Treasury Sanctions Powerful Faction of the Terrorist Sinaloa Cartel

Under Secretary Hurley Visits Border and Sanctions Top Sinaloa Cartel Faction

WASHINGTON - Today, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated Sinaloa Cartel faction Los Mayos, along with the leader of the faction's armed wing. These sanctions follow Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley's visit to the U.S.-Mexico border.

OFAC also designated five individuals and 15 companies in connection with one of Los Mayos' regional networks operating just south of the U.S.-Mexico border, as well as the leader of a separate Sinaloa Cartel-affiliated gang engaged in fentanyl production.

"The Sinaloa Cartel is a foreign terrorist organization that continues to traffic narcotics, launder its proceeds, and corrupt local officials," said Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley. "Today's action, taken in coordination with our law enforcement partners, demonstrates Treasury's dedication to President Trump's priority of stopping the threats across our borders."

THE CARTEL CONTROLS A KEY ARTERY ON THE U.S.-MEXICO BORDER

The Los Mayos faction is responsible for producing and trafficking of fentanyl, cocaine, marijuana, heroin, and methamphetamine from northwest Mexico into the United States. In Rosarito, Baja California, Los Mayos is involved in kidnapping, extortion, money laundering, and local government corruption. Due to its proximity to the U.S. border, Rosarito and the surrounding areas form a key artery for Sinaloa Cartel's drug trafficking operations.

The Sinaloa Cartel is a U.S.-designated Foreign Terrorist Organization (FTO) that is responsible for a significant portion of illicit fentanyl trafficked to the United States that ultimately poisons Americans. In addition to trafficking deadly drugs, the Sinaloa Cartel has profited from smuggling migrants across the southern border.

This action was coordinated with the U.S. Drug Enforcement Administration (DEA) San Diego Field Division, the Federal Bureau of Investigation (FBI) San Diego Field Office, and the U.S. Attorney's Office for the Southern District of California. Today's action is pursuant to Executive Order (E.O.) 14059, which targets the international proliferation of illicit drugs and their means of production, and pursuant to E.O. 13224, as amended, which targets terrorists and their supporters.

THE EVOLUTION OF THE SINALOA CARTEL

The Sinaloa Cartel, one of the most powerful in Mexico, represents a major threat to the United States. For decades, the Sinaloa Cartel has trafficked cocaine and methamphetamine-and more recently, fentanyl-into the United States. On December 15, 2021, OFAC designated the Sinaloa Cartel pursuant to E.O. 14059. On February 20, 2025, the U.S. Department of State designated the Sinaloa Cartel as an FTO and a Specially Designated Global Terrorist (SDGT). Since the arrests of founder Joaquin Guzman Loera ("El Chapo") and co-founder Ismael Zambada Garcia ("El Mayo"), the Sinaloa Cartel has undergone foundational changes that created two dominant factions vying for power and influence across its controlled territories. On June 9, 2025, OFAC designated Sinaloa Cartel's Los Chapitos faction, led by the sons of El Chapo, pursuant to E.O. 14059 and E.O. 13224, as amended.

THE LOS MAYOS FACTION OF THE SINALOA CARTEL

Composed of persons aligned with El Mayo, the Los Mayos faction of the Sinaloa Cartel rivals the Los Chapitos faction. Los Mayos maintains a strong presence in the Mexican states of Baja California, Sonora, and Zacatecas. Through various alliances, Los Mayos has trafficked illicit fentanyl, methamphetamine, heroin, marijuana, and cocaine, which are smuggled into the United States. Turf wars between Los Mayos and Los Chapitos have resulted in the deaths of over a thousand people in the Mexican state of Sinaloa.

At the forefront of Los Mayos' battles with Los Chapitos is Juan Jose Ponce Felix (a.k.a.Jesus Alexandro Sanchez Felix, commonly known as "El Ruso"). El Ruso is the founder and leader of the primary armed wing of Los Mayos, which controls drug trafficking routes in Baja California. In a 2015 indictment, the U.S. District Court for the Southern District of California identified El Ruso as a leader of a fleet of soldiers who engaged in acts of kidnapping, hostage taking, torture, and murder, in furtherance of Sinaloa Cartel interests in Culiacan, Mexico. As a long-term Sinaloa Cartel senior member, El Ruso's current dominance in Baja California has strengthened Los Mayos' drug trafficking operations into the United States. The Department of State announced on September 16, 2025 a reward under the Narcotics Rewards Program (NRP), offering up to $5 million for information leading to the arrest and/or conviction of El Ruso.

The Los Mayos faction is being designated pursuant to E.O. 14059 and pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, the Sinaloa Cartel. Additionally, Juan Jose Ponce Felix is being designated pursuant to E.O. 14059 and pursuant to E.O. 13224, as amended, for being directed by, or having acted or purported to act for or on behalf of, directly or indirectly, the Sinaloa Cartel.

BOARDWALK EMPIRE: THE PLAYAS DE ROSARITO NETWORK

Los Mayos controls large swaths of territory in northern Baja California under the leadership of previously designated cartel leaders, Alfonso Arzate Garcia and Rene Arzate Garcia (Rene Arzate), also known as the Arzate brothers. One of the towns controlled by Rene Arzate is Rosarito, a beachside community approximately 15 miles south of the California portion of the U.S.-Mexico border. Due to its proximity to the U.S. border, Rosarito and the surrounding areas are part of a critical corridor for the Sinaloa Cartel to smuggle drugs into the United States. Rene Arzate maintains command of Rosarito through several associates, including Mario Alberto Herrera Sanchez (Mario Herrera)and Karlo Omar Herrera Sanchez (Karlo Herrera). The Herrera brothers work with Jesus Gonzalez Lomeli (Gonzalez), a Rosarito-based business magnate and high-ranking financial operator for the Sinaloa Cartel, to help carry out the cartel's operations in the area. Gonzalez owns several bars and restaurants in Rosarito, including the Bombay Beach Club, Coco Beach Club, and Mariscos El Caiman, as well as other restaurants, night clubs, and resorts throughout Mexico. Gonzalez has used his businesses to launder millions of dollars of illicit proceeds from drug trafficking on behalf of the Sinaloa Cartel for the Arzate brothers as well as for other high-level cartel figures, including El Ruso.

Mario Herrera, Karlo Herrera, Gonzalez, Arcega, and Brown are being designated pursuant to E.O. 14059, and pursuant to E.O. 13224, as amended, for being directed by, or having acted or purported to act for or on behalf of, directly or indirectly, the Sinaloa Cartel.

In addition to designating the key individuals aligned with Los Mayos in the Playas de Rosarito network, OFAC also targeted 14 businesses owned by Gonzalez: JR Alimentos Del Mar, S. De R.L. De C.V.; Grupo JRCP, S. De R.L.; Sabor Tapatio, S. De R.L. De C.V.; Gotoco Alimentos Procesados S. De R.L. De C.V.; Grupo Hotelero JJJ, S.A. De C.V.; Complejo Turistico JJJ, S.A. De C.V.; Operadora De Espectaculos, Alimentos Y Bebidas J&R S.A. De C.V.; Alimentos Y Diversion Insurgentes, S. De R.L. De C.V.; Sunset Servicios Gastronomicos S. De R.L. De C.V.; JJ Gonver S. De R.L. De C.V.; Operadora De Alimentos Con Origenes De Mexico, S. De R.L. De C.V.; Veintiuno Mexicali, S. De R.L. De C.V.; Coco Beach Bar, S. De R.L. De C.V.;and, Cavally Antro & Bar. These businesses are being designated pursuant to E.O. 14059, and pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, Gonzalez.

OFAC also targeted a transportation company owned by Arcega: Transporte Urbano Y Suburbano Del V Municipio S.A. De C.V. This company is being designated pursuant to E.O. 14059, and pursuant to E.O. 13224, as amended, for being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, Arcega.

"LOS RUGRATS": VIOLENT SINALOA GANG IN LAGUNA COLORADA

Based in Laguna Colorada, Sinaloa, Mexico, Carlos Alberto Paez Pereda (Paez) or "Carlitos" is the leader of a violent Sinaloa Cartel gang known as "Los Rugrats." Paez is a producer of fentanyl and one of the major narcotics traffickers in Culiacan, Sinaloa. Paez is known to have murdered and attempted assassinations of rival cartel figures on orders from Rene Arzate.

Paez is being designated pursuant to E.O. 14059, and pursuant to E.O. 13224, as amended, for being directed by, or having acted or purported to act for or on behalf of, directly or indirectly, the Sinaloa Cartel.

SANCTIONS IMPLICATIONS

As a result of today's action, all property and interests in property of the designated or blocked persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC's regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.

Violations of U.S. sanctions may result in the imposition of civil or criminal penalties on U.S. and foreign persons. OFAC may impose civil penalties for sanctions violations on a strict liability basis. OFAC's Economic Sanctions Enforcement Guidelines provide more information regarding OFAC's enforcement of U.S. economic sanctions. In addition, financial institutions and other persons may risk exposure to sanctions for engaging in certain transactions or activities involving designated or otherwise blocked persons. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated or blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person.

Furthermore, engaging in certain transactions involving the persons designated today may risk the imposition of secondary sanctions on participating foreign financial institutions. OFAC can prohibit or impose strict conditions on opening or maintaining, in the United States, a correspondent account or a payable-through account of a foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of a person who is designated pursuant to the relevant authority.

The power and integrity of OFAC sanctions derive not only from OFAC's ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, or to submit a request, please refer to OFAC's guidance on Filing a Petition for Removal from an OFAC List.

Click here for more information on the persons designated today.

To view a chart on the individuals and entities designated today, click here.

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