Circumstances create new tycoons.
From a heavily guarded mountain hideout in the heart of the Sierra Madre, Nemesio Oseguera is rising to become the “ultimate boss” of Mexican drug cartels, leading his Jalisco New Generation cartel to replace the Sinaloa cartel as the world’s largest drug trafficking organization.
The Sinaloa cartel, Mexico’s leading fentanyl traffickers, came under the scrutiny of the Trump administration, which had promised to eradicate this devastating synthetic drug from the United States. This aggressive crackdown on the Sinaloa cartel and fentanyl inadvertently opened a lucrative market for Jalisco. The resulting massive cocaine trade into the U.S. propelled Oseguera to the top position in Mexico’s underworld.
The US arrest of gang leader Joaquin “El Chapo” Guzman weakened the Sinaloa cartel and created an opportunity for the Jalisco cartel to rise to power.
“Nemesio ‘Mencho’ Oseguera is currently the most powerful drug trafficker in the world,” said Derek Maltz, who served as Acting Director of the U.S. Drug Enforcement Agency (DEA) this year. “What’s happening now is a shift toward even more cocaine distribution in the U.S.”
Oseguera, who grew up in poverty selling butter, is making a fortune from cocaine buyers in the United States. His gang transports the drug in tons from Colombia to Ecuador and then north to the Pacific coast of Mexico by speedboat or what are called “drug submarines.”
The U.S. offered a $15 million reward for the capture or killing of Oseguera, but authorities said he rarely left his mountain hideout. Very few photos of him circulated. Those familiar with Mexican gang operations said Oseguera’s guards, known as the High Command Task Force, carried heat-seeking RPG-7 grenade launchers capable of penetrating tanks.
These people said that anyone visiting the drug lord’s hideout had their head covered before beginning a six-hour car ride through mine-strewn terrain. The locations of the explosives were known only to members of Oseguera’s inner circle.
Oseguera’s fortunes changed after the U.S. pressured Mexico to crack down on the Sinaloa cartel. The Sinaloa cartel was a pioneer in the production and smuggling of fentanyl into the U.S. via a network of smuggling tunnels under the U.S.-Mexico border, causing their revenue and overdose deaths in the U.S. to skyrocket in recent years.
The arrest of Sinaloa cartel leader Joaquin “El Chapo” Guzman in January 2016 and his extradition to the United States a year later led to the rapid decline of the drug empire. Guzman’s four sons, who inherited their father’s empire and are collectively known as the “Little Chapos,” or “Los Chapitos,” sparked a bloody civil war against Ismael “El Mayo” Zambada, a co-founder of the Sinaloa cartel.
Last July, Zambada was tricked by Joaquin Guzman, one of El Chapo’s sons, into boarding a private plane to the United States to be handed over in the hope of leniency from U.S. prosecutors. Both were arrested upon landing in El Paso, Texas. Zambada pleaded guilty to drug trafficking last month and could face life imprisonment in the U.S. Guzman, who remains in custody, has pleaded not guilty to drug trafficking.
Zambada’s capture led to a violent split between those loyal to Ismael “Mayito Flaco” Zambada, Zambada’s son, and those allied with the Chapito brothers. An estimated 5,000 people from both sides have been killed or missing in this gang war, not including bystanders caught in the crossfire. Mexico has deployed 10,000 federal troops to Sinaloa state over the past year, where the federal government has been largely powerless to end the fighting.
Surrounded by the US and Mexican authorities on one front, and by Zambada’s forces on the other, the Chapitos cast aside their pride and sought the help of their sworn enemy, Oseguera. Each side had something the other desired. Oseguera agreed to meet, envisioning a future where he and his Jalisco cartel would dominate the Mexican underworld.
The U.S. Drug Enforcement Agency (DEA) posted information offering a $15 million reward for the capture or killing of Nemesio “Mencho” Oseguera.
The turning point from the “agreement” between Sinaloa and Jalisco
Last December, Oseguera met with a deputy of Ivan Archivaldo Guzman, the leader of the Sinaloa Chapito faction. At the meeting in the western Mexican state of Nayarit, Oseguera agreed to supply weapons, cash, and fighters to the Chapito.
In return, the Sinaloa cartel opened up smuggling routes and border tunnels into the U.S. to Jalisco, who had previously paid exorbitant fees to use these tunnels to transport drugs from Mexico into the U.S.
This agreement also splits up the drug trade in the U.S. “Chapito will focus on supplying fentanyl addicts in the U.S. Oseguera will focus on cocaine and methamphetamine, a similar drug, in the mass market. The Jalisco cartel is currently transporting record tons of cocaine and methamphetamine into the U.S. through tunnels built by the Sinaloa cartel,” a source familiar with Mexican cartel operations told the Wall Street Journal.
The “agreement” between Sinaloa and Jalisco is “an unprecedented event in the world of organized crime,” the Mexican Attorney General’s office said in a July report. According to the latest DEA assessment of the drug threat, the Jalisco cartel is now comparable to the Sinaloa cartel at its peak before El Chapo’s capture.
Not only did Oseguera benefit from Sinaloa’s weakening, but it also gained an opportunity from movements across the border. President Donald Trump’s campaign to deport undocumented immigrants into the U.S. kept federal agents too busy to focus on stopping drug trafficking. For example, in Arizona, two Customs and Border Protection (CBP) checkpoints along a major fentanyl smuggling corridor from Mexico were left empty because the officers stationed there were deployed to handle detained migrants, the Wall Street Journal reported.
The final factor that made Oseguera’s business even more favorable was Colombia’s record cocaine production, which had driven down the price of this “white powder.” Thanks to the cheap and abundant supply, supported by the Sinaloa cartel’s logistics system, the Jalisco cartel had boosted its cocaine supply to the US market to the point where the drug was becoming purer and more refined than ever for retail buyers.
In the U.S., a gram of cocaine now costs only about $60 to $75, half the price it was five years ago, according to Morgan Godvin, a researcher at the community organization Drug Checking Los Angeles. Meanwhile, according to drug testing company Millennium Health, cocaine consumption in the Western U.S. has increased 154% since 2019 and 19% over the same period in the Eastern U.S.
The enormous profits from cocaine allowed Oseguera’s cartel to extend its reach beyond the drug trade and operate as a parallel government in the southwestern Mexican state of Jalisco and other areas. They controlled construction companies, building roads, schools, and sewage systems for the city government, and even extorted protection money from consumers such as tortillas, chicken, cigarettes, and beer.
The booming black market for fuel also came under Oseguera’s scrutiny. Gasoline and diesel stolen by the Jalisco cartel from refineries and pipelines in Mexico—or smuggled from the U.S. into Mexico—were sold below market price to businesses large and small. U.S. officials estimated to the Wall Street Journal that up to one-third of the fuel sold in Mexico was illegal. The fuel boss of the Jalisco cartel was nicknamed “Tank” for his talent in stealing and stockpiling millions of liters of fuel.
This criminal organization also profited from transporting migrants to the U.S., charging them thousands of dollars each as they passed through territory under its control. And in recent years, according to the U.S. Treasury Department, the Jalisco cartel has operated more than two dozen call centers to defraud senior citizens in North America, stealing hundreds of millions of dollars from them through vacation-sharing scams.
