From The Center Square

By Bethany Blankley

The U.S. Treasury Department is cracking down on Mexican cartel crude oil smuggling in Texas and along the southwest border.

The department’s Office of Foreign Assets Control on Thursday (OFAC) sanctioned multiple Mexican nationals and Mexico-based entities involved in a drug trafficking and fuel theft network connected to the Mexican cartel, Cartel Jalisco Nueva Generacion (CJNG).

In February, the Trump administration designated CJNG and other Mexican cartels and transnational criminal organizations as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorist (SDGT).

Crude oil smuggling, “huachicol,” is interconnected with “a slew of criminal activities, including fentanyl trafficking,” and a range of violent crimes. It’s considered “the most significant non-drug revenue source for Mexican cartels and other illicit actors,” OFAC said. The thieves, “huachicoleros,” use a variety of means to steal fuel and crude oil from Mexico’s state-owned energy company, Petróleos Mexicanos (Pemex), including bribing and threatening Pemex employees, illegally drilling taps into pipelines, stealing from refineries and hijacking tanker trucks.

Their operations are facilitating “rampant violence and corruption across Mexico, and undercutting legitimate oil and natural gas companies in the United States,” OFAC states.

Stolen fuel is sold on the black market in Mexico and Central America through unregulated roadside fuel stops and cartel-controlled gas stations.

It’s also smuggled into the U.S. by brokers who label it as “waste oil” or hazardous material to evade detection. Stolen crude oil is then sold and shipped to oil and natural gas companies and refineries in Texas and nationwide, as well as to Japan, India, Africa and other countries, investigators found. It’s sold at a significant discount and the illicit proceeds are sent back to the FTOs and SDGTs.

According to law enforcement estimates, the U.S.-based importers earn roughly $5 million for each oil tanker shipment of crude oil to foreign jurisdictions, with multiple tankers leaving Texas ports every month. Most purchasing the shipments are likely unaware they’ve been stolen, OFAC states.

Those sanctioned this week include CJNG leader Mexican national Cesar Morfin Morfin (a.k.a. Primito) of Tamaulipas, for his alleged role in transporting, importing and distributing narcotics, including fentanyl, heroin, methamphetamine, cocaine, and marijuana, and fentanyl and methamphetamine precursor chemicals sourced from China into the U.S.

Primito’s older brother, Alvaro Noe Morfin, was also sanctioned for his alleged role in CJNG narcotics trafficking. Both Primito brothers are on a 10 Most Wanted list in Texas and Tamaulipas, published by U.S. Customs and Border Protection and the Mexican government.

Their younger brother, Remigio Morfin, was also sanctioned for alleged drug trafficking, operating out of Hidalgo, Mexico.

Mexican national Cesar Morfin was also sanctioned for his role in CJNG drug trafficking, as were two of his family members and business associates, who are linked to CJNG fuel theft, OFAC said. However, he’s allegedly now focused primarily on stealing crude oil, OFAC said.

As Trump administration border security efforts shut down illegal entries, Primito’s network refocused their efforts to smuggle crude oil into the U.S., OFAC said. “Given his control over port of entry bridges between the Tamaulipas and Texas border regions, Primito also charges fees to any trucks moving crude into the United States via these routes.” He and his subordinates also allegedly falsify official customs documents to facilitate cross-border smuggling of stolen crude oil, investigators allege.

In addition to the sanctions, OFAC and several federal agencies issued an alert to U.S. financial institutions urging them to vigilantly detect, identify and report suspicious activity that might be connected to stolen crude oil smuggled by FTOs and SDGTs.

“In recent years, fuel theft in Mexico, including crude oil smuggling, has become the most significant non-drug illicit revenue source for the Cartels and enables them to sustain their global criminal enterprises and drug trafficking operations into the United States,” the alert states.

The alert provides an overview of methodologies and financial typologies associated with cartel crude oil smuggling, includes red flag indicators and reminds financial institutions of Bank Secrecy Act reporting requirements.

Since the Trump administration designated Mexican cartels and transnational criminal organizations as FTOs and SDGTs in February, the Treasury Department has sanctioned 11 individuals and six entities affiliated with the Sinaloa Cartel, La Nueva Familia Michoacana, and the Beltran Leyva Organization.

Last September, OFAC also sanctioned nine Mexican nationals and 26 Mexico-based entities linked to CJNG fuel theft activities, including senior CJNG member Ivan Cazarin Molina (a.k.a. El Tanque).

From the Daily Caller News Foundation

By Wallace White

China is running away with critical drone technology while the U.S. struggles to even get into the race, with experts warning that the technological gap spells a “nightmare” scenario for America’s military on the battlefield.

Chinese company Da Jiang Industries (DJI) currently controls 70% of the worldwide commercial drone market alone, and American drone companies specializing in defense applications still rely heavily on Chinese parts to make their products, according to Forbes. The U.S.’ inability to match China’s drone production poses a major threat to national security, according to defense experts, with one source of the problem being the military’s insistence on developing “exquisite” weapons systems that have big price tags.

“China has captured 90% of the global market for small civilian drones by directly subsidizing drone manufacturers,” Bret Boyd, CEO of defense-oriented logistics firm Sustainment, told the Daily Caller News Foundation. “This has allowed them to be extremely competitive on price, undercutting most of their competitors and receiving huge benefits from economies of scale. This has been happening for decades.”

The 2025 National Defense Authorization Act (NDAA) included a review of the effect of using Chinese-made parts for domestic drone manufacturing, with DJI saying in a press release that the law was based on “xenophobic fear.” New York Republican Rep. Elise Stefanik attempted to add formal restrictions on Chinese parts into the NDAA, but the law only passed the house before stalling in the Committee on Commerce, Science and Transportation.

DJI sued the Pentagon in October over its inclusion on the department’s Chinese military company list. The case is ongoing.

The U.S. currently utilizes mostly high-cost, plane-like drones such as the MQ-9 Reaper, which specializes in air-to-ground attacks with missiles. An MQ-9 costs around $56.5 million to build per unit, according to the Air Force.

Since October 2023, Houthi rebels in Yemen have brought down at least six Reaper drones, according to ABC News in April. Meanwhile, Houthis have found great success with small, cheaply-made drones, with some having the range to fly nearly 16 hours to targets in Israel, according to Armed Conflict Location and Event Data (ALCED).

Moreover, the Houthis have killed an estimated 470 people with suicide drones since 2016, according to ALCED. By contrast, the drones can cost as little as $2,000, experts told Politico in 2023.

The enormous gap in the cost to wage war presents a unique national security risk that the Pentagon must urgently tackle, Boyd told the DCNF.

“Our military has become far too reliant on exquisite, expensive weapon systems that can only be built by a very small percentage of the American industrial base,” Boyd told the DCNF. “While this was appropriate for the Cold War, we need to adapt to the realities of combat in 2025. Ukraine is showing us that the modern battlefield is going to be dominated by ‘good enough’ technology deployed at scale.”

Cheap drones have fundamentally changed the battlefield, most exemplified by their extensive use in the Russia-Ukraine war beginning in 2022. The drones allowed Ukrainian and Russian soldiers alike to deal with tanks and other armored vehicles without exposing themselves with traditional anti-tank weapons systems like rocket launchers, according to The New York Times.

“These drones allow these service members to destroy a tank from 20 kilometers away,” William Thibeau, director of the American Military Project at the Claremont Institute and Army Ranger veteran, told the DCNF. “When you’re used to being threatened at only two and a half kilometers away, it changes the whole dynamic of how you move around and how you find cover and concealment.”

The air duel.
A Ukrainian FPV drone destroyed a russian Lancet drone that tried to escape its fate. 

📹: 93rd Mechanized Brigade pic.twitter.com/R8BfrGIMNE

— Defense of Ukraine (@DefenceU) October 30, 2024

In the Bakhmut region alone in Ukraine, drones killed nearly 210 Russian Wagner Group mercenaries and wounded 360 more over the course of months in mid-2023, the NYT reported.

“The question is, are we ready for drone on drone warfare, or are we still putting humans in the loop?,” a former defense engineer granted anonymity to freely discuss U.S. military policy, told the DCNF. “Because as far as I know, we’re still putting humans out there, and human against drone is a nightmare.”

The U.S. armed forces have already made some headway into adopting small drones for combat, with the Army creating “hunter-killer” platoons equipped with drones used for mainly reconnaissance. Most recently, Defense Secretary Pete Hegseth directed the Army to investigate the use of “low-cost” drones in strike applications as part of a $36 billion overhaul of the service branch.

“Ukraine set up this infrastructure from basically nothing, and it happened in garages, and they set it up in less than two years,” Thibeau told the DCNF. “We don’t want to figure this out after the shooting starts.”