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A high-stakes investigation into a sprawling fuel-smuggling operation linked to Mexico’s powerful Jalisco New Generation Cartel (CJNG) has ensnared Houston-based petroleum trader Ikon Midstream. Mexican authorities have been scrutinizing a network of fuel shipments from the United States and Canada that were secretly rebranded as lubricants to evade hefty Mexican fuel taxes, valued at millions of dollars.
According to security sources and documents reviewed by Reuters, investigators are examining mislabeled shipments of diesel and naphtha aboard tankers like the Torm Agnes and Torm Louise and linked to Mexican firms Intanza and Azteca Cone, which appear to be fronts connected to CJNG. While neither company seems to have a real physical presence, necessary import permits, or a discernible online presence, suspicions against these businesses indicate a deliberate effort to conceal ties to the notorious cartel.
Mexican authorities have also targeted Ikon Midstream and suspect its involvement in working with local trucking company Mefra Fletes to unload smuggled fuel in Ensenada and Guaymas. Mefra Fletes, itself a target of investigation for alleged connections to CJNG, is suspected of facilitating these illicit transactions.
Relevant records reviewed by Reuters reveal that Ikon Midstream repeatedly employed incorrect United States customs codes for fuel exports, which have been deemed improper by U.S. Customs officials and could provoke further enforcement actions. According to company officials, these labeling issues represent simple ‘clerical’ mistakes with no hidden intention.
Contrary to their assertion of innocence, Ikon Midstream recently took action against Reuters for purported defamation, citing their previous investigation reports. The U.S. Department of Homeland Security conducted a raid on Ikon’s Houston offices in April in the context of an on-going investigation.
It has also been reported that fuel supplied by Exxon Mobil and Imperial Oil was used in some of the under scrutiny shipments. While Ikon Midstream has maintained that it never intentionally supported the activities of CJNG or the cartel’s smuggling operation, these findings are indicative of broader complicity within the petroleum trade networks.
The fuel smuggling networks investigated appear to have become one of CJNG’s primary revenue sources, second only to narcotics.