Drug Underworld – Money Laundering: DEA World’s Most Wanted Kingpin’s Daughter Headed to Federal Prison

America’s most wanted drug lord Ruben Osegura Cervantes AKA “El Mencho,” is known in the drug underworld as the kingpin of a global trafficking organization. A Mexico native, El Mencho has eluded the U.S. Federal Government capture for several years. But his solemn-faced, attractive, sweetheart daughter was recently caught and sent to federal prison for 2 1/2 years for laundering tons of money into her father’s Mexico-based businesses under the Kingpin Act. Federal government designated the drug lord’s businesses as an operation to wash dirty money earned illegally from the narcotic underworld.

Oseguera-Cervantes, drug underworld kingpin. DEA photo
Oseguera-Cervantes. DEA photo

The young lady sentenced was a prize catch for the powerful feds: Her name is Jessica Oseguera Gonzalez, the daughter of the (already stated), notorious Ruben El Mencho Osegura Cervantes. El Mencho is also wanted in Mexico for a string of narcotic charges including a laundry list of violent crimes and murders.

Gonazalez, a 34-year-old mother with dual U.S. citizenship was born in California but she also lives in Guadalajara Mexico. Each year, according to the U.S. Treasury Department, at least $300 billion in dirty money is laundered in America alone, with approximately one-third of that amount related to illegal narcotics proceeds traced back to the Colombian and Mexican cartels.

The federal government has tracked and recovered billions of dollars around the world belonging to Mexico’s drug cartels. For instance, in 2014, over 1000 L.A. California and Beverly Hills police officers and federal agents busted a massive money laundering ring operated by El Chapo’s Sinaloa cartel through QT Fashion INC.

Of 90 million seized, $70 million was in cash and the Drug Enforcement Agents (DEA) assisted by ICE authorities arrested nine people.

Cartels and groups of street-level drug dealers have been known to launder their proceeds from the drug trade into exclusive clubs, trucking companies, washaterias, horses, auto detail shops, rental properties, car lots, clothing shops, etc. Bigger cartel organizations usually have the clout to invest their narco money into shell companies, large trade-based businesses, cessna jets, airplanes, boats, marinas and islands.

El Mencho, Jessica Gonzalez’s father, is the head of the “Cartel Jalisco Nueva Generacion”(CJNG). CJNG is a drug empire that’s been targeted along with the Sinaloa Cartel for shipping the bulk of illegal narcotics (meth, cocaine, heroin. fentanyl and marijuana) into the United States. (And in most cases the drug’s extra potency is deadly for users).

The unending battle between U.S. DEA and Mexican drug cartels, specifically in the area of Guadalajara was recently featured in the Netflix series “Narcos Mexico.” Narcos Mexico tells the exclusive, hard-hitting story of deceased DEA agent Enrique “Kiki” Camerena. Cartels kidnapped, tortured and murdered Camerena in 1985.

The U.S. government is offering a $10 million bounty for information leading to the capture of the billionaire gangster El Mencho.

Judge Beryl A. Howell. Public Domain photo.
Judge Beryl A. Howell. Public Domain photo.

Known in the drug world as “La Negra,” Jessica Oseguera Gonzalez had desperately tried to sway Chief federal judge Beryl A. Howell in Washington D.C., to free her since she’s served 15 months in jail already, so she could return home to her daughter, age 5, and her older son at their family home in Guadalajara, Mexico.

Judge Howell sentenced Jessica Gonzalez to 30 months in federal prison on June 11, 2021, for her money laundering schemes with time credited that Gonzalez served in jail beginning when she was arrested. Prosecutors sought to convince Judge Howell to punish Gonzalez with a prison sentence of four years and three months, arguing the money laundering Gonzalez lied about including the extent of her involvement with her father’s drug empire, Cartel Jalisco Nueva Generación.

Bill Bodner, Special Agent in Charge of the Drug Enforcement Administration's (DEA), Los Angeles Field Division. Official photo.
Bill Bodner, Special Agent in Charge of the Drug Enforcement Administration’s (DEA), Los Angeles Field Division. Official photo.

“The Kingpin Act is a critically important tool in the U.S. government’s unrelenting efforts to target foreign drug cartels that seek to flood American streets with illegal drugs,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “This sentence shows that violating the Treasury Department’s sanctions of businesses and persons tied to foreign drug cartels will not go unpunished,” McQuaid concluded.

“Today’s sentencing of a prominent individual who willfully violated the Kingpin Act to engage in criminal transactions that facilitated the CJNG organization shows our unwavering commitment to bring to justice those who disregard the law and threaten public safety,” stated Special Agent in Charge Bill Bodner of the Drug Enforcement Administration’s(DEA), Los Angeles Field Division.

Indictment

On February 13, 2020, a Washington D.C. Federal Grand Jury returned an indictment against Jessica Gonzalez, charging her with five counts of violating the Kingpin Act by engaging in transactions or dealings with properties of a designated foreign person, in violation of Title 21, U.S. Code, Sections 1904(c)(1).

In 2015, El Mencho’s son, Ruben Oseguera Gonzalez AKA El Menchito (a variation of his father’s nickname) was arrested in Guadalajara along with his sister (Jessicia’s) husband identified as Julio Alberto Rodriguez Castillo. Although both Ruben Jr. and Castillo were suddenly released the men were rearrested within a year. Rumors indicate Jessicia’s husband remains behind bars in Mexico, while her brother was extradited to the U.S. in February 2020 to face drug trafficking charges. Concerned about her brother, Jessicia Gonzalez flew to Washington to visit him. Once she entered the federal courthouse property she was quickly taken into custody on the federal warrant by DEA agents and U.S. Marshals.

“These charges are false, and we are certain a jury will quickly exonerate Jessicia,” her attorney, Steven McCool, said at the time, to NBC News.

Would the accused woman act bold and defiant and fight the government – tooth, nail and claw?

Realizing the stakes in America were far too high if she lost during a jury trial, Jessica Gonzalez pleaded guilty this past March to violating the Kingpin Act for her participation in businesses linked to her father, Ruben “El Mencho” Cervantes. The federal government classified Cervantes an official Kingpin by the U.S. Treasury Department in 2015. Gonzalez’s money laundering crimes consisted of funneling funds and helping to manage or promote the following businesses:

  • Mizu Sushi Lounge
  • J&P Advertising
  • Las Flores Cabana
  • Tequila Onze Black ( Tequila Label)
  • Operado Los Famosus ( Doing Business as Kenzo Sushi)

CJNG has an estimated 5,000 members and these criminals have taken the word “violent” to new levels. They are downright bizarre and eerily frightening.

The group carry out video recorded decapitations, kidnappings, burying people in mass graves, kidnappings, with recordings of dipping victims in tubs of pure acid etc.

CJNG are known to use TikTok to video themselves killing helpless victims. On the lighter side, CJNG also uses social media to recruit new members. Prosecutors accused Jessicia Gonzalez of lying to the probation officer who prepared a pre-sentencing report on Gonzalez’s legal and social background to the judge, prior to Gonzalez’s sentencing date.

Investigators and prosecutors claimed evidence showed she helped provide bookkeeping services for the “ruthless and violent” Cartel at the direction of her fugitive father, according to a federal sentence report as well as news media outlets. Investigators alleged that Gonzalez’s father, El Mencho, age 54, ordered her to manage Las Flores Cabanas, a resort located in the plush mountains of Tapalpa, a city in the Western state of Jalisco. Jalisco is the headquarters for the ruthless CJNG trafficking organization.

The witness-informant told investigators El Mencho met with his daughter at the Las Flores resort in 2011 and told her to review drug accounting ledgers “so that she could confront a cartel member suspected of ripping off the cartel’s money,” prosecutors allege in court documents.

Gonzalez denied the story, insisting she hadn’t seen her infamous drug boss father since she was 11 in 1996 – after El Mencho left her mother due to deportation. El Mencho had been deported three times and had served over four years in prison for selling heroin to two undercover police officers at Imperial Bar in San Francisco.

jessica oseguera gonzalez. DEA photo.
Jessica Oseguera Gonzalez. DEA photo.

DEA-FBI Manhunt for Drug Kingpin Ruben “El Mencho” Cervantes

DEA agents, Mexican military and Mexico Federal police have been searching for Kingpin El Mencho since 2011. A Hot lead finally surfaced when a state trooper and a DEA intelligence analyst based in Gulfport, Mississippi, discovered the drug lord’s hideout in 2012. The investigators hurriedly relayed the information to Mexican military officials.

On August 25, 2012, five Blackhawks and one Mi-17 helicopter headed to the cartel’s compound in Tonaya, Jalisco, a five-hour drive southeast of Puerto Vallarta. El Mencho ordered his men to stay behind and shoot it out with the police and military, so that he and his son, Ruben Oseguera Jr. aka Menchito, could escape out the back side, DEA sources allege. As hails of bullets flew in different directions, four of El Mencho’s bodyguards were killed and three military soldiers were injured.

In a memorandum presented during Jessica Gonzalez’ sentencing hearing, her attorney Steven J. McCool told the court, “Ms Gonzalez admits that the entities she associated with were designated for supporting drug trafficking and specifically the CJNG.” But, McCool added, “Ms Gonzalez does not accept the claim that she met with her father.”

The DEA and Justice Department published a drug trafficking network organizational chart which displayed photos of Gonzales’s father EL Mencho and her uncle at the top. Gonzalez’s mother’s brother was identified as Gonzalez Valencia, known as the leader of the Los Cuinis Cartel (CJNG’s) financial arm. Nicknamed the “Boss,” Mexican police arrested Gonzalez Valencia in 2015. Grand juries indicted Valencia and El Mencho on international drug trafficking charges in 2018. More drug-related charges were filed against El Mencho in 2020.

Two years ago the Courier Journal newspaper in Louisville Kentucky published a special investigative report on El Mencho’s power-based dope connections into small-town America. The Courier identified 35 states where El Mencho’s group distributed illegal narcotics which included places like Kentucky, Tennessee, Kansas, Iowa and Massachusetts. Unable to capture El Mencho, Jessica’s Gonzalez’s father, agents targeted Gonzalez, her attorney argued in a motion alleging “vindictive prosecution.”

News media outlets reported that during the past two decades, over 2000 players in the dope game including businesses have been hammered with civil sanctions under the Kingpin Act. Extremely large fines were handed down including valuable assets that were frozen, the U.S. Treasury Department reported in their annual updates. Investigators said since El Mencho’s daughter Jessica Gonzalez was born in California and is a dual citizen that the law allowed the government to charge her with violating the Kingpin Act. American citizens are prohibited to associate or even do business with commercial businesses blacklisted by the U.S. Treasury Department.

Federal prosecutors argued to the judge that Gonzalez knew she was in the wrong because she spent years trying to avoid Kingpin Act sanctions. The feds said Gonzalez knew she was violating the law because she spent years desperately trying to avoid the Kingpin Act sanctions filed against the businesses that she operated for her fugitive father El Mencho.

mexico map
Map of Mexico

How Do Narcotic Dealers and Cartel Organizations Launder Drug Money?

Money laundering consists of a sophisticated crime ingeniously executed by criminals, terrorists, drug dealers and launderers across the globe. In plain words, money laundering involves the unique process of converting illegal proceeds into “clean money,” that is untraceable back to the original source. It is estimated that 2-5 percent of the global GDP, or U.S. $2 trillion is laundered into the financial system each year around the world. For example, Saudi Arabia’s estimated nominal GDP (Gross Domestic Product) is approximately U.S. 748 billion in 2018, ranking the country at 19 in the world. With a deep focus on combating money laundering the governments implemented policies to identify and arrest the heaviest-hitters in the money laundering game.

Aside from being a financial crime, money laundering is also associated with crimes involving human trafficking, prostitution, white collar crimes, investments, bank accounts, securities, stock, gold, and other legal capital.

The primary reason criminals, drug dealers and terrorist groups need to launder their earned illegal cash is to legitimize the cash prior to distributing the money into the financial system as legal currency.

Money Laundering Techniques

Money laundering has different techniques/ methods. Law enforcement experts have said the most common are placement, layering, and integration. If a person deposits at least $10,000, banks must file a report under the Bank Secrecy Act.

To avoid the alarm, criminals will launder their illicit funds in different ways.

Breakdown of Money Laundering Schemes

Placement

Placement is the initial stage where the drug dealers will introduce the illegal funds or financial assets earned from their activities into a legalized financial institution. There are different techniques undertaken to carry out the scheme such as smurfing, using shell companies, trade-based money laundering or bulk-cash smuggling.

Layering

This is the second stage where layering is to reduce the amount of bulk cash and split the funds into smaller transactions that are transferable to different jurisdictions. The layering/structuring stage is meant to convert the illegal money into numerous complex transactions designed to prevent law enforcement from tracking the source of income.

There are different techniques of layering such as virtual transfer of funds also known as a wire transfer by transferring funds to an offshore account, which is an account held in an offshore bank account.

The layering of illegal funds can also involve a Walking Account whereby funds are supposed to be transferred through several layers of different accounts like Shell Corporations.

Integration

The final stage of laundering money is integration whereby the funds can now become a part of the financial system which means the laundered money can be finally integrated back into the economy as “legal funds.”

This is possible when the funds have been broken down into smaller transactions and the original source converts from illegal to eligible for use.

The stage of integration allows the drug dealers to use their laundered money as their legal income. They can redeem these funds through the purchase of luxury assets, goods or properties, which may not attract much attention or seem suspicious.

Public Record Photo: ICE Recover Millions From Drug Cartel: Source ICE
Public Record Photo: ICE Recover Millions From Drug Cartel: Source ICE

How Jessica Gonzalez Helped her Fugitive Kingpin Father El Mencho Launder Drug Money into Restaurants

Restaurants involved in money laundering are legitimate businesses with cash-flow profits. “Buying a restaurant that’s already in operation would be the easiest way (to launder drug money) because it already has employees,” says Professor Kerry Myers. Myers specializes in forensic accounting and money laundering at the University of South Florida. An expert in accounting, Myers worked money laundering cases with the FBI for 25 years. Myers said in most cases the employees usually don’t know what’s going on.

Drug Underworld Secrecy

“If I’m a drug kingpin the last thing I would want is one of the waitresses (or any employee) having any idea what I’m doing,” Myers explained. Experts say if a restaurant is popular among customers the status can be a smokescreen for money laundering. “You don’t want to pick a front company,” Myers further said. “If I’m going to launder money – I would want a business where – if the FBI or IRS stops by – there are lots of customers coming and going. That way, the revenues are justified by the clientele.” Investigators in Jessica Gonzalez’s case where drug money was laundered into Gonzalez’s popular Mizu Sushi restaurant in Puerto Vallarta, say Mizu Sushi was a perfect place to funnel drug money into. Mizu Sushi represented the finest of restaurants. Customers dined in exquisite style on deep-fried sushi rolls while sipping ice cold sangri. Guests celebrating parties posted the events on Facebook and Instagram.

Mizu Sushi’s five-star restaurant was a place to hang out and enjoy life to its fullest until the U.S. government came knocking.

The goal of the criminal is to open legitimate bank accounts to transfer illegal proceeds and a restaurant are a good start.

Money Laundering in Action

“Let’s say I’m with a Mexican drug cartel,” Professor Myers explains. “I have a lot of money from selling cocaine. So I want to take the cash from that illegal activity and turn it into clean money. So, I buy a restaurant. Every day, I collect my restaurant receipts to take to the bank and make a daily deposit. But I also take a major portion of my drug proceeds and mix it in with my restaurant proceeds. Then, I make the deposit. Because you would expect a restaurant to have all that cash on hand. It looks like sales of food and alcohol.”

In April 2015 – the Office of Foreign Assets Control(OFAC) sanctioned the CJNG and Los Cuinis, specifically labeling Gonzalez’s father, El Mencho, and her uncle Abigael Gonzalez Valencia, as foreign narcotic traffickers under the U.S. Kingpin Act. Next, according to Vice.com, the OFAC hand-delivered and mailed numerous notifications about the sanctions to relatives of Jessica Gonzalez, as well sending notification to a California address that she listed on her passport request, including emails associated with her businesses.

Determined to stay in the game, Jessica Gonzalez kept rolling.

Jessica Gonzalez Tries to Avoid U.S.Government Sanctions Targeting Her Mexico Businesses

Making attempts to evade the sanctions filed against her drug money businesses, Gonzalez dissolved the J&P Advertising Company and the Tequila liquor brand was temporarily inoperable. Then Gonzalez got closer to the fire when she abruptly changed the name of the cabin business from Las Flores Cabana to Cabanas La Loma, and she changed the name of the restaurant from Mizu Sushi to Kenzo Sushi. Thinking she could outsmart the Federal government, Gonzalez gave ownership of the Sushi restaurant to the chefs on paper, but, according to the sentencing memorandum, Gonzalez “continued to maintain control.” In another surprise move the federal government even sanctioned the chefs!

Federal Correctional Institute(FCI) in California where Jessica Gonzalez will serve her prison term. photo by Jesstess87, CC BY-SA 4.0, via Wikimedia Commons
Federal Correctional Institute(FCI) in California where Jessica Gonzalez will serve her prison term. photo by Jesstess87, CC BY-SA 4.0, via Wikimedia Commons

Punishment

Jessica Gonzalez returned to federal jail lockup to await transfer to prison. Gonzalez’s punishment was a blessing in disguise, she got off light, because the charges she faced carried up to 20 long years behind bars. Judge Howell slapped Gonzalez with a hefty fine of $20,500. In a sorrowful letter, Gonzalez asked the judge to be reunited with her children. She lamented: “It has been a year and three months of learning, pain, anguish, analyzing what is good and what is not, and allowing myself to start over and live in peace,” Gonzalez wrote. “I have had time to think about my actions, and I understand what I did was wrong. I ask for forgiveness – and I know, without hesitation, that I will never make the same mistakes again.”

With millions and millions and billions of dollars in the illegal drug trade only time will time if Jessicia Gonzalez can avoid the temptation of falling prey to the alluring smell of cold, hard, green cash, that can be made from her fugitive father’s drug underworld money-laundering operation, once she’s released from prison, which should be soon.

Newsblaze Criminal Justice-Drug-Trafficking Reporter Clarence Walker, can be reached at: [email protected]

As an analyst and researcher for the PI industry and a business consultant, Clarence Walker is a veteran writer, crime reporter and investigative journalist. He began his writing career with New York-based True Crime Magazines in Houston Texas in 1983, publishing more than 300 feature stories. He wrote for the Houston Chronicle (This Week Neighborhood News and Op-Eds) including freelancing for Houston Forward Times.

Working as a paralegal for a reputable law firm, he wrote for National Law Journal, a publication devoted to legal issues and major court decisions. As a journalist writing for internet publishers, Walker’s work can be found at American Mafia.com, Gangster Inc., Drug War Chronicle, Drug War101 and Alternet.

His latest expansion is to News Break.News Break avatar

Six of Walker’s crime articles were re-published into a paperback series published by Pinnacle Books. One book titled: Crimes Of The Rich And Famous, edited by Rose Mandelsburg, garnered considerable favorable ratings. Gale Publisher also re-published a story into its paperback series that he wrote about the Mob: Is the Mafia Still a Force in America?

Meanwhile this dedicated journalist wrote criminal justice issues and crime pieces for John Walsh’s America’s Most Wanted Crime Magazine, a companion to Walsh blockbuster AMW show. If not working PI cases and providing business intelligence to business owners, Walker operates a writing service for clients, then serves as a crime historian guest for the Houston-based Channel 11TV show called the “Cold Case Murder Series” hosted by reporter Jeff McShan.

At NewsBlaze, Clarence Walker expands his writing abilities to include politics, human interest and world events.

Clarence Walker can be reached at: [email protected]