The Justice Department’s Multifront Battle Against Drug Cartels

On Feb. 20 the State Department designated specific Mexican drug cartels and transnational criminal organizations (TCOs) as foreign terrorist organizations (FTOs). The designation triggers new investigatory and prosecutorial tools for federal prosecutors, including the broad Material Support of Terrorists criminal statute (“Material Support” 18 U.S.C. Section 2339B). Material Support includes providing nearly anything to an FTO, including money or services. 

Drug cartels have metastasized in Mexico, spreading throughout the geographic and economic landscape. With hundreds of thousands of fentanyl deaths over the past decade, there appears to be political support for the Trump administration’s more aggressive methods. Targeting drug trafficking operations alone is insufficient to accomplish the administration’s stated goal to “totally eliminate” the drug cartels. Large drug seizures and the extradition of a few drug cartel leaders is the same business-as-usual approach to the drug war; instead, the administration’s actions signal a sweeping approach likely to impact U.S. and international businesses.

Beyond the FTO designation, a Feb. 5 memo from Attorney General Pam Bondi suspended prior Department of Justice National Security Division approval requirements for prosecutors using terrorism charges to investigate and prosecute drug cartels, fast-tracking the process. The department has also increased resources for drug cartel investigations, including re-tasking seasoned anti-money laundering, using the Foreign Corrupt Practices Act (FCPA), and deploying forfeiture prosecutors for drug cartel investigations. 

During his March 4 address to a joint session of Congress, President Trump said: “The territory to the immediate south of our border is now dominated entirely by criminal cartels that murder, rape, torture, and exercise total control — they have total control over a whole nation — posing a grave threat to our national security. The cartels are waging war in America, and it’s time for America to wage war on the cartels.” On March 5, the U.S. Attorney’s Office for the Eastern District of New York announced a Transnational Criminal Organizations Strike Force, targeting cartels and TCOs, which will include efforts to identify and seize assets in support of the cartels. And on March 6, Deputy Attorney General Todd Blanche issued a memo establishing “Operation Take Back America,” outlining the Justice Department’s core enforcement priorities: “[S]topping illegal immigration, eliminating Cartels and TCOs, and ending illegal trafficking of dangerous drugs and human beings.”

These initial policy announcements, in concert with the FTO designation, are only the first steps in executing a strategy designed to “totally eliminate” the cartels and TCOs. Here, I lay out the investigative tools and agency resources unlocked by the FTO designation and offer some potential next steps that the administration may take to advance its agenda based on my experience as a federal prosecutor. I also discuss the potential impacts such an approach may have on businesses and individuals working in Mexico and Latin America.

Intelligence Tools

There are a number of intelligence-gathering tools triggered by the FTO designation and an enforcement focus on drug cartels as a national security threat. Below I outline several of the authorities and resources that may be deployed.

Executive Order 12333

Executive Order 12333 provides authority for intelligence agencies to collect intelligence outside of the United States. Different intelligence agencies exercise those authorities, acting on the intelligence priorities of the president; these traditional overseas intelligence-gathering tools are now being focused on drug cartels and their facilitators. For example, public reports have indicated that the CIA has refocused its resources—including human sources and drone flights—on drug cartel-related activity. Publicly available leaks also document the ways that the CIA can allegedly use malware delivered to cell phones to give them direct access to encrypted communications. Additionally, the National Geospatial-Intelligence Agency works closely with the National Reconnaissance Office to operate and analyze a network of satellites that can track and map activity around the globe, including in remote areas in Mexico.

Section 702

The primary authority for intercepting electronic signals—such as phone calls and emails, with the assistance of U.S. communications providers—is the Foreign Intelligence Surveillance Act (FISA). Section 702 of FISA authorizes the intelligence community to collect electronic communications of non-U.S. persons located outside of the U.S. who have “foreign intelligence” information. Section 702 does not require an individualized determination of probable cause. In 2024, when Congress reauthorized FISA, it added counternarcotics to the definition of “foreign intelligence.” That means that as of April 2024, Section 702 could be used to collect information about the international production, distribution, and financing of narcotics from non-U.S. persons outside of the U.S. who use U.S. communications providers. With the addition of drug cartels as FTOs, any information connected to those designated groups is “foreign intelligence,” even outside of their narcotics activities, and thus subject to Section 702 collection. 

In general, however, information collected under Section 702 or derived from Section 702 is not used directly in criminal investigations or prosecutions.

Title I

In contrast, information acquired or derived from Title I of FISA is more likely to be used in criminal investigations and prosecutions. Title I authorizes the collection of U.S. person and U.S. corporation information, requiring a probable cause finding by the Foreign Intelligence Surveillance Court (FISC) that the target is an agent of a “foreign power.” FISA defines “foreign power” to include “a group engaged in international terrorism or activities in preparation therefore,” and traditionally Title I applications to the FISC have referenced the FTO designation of a particular group as strong support for meeting the definition. In a criminal legal process, probable cause rests on evidence that a specific criminal offense has occurred and that evidence of that offense will be found in the course of a search of a specific location.

Title I FISA application targets a person who is shown to be an agent of a foreign power or aiding and abetting an agent of a foreign power. With the limited exceptions of roving wiretaps, which require high-level internal Justice Department approvals and additional facts about the target, criminal search warrants and wiretaps are directed at specific email accounts or phone numbers. There must be probable cause that evidence of specific offenses will be found on those specific accounts. Title I FISA applications may include long lists of every digital and telephonic account used by the target, all of which the FISC may authorize in one order.

Minimization

While U.S. persons and businesses may not be the target of Section 702 collection, those communications are often collected when foreign targets communicate with U.S. persons. In other words, if an FTO drug cartel money launderer who is under Section 702 surveillance emails a U.S. businessperson about goods he wants to buy with cartel proceeds, those communications will be collected.

There are minimization procedures under FISA that prevent nonpublic information concerning U.S. persons from being shared with agents and analysts in a way that identifies the U.S. person. However, there are two exceptions to that rule: (a) if the identity is necessary to understand or assess the importance of the foreign intelligence or (b) if the information is necessary to protect against certain serious threats, such as terrorism. In the drug cartel context, those exceptions would often apply, meaning that the U.S. person’s or business’s information would not be minimized.

Resources

One of the most efficient ways for the Trump administration to utilize the new intelligence authorities and act quickly is to use existing multi-agency task forces to bring together the skills and resources needed to execute a multi-front campaign against the drug cartels. Forming and organizing new task forces can be time consuming; plugging into existing multi-agency teams is the fastest way to move large investigations forward. While the new tools and classified techniques unlocked by the FTO designation are important, pouring additional resources into existing drug cartel and TCO work using traditional investigative tools is equally vital. Increasing arrests of cartel operatives makes it more likely that cooperating defendants will share inside information about financial operations.

Agent Resources

Joint Terrorism Task Forces (JTTFs) form the backbone of FBI's response to the terrorism threat. There are 200 located throughout the country, composed of FBI agents, local law enforcement task force agents, and multiple federal law enforcement partners from other agencies. Additionally, the Organized Crime Drug Enforcement Task Force (OCDETF) is designed to dismantle major drug trafficking organizations. OCDETF has a national presence and a leadership and organizational structure designed to find and prioritize major organized crime targets; it also has analytical resources with access to data from every major U.S. law enforcement entity.

OCDETF brings together agencies that focus on narcotics and financial crimes, including the FBI, the Drug Enforcement Administration, Homeland Security Investigations, the U.S. Secret Service, the Office of Inspector General by the Department of Labor, IRS Criminal Investigation, and the U.S. Postal Inspection Service. OCDETF houses the International Organized Crime Intelligence and Operations Center (IOC-2), which has teams of analysts and agents who focus on non-drug organized crime offenses—especially useful to attack the designated cartel’s non-drug operations. OCDETF funds prosecutors and agents around the country and has a history of working with other task forces, like the High Intensity Drug Trafficking Area task forces. Finally, OCDETF also has the ability to deconflict investigations all over the country and encourage collaboration. Law enforcement will use that ability to prevent overlapping investigations and efficiently coordinate.

The president ordered the establishment of new Homeland Security Task Forces in every U.S. state with the aim of dismantling drug cartels and TCOs, including by focusing on human smuggling networks. These new task forces will be staffed by agencies that are already part of OCDETF and on JTTFs, making it easier to share data and targeting decisions.

Prosecutor Resources

In her Feb. 5 memo, Attorney General Bondi decreased the bureaucratic hurdles that assistant U.S. attorneys normally face in order to use some of the Justice Department’s most powerful legal tools, including the Material Support statute and the Racketeer Influenced Corrupt Organizations (RICO) Act, which can be used to target organized criminal groups Previously, using those statutes as the basis for a search warrant or an indictment required a time-consuming process of review by Washington, D.C. Attorney General Bondi eliminated that requirement for cases involving designated drug cartels and TCOs. That will free up assistant U.S. attorney resources, encourage the use of those tools, and shorten investigation timetables—especially for smaller and mid-size U.S. attorney’s offices that may be reluctant to launch investigations and use legal tools that require approval from Washington, D.C.

However, there is also a policy trade-off: lowering approval requirements will increase the likelihood that these powerful tools are misused and that there are disparities in how they are used around the country. The Justice Department’s guidelines for RICO and Material Support detail a multi-layered review designed to make sure experts with experience navigating the nuances of both statutes review the legal and policy rationale of the AUSAs in the field. Additionally, the Justice Department’s RICO guidelines explicitly state that the review process is designed to ensure RICO is “selectively and uniformly used” around the country. Decentralizing the decision-making also means that different assistant U.S. attorneys will choose to use these powerful tools in different ways—in one U.S. attorney’s office a case may be charged as a Material Support or RICO case, while it may be charged as standard drug trafficking in a different office.

In the Feb. 5 memo, Attorney General Bondi also redirected the resources devoted to the KleptoCapture Task Force to instead combat drug cartels, and told the experienced anti-money laundering prosecutors in the Money Laundering and Asset Recovery Section and FCPA Unit to focus on bringing charges and forfeiting funds related to drug cartels. These skilled prosecutors will now be involved primarily with cartel-related conduct, augmenting efforts at U.S. Attorney’s Offices around the country.

Impact Beyond Drug Traffickers

Businesses will likely be impacted as part of the administration’s efforts. The FTO designations enable federal civil suits against financial institutions or other businesses under the Antiterrorism Act and state criminal and civil state statutes are also triggered by the FTO designations, opening the door to local enforcement. But federal enforcement mechanisms will likely be the primary tools used to implement the “total elimination” policy.

In coordination with regulatory and other enforcement authorities, the Justice Department will likely increase scrutiny of businesses and individuals doing business in Mexico and areas in Latin America with a cartel or TCO presence to attack their financial support. This will not be a painless exercise.

The Justice Department has used FTO charges to target business entities in the past. In 2022, a building materials manufacturer from Europe pleaded guilty to Material Support and paid a $778 million fine for making payments to FTOs in Syria to allow a cement plant to operate. Secretary of State Marco Rubio highlighted the financial system’s exposure in a Feb. 20 interview, saying that the FTO designation “doesn’t allow anyone to have a commercial relationship with these groups. All of these gangs have to operate by touching the banking system []” Business and financial institutions should expect new levels and means of scrutiny. In order to understand how and why that scrutiny might materialize, it’s important to understand what steps enforcement authorities might take when mounting a full court press against the drug cartels and how that policy choice will likely impact U.S. and international companies.

Enforcement Strategy

In 2024, I left the Justice Department after 15 years as a federal prosecutor. I was fortunate to work alongside experienced agents and prosecutors in multiple areas of expertise relevant to the department’s new FTO cartel strategy, including prosecuting national security cases, transnational criminal networks, and Mexican drug cartel leadership. I also established and trained strike forces of agents and prosecutors across the country.

Based on that experience, I expect a combination of established and new interagency task forces using both familiar and newly unlocked investigative tools to: (a) continue existing investigations into drug cartel leadership and narcotics distribution hubs; (b) focus electronic evidence gathering, human sources, and analytical resources on the vast and varied money laundering networks the cartels and TCOs use to move the proceeds of their activities; and (c) target the other forms of financial support the cartels derive from extorting legitimate businesses, human smuggling, and operating legitimate businesses.

Initial Steps

The Justice Department’s initial step may be to analyze intelligence collected by classified means to understand what businesses, people, and corporations will be the most fruitful to target. For example, information may have already been collected under Section 702 from a specific email account demonstrating that a Mexico-based executive of an international company knew that pipeline construction workers were making extortion payments to drug cartel affiliated criminals.

Investigative and analyst teams could then use independently sourced information to recreate the necessary probable cause for a traditional search warrant or Title I FISA application on the email account in question. This process is sometimes derided as parallel reconstruction and the technique has come under criticism. However, entities that are regulated, including financial institutions, publicly traded entities, and government contractors, have a number of reporting requirements including Suspicious Activity Reports, SEC filings, and audits. Combined with open-source information and public reporting, there is often enough information to meet the very low threshold required to open a criminal investigation, which authorizes the use of federal grand jury subpoenas and opens the door to other investigative techniques.

Another powerful investigative tool—mentioned above—that could be quickly deployed are human sources. Drug task forces and JTTFs have human sources already placed around the country, including paid confidential human sources (CHSs) and undercover special agents (UAs). Both drug and terrorism cases often use these sources to secretly record conversations, identify evidence for search warrants, and testify at trial. It is also common practice to target mid and lower-level members of conspiracies with sources, catch them red-handed with overwhelming evidence, and then “flip” those individuals into informants against more important members of an entity. 

Now that Material Support of the drug cartels is a criminal offense, examining how CHSs and UAs have been used in terrorism cases is critical to understand how they could be used to target cartels and their facilitators. An overlooked aspect of the Material Support statute is that “attempting” to provide material support is also a crime. Even if there are no actual drug cartel members involved, if a person laundering funds, paying an extortion payment, or making a purchase of agricultural goods believes that the FTO-designated drug cartel is receiving the money, then the statute has arguably been violated—even if the money has only been handed to a CHS. 

These sting operations have been criticized for sweeping innocent individuals into a government-orchestrated conspiracy, including in the 2009 Newburgh Sting case involving an FBI CHS offering money and providing fake bombs as part of a planned terrorist attack in New York. However, their use has been upheld on appeal, including in the U.S. Court of Appeals for the Second Circuit’s review of the Newburgh Sting case, holding: “[A]s with all sting operations, government creation of the opportunity to commit an offense, even to the point of supplying defendants with materials essential to commit crimes, does not exceed due process limits.”

The combination of drug and terrorism CHS and UA programs, armed with the Material Support statute and the familiarity that drug and terrorism agents have with these investigative techniques, could result in their rapid deployment. Using intelligence would help identify the individuals and businesses that would be most ripe for the undercover approach to dismantle the cartel’s financial infrastructure. 

Target Areas

The drug cartels are money-making enterprises. They make billions from selling drugs, but also from human smuggling, cybercrime, extortion, and legal businesses. The money allows them to corrupt politicians, fund private armies, build intelligence services, demand payments for goods to traverse through important areas, and, of course, produce drugs. The organizations are resilient, built up over decades, and connected by strong family bonds. 

To target these extensive sources of profit, the Justice Department is likely to focus on narcotics traffickers, money laundering networks, and the non-drug sources of income fueling the cartels.

Narcotics

Experienced prosecutors and agents have long-term investigations focused directly on the cartel’s narcotics trafficking operations. Some of the Justice Department’s investigative teams will be working on historical drug trafficking activity, instead of new investigations, because in February, Mexico deported 29 high-ranking drug cartel leaders to the U.S. to face prosecution. Many of those defendants were indicted years ago for trafficking that took place in the past. However, the traditional drug trafficking investigations—focusing on drug distributors throughout the U.S., seizing loads of drugs, and building indictments against drug trafficking organization leaders—will continue.

There may also be renewed efforts to use intelligence information to stop fentanyl precursor chemical shipments to Mexico or work with Mexican enforcers to dismantle fentanyl labs inside Mexico. However, prosecuting a handful of cartel leaders and destroying fentanyl-production facilities will not put a lasting dent on the cartel’s operations. The Justice Department will have to also focus on the cartel’s finances if they intend to “totally eliminate” the cartels.

Money Laundering

The Justice Department will likely focus on the money laundering networks the cartels and TCOs use to move the proceeds of their illicit activities. These include trade-based money laundering networks, networks of bank accounts opened under fraudulent identities, cryptocurrency networks, and the various illegal money networks run out of China and the Middle East, referred to as “flying money” and “hawala.” Often, money laundering networks employ multiple techniques and are controlled by independent money laundering networks that use the legitimate financial system to move billions of dollars every year.

Peeling back the layers of a money laundering conspiracy is difficult work. Investigations can spend years documenting millions in transfers, but not be able to prove the necessary criminal intent to make an arrest. Adding Material Support to the enforcement toolbox expands the ways law enforcement can prove criminal intent. It also allows for an easier forfeiture standard to seize funds and puts heightened responsibilities on financial institutions.

Taking several aggressive steps in the form of publicly noticed forfeitures, search warrants, or other overt investigative acts—directed at legitimate financial institutions, financial technology companies, brokers, importer-exporters, or other touchpoints in the global trade and financial system—would send a signal that the administration means to take an aggressive stance.

There are policy trade-offs at play when financial institutions react to government oversight and investigations. There very well may be a decrease in legitimate remittances sent to Mexico and investment in legitimate entities in Mexico. But by sending a loud enforcement signal, the administration may believe it will achieve the intended result of clamping down on cartel money laundering networks.

Non-Drug Profits

The third and final area of focus could be non-drug profits made by the cartels and TCOs. That includes illegal immigration, another priority of the administration. The cartels make billions by forcing the human smugglers to pay fees to operate in the border crossing areas controlled by the cartels. These networks are paid outside of the U.S.; subsequent payments are made once people are successfully smuggled into the U.S.

Businesses involved with remittances and cross border payments into Mexico and Latin America should expect heightened scrutiny of their Anti-Money Laundering (AML) practices. They should also expect entities such as Homeland Security Investigations and the new Homeland Security Task Forces to launch multiple investigations into their businesses to stop the transfer of funds to the designated cartels and put pressure on transfer agencies to increase their internal controls.

The drug cartels also extract extortion payments from legitimate businesses operating throughout Mexico. Numerous public media reports and testimony at trials in the U.S. have established that in order for goods to move, mining operations to function, pipelines to flow, agricultural products to be delivered, items to be unloaded from ports, and communication lines to remain intact, drug cartels and their local affiliates demand payments. If increased pressure is put on the narcotics operations of the cartels, they will likely expand other money-making operations. In order to choke off those sources of funds, expect targeted investigations into multilateral businesses based on reports collected from new intelligence gathering tools and human sources.

Just as with the money laundering networks, expect several high-profile investigations to be launched to send a signal to multilateral entities around the globe. Importantly, as seen in the guilty plea of the European entity that was prosecuted by the Department of Justice for extortion payments to ISIS in Syria, the extraterritorial nature of the Material Support statute means that foreign entities are just as likely to be investigated as U.S. entities, perhaps even more so given the recent FCPA guidance on directing resources to focus on cartel-related investigations. 

Finally, using the intelligence gathered with existing and new tools, legitimate businesses owned and operated by drug cartel intermediaries will likely be closely scrutinized. If funds are flowing back to an FTO or under an FTO’s control in some way, it does not matter if the business is entirely legitimate. The forfeiture authorities related to Material Support allow for those funds to be seized. And if the funds of those businesses are overseas, they can be seized from corresponding banks in the U.S. Again, expect several high-profile seizures alongside potentially increased designations of entities by Office of Foreign Assets Control, adding increased pressure on due diligence practices of businesses to understand their vendors and customers. This will serve the ultimate purpose of choking off the cartels’ access to resources.

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Drug cartels have wreaked havoc inside Mexico for decades. They have diversified their incomes and honed their criminal skills, knitted together by financial greed and family ties that make them resilient. Prosecutions of individual cartel leaders in the past have not had long-term effects on their power. 

The Trump administration is taking an aggressive approach with the stated goal of utterly destroying the drug cartels. The new investigative and prosecutorial tools unlocked by the FTO designation will be useful. Existing multi-agency task forces, including OCDETF and JTTFs, will likely use a comprehensive approach, using criminal, national security, forfeiture, and administrative tools intending to pull the cartels out by their roots.

In the process of U.S. efforts to choke off the cartels’ financial operations, legitimate businesses may be forced to increase their due diligence and lower their risk tolerance in the areas where the cartels operate. This may cause additional economic pain both in Mexico and for legitimate businesses around the world, but if the administration’s goal is truly “total elimination” of these hydra-like criminal organizations then collateral consequences should be anticipated.