NY Mayor Bloomberg Donates $150,000 to Pro Gun Control Virginia Politicians- After NYPD Cops Nabbed In Gunrunning Sting

New York City Mayor Michael Bloomberg has opened up his checkbook for six Democrats running for the state office in Virginia ahead of Old Dominion's November 8th elections for state Senate and House of Delegates.

Bloomberg has donated $25,000 apiece to the campaigns of six Democratic candidates for the Virginia state Senate who share his strict beliefs on gun control, officials told the Daily News Friday.

The deep-pocketed mayor, who drew the ire of the Virginia attorney general when he ran gun stings there five years ago, will travel to Old Dominion to campaign for the candidates next week, the officials said.

What happens in the Virginia Legislature will directly affect the public safety of New Yorkers, said John Feinblatt, the mayor s Criminal Justice Coordinator.

Bloomberg was slammed by Virginia's then-attorney general - and now governor - Bob McDonnell for the 2006 stings.

The announcement comes a few days after 8 current and former NYPD officers were arrested by the FBI in a gunrunning sting where the officers are accused of trafficking in stolen property and purchasing guns from an undercover FBI agent before filing off the serial numbers.

The investigation into the conspiracy began in 2009, when an FBI informant was introduced to one cop, William Masso of the 68th Precinct, "as a person who could 'fix' the [informant's] traffic tickets," according to court papers obtained by the Post. But a law-enforcement official tells the tabloid that the probe was "totally unrelated" to the NYPD ticket-fixing scandal currently under investigation by the Bronx DA, who is expected to charge 16 officers soon.

In this case, the officers are accused of buying inoperable weapons, including an M-4 assault rifle, from an undercover FBI agent. They then allegedly filed off the serial numbers so they couldn't be traced, and transported them over state lines. Masso allegedly told his conspirators that they should carry their police badges, and if they ran into trouble with non-corrupt cops, to say they were cops working off-duty "delivering items purchased at auction."

"The criminal complaint lays out a scheme of brazen misconduct that include the illegal transportation of stolen cigarettes and stolen slot machines, the illegal transportation firearms, and the illegal transportation of defaced firearms," FBI's Special Agent in Charge, Diego Rodriguez, said in a statement this morning. "All of these crimes were seemingly committed for one simple reason: money. For their participation in the various schemes—cigarettes, slot machines, guns—the defendants were paid handsomely."

Interestingly, while the news of crooked NYPD cops allegedly trafficking black market guns with the serial numbers filed off was the most dramatic accusation made against them, the cigarette smuggling scheme the accused were reportedly involved in was their most lucrative.

The demand for cheap cigarettes in New York—which has the nation's highest tax levy, $6.46 a pack in the city—has fueled a burgeoning underground market that costs the city about $200 million a year and the state $525 million, city, state and federal officials said.

"Over the past decade we have seen a marked increase in contraband cigarettes coming into the greater New York area," Joseph Green, a spokesman for the ATF's New York office, said Wednesday.

The cigarette-smuggling operation actually made the defendants more money: Undercover investigators paid the defendants about three times as much money—about $92,000—for moving cigarettes than for the guns, the complaint said.

And unlike the guns the defendants sold in the federal sting operation, some of the 2.4 million cigarettes they allegedly smuggled appear to have made their way into the New York market, the complaint suggests.

According to recorded conversations cited by federal prosecutors, Mr. Masso was long familiar with cigarette smuggling. He told undercover investigators that he used to acquire cigarettes from a woman who bought them from Native American reservations and put bogus tax stamps on the cigarette boxes, a criminal complaint said.

He allegedly told the informant that he made $5,000 a week on the scheme and ruminated about again finding the woman and getting a tax stamp.

By May of this year, Mr. Masso and the group of officers and civilians he recruited allegedly had participated in the smuggling and sale of more than $600,000 worth of cigarettes, moving them from Virginia and New Jersey into the New York City area, authorities said. In one case, a group broke into box trucks in Virginia and stole the cigarettes, authorities said.

Meanwhile, Bloomberg's felon-riddled gun control advocacy group has begun lobbying in earnest against national conceal-carry reciprocity legislation that has been working its way through Congress. Members of the organization claim the legislation would undercut state's rights, which is pretty interesting considering how much Bloomberg himself had attempted to influence firearms legislation in Virginia and Arizona.

Anti-Social Club Episode of Borderline Psychosis- 53 Killed After Gunmen Torch Monterrey Casino; NM Police Chief Admits Cartel Ties; Iraqi Connection?

UPDATE 8/31: Acting ATF director Kenneth Melson was reassigned to a lesser post in the Justice Department on Tuesday in the wake of further fallout from the Fast & Furious investigation. US Attorney for Minnesota B. Todd Jones was named as acting director after Melson's departure- a permanent head for the ATF would need to be confirmed by the US Senate.



Also on Tuesday, the US Attorney for Arizona resigned effective immediately. US Attorney Dennis Burke stepped down two weeks after testifying before a House Oversight Committee regarding Fast & Furious, which Burke was in charge of as the state's US Attorney.





NUEVO LEON: At least 53 people were killed when eight gunmen burst into a casino in the northern industrial center of Monterrey, doused the place with gasoline and ignited a fire that trapped dozens of patrons and gamblers.

With shouts and profanities, the attackers told the customers and employees to get out. But many terrified customers and employees fled further inside the building, where they died trapped amid the flames and thick smoke that soon billowed out of the building.



Video footage showed workers continuing to remove bodies well into the night.



Monterrey Mayor Fernando Larrazabal said many of the bodies were found inside the casino's bathrooms, where employees and customers had locked themselves to escape the gunmen.



In an act of desperation, authorities commandeered backhoes from a nearby construction site to break into the casino's walls to try to reach the people trapped inside.

The attack took place on August 25th. The following day, Mexican President Felipe Calderon declared three days of mourning and the Mexican government offered a reward of 30 million pesos ($2.4 million) for information leading to any of the assailants in the Casino Royale attack.



On Monday night, Federal Police in Monterrey announced that they had arrested five suspects and were still seeking the whereabouts of two more. Authorities believe a likely motive in the casino attack is nonpayment of extortion money and the five detained suspects are said to be members of the Zetas. Surveillance footage of the suspects filling up five gallon canisters of gasoline at a gas station not too far from the Casino Royale was shown at the conference announcing the arrests Monday.



The attack shocked and angered many Mexicans because instead of career criminals, the victims were mostly middle aged women who frequently visited the casino to play bingo.



MEXICO CITY: 21 of Mexico's 31 senior federal prosecutors abruptly quit earlier this month. Mexican press outlets report this as being the single biggest mass resignation of federal officials in recent history.

The office announced late last month that in Morales' first 100 days on the job, 462 prosecutors and other officials had been dismissed and 111 more were facing criminal charges involving a range of infractions, including fraud, theft, abuse of power and falsification of documents. An additional 386 employees were in the process of being dismissed.



Rosa Elena Torres Davila, a senior official in the attorney general's office, made Monday's announcement and said the resignations were tendered on Friday. They included the top federal prosecutors in some of Mexico's most violent states where drug traffickers have intimidated local authorities and killed thousands of people in cases that have largely gone unprosecuted. They also included the top federal prosecutor in the capital, Mexico City, which is a federal district with a status similar to that of a state.

Attorney General Marisela Morales declined to cite specific reasons behind the mass departures



CALIFORNIA: Local, state and federal law enforcement officers raided an Iraqi-Chaldean social club in San Diego County and arrested 60 men in a multi-agency investigation dubbed 'Operation Shadowbox'. The social club had been a source of complaints from both neighboring businesses claiming drug dealing and prostitution were rampant and wives of some patrons said that their life savings was being gambled away at the club.



More ominously, members of the club were alleged to have purchased drugs and explosives from the Sinaloa cartel. Marijuana was sold out of the club while methamphetamine smuggled in from Mexico would be forwarded to a sister organization in Detroit.

Since January, the DEA and El Cajon police have purchased narcotics, firearms, improvised explosive devices and pharmaceuticals from people at the club, Sprecco said. In April, an undercover operative was shown a hand grenade and was told more were available from a Mexican military source. Suspects in the investigation reportedly arranged narcotics shipments from El Cajon to Detroit.



During the course of the investigation, operatives discovered a suspected association with the Sinaloa Cartel, a Mexico-based drug trafficking organization, and the Chaldean Organized Crime Syndicate, which began in Detroit in the early 80s and has been linked numerous crimes, including murder, arson and kidnapping, Sprecco said.



The investigation resulted in the seizure of drugs including more than 13 pounds of methamphetamine, more than four pounds of ecstasy and pharmaceuticals and about 3,500 pounds of marijuana, Sprecco said. Authorities confiscated more than $630,000 and three luxury cars.



Officers seized 34 firearms, including semi-automatic rifles and four explosive devices, which were processed with the help of the San Diego County Sheriff's Department's Bomb Squad and the FBI, Sprecco said.

The city of El Cajon has the second-highest Chaldean population in the United States after Detroit- the San Diego suburb is home to about 47,000 Iraqi Chaldeans, many of them having immigrated there before the 2003 fall of Saddam Hussein's regime in their native Iraq.



NEW MEXICO: The former police chief of the small New Mexico border town of Columbus has pleaded guilty to trafficking firearms and tactical gear across the border into Mexico on behalf of enforcers for 'La Linea'- a gang of enforcers for the Juarez cartel.

As a participant in the conspiracy, Vega conducted counter-surveillance, used a village-owned Ford F150 truck to transport firearms from the country, pulled over a car of ATF agents at La Linea's request, and tried to get ATF agents to return firearms to Gutierrez after they were seized, Spitzer told the court.



And on Feb. 10, Vega purchased thousands of dollars in body armor, boots, helmets and clothing, including a bulletproof vest for a La Linea leader, whose name was not mentioned in court.



Vega had previously pleaded not guilty to taking part in the conspiracy, in which he and his co-defendants allegedly purchased about 200 firearms - including AK-47-type pistols, weapons resembling AK-47 rifles, but with shorter barrels and without rear stocks, and American Tactical 9 mm caliber pistols - from Chaparral Guns in Chaparral and smuggled them to members of the Juárez-based La Linea cartel between January 2010 and March 2011.



In raids, law enforcement seized 40 of the AK-47 type pistols, more than 1,500 rounds of ammunition and 30 high-capacity magazines before they crossed the border, and found another 12 firearms in Mexico that were traced back to the defendants. Three others were found on three dead individuals in an SUV in Juárez, and others were found at a narcotics bust there, according to federal prosecutors

Former police chief Angelo Vega faces up to 35 years in prison and a $750,000 fine. The village's former mayor- Eddie Espinoza- and village trustee- Blas Gutierrez- have already pleaded guilty for their role in the weapons smuggling case.



Since the arrests, the small 4-man police department has been disbanded and the area is patrolled now by the Luna County Sheriff's Department.

ATF Awarding Promotions to Fast and Furious Architects?

Earlier this week, the Los Angles Times had reported that three supervisor level ATF officials from the agency's Phoenix office were promoted and transferred to Washington D.C.

The three supervisors have been given new management positions at the agency's headquarters in Washington. They are William G. McMahon, who was the ATF's deputy director of operations in the West, where the illegal trafficking program was focused, and William D. Newell and David Voth, both field supervisors who oversaw the program out of the agency's Phoenix office.

McMahon and Newell have acknowledged making serious mistakes in the program, which was dubbed Operation Fast and Furious.



"I share responsibility for mistakes that were made," McMahon testified to a House committee three weeks ago. "The advantage of hindsight, the benefit of a thorough review of the case, clearly points me to things that I would have done differently."



Three Bureau of Alcohol, Tobacco, Firearms and Explosives spokesmen did not return phone calls Monday asking about the promotions. But several agents said they found the timing of the promotions surprising, given the turmoil at the agency over the failed program.



McMahon was promoted Sunday to deputy assistant director of the ATF's Office of Professional Responsibility and Security Operations — the division that investigates misconduct by employees and other problems.



Kenneth E. Melson, the ATF's acting director, said in an agency-wide confidential email announcing the promotion that McMahon was among ATF employees being rewarded because of "the skills and abilities they have demonstrated throughout their careers."



Newell was the special agent in charge of the field office for Arizona and New Mexico, where Fast and Furious was conducted. On Aug. 1, the ATF announced he would become special assistant to the assistant director of the agency's Office of Management in Washington.



Voth was an on-the-ground team supervisor for the operation, and last month he was moved to Washington to become branch chief for the ATF's tobacco division.

Shortly after the Los Angeles Times article, the Justice department confirmed that the three had been transferred to D.C. but defined the move as a 'lateral transfer' to 'adminstrative duties'.



The ill-fated Operation Fast and Furious involved the agency allowing weapons purchased on the American side of the border to 'walk' into Mexico- in many cases against the wishes of ATF field agents- where they would supposedly be tracked to leaders of the different Mexican cartels. No cartel leaders were arrested as a result of Fast and Furous- the weapons instead turned up at the scene of the December 2010 shooting death of Border Patrol agent Brian Terry in Arizona and at several crime scenes south of the border.



Additional House Oversight Committee hearings on Operation Fast & Furious are scheduled for later on this year.



Senator John Cornyn (R-TX) sent a letter to the Justice Department demanding answers to reports that there were similar ATF "gun-walking" programs operated out of Texas.

“Until Attorney General (Eric) Holder and Justice Department officials come clean on all alleged gun-walking operations, including a detailed response to allegations of a Texas-based scheme, it is inconceivable to reward those who spearheaded this disastrous operation with cushy desks in Washington,” said Sen. John Cornyn, R-Texas, a member of the Senate Judiciary Committee.

Last month, acting Director Kenneth Melson admitted to congressional investigators that his agency, in at least one instance, allowed sales of high-powered weapons without intercepting them. Melson accuses his superiors at the Justice Department of stonewalling Congress to protect political appointees in the scandal over those decisions.

Borderline Psychosis Update- Fast & Furious Twin in Fla?; PEMEX Files Suit Over Stolen Oil; If a Tree Falls in the Woods, did the Zetas Cut it Down?

NEW MEXICO: The former mayor of the small border town of Columbus, NM pled guilty to multiple counts of weapons smuggling four months after his arrest.

Eddie Espinoza, 51, pleaded guilty to one count of conspiracy, three counts of smuggling firearms from the United States and three counts of making false statements.

Former NM mayor admits to gun smuggling: krqe.com

Federal documents state the group smuggled more than 200 guns from New Mexico to the streets of Cíudad Juárez and Palomas, Chihuahua. The documents further state that at times the group used unmarked police cars registered toColumbus to smuggle the guns across the border. Agents had been following the illegal operation for more than a year.

Espinoza is the fourth person to plead guilty in this case so far.

Earlier this month, the village board voted to eliminate the four-man police department as a cost-cutting measure. The Luna County Sheriff's Department will be responsible for patrolling the area now.

In another development on the Columbus case, the El Paso US Attorney's office recently took over the case from the New Mexico US Attorney, although the Justice department has been tight lipped about the reasons behind the switch.

ARIZONA: Recently leaked memos from the Arizona Deparment of Public Safety confirm that Hezbollah has established ties with some of the Mexican cartels in establishing smuggling routes and warn that the terrorist organization may be stockpiling heavy weaponry south of the border.

As evidence, it points to the 2010 Tijuana arrest of Hezbollah militant Jameel Nasr, who was allegedly tasked with establishing a Hezbollah network in Mexico and South America. The memo also recalls the April 2009 arrest of Jamal Yousef in New York, which exposed a huge cache of assault rifles, hand grenades, explosives and anti-tank munitions. According to Yousef, the weapons were stored in Mexico after being smuggled from Iraq by members of Hezbollah.

The memo warns that consequences of partnerships between Hezbollah and Mexico's drug partnerships could be disastrous for Mexico's drug war, given Hezbollah's advanced weapons capabilities — specifically their expertise with improvised explosive devices (IEDs). It notes that some Mexican criminal organizations have started using small IEDs and car bombs, a marked change in tactics that indicates a relationship with Islamic militants

Hezbollah is already active in the tri-border/Iguazu region of South America where the borders of Argentina, Brazil and Paraguay meet.

Some experts, while aware of Hezbollah's presence in Mexico, claim that while the organization may have no immediate plans for attacking the USA, the terrorist organization raises funds through criminal activity in Mexico and the USA.

FLORIDA: A possible counterpart to the ATF's Phoenix-based Fast & Furious has come to light in Florida in recent weeks. Guns from a suspected trafficker in Florida under surveillance by the ATF had begun turning up in Puerto Rico, Honduras and Colombia in 2010.

At the center of the operation is 63-year-old Hugh Crumpler III, a well-known Central Florida bass fishing guide and tournament pro. He and 10 others have been charged -- six of whom were in the country illegally. Nine, including Crumpler, are scheduled for sentencing next month in federal court in Orlando. The other two are fugitives and are believed to have fled the country.

Crumpler, who lives in Palm Bay, has admitted to selling the guns and knowing most of them were going out of the country to places such as Honduras, according to court documents. Records show three guns Crumpler bought were used in crimes in Puerto Rico, one just nine days after he bought it. Another gun was used in a homicide in Colombia 66 days after he bought it.

The reports prompted a letter from Congressman Gus Bilirakis (R- FL9) to the ATF enquiring about the scope of Operation Castaway and whether or not the agency allowed any weapons to be 'walked' to Central America or Colombia.

NUEVO LEON: A few weeks ago, Reuters ran a special report titled If Monterrey Falls, Mexico Falls highlighting how the northern industrial center has largely been spared the bloody narco-violence spasming the rest of the country so far, but how that is changing.

If there's any merit to using Mexico's main industrial center as a barometer, then Mexico's problems have only just begun, as the violence in the city has escalated with gunmen massacring 17 people at a bar in the city last weekend.

Monterrey, a major industrial hub, has seen a spike of violence since the Gulf and Zeta cartels began fighting for control of drug traffic there two years ago.

The medical examiner's official said his office has recovered 17 bodies, including those of women, from the crime scene. He spoke on the condition of anonymity because he was not authorized to speak on the record.

Police sources would not confirm the number of dead people with The Associated Press and referred the AP to local prosecutors, who are not giving an official account of the shooting.

Federal police spokesman Jose Ramon Salinas said that high-powered weapons used in the shooting indicated it might have been a drug cartel confrontation.

The uptick in violence in Nuevo Leon could be attributed to violence from neighboring Tamaulipas spilling over.


MICHOACAN: As the cartels have begun expanding their operations into illegal logging, one mountain village is barricading itself in an attempt to preserve the nearby old growth forests.

Masked and wielding rifles, the men of this mountain town stand guard at blockades of tires and sandbags to stop illegal loggers backed by drug traffickers. Their defiance isn’t just about defending their way of life; it’s one of the first major challenges to the reign of terror unleashed by Mexico’s drug cartels.

The indigenous Purepecha people of this town surrounded by mountains of pine forests and neat farmland took security into their own hands last month after loggers, who residents say are backed by cartel henchmen and local police, killed two residents and wounded several others.

“There is no fear here,” said one young man, defiantly peering out between a red handkerchief pulled up to his dark eyes and a camouflage baseball cap riding low over his brow. “Here we are fighting a David-and-Goliath battle because we are standing up to organized crime, which is no small adversary.”

Nearly all residents in the town of 16,000 in the southwestern state of Michoacan spoke to reporters on condition of anonymity because of safety concerns.

The Cheran rebellion is one of the few examples of a town standing up to drug cartels since President Felipe Calderon launched his crackdown on organized crime in late 2006, sparking a national wave of violence that has killed at least 35,000 people. Most Mexicans are too frightened to openly fight back against gangs that have terrorized the country with beheadings and massacres. Some towns in northern Mexico have emptied as cartels move in.

The rebellion in Cheran caught the attention of the federal government, which deployed troops and federal police last week to patrol the outskirts of the town.

“La Familia has the heaviest presence in the zone. Everything indicates that it’s them because they have the biggest presence, but we can’t say for sure,” said David Pena, a lawyer who has been representing the community in negotiations for protection with the federal government.

Disputes over communal woods — between those who want to log indiscriminately and those who subsist on forest products — has long been a source of conflict in southwestern Mexico. The federal government has stepped up efforts against deforestation, conducting raids and shutting down illegal sawmills.

But rogue loggers have become more violent as they align themselves with drug cartels, said Rupert Knox, a Mexico researcher at London-based Amnesty International, which has investigated the crisis in Cheran.

“Illegal logging has gone hand-in-glove with criminal gangs. They have moved into that sphere and controlled it with extreme brutality and corruption of local officials,” Knox said.

The animosity came to a head in Cheran when residents captured five illegal loggers on April 15 as their truck attempted to smuggle out illegally harvested wood.

Two hours later, a convoy of armed men rumbled into the town to free the detained loggers, accompanied by local police, according to Pena and Amnesty International. One Cheran man was shot in the head and remains in a coma. But the townspeople, through force of numbers, managed to drive out the gunmen.

In apparent reprisal, loggers shot and killed two Cheran men and wounded four others who were patrolling the woods on April 27.

Angry Cheran residents stormed the local police headquarters, seizing 18 guns. They swiftly barricaded the town, piling sandbags and tires beneath plastic tents at several checkpoints along the main road. Young men with rifles keep track of residents venturing out and question anyone trying to get in.

Classes have been suspended at the town’s more than 20 schools, which draw students from neighboring communities because both Spanish and the Purepecha language are taught. Instead, young boys hang out at the barricades, covering their faces with handkerchiefs and pretending to patrol with plastic toy guns.

“Everything is paralyzed out of fear that this gang might attack the children,” said a soft-spoken man wearing a white bandana and a black wool cap at a checkpoint.

The municipal police dissolved itself. Mayor Roberto Bautista Chapina reported the guns stolen but has otherwise stayed out of the dispute, trying not to inflame tensions. He said the Cheran men attacked the police chief and grabbed his gun.

Community leaders and Interior Department representatives met Tuesday in the state capital of Morelia and agreed on a long-term security plan, Pena said. The government promised to set up two bases outside the town for army troops and federal and state police, who will patrol the hills and forests and meet weekly with Cheran leaders. Residents will be allowed to keep protecting the town on their own.

Among many observers, this is thought to be the most direct challenge to the cartels since the reported last stand of rancher and businessman Don Alejo Garza last year. It's also worth noting that as an organization, La Familia is pretty much finished thanks to infighting and it's leadership on the run or imprisoned with the rest of the organization reconstituting themselves into the Knights Templar.

ELSEWHERE IN MICHOACAN: Speaking of the Knights Templar, Mexican Federal Police have arrested the man they claim oversees killings for the young organization. Javier Beltran Arco- aka 'El Chivo'- was arrested along with two lookouts in Michoacan this month. Also seized were two pounds of methamphetamine and three automatic rifles.

At the Lazaro Cardenas seaport, officials also intercepted containers from Shanghai, China carrying 44 metric tons worth of chemicals used to manufacture methamphetamine.

TEXAS: PEMEX, Mexico's state run oil company, has filed a lawsuit against nine companies in the US District Court in Houston, TX last month. The suit alleges that the nine companies and two individuals named in the suit have either willingly or unknowingly received oil stolen from PEMEX pipelines.

Pemex said the suit is intended to "combat the theft and smuggling of gas condensate from its facilities in northern Mexico," including tanker trucks hijacked at gunpoint in northern Mexico. The thefts involved dozens of tanker-truck loads.

The suit does not claim any of the U.S. firms participated in the actual robberies, but says some knowingly conspired to ship the stolen goods, while others unwittingly handled them.

"All of the defendants have participated and profited, knowingly or unwittingly, in the trafficking of stolen condensate in the United States," the suit says, referring to a mix of oil liquids produced as a byproduct of natural gas wells.

"Some of the defendants knew, or at least should have known, they were trading in, or transporting, stolen condensate," the suit says. "Others were ignorant that they were purchasing stolen goods. In either case, however, the defendants took possession of Mexico's sovereign property without right or title. All defendants are therefore liable for their individual usurpation of Mexico's patrimony."

The lawsuit does not name a specific amount of damages being sought, but argues that the sued companies are liable for part or all of the $300 million in oil stolen since 2006.

Pemex has "lost large amounts of its condensate, at times approaching 40 percent of the production of condensate from the Burgos Field," the suit says.

A joint U.S.-Mexico investigation in 2010 found that smuggled oil stolen from Pemex was being transported across the border and sold to U.S. refineries. The Mexican government has said drug cartel members and other criminals are responsible for many of the oil thefts.

This would not be the first time organized crime in Mexico branched out into the theft and resale of stolen natural resources as the value of said resources went up.

PEMEX, for its part, has claimed that a crackdown earlier this year has led to a decline in the amount of oil stolen from the national oil company's pipelines, but the thieves have been switching tactics as well as allegedly employing the cartels to help them smuggle and sell off the stolen product.

Gangs are still believed to earn hundreds of millions of dollars a year tapping Mexico's vast, but largely unprotected, pipeline network

We're seeing changes. They are tapping into (propane) pipelines. We've also found some double taps that the criminals use to inject water into the pipes to stop the detection of a loss of pressure," Pemex Chief Executive Juan Jose Suarez said during testimony before a congressional panel last week.

Fuel thieves traditionally focused on stealing gasoline and diesel for sale on the local black market, but gangs increasingly have set their sights on crude oil.

Pemex found 712 connections to its network last year, nearly double the number found the year before and five times the amount detected in 2005.

Two crude pipelines were the most tapped nationwide last year with 191 illegal connections, up from only five in 2005.

Pemex believes thieves siphoned off about 10,000 barrels of crude worth more than $700,000 every day last year.

Officials say the crude most likely ends up with brickmakers and other industrial customers who use it as a substitute for boiler fuel. Privately they admit criminals may be smuggling the oil out of Mexico, given the relatively small size of the domestic market for industrial boiler fuel.

Drug cartels, which extort protection money from fuel theft gangs who are often made up of current and former oil industry workers, are believed to provide the expertise to smuggle siphoned oil into the United States.

Court papers indicate that Mexican and U.S. authorities believe the Zetas cartel helped one gang move up to $300 million in condensate -- a liquid byproduct of natural gas used to make plastics -- into Texas by bribing customs officials, using false transit documents and hiring middlemen to sell it to some of the world's largest chemical companies.

A similar scheme with crude would be easy to replicate and hard to detect due to the huge size of the oil market. Pemex officials say the origin of the smuggled crude can be easily concealed by blending it with legitimately-obtained oil.

The companies named in the suit include Big Star Gathering LTD, F&M Transportation Inc., Western Refining Company LP, Joplin Energy LLC, Superior Crude Gathering Inc., Plains All-American [NYSE- PAA], TransMontaigne Partners LP of Denver, Colorado [NYSE- TLP], SemCrude LP of Oklahoma City, Oklahoma, and Saint James Oil Inc. of Sandy, Utah.

MEXICO CITY: Another seemingly mundane avenue that various cartels have muscled into include movie piracy.

Led by the notorious La Familia and Los Zetas drug mafias, Mexican cartels now take a big cut of the hundreds of millions of dollars in bootleg disks sold in Mexico each year, according to U.S. officials and representatives of film studios and software manufacturers.

“This is no longer a victimless crime. There is blood on the product,” said Federico de la Garza, managing director of the Motion Picture Association in Mexico City, whose own investigators work closely with the Mexican attorney general.

Disk piracy and U.S. copyright violations are a challenge around the world, but in Mexico the sale of bootleg copies of “Toy Story 3” and Microsoft Windows XP are funding the powerful mafias whose relentless violence has left more than 35,000 Mexicans dead in the past four years.

Mexico has become the pirate capital of Latin America, exporting so many bootleg movies to Central America, for example, that the major studios no longer bother to sell their products on the shelves there, according to industry watchdogs.

And in Cancun or Monterrey or Tijuana, when you buy a bootleg Disney movie for the kids, it is as likely as not to bare a stamp that shows it was distributed by the Zetas (a stallion) or La Familia (a butterfly).

Video piracy is ubiquitous in Mexico, where more than nine of 10 movie DVDs sold are counterfeits. Mexican authorities rarely seize products from street dealers or market stalls. U.S. officials in Mexico suspect many vendors give kickbacks to local authorities to allow them to operate.

While its likely that they aren't producing the bootleg DVDs themselves, the cartels usually make their money through taking over distribution routes and demanding protection money from vendors operating in territory they've taken over.


BAJA CALIFORNIA: Mexican soldiers detained 58 people and seized an estimated US$160 billion worth of pot after stumbling across a massive 300 acre marijuana plantation in the northern part of the state last month.

Mexican officials call it the largest seizure of marijuana on record and claim that the plantation had been operational for less than four months.

Army officers said that the crop was discovered under canopies less than two miles off of Route 1, the main highway that traverses the Baja Peninsula. Although 58 people were taken into custody at the time of the raid, it appears that nearly twice as many people were working there. Although the territory was controlled by the Tijuana-based Arellano Felix cartel, that organization was one of the first organizations to have been undermined by President Calderon's stepped up attacks against the narcos.

A spokesman for the Mexican Army's second region believes that Joaquin 'El Chapo' Guzman's Sinaloa cartel had a hand in setting up the massive plantation.

TAMAULIPAS: At least 60 inmates managed to escape a state prison in Nuevo Laredo in a jailbreak that was thought to be orchestrated by Los Zetas, across the Rio Grande from Laredo, TX.

Seven prisoners were also killed during the escape, which the government said was preceded by a large-scale fight between inmates. Five employees of the prison, the Centro de Ejecución de Sanciones (CEDES), also deserted their posts. Thirty-five of the inmates were being jailed on federal charges.

The escape marks the second time in eight months the city has seen a mass exodus of criminals from the prison. In December about 140 inmates escaped, which Cuellar attributed to a plan orchestrated by the Zetas to swell its ranks after suffering heavy losses throughout its ongoing battles against rival gangs and law enforcement. The sheriff could not confirm that today’s escape was part of a similar plan.

Between January 2010 and March 2011, more than 400 inmates have escaped from five prisons operated under the state's authority in Tamaulipas.

[Hat tip: Correspondence Committee; Borderland Beat; Friends of Ours]

Borderline Psychosis- Calderon Meets with Critics; Mexican Army Finds Cartel's Homemade 'Tanks', La Familia Unravels

MEXICO CITY: Mexican president Felipe Calderon took the unusual step of meeting with peace activists and victims of Mexico's drug violence in a televised meeting called 'Dialogue for Peace', but defended his hard-line strategy of using the military to crack down against the drug cartels.

[Poet-activist Javier] Sicilia demanded Calderon apologize for carnage that has left an estimated 40,000 dead, and demanded a change in the government's anti-crime strategy. But Calderon, flanked by Cabinet officials, repeated once more that it would be wrong to alter the basic thrust — a military-led campaign against the country's powerful cartels.

Calderon also said he would like to be remembered for other things he has done during his administration, such as building hospitals, fortifying education and legal institutions, and his environmental initiatives. But the conservative president admitted he will "probably be remembered for [the drug war], and probably with much injustice."

The meeting, at Chapultepec Castle in Mexico City, was televised live and attended by other relatives of victims of drug-related violence.

May not be too often I get to say this, but Calderon is absolutely correct. The problem of corruption and emboldened narcocriminals killing with impunity simply does not go away if the president orders the troops to the barracks, and state and local police have often demonstrated that they are unwilling to take on the cartels- or even operate in concert with them.


TAMAULIPAS: Members of the Mexican military on patrol on the northwestern state last month discovered a pair of homemade 'tanks' reportedly belonging to Los Zetas.

The patrol came across the warehouse when they clashed with a group of armed men in the town of Ciudad Camargo, in the far northeastern state of Tamaulipas. Two of the gunmen were killed in a firefight, while two hid inside the warehouse.

"We found two home-made armored trucks in the warehouse, which belongs to the Gulf Cartel," the military source told AFP, speaking on condition of anonymity.

The trucks were covered in steel plates one inch (2.5 centimeters) thick, strong enough to "resist the caliber of personal weapons the soldiers use," said the source.

The air-conditioned armored vehicles were equipped with portholes where snipers could open fire from and remain protected.

The home-made tanks are used in clashes with other drug cartels as well as to protect drug shipments.

In recent years, soldiers deployed in the northeastern Mexican border region have confiscated 109 home-made armored vehicles -- including one dubbed the "Popemobile" because it carried an armored cabin similar to that used to protect Pope Benedict XVI in foreign trips.

In May, police in the western state of Jalisco carrying out a sweep against the Los Zetas drug cartel discovered an armored vehicle large enough to carry 20 armed men and also equipped with weapons portholes.

The soldiers also found more than 20 big rigs in the warehouse that were apparently waiting to be up-armoured.

Over the last couple of years, the Mexican military has seized over 100 of these home made armoured vehicles- sometimes dubbed 'El Monstruo' by locals- designed to either attack rival gangs or protect high value shipments. The vehicles often cobbled together from dump trucks, garbage trucks or even heavy duty work trucks with inch-thick steel plating welded on. While the plating and strategically placed bulletproof glass make the vehicles nearly impervious to small-arms fire, they also are exceptionally slow and cumbersome, thus largely offsetting whatever advantage they'd provide in an assault with having to move it from point A to point B while maintaining the element of surprise.

ELSEWHERE IN TAMAULIPAS: The Houston Chronicle published a report earlier this month citing an unnamed cartel operative who claimed that Los Zetas had kidnapped passengers from buses running along Mexican National highway 101 through Tamaulipas and forced some of the abducted passengers into death matches with each other while raping and killing others.

In one of the most chilling revelations yet about the violence in Mexico, a drug cartel-connected trafficker claims fellow gangsters have kidnapped highway bus passengers and forced them into gladiator like fights to groom fresh assassins.

Members of the Zetas cartel, he says, have pushed passengers into an ancient Rome-like blood sport with a modern Mexico twist that they call, "Who is going to be the next hit man?"

"They cut guys to pieces," he said.

The victims are likely among the hundreds of people found in mass graves in recent months, he said.

Many are believed to have been dragged off buses traveling through Mexico, but little has been said about the circumstances of their deaths.

The trafficker said those who survive are taken captive and eventually given suicide missions, such as riding into a town controlled by rivals and shooting up the place.

The trafficker said he did not see the clashes, but his fellow criminals have boasted to him of their exploits.

Former and current federal law-enforcement officers in the U.S. said that while they knew Mexican bus passengers had been targeted for violence, they'd never before heard of forcing passengers into death matches.

But given the level of violence in Mexico — nearly 40,000 killed in gangland warfare over the past several years — they didn't find it tough to believe.

Borderland Beat, a blog specializing in drug cartels, reported an account in April of bus passengers brutalized by Zeta thugs and taunted into fighting.

"The stuff you would not think possible a few years ago is now commonplace," said Peter Hanna, a retired FBI agent who built his career focusing on Mexico's cartels. "It used to be you'd find dead bodies in drums with acid; now there are beheadings."

Even so, Hanna noted, killing people this way would be time-consuming and inefficient. "It would be more for amusement," he suggested. "I don't see it as intimidation or a successful way to recruit people."

While an outlandish anonymously-sourced story from an individual with a criminal background, the tale of forcing bus passengers into death matches would be consistent with autopsy findings that most of the 183 people pulled from the graves were killed by blunt force trauma, not gunshot wounds.

Earlier this month, Federal prosecutors in Mexico have charged 73 people in the mass killings, including at least seven police officers in the town of San Fernando.

MICHOACAN: Jose de Jesus Mendez Vargas- aka "El Chango" (the monkey)- was arrested by Mexican federal police at a checkpoint in the state of Aguascalientes without incident this week. Vargas, who was the de-facto head of the cult-like La Familia Michoacana cartel after military raids resulted in the killing or capture of top members back in December, started out as a hitman for the Gulf cartel, but cast his lot with the quasi-evangelical La Familia cartel when they asserted themselves along Mexico's western coast and in their namesake state in recent years.

La Familia was reportedly financially struggling to the point where they couldn't afford to pay hitmen, while Vargas was soliciting help and manpower from one-time rivals Los Zetas. After La Familia shot down a Mexican Army helicopter in May. Acting on documents obtained in the raid where the helicopter was downed, Police raided a meeting in nearby Jalisco. Information from one of the suspects arrested in that meeting led to the arrest of Vargas. While Vargas' capture may very well be the death knell for La Familia, other organizations including one made up of former La Familia members displaced after the December army raids continue to operate openly in the state.

The remnants of La Familia had been fighting with another faction that had broken off to form another cartel called the Knights Templar, which like La Familia, portrays themselves as Robin Hood-esque figures protecting the people of Michoacan from the invasive designs of the police, military or rival drug gangs.

CHIHUAHUA: A CBS investigative report has discovered that an AK47-variant rifle allowed to cross the Mexican border from the USA as part of the ATF's disastrous Operation Fast & Furious was involved in the abduction and slaying of Mario Gonzalez Rodgriguez- the brother of Chihuahua's then-state attorney general Patricia Gonzalez Rodriguez. In a video filmed shortly before he was killed in 2010, Mario appears in handcuffs and flanked by masked gunmen while being forced to read a statement that his sister was working on behalf of La Linea cartel.

Police later arrested 8 members of the Sinaloa cartel, confiscated their weapons and found Gonzalez Rodriguez's body buried under a home under construction in Chihuahua.

ELSEWHERE IN CHIHUAHUA: The police chief for the embattled border city of Ciudad Juarez survived an assassination attempt on Thursday in downtown Juarez.

City officials said two men opened fire on Leyzaola and his motorcade while they patrolled La Chaveña neighborhood near downtown Juárez, an area known for crime.

Leyzaola's bodyguards returned fire and wounded one of the attackers, identified as Roberto López Valles, 24, officials said. The other attacker fled.

Authorities detained López Valles in connection with the ambush and seized a gun and a weapon's magazine at the scene.

A retired Mexican army officer, Police Chief Julian Leyzaola was sworn in as the city's police chief in March and vowed to crack down on organized crime operating in the city and purge corrupt officers from the Juarez police department.

TEXAS: Officers from the Texas Rangers and other law enforcement agencies were involved in a cross-border shootout outside the town of Abram, TX earlier this month.

The incident began about 6:30 a.m. Thursday, when U.S. Border Patrol agents spotted a Dodge Durango near the lightly populated border town of Abram, Texas, said Steve McGraw, director of the Department of Public Safety Director. He joined officials from Border Patrol and Texas Fish and Wildlife for a news conference Friday in Weslaco, roughly 250 miles south of San Antonio and just north of the river separating Mexico and the U.S.

Agents who gave chase found the truck abandoned on the banks of the Rio Grande, and a group of people on the Mexican shore unloading bundles of marijuana from rubber rafts, according to the Department of Public Safety.

Border Patrol agents say Mexican smugglers often use small, high-quality rafts to float drugs into U.S. territory, where they load them onto waiting vehicles to be taken farther north. Of late, however, smugglers wait with the rafts in American territory in case the vehicles are spotted and have to flee back to the river. There, they quickly put the drugs back onto the rafts and head back to Mexico to keep U.S. authorities from seizing the load.

The group threw rocks and shot "at least six" rounds at American agents, who responded by flooding the area with gunfire, the Department of Public Safety said. A U.S. Border Patrol boat was the first to arrive on the scene, followed by boats from Texas Parks and Wildlife and one belonging to the Texas Rangers, it said.

Authorities said they are still looking into how many Americans fired shots and what agencies they were from.

Three suspects on the Mexican side of the river were believed injured or killed, although authorities in that country were still working to confirm that. Two U.S. game wardens were treated for cuts and abrasions after being struck with rocks.

A video shot from a Department of Public Safety helicopter shows a blue raft with bundles of marijuana packed in plastic and burlap. Smoke is seen pouring from a small structure nearby, although what caused the fire is unclear.

U.S. authorities seized the Durango but found no drugs in it. They contacted authorities in Mexico, who seized about 400 pounds of marijuana on that side of the river and destroyed a raft left behind. No arrests were made.

The Texas Department of Public Safety, whose Rangers were involved in the shootout, said such an overwhelming response was standard given the United States' zero tolerance policy when guns are pointed at its authorities. Department officials previously said the Americans were under "heavy fire," but they've since backed away from that.

Delicia Lopez- Valley Monitor

ELSEWHERE IN TEXAS: Police in San Juan, TX discovered more than 1700 rounds of .50 cal BMG machine gun ammunition concealed in cases after attempting to pull over a truck driven by two illegal aliens earlier this month.

Police found more than 1,700 rounds of military-grade ammunition, commonly used by U.S. troops in Iraq and Afghanistan, during a Monday evening traffic stop.

Investigators believe the load was headed to Mexico.

San Juan police stopped the driver of a Ford F-150 pickup near the intersection of “I” Road and Business 83 about 7:30 p.m. after an officer noticed the vehicle had a broken tail light, Sgt. Rolando Garcia said.

The driver, later identified in a federal court document as 34-year-old Miguel Angel Avendano-Reyna, drove into the parking lot of an H-E-B near the area before he and his passenger tried to flee on foot, police said. But two officers at the scene, including Garcia, were able to apprehend both of them after a short pursuit.

A search of the vehicle led to the discovery of 16 boxes and a black duffle bag under the truck’s back seat, Garcia said. Each container was filled with at least 100 rounds of .50-caliber ammunition.

The suspects had apparently picked up the load from an undisclosed residence in San Juan, and they had agreed to drop it off to an unidentified person in Hidalgo County for a payment of $250, officials said.

“This is something different for us. We usually get marijuana or other narcotics, but this type of seizure is big, especially with this type of ammunition,” Garcia said. The bullets were attached to a belt used for automatic weapons. “These have had confirmed kills in the military from as far as 3 miles away and it’s very destructive. It’s a very deadly round.”

The bullets are so powerful that they will go through bullet-proof vests and even armored vehicles and tanks, Garcia said.

San Juan police teamed up with U.S. Immigration and Customs Enforcement and the Bureau of Alcohol, Tobacco, Firearms and Explosives to continue investigating, Garcia said.

Avendano-Reyna and his passenger Jose Resendez-Olivares, 37, both are illegal immigrants who previously were deported a few months ago, according to federal court documents.

Avendano-Reyna, who admitted to authorities he knowingly possessed the rounds, was deported in September, while Resendez-Olivares, who claimed he helped load the boxes but didn’t know what was in them, was removed from the U.S. in November, documents show.

CENTRAL AMERICA: El Salvador's defense minister has asserted that Mexican drug traffickers are continuing to try and acquire high-powered weaponry through police and military forces in Central America.

Mexican officials have long said the most of the guns used by the cartels are smuggled in from the United States.

But Gen. David Munguia warns that the gangs have expanded into Central America are also trying to buy weapons there.

Munguia said Tuesday "there is a real threat," just days after his army arrested two noncommissioned officers and four soldiers accused of trying to steal 1,812 grenades.

The soldiers were allegedly trying to sell the grenades to gang members and drug traffickers in neighboring Guatemala, where Mexico's Zetas cartel has been active.

Earlier this month, Salvadoran military intelligence agents arrested a junior officer who deserted in December 2010 and was attempting to sell three M-16 rifles as well as uniforms to a civilian through to be an intermediary for drug traffickers.

Reports: Acting ATF Director May Resign Over Fast & Furious Program; WaPo Covers For Obama Administration

Kenneth Melson, the acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives is expected to step down in the next couple of days in the wake of controversy and damning testimony from field agents before a Congressional oversight committee.

In the operation, straw buyers were allowed to purchase illegally large numbers of weapons, some of which ended up in the hands of cartels in Mexico.

Attorney General Eric Holder will meet Tuesday with Andrew Traver, head of the ATF field office in Chicago, about possibly becoming the agency's acting director, according to senior federal law enforcement sources, who are familiar with the details of the controversy.

The Justice Department refused comment. White House press secretary Jay Carney told reporters he had no new information on the issue.

The operation has come under intense criticism since the December killing of a U.S. Border Patrol officer.

Operation Fast and Furious was "a colossal failure of leadership," Peter Forcelli, a supervisor at the bureau's Phoenix field office, said recently.

The program focused on following people who legally bought weapons that were then transferred to criminals and destined for Mexico. But instead of intercepting the weapons when they switched hands, Operation Fast and Furious called for ATF agents to let the guns "walk" and wait for them to surface in Mexico, according to a report by the House Oversight and Government Reform Committee.

The idea was that once the weapons in Mexico were traced back to the straw purchasers, the entire arms smuggling network could be brought down. Instead, the report argues, letting the weapons slip into the wrong hands was a deadly miscalculation that resulted in preventable deaths, including that of Border Patrol Agent Brian Terry.

Terry was killed last year north of the Mexican border in Arizona after confronting bandits believed to be preying on illegal immigrants. Two weapons found near the scene of the killing were traced to Fast and Furious.

"I was flabbergasted. I couldn't believe it at first," Terry's mother, Josephine, said when she learned the ATF may have let some of the guns used in the attack slip through its fingers. Terry's relatives said they want all those involved in his killing and who helped put the weapons in their hands to be prosecuted.

"We ask that if a government official made a wrong decision, that they admit their error and take responsibility for his or her actions," Robert Heyer, Terry's cousin and family spokesman, said in a hearing last week by the House panel.

Reportedly, the Obama Administration is tapping former Chicago ATF Chicago branch head Andrew Traver to head the agency should Melson resign. Traver appeared in a misleading 2009 segment on a Chicago NBC affiliate's report on gang warfare implying that gangs were arming themselves with military style weapons purchased from retail outlets. Traver also reportedly supported Illinois Attorney General Lisa Madigan's recent efforts to make public the name of Firearms Owner Identification Card (FOID) holders to the press available on request.

The successful nomination or appointment of Andrew Traver to the head of the ATF would basically be rewarding the Department of Justice and Obama Administration for this clusterfuck known as Fast & Furious.

In what can only be described as a pathetic, flailing attempt at damage control on behalf of the Obama administration, the Washington Post began circulating reports on Tuesday evening that House Oversight Committee chair Darrell Issa had already been briefed on Fast & Furious as far back as April 2010.

At the briefing last year, bureau officials laid out for Issa and other members of Congress from both parties details of several ATF investigations, including Fast and Furious, the sources said. For that program, the briefing covered how many guns had been bought by “straw purchasers,’’ the types of guns and how much money had been spent, said one source, who spoke on the condition of anonymity because the briefing was not public.

“All of the things [Issa] has been screaming about, he was briefed on,’’ said one source familiar with the session.

Wow...so even if I were to take the WaPo's VERY convenient anonymous source at face value that there was a private briefing for members of both parties regarding Fast & Furious, according to the WaPo, they discussed the number and types of guns purchased by 'straw buyers' and how much money was spent. I wonder if THE ATF INTENTIONALLY ALLOWING THE WEAPONS TO BE FORWARDED TO MEXICAN CRIMINAL ORGANIZATIONS came up in that same briefing.....which took place when the Democrats had a supermajority in the House of Representatives and were focusing on things like 0bamacare, cap and trade or card check.

Probably not- I'd like to think that if that was explicitly mentioned to members of Congress in that aforementioned briefing the WaPo assures us took place, that members of both parties would've demanded answers and hearings into exactly what the hell the ATF was doing right then and there.

But that's just me.

BipolarNational Borderline Psychosis Update- Cartels Going For Gold? Massacre Suspect Nabbed by Mexican Military; More Mass Graves Unearthed

I'm not sure how many people still buy the notion that firearms legally purchased in the USA at Wal Mart or Cabellas are single-handedly responsible for the narco-violence down in Mexico, but a couple of stories that broke this month can effectively bury that tired and dishonest talking point.

Mexican cartels and other criminal groups have been helping themselves to weapons caches left over from the numerous civil wars in Central America in the 1980s as well as military arsenals throughout the region.

The weapons run the gamut from assault rifles to anti-tank missiles, some of which the U.S. supplied during regional conflicts more than two decades ago. The slippage from military armories occurs regularly.

The feared Mexican organized crime group known as Los Zetas has stolen weapons from military depots in Guatemala three times in recent years, Guatemalan Deputy Security Minister Mario Castaneda told an anti-narcotics conference in early April in Cancun, Mexico.

In February, U.S. prosecutors unsealed a five-count indictment against a retired army captain from El Salvador for allegedly selling or offering C-4 plastic explosives, assault rifles, grenades and blasting caps to undercover agents.

U.S. diplomatic cables obtained by WikiLeaks and passed to McClatchy Newspapers show that American envoys have repeatedly voiced concern over lax controls on military weapons depots in Guatemala and Honduras.

One cable from June 2009 carries a simple message line: "Rogue elements of Guatemalan military selling weapons to narcos."

The cable was sent after a narcotics raid on a warehouse south of Guatemala City on April 24, 2009, when agents clashed with "a number of heavily armed Zetas," leaving five agents dead. Inside the warehouse, the unit found 11 machine guns, a light antitank weapon, 563 rocket-propelled grenades, 32 hand grenades, eight landmines and abundant ammunition in crates with the seal of a Guatemalan military industrial facility.

U.S. defense analysts determined "with a high degree of confidence that many of these weapons and munitions came from Guatemalan military stocks," the cable said.

"The involvement of Guatemalan military officers in the sale of weapons to narco-traffickers raises serious concerns about the Guatemalan military's ability to secure its arms and ammunition," it added.

Moreover, it puts police tasked with confronting the cartels at a sharp disadvantage, the cable said, because they "now have to go up against weapons from Guatemala's own military."

Further piquing U.S. officials, Washington furnished some of the munitions.

That turned out to be the case in Honduras, where U.S.-supplied grenades and light anti-tank weapons turned up as far away as Ciudad Juarez, the narco-infested Mexican city on the border with Texas, and on Colombia's San Andres Island, an entry point for weapons going to drug-trafficking guerrillas

According to State Department documents, Mexico accounted for $177 million in sales of American-made weapons in 2009- exceeding Iraq or Afghanistan. Many of these sales were tracked by the state department as 'Direct Commercial sales' to the Mexican government.

To make things even more interesting, narco-watchdog blog Borderland Beat points out that the sale, storage and transportation of legally purchased firearms in Mexico is monopolized by the SEDENA- Mexico's Secretariat for National Defense. Yet despite this apparent monopoly, a substantial number of M-16 style rifles ordered from America in transactions brokered by Mexico's SEDENA and supposedly destined for state and municipal police agencies in Mexico simply 'disappear' only to turn up later at crime scenes in Mexico.

This, of course, is in addition to the privately purchased firearms on the US side of the border that the ATF had intentionally allowed to be illegally exported to Mexico by smugglers and straw purchasers. As far back as 2009, equipment from US Government inventory ranging from MRE's and night vision equipment to automatic rifles and jet engine parts were reported missing and turned up in places as far afield as Ciudad Juarez, Colombia and Iran.

Always looking for additional sources of revenue, Mexico's cartels have reportedly set their sights on that nations vast mineral deposits and the domestic and foreign mining companies tasked with unearthing those deposits.

As international metals prices surge, gunmen are attacking workers to steal valuable ores and equipment at often remote mining sites that have fallen under the gaze of drug gangs extending their reach into new criminal rackets.

Canadian miner Torex Gold Resources Inc halted drilling at its exploration property in the western state of Guerrero last month after assailants stole trucks. Mexican authorities blamed a drug cartel for illegally extracting iron ore at another site and exporting it to China.

Mexico is the 2nd largest producer of silver in the world and also has substantial deposits of gold, copper, iron ore, zinc and lead. Entering Friday morning, silver was trading at over $48 an ounce while gold was trading at record highs of $1534 an ounce.

Aside from Torex [TSX: TXG], International mining companies like New Gold [TSX: NGD] or Ternium [NYSE: TX] have operations in troubled areas like Michoacan, Guerrero or Durango.

Steel producers say they lost $240 million to thefts in 2010 and have seen the pace of robberies double so far this year, according to a Mexican industry association.

"They are robbing from companies' (iron ore) deposits or they are taking over the deposits completely," said Raul Gutierrez, head of the national steel chamber. "It makes it impossible to work there."

The wave of thefts has spilled out of an escalating drug war in Mexico, which pits an increasingly stretched military against brutal gangs warring over smuggling routes to the United States and other lucrative illicit businesses.

Deteriorating security is a mounting concern for investors, industry surveys show.

The lawlessness led to a slip in Mexico's ranking in the Fraser Institute's annual study of the top global mining destinations. Some 39 percent of companies surveyed this year counted violence as a "strong deterrent" for investment, versus 33 percent in Colombia, where a U.S.-backed offensive has in recent years quelled a cocaine-funded guerrilla conflict.

Iron ore mines in Mexico's western state of Michoacan have been besieged by the powerful La Familia (The Family) drug cartel that operates in large swathes of the state, extorting businesses and illegally mining material for export.

A captured money launderer belonging to La Familia confessed to exporting 1.1 million tones of iron ore last year to China through three established companies in Mexico, netting $42 million, according to the attorney general's office.

Companies are being forced to hire more guards or change the way they transport goods, with some shipping valuable metals by air instead of on dangerous highways.

"We spent 20 percent more on security last year," said Armando Ortega, vice president for Latin America at New Gold Inc, which owns the Cerro San Pedro gold mine in San Luis Potosi state. "There are miners that have suffered robberies of gold-silver dore bars or concentrates. The high prices make gold an attractive target for organized crime.

I was made tangentially aware of the various cartels interest in mining last year after investigators said a deadly car bombing in Juarez used the water gel based explosive Tovex, a popular replacement for dynamite with mining companies.

I've also been entertaining another theory regarding the cartels and mining. Aside from their lucrative drug smuggling and human trafficking activities, groups like La Familia Michoacana also reportedly engage in the extortion of already-existing businesses in territory they control, so who's to say this wouldn't include extortion against the various mining companies for continuing to operate in what the cartels consider 'their' territory?

Also, even though they would be making money hand over fist from both their criminal pursuits and their newfound interest in metallurgy, I'm wondering if stock manipulation of the various publicly-traded mining companies could be another source of revenue for them.

Think about it- how difficult would it be for the cartels to round up some hired guns to attack the miners, destroy equipment, rob the mines of concentrated ore, bullion or dore bars or cut off power and water to some of the more isolated facilities? And basically keep it up until the feasibility of operating that mine is in doubt? Even if they fail in closing down the mines outright, the cost of stepped up security precautions would eat into that company's profit margin pretty quickly, and by extension, their share price (at least if they're heavily invested in Mexico).

Shares of Torex slid in March when the company announced that it was temporarily suspending operations after company employees were attacked and company vehicles were robbed in Morelos. Since then, shares of the company on the Toronto Stock Exchange have levelled off as Torex resumed operations amid stepped-up security.

Exit question (however hypothetical): Who's to say that somebody with inside knowledge of the activities directed against the mining companies wasn't buying up shares when they were plummeting in value and will sell them once production resumes and the share prices bounce back?

TEXAS: Police in the border town of Brownsville are trying to determine who set up an IED along a stretch of US Highway 77 over the weekend. A passing motorist noticed the device and called police on Sunday afternoon. Authorities shut down the southbound lane of the highway for just under two hours while searching the area for any additional devices and disarmed the device using a remote controlled robot.

NEW MEXICO: A small aircraft believed to be smuggling narcotics crashed into Heron Lake, NM on Sunday morning. Aside from the pilot, there was no indication of whether or not there was anybody else on board due to the plane sinking to depths greater than 100 feet. However, within hours of police and searchers arriving, small packages of cocaine started to make their way to the surface.

The lake is located in a state park in Rio Arriba County, NM which abuts the Colorado state line.

ARIZONA: An Arizona gun dealer reportedly approached the ATF with concerns that firearms from his store were being funneled to criminals through straw purchasers. A Congressional investigation into the ATF's ill-advised 'Operation Fast & Furious' shows that agents encouraged him to continue the sales, despite the red flags raised.

The investigation into a federal operation that allowed Mexican drug cartels to acquire U.S. weapons escalated Thursday with new revelations that an Arizona gun dealer repeatedly expressed fears that his guns were falling into the "hands of the bad guys" but was encouraged by federal agents to continue the sales.

A series of emails released by congressional investigators showed that the Bureau of Alcohol, Tobacco, Firearms and Explosives encouraged the gun dealer against his better judgment to sell high-powered weapons to buyers he believed were agents for the drug cartels.

Employees of the dealer videotaped gun buyers — suspected "straw purchasers" who could legally buy the guns, though cartel members could not — exchanging money with other individuals on the dealer's premises.

In an eerie case of premonition, the gun dealer expressed fears that the guns he was selling could be used against U.S. border agents.

"I wanted to make sure that none of the firearms that were sold per our conversation with you and various ATF agents could or would ever end up south of the border or in the hands of the bad guys," the dealer, who has not been named, wrote in June 2010 to David Voth, the lead ATF case agent in Phoenix. "I want to help ATF with its investigation but not at the risk of agents' safety, because I have some very close friends that are U.S. Border Patrol agents in southern AZ."

Three guns sold to suspects who were part of Project Gunrunner have since turned up at the scenes of the deaths of two U.S. agents — in the Mexican state of San Luis Potosi and near the Mexican border in Arizona.

"Not only were the ATF agents who later blew the whistle [on the investigation] predicting that this operation would end in tragedy, so were the gun dealers — even as ATF urged them to make the sales," Sen. Charles E. Grassley (R-Iowa), ranking member of the Senate Judiciary Committee, said in a letter with the new emails to Atty. Gen. Eric H. Holder Jr.

The Justice Department in its only official response to the congressional inquiry denied that the ATF "sanctioned" or "otherwise knowingly allowed" the sale of assault weapons to straw purchasers, who then transported them to Mexico.

The new emails suggest that the Arizona gun dealer was seeking assurances from the ATF and the U.S. attorney's office that the company would not be held responsible if someone got hurt with guns that ended up in the hands of gunrunners.

Voth, the ATF agent, wrote to the dealer: "I understand that the frequency with which some individuals under investigation by our office have been purchasing firearms from your business has caused concerns for you. … However, if it helps put you at ease we (ATF) are continually monitoring these suspects using a variety of investigative techniques which I cannot go into [in] detail."

News reports in June 2010 that guns purchased in the U.S. were being found at Mexican crime scenes prompted the dealer to again express concerns.

"I shared my concerns with you guys that I wanted to make sure that none of the firearms that were sold per our conversation with you and various ATF agents could or would ever end up south of the border or in the hands of the bad guys," the dealer wrote, adding that the reports are "disturbing."

On "one or two" occasions when the dealer's employees videotaped a suspected straw purchaser exchanging money with another person, the ATF urged that the sale go forward, but the employees refused, Grassley said in his letter.

"In light of this new evidence, the Justice Department's claim that the ATF never knowingly sanctioned or allowed the sale of assault weapons to straw purchasers is simply not credible," Grassley wrote.

Congressman Darrel Issa (R- CA49), House Committee on Oversight and Government Reform Chairman has threatened ATF and Justice Department officials with contempt proceedings for not replying to subpoenas issued at the end of March.

ELSEWHERE IN ARIZONA: An Arizona Sheriff has alleged this month that the US Border Patrol is acting under a 'No Apprehension' policy in the Tuscon sector.

Cochise County Sherriff Larry Dever said that he had received hundreds of supportive e-mails from active and retired former Border Patrol agents confirming the policy, apparently implemented at times to keep apprehension number artificially low. Homeland Security secretary Janet Naploitano had recently cited lower border apprehension as proof the border was more secure under her watch.

“This is nothing new, during my career with the border patrol, this was done regularly,” said another email to Dever reviewed by FoxNews.com.

“By assigning agents to different tasks, locations, etc., the apprehensions can be increased or decreased dramatically,” wrote Dan McCaskill Jr., a retired Border Patrol agent who worked in the Anti-Smuggling Unit.

McCaskill went on to describe how, he said, apprehension numbers were regularly
manipulated to achieve various budget, equipment or manpower goals.

A second Arizona Sheriff, Pinal County Sheriff Paul Babeau, had also testified before a
Senate Homeland Security Committee in support of Dever's claims.

The Tucson local of the National Border Patrol Council union also came out in support of Dever, and posted this message on their website after the FoxNews.com report.

“Sheriff Dever is right. We have seen so many slick shenanigans pulled in regards to 'got-aways' and entry numbers that at times it seems David Copperfield is running the Border Patrol. Creating the illusion that all is well and you can start having family picnics in the areas where we work has been going on far too long. Has there been improvement in some areas? Absolutely. Is the border anywhere near 'under control'? Absolutely not. Do some in management play games with numbers and cater to the wishes of politicians like Janet Napolitano and David Aguilar? Resoundingly, yes. Time for the foolish political games to stop.”

Instead of apprehending illegal border crossers, agents are reportedly advised from on high to 'TBS' (or 'Turn Back South') any illegal border crossers they detect, despite the same people attempting to cross as soon as 10 minutes later.

AUSTRALIA: A report from Australia's leading criminal intelligence body issued earlier this month has indicated that Mexican cartels are gaining a foothold Down Under.

The Australian Crime Commission report suggested that the Mexican cartels could account for as much as 50% of the cocaine imported to Australia and expressed concerns that the drug traffickers could resort to the same violent and brutal tactics used in Mexico to try and expand their influence.

Bordered by nothing but coastline and with cocaine fetching a higher price than in the USA (US$ 200 an ounce vs as little as US$30 an ounce in the USA), Australia is considered a lucrative growing market by the cartels. To that end, some organizations like the Sinaloa cartel have partnered with Australian branches of the 'Ndrangheta (Calabrian mafia) in Sydney and Melbourne to aid in smuggling, distribution and sales.

GUATEMALA: Police in Guatemala this week have arrested a suspected drug trafficker nicknamed 'The Patriarch' with suspected ties to the Sinaloa cartel.

71 year old Waldemar Lorenzana was arrested by local police and DEA agents outside of Guatemala City, although his three sons- all thought to be active in drug trafficking- are said to be still at large.

Lorenzana had been sought by the DEA since 2009 and a $500,000 reward was offered for information leading to his capture. The State Department is likely to request 'The Patriarch's' extradition to the USA.

Mexican cartels have stepped up recent efforts to set up shop in Central America where law enforcement is even less reliable. Los Zetas has reportedly successfully recruited members of the Kabiles special operations forces from Guatemala's military.

TAMAULIPAS: Forensic experts and Mexican soldiers are sifting through mass graves in northern Mexico, a month after armed men set up roadblocks and boarded buses travelling along National Highway 101 along the Gulf coast of Tamaulipas for the last several months, pulling off mostly young men. The abductions and carnage had left the normally busy highway in the norteastern corner of Mexico virtually deserted during the week before Easter when many American living across the border in Texas would be vacationing or visiting relatives.

So far, authorities have pulled 177 bodies out from mass graves outside of San Fernando- not far from where 72 migrants were massacred at a isolated ranch last summer. More disturbingly, hardly any of the bodies examined have shown indications that the victims were shot. Instead, Mexican investigators say it appears as though most of the victims were killed by blunt-force trauma and a sledgehammer was found at the crime scene.

The territory in which the slayings took place is being fought over by the Zetas and one theory is that the one of the cartels abducted bus passengers and attempted to press them into service as drug mules of sicarros (low-level gunmen), murdering those who refused.

Mexico's Navy issued a statement saying they had captured the suspected mastermind of the massacres of the immigrants in San Fernando as well as the more recent abductions from intercity buses earlier this month.

Omar Martin Estradad flanked by Mexican Marines- Marco Ugarte/AP Photo

34 year old Martin Omar Estrada Luna is thought to be the head of a northern Mexico branch of Los Zetas. Luna, aka 'El Kilo' grew up on the American side of the border in the Yakima Valley region of Washington state. Authorities in Tieton, WA remember Luna as a dropout who racked up a juevenile record before moving on adult felony charges of burglary and drug dealing. Luna was reportedly last deported in 2009, but those who knew him from his time in Tieton question whether or not he was competent enough to have risen through the hierarchy of one of the world's most notorious and ruthless criminal organizations so quickly.

Other members of a San Fernando based Zetas cell were detained by Mexican Marines and paraded before the media last weekend as well. In addition, at least 17 members of San Fernando's municipal police department were detained and charged by Mexico's federal attourney general's office for charges of protecting Luna and other Zetas, covering up the kindappings and in some instances directly participating in the murders.

ELSEWHERE IN TAMAULIPAS: Mexican soldiers reportedly acting on a tip freed at least 52 migrants from Central America who were being held captive in the border city of Reynosa. The cartels and other Mexican gangs will sometimes adbuct migrants heading to the USA transiting through Mexico and demand ransom from their families in America or the country of origin.

-A convoy of gunmen in SUVs went on a rampage last week in the border town or Miguel Aleman, opening fire on the Tamaulipas State Police and local transit police headquarters and torching them before being driven out of the town in a running firefight with the Mexican Army. One civilian and an unpecified number of gunmen were killed in the attack according to local police.

According to the 8th Military Zone in Reynosa, the Zetas also attacked a military patrol along the Riberena highway prior to the attack in Miguel Aleman which prompted the mobilization of army troops toward the area.

Also prior to the arrival of the military, when Zetas arrived in town, they began shooting at the law enforcement headquarters and shot at the buildings and patrol cars as well as causing other damage, the Mexican law enforcement official stated.

The group then went around town shooting at and setting fire to a number of high-profile buildings along the city’s main avenue, including the Ford and Nissan dealerships, an Auto Zone store, a Stripes convenience store, a large furniture store and a used car lot.

During the rampage, one employee of the local Coca-Cola Co. bottling plant was killed as he drove to work. His name was not released pending notification of next of kin, the law enforcement official said. When military forces arrived toward the end of the rampage, a shootout ensued that left several gunmen dead on the street.

On Thursday, the Mexican Army was involved in a 3-way shootout when a patrol was resonding to sounds of gunfire from a shootout between gunmen from the Zetas and Gulf cartel. The shootout, involving Gulf and Zetas enforcers wearing body armour and travelling in a SUV, began in the early morning hours of the middle of the farming town of Arbacuz with six dead gunmen and an unknown number in custody.

DURANGO: In the northwestern corner of Mexico, Federal police and soldiers are exhuming another series of mass graves in the capital city of Durango (which happens to be named Durango). 87 bodies were pulled from a grave under a repair shop while 17 other decomposing bodies were found at a nearby hacienda.

GUERRERO: Four women and a teenage girl were found stripped, bound and with their throats slit in the popular resort city of Acapulco. Two of the bodies were discovered in a beauty salon located adjacent to an area known for drug dealing and prostitution while another body was discovered in a parked car and the 4th body was dumped in a street behind a church.

Investigators have not ruled out a possible connection with organized crime and prostitution in the murders. Some brothels or massage parlors in that part of the country sometimes operate under the guise of beauty salons.

[hat tip- Friends of Ours; Borderland Beat]