Two-Way Mules

One of several Mexican gas companies who were being severely economically damaged by this competitor, who was selling gas in Mexico at a price no one else could match. Losing almost $4M a month, which is unheard of in the petroleum industry, they hired us to figure this out.

The client stated that for about the past nine months, one of their competitors had been selling their gas for about 3 pesos less per liter at the pump. This may not sound like a lot, but that equated to about $4,000 less per standard tanker truck. That rate meant that they were making zero profit, basically selling the gas at cost. Of course, the unspoken fear was that one of the violent drug cartels were involved, which also meant reporting it to Mexican government officials would fall on deaf ears. But the competitor was owned and operated out of the U.S. by a prominent Mexican family. Our client’s hope was that we could build a case against them for something they could be charged with in the U.S.

We began systematic close surveillance to learn everything we could about their operations. We surveilled their drivers, their company offices, and the family decision-makers. We conducted trash surveys, used drones and followed trucks on their routes. We documented many violations, such as illegal fuel dumping, and adding additives to a tanker while stopped on the side of the road. We interviewed drivers and customs agents, and even followed our targets into a heavily cartel-controlled area of Mexico, a very dangerous undertaking. We engaged a trusted private investigator in Mexico to help us get around discreetly.

What we discovered was that the smuggling operation indeed involved the cartel and Mexican customs officials. A full tanker truck would head towards the border, and a phone call would be made alerting a certain Mexican customs guard of the license plate. The truck would get into the “empty” lane instead of the “full” lane, and the guard, instead of stopping him to verify, would simply wave him through. This avoided the import tax of approximately $4,000 they would normally pay per tanker truck. That explained how they could offer gas so cheap, but what did the cartel get out of the deal? Once the tankers had made their deliveries in Mexico (often delivering to the government-controlled company, Pemex), they parked in a hangar overnight. During the night, cartel operatives hid 50-lb packages of fentanyl inside, a weight that would never be noticed at any border check. The wholesale value of that much fentanyl was approximately $600 - $700K, with a final retail value that could be into the millions.

We presented our findings to the Department of Homeland Security, who initiated their own investigation to confirm our information. Within 90-days, gas prices in Mexico had returned to normal, and our client was back in the black.