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Cousin of Chinese-Mexican meth kingpin sentenced to 25 years in jail

August 1, 2014
Alleged meth kingpin Zhenli Ye Gon remains in custody in the US fighting extradition to Mexico.

Alleged meth kingpin Zhenli Ye Gon remains in custody in the U.S. fighting extradition to Mexico.

A Mexican federal court has sentenced Ye Yong Ping, the cousin of alleged drug kingpin Zhenli Ye Gon, to 25 years of imprisonment for money laundering and manufacturing methamphetamine.

Yong Ping was found guilty of producing of ephedrine, pseudoephedrine, ephedrine acetate and n-acetylmethamphetamine, precursor drugs used to manufacture methamphetamine – or crystal meth as it is more commonly known – at a laboratory in Toluca, Mexico State. He was also convicted of money laundering after it was proven that he was a partner in a business founded with illicit funds in Toluca.

The court acquitted co-defendant Fu Huaxin because of insufficient evidence that he was involved in the criminal enterprise allegedly run by Yong Ping’s infamous cousin, Zhelin Ye Gon. Yet the conviction of Yong Ping is the latest of several recent blows against Ye Gon and his associates.

In July a federal court upheld a prison sentence against his wife, Tomoiyi Marx Yu, who was convicted last year of organized crime and possession of military-grade firearms and ammunition. The charges dated back seven years to when Marx Yu was arrested at the luxury home she shared with Ye Gon in Mexico City’s exclusive Lomas de Chapultepec neighborhood.

In June this year another federal court sentenced Bernardo Mercado Jimenez, a close associate of Ye Gon, to 95 years in jail for smuggling 80 tons of chemical precursors into Mexico. The shipments were unloaded at the Pacific ports of Manzanillo, Colima, and Lazaro Cardenas, Michoacan, and then transported to Toluca, where Ye Gon’s organization allegedly used them to manufacture synthetic drugs.

Zhenli Ye Gon's opulent home in Mexico City's Lomas de Chapultepec neighborhood.

Zhenli Ye Gon’s opulent home in Mexico City’s affluent Lomas de Chapultepec neighborhood.

Breaking bad

Ye Gon is an enigmatic and controversial figure. Once considered an upstanding pharmaceutical entrepreneur with close ties to Mexico’s political elite, he now stands accused of masterminding a crystal meth empire that would have made even Walter White blush.

Born in Shanghai in 1963, Ye Gon migrated to Mexico in the 1990s where he founded the Unimed pharmaceutical company. He became one of Mexico’s largest legal importers of pseudoephedrine, an ingredient in cold medicines that can also be used to make crystal meth, and in 2002 he became a naturalized Mexican citizen, with President Vicente Fox himself personally handing him his citizenship papers.

However the Mexican government soon began to suspect that Ye Gon was importing more pseudoephedrine than was legally allowed and in December 2006 federal agents discovered 19 tons of precursor chemicals in his name at the port of Lazaro Cardenas. The authorities believe he was using the precursors to manufacture huge quantities of crystal meth for the powerful Sinaloa Cartel.

After months of investigation, in March 2007, the Mexican police and DEA launched a raid on Ye Gong’s Mexico City residence that would go down in history. Ye Gong was not home at the time but the agents who stormed his luxury property uncovered huge stacks of cash stuffed behind false walls and in closets and briefcases. The DEA trumpeted it as “the largest single drug cash seizure the world has ever seen.”

The bust totaled $207 million in U.S. dollars, 18 million Mexican pesos, 200,000 Euros, 113,000 Hong Kong dollars and eleven gold bullion coins. On top of that, the authorities found boxes of expensive jewelry, seven luxury cars, and an arsenal of automatic weapons.

The authorities found over $105 million at Ye Gon's home, the biggest drug cash seizure ever.

The authorities found over $105 million at Ye Gon’s home, the biggest drug cash seizure ever.

Evading Justice

Ye Gon fled to the United States but was arrested four months later in a restaurant on the outskirts of Washington D.C. He was charged him with conspiracy to import crystal meth but U.S. prosecutors eventually dropped the charges after crucial witnesses refused to testify and the Chinese government refused to hand over key documents.

Mexico demanded his extradition but Ye Gon argued he would not get a fair trial south of the border. Having always maintained his innocence, he even claimed that he had been set up by the Mexican government. Ye Gon admitted that the money was from the Sinola Cartel but claimed that it was destined to be used as a secret slush fund to support the re-election campaign of the governing National Action Party (PAN).

Mexico’s Labor Secretary, Javier Lozano Alarcon, had threatened to kill him unless he agreed to hide duffel bags stuffed with tens of millions of dollars in his house, Ye Gon alleged. He even claimed that if the PAN lost then the money would be used to finance “terrorist” activities.

Unsurprisingly, the Mexican government dismissed his tale as a “ridiculous” and “perverse blackmail attempt” at escaping justice. “These lawyers are unscrupulously and uselessly seeking to blackmail the Mexican government with absurd and unbelievable accusations, in an attempt to discourage the government from bringing all the weight of the law to bear against Mr. Zhenli Ye Gon,” read a statement issued by the federal Attorney General’s Office.

Given the lack of transparency in Mexico and the long history of corruption in government, many Mexicans either believed Ye Gon’s account or distrusted the official version of events, a poll by Reforma newspaper showed. Bumper stickers saying “I believe the Chinaman” even went on sale in Mexico.

Authorities recovered a number of gold-plated military-grade firearms at  Ye Gon's home.

Authorities discovered a number of gold-plated, military-grade firearms at Ye Gon’s home.

Viva Las Vegas

Although no longer facing charges in the United States, Ye Gon’s past activities in the country still landed one of Las Vegas’ most famous casinos in hot water. In August 2013, the U.S. Attorney General’s Office fined the Las Vegas Sands Corporation $47.4 million dollars for failing to report Ye Gon’s highly suspicious gambling activities.

All casinos are obligated to alert U.S. authorities to suspicious transactions that may involve dirty money, but Sands made no report of Ye Gon blowing $85 million at its famous Venetian hotel between 2004 and 2007. On the contrary, The Venetian was so enamored with Ye Gon that it showered him with gifts including a complimentary Rolls Royce. Ye Gon also lost another $40 million at a number of nearby casinos, bringing his total losses in Vegas to $125 million.

It remains unclear whether Ye Gon was deliberately losing his money in an elaborate money laundering scheme, or whether he was simply so wealthy that he afford to lose hundreds of millions of dollars on a whim. But serious concerns were raised by the fact that The Venetian reportedly permitted him to transfer his funds from Mexican banks and currency exchanges via a Sands subsidiary in Hong Kong before returning them to Las Vegas. Sands also allowed Ye Gon to transfer money into an aviation account that it used to pay its pilots, so as to avoid the funds ever being directly linked with the casino.

Sands ultimately avoided prosecution after agreeing to cooperate with investigators and make changes to its compliance program. Ye Gon, meanwhile, remains in custody in the United States, immersed in a protracted legal battle to evade extradition.

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