2012. It´s at this moment when El Mencho rised to the top of the CJNG. We must remember that Erick Valencia Salazar left the CJNG to form the Cartel Nueva Plaza, based in Guadalajara, which is now one of the main opponents of CJNG.
It´s 2012 the year at which Mencho consolidated his role as CJNG leader and the time at which he partnered with his compadre Abigael González Valencia (a.k.a. El Cuini) who would become the head of the new cartel´s financial network: Los Cuinis. Mencho and Abigael had worked together in the US, where the first one was jailed for dealing with heroin. After returning to Mexico he married Rosalinda, one of Abigael´s sisters.



The González Valencia financial role:
Los Cuinis is apparently integrated by 17 siblings (although there are sources indicating they´re in fact 18): Abigael, Gerardo, Arnulfo, Elvis, Edgar Eden, Jose Maria, Ulises Giovani, Mauricio, Jose, Luis Angel, Rosalinda, Marisa Yvette, Noemi, Berenice, Maria Elena, Erika and Abigail.  Now, these 17 siblings are the hard core of Los Cuinis, although nearly half of them have not been designated by the OFAC as individuals linked to Los Cuinis nor to CJNG. In fact only 9 of them are listed as individuals whith whom it is prohibited to do businesses or maintain any kind of economic/financial activity: Abigael, Ulises Giovani, Luis Angel, Egar Eden, Arnulfo, Elvis, Marisa Yvette, Noemi and Abigail.
It´s extremely interesting that Rosalinda Gonzáez Valencia (El Mencho´s wife) is not included in the OFAC sanctions list as member of the network taking into account that most reports put her as one of CJNG/Los Cuinis´ top financial operators.


OFAC indictment list of Los Cuinis partial family tree

In order to avoid asset forfeiture or further investigations each time their names appear on scene the Gonzalez Valencia siblings have developed a network of front men. Some of them are relatives (mainly wifes) in other cases they are people related to the Gonzalez Valencia clan in a very random manner and in other occasions they´re directly lawyers and local businessmen/women.
The Mexican law, contrary to some expressions of the anglo-saxon Common Law system, does not allow the use of people as front men. Thus, the stablishment of such networks requires the use of extremely trusted people since in the end the front men are the ones who manage the entities. Contrary to what happens in countries such as Costa Rica, Panama or Uruguay (where front men are simple legal formalities that do not prevent the management of the legal entity by the beneficial owner) in Mexico front men used by organised crime receive the instructions from the beneficial owners (the Gonzalez Valencia in this case) but they´re the ones who, aided by legal personnel of course, have to manage the entities.
That´s the reason for finding top Los Cuinis´ members wifes or close friends as the owners of societies and businesses used as laundries.
For example:
- Wendy Dalaithy Arevalo: wife of Gerardo Gonzalez Valencia (probably second in command of Los Cuinis and currently awating extradition to US from Uruguay)
- Jennifer Beaney Camacho Cazares: wife of Abigael Gonzalez Valencia, head of Los Cuinis
- Liliana Rosas Camba: wife of Gonzalo Mendoza Gaytan a.k.a. El Sapo (top CJNG member in charge of recruitment through fake private security employment offers and Puerto Vallarta plaza boss)
- Ana Paulina Barajas Sahd: wife of Ulises Giovani Gonzalez Valencia

Now, Los Cuinis didn´t start as a launderer for CJNG after its birth back in 2012. They were already in the laundering business since the 2000´s. During this years they were employed by the Milenio Cartel as financial operators. When the Milenio went under Sinaloa´s protection they started working for Nacho Coronel.This leads us to the first money laundering case; the well known Hotelito Desconocido resort  spa.
Founded in 1995 as a luxury hotel/boutique by an Italian businessman the complex, located in the shores of Tomatlán (Jalisco), became very famous as a holiday destination for well known Hollywood stars such as Julia Roberts or Gary Oldman. After turning into a money making machine someone inside the Los Cuinis structured designated it as a possible shell company that could be used to disguise illicit profits and gave the order to buy it. We don´t certainly know who designed the whole project. We must remember that at that moment (2007) Los Cuinis were laundering money for the Milenio Cartel that at the time was part of the Sinaloa Federation. Maybe the fact that after the independence from Sinaloa in 2012 Hotelito Desconocido remained as a laundering front for CJNG indicates the fact that since the beginning the operation was fully designed by members of the Los Cuinis organization.
It´s time now to enumerate the financial operations related to the adquisition of Hotelito Desconocido by Los Cuinis and the subsequent maneuvers operated by the financial advisers of Los Cuinis in order to protect the asset. Most of the following information has been obtained from Mexico´s Public Treasury Department, OFAC, Proceso, Reporte Indigo and la Silla Rota.
First of all, when a criminal organization manages its assets it doesn´t do so directly. The most common thing is to create a secondary entity which will be the one operating the asset. In this case this purpose was assigned to W&G Arquitectos (W&G Architects)
W&G Arquitectos was legally constituted in Ciudad de Mexico on April the 1st 2005. The notary who drew up the legal documents was Mexico City´s nº 68 Alejandro Soberón Alonso. According to its founding statutes, W&G´s purpose was: to posses, adquire or exploit any kind of intellectual/industrial property rights, including brands, patents, commercial names and copyright. Design, production and comercialization of any kind of movable goods and machinery for the industry in general. The statutes also enabled W&G to get involved in the real estate sector and to grant loans.
As we can see W&G´s Statutes were deliberately wide and vague in order to comprise any kind of economic activity. Thus, the legal name of the company wanted to suggest an Architect Firm, but the legal documents of the society in fact indicate that the business was conceived as an enterprises designed to get involved in every single economic sector where illicit funds could be introduced into the financial sector (the very first phase of money laundering generally known as Placement)
The initial capital of W&G were 50,000 Mexican Pesos (MXP) which at the time was legal minimum in order to found a Sociedad Anonima de Capital Variable (Public Limited Company of Variable Capital), the kind of corporate structure used always by Los Cuinis in their operations since its creation is simple, cheap and enables shareholders to avoid economic sanctions in the case of default. The capital was represented by only 50 stocks
Who were the owners (the shareholders) of W&G Arquitectos? It isn´t easy to answer this question since they were constantly changing. Nevertheless I´ve been able to identify 3 main shareholders during the initial moments of W&G:
1.- Wendy Dalaithy Amaral Arevalo (wife of Gerardo, Los Cuinis´ 2nd in command):
5,950 stocks for 5,950,000 MXP
2.- María del Carmen Arévalo Monzón (cousin of Wendy Dalaithy):
3,600 stocks for 3,600,000 MXP
3.- ARE-CO Construcciones (a real estate firm involved in detached houses construction created in Naucalpan de Juárez which still exists being the only company in touch with W&G Arquitectos which isn´t mentioned anywhere as related to Los Cuinis assets):  
8,400 stocks for 8,400,000 MXP
These 17,950 stocks where the result of a capital increase decided in a sahreholders´ meeting held in Naucalpan de Juarez (casually the founding place of ARE-CO Construcciones) on April the 1st 2005, the same day W&G was founded. It was agreed to increment the social capital by 17,950 new stocks for 17,950,000 MXP.
For nearly two years W&G Arquitectos remained silent without any remarkable activity. The only important operation at which the company was involved was a loan requested by Wendy Dalaithy to Juan Carlos Cortez Orendain (an unknown mexican musinessman who apparently is related to a car wash business in Tepic (Mexico City) on January 1st 2007. Wendy Dalaithy asked for 58,000,000 MXP committing herself to pay before December 1st 2012 through a promissory note.
A second capital increase happened on July 20th 2007. 55,500 new stocks were issued for 55,500,000 MXP.
It´s at this time when Wendy Dalaithy and her cronies at W&G started sketching the adquisition of Hotelito Desconocido. The hotel resort was already a well known and luxurious property and W&G´s size wasn´t big enough to face such an operation. The Los Cuinis´ firm had been involved in constant capital increases since its creation through loans and obscure shareholders´ contributions. Yet they needed more money to purchase the hotel. The answer to the problem: ask for a second loan.
On October the 25th 2007 the same notary used for W&G creation (Alejandro Soberón) left record of a shareholders´ meeting at which it was decided that the purchase of Hotelito Desconocido would be done through a bank loan.
The candidate for the loan: Banco Bansí. Founded in 1995 in Guadalajara (Jalisco) by a conglomerate of businessmen and finance proffesionals it defines itself as Mexican Bank  designed for investors who want to increase its operations. According to their own webpage the offer investments, credits, trusts (which is one of the most common financial structures for money laundering), currency exchange (dollars for pesos and viceversa), appraisals and electronic banking through a personalized service, advisory, planification and fully developed surveys for decission taking.
Bansí Bank is stablished in Guadalajara, one of the most violent cities in Mexico and maybe the most traditional drug capital of the country. I´m not saying that Bansí is a narco-bank itself but only pointing the fact that a financial institution born in a region flooded with literally tens of millions of dollars of drug trafficking proceeds must have had a certain level of collusion with the narco sector. This assumption becomes clear considering the fact that financial institutions are obliged to apply the so-called KYC (Know Your Customer) policy whose objective is to identify the customer and cut relations with those whose activities aren´t clear or are doubtful. Bansí Bank granted 40,000,000 MXP to W&G Arquitectos, a company led by Wendy Dalaithy Arevalo (who had already achieved the president of the shareholders assembly position), the wife of the financial operator of one of the biggest organized crime clans of the whole State (the Milenio Cartel at the time) It´s impossible that Bansí Bank didn´t know who Wendy Dalaithy, her husband or their associates were (on August 9th 2012 W&G would pay back the 40 million MXP loan (plus interests) to Bansí bank)
On November 5th 2007 Bansí Bank granted the 40 million MXP (nearly US$ 2,200,000) loan to W&G and that very day W&G acquired Hotelito Desconocido from MMC, the company which had created and owned the hotel until that date.
The purchase invoice for W&G was:
- Land and buldings: US$7,700,000 (VAT: US$182,250)
- Construction Equipment: US$285,000 (VAT: US$42,750)
- Brand and Property Rights: US$250,000 (VAT: US$37,500)
TOTAL (concepts + Value Added Tax): US$8,497,500


Hotelito Desconocido complex map

W&G didn´t purchase only the land and the buildings. Along with the facilities it acquired three public concessions from the Federal Government. Hotelito Desconocido was located in Tomatlán, an area branded as a natural reserve. In order to build or conduct economic activities in such a place companies must obtain a permission from the central Government. This permission to operate is granted through Concessions. In this case W&G obtained three concessions:
1. DGZF-051/04: for using, occupying and take advantage of a surface of less than 1 hectare of federal maritime-terrestrial zone all along with the constructions under development in El Ermitaño estuary.
2. DGZF-374/04: surface of 4,3 hectares for ornament use
3. DFZF-375/04: surface of 2 hectares of beach for solely for hotel purposes
Immediately after acquiring Hotelito Desconocido W&G Arquitectos transferred two of the concessions to a subsidiary (a second society created for the assignment of Hotelito´s resources) called HD Collection. HD Collection S.A. was founded on November 24th 2009 in Tepatitlán (Jalisco) with the presence of public notary Cayetano Casillas y Casillas. The 2nd of February 2010 (nearly two months after its formation) HD Collection sold great part of its stocks to Wendy Dalaithy Amaral Arevalo who became Chairman of the Board of Directors of the company.

Now we have three different businesses:
- W&G Arquitectos: manages Hotelito Desconocido and HD Collection
- Hotelito Desconocido
- HD Collection S.A.: manages Hotelito´s public land assets (a practice commonly referred as compañía espejo (Mirror Company)
The transferred concessions were DGZF-375/04 and DFZF-374/04
In order to transfer such an asset an authorization was needed. José Luis Gutiérrez Miranda, general director of the Federal Maritime-Terrestrial and Coastal Zones Department of the SEMARNAT (Secretary for Environment and Natural Resources) granted the permission for transferring the concessions from Hotelito Desconocido to HD Collection S.A.
It was at this time (middle of 2009) when W&G tried to expand by acquiring even larger amounts of land. These terrains were located at the protected natural area of Santuario Playa de Mismaloya, a very special zone since it was essential for the preservation of maritime turtles.
The requests for these two new concessions were handed on April 3rd 2009 by W&G to Jose Luis Gutierrez Miranda (SEMARNAT) the first one wanted a 5,577,1 square meters parcel and the second one requested 5,330,9 squared meters. Both of them where for purely ornament use.
Tomatlan´s town hall Public Works Department obviously had approved the project on February 26th 2009 and asked the SEMARNAT for permission to grant the concessions. Here the CONANP (Protected Natural Areas National Commission) intervened and encouraged SEMARNAT to deny the concessions to W&G through an internal memorandum on March 16th 2010. In the end SEMARNAT officially denied the concession on August 11th 2010.
The refusal was possible because of the legal battle waged by local fishermen form the town of Tomatlán who where constantly harassed by Hotelito´s managers who forbid them from working in the area. The local fishermen had arranged a deal with MMC, the previous owner of Hotelito Desconocido: they were able to fish in the area during off-season and during high-season they would be compensated with a fixed amount of money per each day they didn´t operate. As the fishermen later exposed after W&G acquired Hotelito Desconocido the deal was broken and they didn´t receive any kind of payment.
On March 24th 2011 three of these brave men from the town of Loreto where kidnapped in Guadalajara (the operational base of CJNG) while attending a meeting with public officials from de Water National Commission. Their current whereabouts are unknown.
During this time W&G´s shareholders varied significantly:
On December 28th 2007 (nearly one month after Hotelito Desconocido´s purchase) María Emilia Arévalo Monzón, another of Wendy Dalaithy´s cousins acquired 16,500 stocks for 16,500,000 MXP.
On January 31st 2008 Julio Alberto Castillo Rodíguez (a.k.a. Glass Eye) acquired 36,898 stocks for 36,898,000 MXP. Castillo Rodriguez is married to Johanna Jessica Oseguera Cervantes, El Mencho´s daughter.
On January 1st 2012 María Emilia Arévalo Monzón was removed from W&G in the middle of a restructuring process due supposedly to the scarcity of resources the company was suffering at the moment selling all of her stocks,
On December 31st 2012 Castillo Rodríguez (whose father-in-law is El Mencho we must recall) sold his stocks at W&G for 11,090,318 MXP. Taking into account that he had bought them for 36,898,000  he ended up loosing 25,807,682 MXP. This factor, together with the fact that he waited until the last day of 2012 exercise to make the sale might indicate that the hole operation was planned since the beginning. Castillo Rodriguez sold his stocks to three parties:
- Wendy Dalaithy (who at the time wasn´t only the director of W&G but also the main stockholder)
- María del Carmen Arevalo Monzon (the second stockholder at the time of W&G foundation)
- Maribel Torre Suárez
On January 28th 2013 Wendy Dalaithy Amaral Arevalo sold all his stocks at W&G (the company she had founded 8 years earlier) She had accumulated 39,000 stocks. Her stocks were liquidated, and she was paid with real estate properties owned by W&G.
By 2013 the situation had reached a new limit. A lot of people knew something abnormal was happening with Hotelito Desconocido. The fishermen disappearances, the fact that several convoys of black hummers where constantly being spotted all around the area, the arrival of helicopters carrying mysterious packages and the private parties being held inside the complex, everything indicated the Narco had taken control of the business.
At this point two of the main stockholders of W&G decided to dissociate themselves from the sociey. On September 30th 2013 they where removed form W&G and the liquidation of their stocks was compensated with Hotelito Desconocido. In other words; in other to leave W&G they where paid with the hotel complex.
María del Carmen Arevalo Monzon received 60% of Hotelito and the other 40% became property of Maribel Torre Suarez.
By 2015 CJNG had already become an international organization. Their ruthless tactics and their turf war against Sinaloa and Los Zetas were well-known and their top bosses where already identified. During this year the US Treasury Department and the DEA started focusing on their financial structure and indictments against Los Cuinis´ members started popping up.
Due to this higher attention levels, Torres Suarez and Arevalo Monzon decided to sell Hotelito Desconocido before it was designated as a CJNG/Los Cuinis laundering front. On May 20th 2015 they sold Hotelito to Inmobiliaria ANFE (ANFE Real Estate Agency), founded on December 15th 2014 in Zapopan (another CJNG hub) before Public Notary nº 38 by Luis Angel Orendain and Juan Gabriel Fernandez Sanchez. Its social purpose was real estate development, purchase, leasing, renting, administration and maintenance of resort, residential, commercial or hybrid properties (it almost seems that the Statutes were deliberately designed for the purchase of Hotelito Desconocido) The initial capital was, again, the required legal minimum of 50,000 MXP which belonged in a 60% to Orendain while the other 40% belonged to Juan Gabriel Fernandez Sanchez.
On May 18th, just two days before purchasing Hotelito Desconocido, Inmobiliaria ANFE expanded its capital for another 50,000,000 MXP 95% of which would be provided by Orendain (thus making him the main stockholder and virtual owner of Hotelito) and the remaining 5% by Fernandez Sanchez.
On August 19th 2015 the Treasury Department made public indicting 8 people (among them Abigael Gonzalez Valencia, Wendy Dalaithy Amaral Arevalo and El Mencho) and 15 different companies (including Hotelito Desconocido, W&G Arquitectos, HD Collection and a new fourth company called Arenas de Loreto which appears to be a seaside resort attached to the Hotelito complex) One of the designed individuals was Jeniffer Beaney Camacho Cazares, Abigael´s wife, who was accused of managing Ahome Real Estate SA de CV, a real estate agency operating in Sinaloa.


OFAC indictment for Los Cuinis Hotelito Operation (including 3 more companies related to the whole scheme: Arenas de Loreto, W&G Arquitectos and HD Collection)

One day earlier, on August 18th, Inmbiliaria ANFE received a notification form the PGR stating that Hotelito Deconocido was going to be confiscated based on a formal indictment on the basis of money laundering and drug trafficking charges. The assets owned by Inmobiliaria ANFE related with Hotelito Desconocido would be frozen and the complex would be put under public administration.
Immediately after the seizure Luis Angel Orendain filed a lawsuit against the PGR decision claiming he didn´t have nothing to do with the activities of the previous owners and that he had bought the property legally. The demand is still being discussed in the tribunals, but we must take account that in most cases like this it is usually decided in favor of the complainant.
There are basically two ways for a criminal organization for recovering assets being confiscated or under suspicion: the first one is to let it be confiscated by the authorities and wait until the asset is held in public auction. The organization sends a legal representative (generally a lawyer or a businessman) which offers the highest bid using the organization´s money. The other one is to legally sell the asset just before the confiscation to an accomplice who appears to be a bad luck guy who partnered naively with the wrong people, thus ignoring who the sellers where. After the purchase comes the confiscation and the current owner can claim he/she didn´t know anything at all about the previous use of the asset.
In Mexico, where most part of assets confiscated or frozen are later re-sold through public auction it is very well known that the public auctions are always plagued by mysterious lawyers or businessmen and that there are several assets no-one can even think about bidding for.
In my opinion the current legal owner of Hotelito Desconocido is tied to Los Cuinis, he was told to buy the company when the Gonzalez Valencia discovered that it was under suspicion and was advised to create Inmobiliaria ANFE several months before to sketch it all up. He later was provided with the funds by Los Cuinis through some kind of compensation mechanism in order to buy the property although knowing that sooner or later it was going to be intervened.
This is the story of one of Los Cuinis´ most famous operations. Nevertheless, this is only the tip of the iceberg. According to official data, when a money laundering network is cracked only a partial fraction of the whole scheme is discovered (only 1% in Europe, for example) The rest of it is immediately sold or disguised under new legal names or under corporate re-shaping methods. It would be foolish to suggest that Hotelito Desconocido´s operation was a big part of Los Cuinis´ portfolio. It was only a tiny fraction of their empire. A very tiny fraction in fact. And according to the current situation of the whole thing we could end up with the Hotelito being owned again by the same people through indirect means.

This is all for the moment. I´m currently working on the Los Cuinis offshore corporate structure created through the well-known Mossack-Fonseca Panamanian Law Firm and a Uruguayan Accountancy firm. If you want to know more about this issue please, let me know it.
MX
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Re: A journey into CJNG´s finances

MX
Woah, great read! Thank you for sharing. I think you're right about the hotel being only a tiny fraction of the overall money laundering operations of Los Cuinis.

BTW, do you know the status of the two Italian dudes who were part of the hotel's management? Their names were Marcelo Murzilli and Giuliano Gasparotto. This second guy was part of Consorcio Hotelero W&G, S.A. de C.V., a company that constructed Hotelito Desconocido. Gasparotto sufferred an eye accident at the hotel and then left to Uruguay (where Gerardo González Valencia was living). Maybe some of the projects that they / their colleagues in that field are working would be a great starting point to uncover more laundering fronts for your research.

I wrote Hotelito Desconocido's Wikipedia article back in May 2017 but haven't really looked back to research Los Cuinis's laudering fronts since then. Have there been any more updates since it was sold off? Thanks for bringing this back to life.

We look forward to your analysis of their corporate structure.
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Re: A journey into CJNG´s finances

El17
In reply to this post by redlogarythm
Great article.

"take into account that CJNG is an organization which is currently involved in the export of nearly 10,000 tons of meth and cocaine per month to the US. "

Is 10,000 tons even possible per month?  If that is right?  I know the war on drugs is a sham,  just not at that scale.  10,000 kilos maybe?
J
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Re: A journey into CJNG´s finances

J
Department of Justice puts it at 5 tons a month of cocaine, heroin, meth, individually.  Whatever the number is, in a way, it is not possible to know, it is closer to this number.
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Re: A journey into CJNG´s finances

canadiana
Administrator
In reply to this post by redlogarythm
Wow great contribution to the forum Redlogarythm!
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Re: A journey into CJNG´s finances

Frank
In reply to this post by redlogarythm
That was a great read. Complicity from banks willing to look the over way or even blatantly facilitate money laundering is essential to cartel machinations. For those who have followed B.B. and Cartel dynamics for many years, it was obvious from the beginning that the Vancia Family are the true power behind cjng as they are masters of money laundering. They are positioned to possibly survive a fragmentation of cjng as they could simply place their investments with others, though they’re tied to Mencho through marriage, The Milenio Cartel was impressive for its ability to stay under the radar while manufacturing meth, smuggling coke and laundering money. For longer than most, at least. I know that at one time CDG and then Z were a primary source of cocaine for the Calabrian mob, but I wonder if that role has now been usurped by CJNG, as they have a large presence in Europe, and the ndrangheta is the primary importer and distributor of cocaine in the EU. I have read that CJNG supply other Italian DTO’s (mafia’s as well).  

The Valencia’s seem to be among the most intelligent operators in Mexico, second only to the billionaire drug clan in Mexico that we’ve never heard of. Pure speculation of course, that there is one.

Thank you for that highly informative post, redlogarythm!
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Re: A journey into CJNG´s finances

Chivis
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This post was updated on .
In reply to this post by redlogarythm
What is the source????</b> or is this your work? I think it belongs on mainboard
 
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Re: A journey into CJNG´s finances

Chivis
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Never mind I am sure it is your work.  Much time went into this.  

I will post on mainpage...I am editing it a little first.   thanks for the contribution.
 
The way I see it.... the more people that don't like me, the less people I have to please
MM
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Re: A journey into CJNG´s finances

MM
In reply to this post by redlogarythm
This is the type of information that is not readily available from majority of media.  Great read.  Looking forward to more articles like this.  Thanks for taking the time to research and publish.
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Re: A journey into CJNG´s finances

redlogarythm
First of all thank you everyone for the commentaries and your attention.
El17, you´re right. It´s an error. I wanted to say 10,000 kgs. (10 tons) per month to the US (5 tons of meth and 5 tons of cocaine) This were the numbers cited by US Attorney General Jeff Sessions in a press conference held on October the 16th 2018 where he explained the data related to CJNG operations in the US.
Here´s a link to the video: https://www.justice.gov/opa/video/attorney-general-sessions-acting-dea-administrator-uttam-dhillon-and-other-officials

Now MX. Your sources for your article were highly detailed and you were the first one to talk in a professional way about the Hotelito issue, that´s your merit.
About the construction company Consorcio Hotelito W&G SA de CV, extremely good for pointing out. It had escaped to me. Consorcio Hotelero surely was a subsidiary of W&G which was used by this company to refurbish Hotelito after the acquisition to MMC. It seems that W&G Architects bought the complex and Consorcio hotelero W&G refurbished it all. The most astonishing thing is that this company still exists and plays the Real Estate Agency role. It´s located in Boulevard de las Flores, Zapopan (Jalisco) and it hasn´t been detected by the OFAC. They even have a working telephone line. This means that the company has an active status (under the same name which is very similar to W&G Arquitectos) I don´t know if they have their own office but I bet you everything that the location is nothing more than an empty storage room or a normal apartment. In this case the company still is used for channeling founds or it has been sold and is being used for different purposes by the new owners (I don´t think so anyway)
Marcello Murzilli was the Italian hippy-styled businessman who created Hotelito Deconocido in 1995 through MMC. I don´t know if Murzilli knew something about who W&G were, but in the end he sold the hotel in 2007 and returned to Italy where he´s still in the business. In 2017 he opened a new hotel in the Italian Umbria region called Eremito Hotelito which is also disposed as a hippy-style/eco-friendly/luxury-retirement complex, just as Hotelito Desconocido was.
About Giuliano Gasparotto, this ex-model bastard appeared at the Hotelito in 2008, immediately after the purchase by W&G took place. Nobody knew at the time what position did he hold (stockholder, manager, simple worker) The only known thing is that he took control of the complex and immediately fired much of the staff (who were relatives of the fishermen from the surrounding towns) He broke the deals negotiated between the fishermen’s cooperative and froze the retribution payments during high-season negotiated by the people of the area and MMC.
One day Gasparotto appeared with a backhoe and some workers and tried to destroy a beach near the hotel to expand the complex. When people gathered around and start complaining Gasparotto and made death threats to some of the locals (three of them called José de Jesús Romero Quintero, Jorge Ruiz López and Rafael Espinosa Díaz were later kidnapped and killed in Guadalajara. Their relatives had blame Gasparotto ever since)
It appears that Gasparotto ended up working for Gerardo Gonzalez Valencia (W&G owners´ husband) They were so close that Gasparotto followed Gerardo to Argentina. The Gonzalez Valencia clan had landed in Argentina back in the late 2000´s. In 2010 Gerardo opened a convenience store called Corner, Mi Lugar (Corner, My Place) in Pierina Dialesi Street nº 260 in Puerto Madero, an exclusive neighborhood at the sea shore in Buenos Aires. The place was initially administered by a local called Oscar Calvete. Gasparotto succeeded Calvete as Corner´s manager at some point before 2016.
In 2015 Gerardo Gonzalez Valencia moved to Uruguay, where he was captured in 2016 after the Panama Papers leak revealed he co-owned two offshore companies which where channeling drug money from Mexico to buy properties in Uruguay, China and even Rusia.
Arrest warrants were issued against Gerardo, his wife and their Argentinian cronies (among them Gasparotto) Everyone was captured during 2016, everyone except Giuliano Gasparotto who disappeared on April 24th 2016. Since that day he remains at large in an unknown location.
Chivis, about the sources. They comprise nearly 30 magazine/newspaper articles and a few papers about CJNG. I think the most important ones are:
- The New Generation: Mexico´s Emerging Organized Crime Threat
- https://www.debate.com.mx/mexico/El-Hotelito-Desconocido-el-paraiso-del-narco-20161203-0142.html
- https://www.debate.com.mx/guadalajara/cjng-pelean-a-prg-hotel-decomisado-jalisco-hotelito-desconocido-20180722-0017.html
- https://www.reporteindigo.com/reporte/jalisco-hotelito-desconocido-conanp/
- https://www.reporteindigo.com/reporte/justicia-golpe-a-la-delincuencia-organizada/
- https://www.capitalmexico.com.mx/videos/la-historia-del-hotelito-desconocido/
- http://guadalajaraenred.mx/narco-bienes-la-nacion/
- https://es-us.noticias.yahoo.com/un-beneficiario-de-un-programa-publico-y-una-red-de-familiares-los-presuntos-lavadores-del-cjng-220611690.html
- https://www.vice.com/es_latam/article/evv3qa/lo-que-quedo-de-un-paraiso-del-narcolavado
- Several Mexican Public and Private records
Most of them are easily accessible on the internet. In the end it´s a matter of searching the info and gathering it all up.
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Re: A journey into CJNG´s finances

Mica
In reply to this post by redlogarythm
Excellent read, thank you!
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Re: A journey into CJNG´s finances

Chivis
Administrator
In reply to this post by redlogarythm
I asked at first because source was missing...then i realized it was an original, because I checked on line to find original source and there was none.

I am almost finished with the editing.  So it will go up tomorrow.  

I took the "first person" out of the  report, I hope that is ok.  The "I" "You" etc and fixed syntax a bit  in a couple of sentences, there was not much for such a large piece of writing.    and spelling.  Lots of spelling jaja.  

One thing I adjusted, the bodies found in boca del rio were not chopped up.  

Great job..

I will use the sources you have listed

THANK YOU!!  We have some great researchers on board now....  Frank, MX and you.  awesome
 
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Re: A journey into CJNG´s finances

Frank
In reply to this post by redlogarythm
Stratfor used to be a decent source of in depth information similar to that found on this post, though they now require a subscription. Kudos for taking the time to piece it all together from various sources.

Thanks for the shout out Chivis, I look forward to posting more info as well as reading more of your great articles on main page!

Redlogarythm, again, awesome, you have set the bar high my friend! Cheers!

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Re: A journey into CJNG´s finances

Chivis
Administrator
They are good people and I continue to communicate with them.  It is funny how life is.  At first they shut us down from republishing their posts, but a year later they asked for a conference and possible co-projects in the future.  We would have but none of us had extra time.  BB is enough.  
 
The way I see it.... the more people that don't like me, the less people I have to please
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Re: A journey into CJNG´s finances

Frank
Hells yeah Chivis, B.B. is a massive undertaking and you guys kill it. All the info anyone really needs is right here.

Used to be I’d read B.B. Stratfor and insight along with whatever else I could find, which I still do, though now I enjoy digging deeper and learning more about DTOs in Mexico, their fluid nature and contributing my findings. Looking forward to more research and reading more of your informative and thought provoking articles on the main page.

Be well, my friend
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Re: A journey into CJNG´s finances

Chivis
Administrator
Here is my take on Insight.  I have contributed to them.  I wrote a piece about the Boca del Rio 35 being innocents an used as props.  This was recognized by the atty general and by PGR info and docs sent to me.  

BUT Insight are a group of think tankers whose strength and knowledge was south america specifically colombia. They were weak in Mexico matters, org crime and autodefensas.  For example they tried to compare FARC to AD.  inaccurate.  I like Steve very much and the guy is ultra intelligent and an excellent source for so america, but not mexico.

That said they have need contributors all the time and currently their reporting on mexico is much improved

Paz

Chivis
 
The way I see it.... the more people that don't like me, the less people I have to please
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Re: A journey into CJNG´s finances

Bounty Law
The effort you've gone to in writing this is much appreciated Redlogarythm. Also thanks to Chivis as well. I'm half a world away here in Australia and I've put quite a few people in my office onto BB  for content like this.