The US government has targeted the criminal organization Hysa, which the Treasury Department says is linked to the Sinaloa cartel. In a lengthy statement, the Treasury Department said that Luftar Hysa's organization was targeted in cooperation with the Mexican government for laundering money linked to the cartels.
Full Treasury Announcement
Today, the Treasury Department's Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) joined the Government of Mexico in targeting the Hysa Organized Crime Group and numerous Mexico-based gambling establishments involved in laundering cartel-related money and a host of other criminal activities throughout Mexico and Europe.
This coordinated action is the result of recent U.S.-Mexico commitments - secured during the trip of Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley - to work together more closely to combat drug trafficking and related financial crime by Mexico-based drug cartels and other groups.
"The United States and Mexico are working together to combat money laundering in Mexico's gambling sector. Our message to those who support the cartels is clear: You will be held accountable," said Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley. "We thank the Government of Mexico for its strong partnership in this effort."
OFAC today sanctioned 27 individuals and entities, and FinCEN proposed a special measure to cut off 10 Mexican-based gambling establishments' access to the U.S. financial system due to money laundering concerns.
OFAC SANCTIONS TAGGING THE HYSA ORGANIZED CRIME GROUP
The Hysa Organized Crime Group (HOCG), which includes family members Luftar Hysa (Luftar), Arben Hysa (Arben), Ramiz Hysa (Ramiz), Fatos Hysa (Fatos) and Fabjon Hysa (Fabjon), has used its influence through its investments in, or control over, various Mexico-based businesses - including gambling establishments and restaurants - to launder the proceeds of drug trafficking. The HOCG is believed to operate with the consent of the Sinaloa Cartel, which maintains criminal control over much of the territory where the group operates.
Luftari, based between Mexico and Canada, is often seen in public media as a key member of the Hysa family, giving public interviews about his family’s businesses in Mexico and Europe. Luftari, Fatosi, Arbeni, and Fabjoni worked closely with a U.S. person to launder money, including moving bulk cash from Mexico to the United States, where the U.S. person’s company was used to launder the funds. Luftari and Arbeni used a European-based entity to enrich themselves by laundering illicit funds belonging to suspected drug traffickers. Luftari also owns or directs several companies used by HOCG.
Arbeni owns or directs several companies used by HOCG in Mexico. Arbeni has also been involved in smuggling bulk cash into the United States for money laundering purposes, as well as using gambling establishments and upscale restaurants in Mexico to launder drug money.
Ramiz has been involved in using gambling establishments and luxury restaurants in Mexico as fronts for laundering proceeds from drug sales.
Fatos, along with Luftar, Arben, and Fabjon, was involved in smuggling large amounts of money into the United States for the purpose of money laundering. Fatos and Fabjon were also involved in using a European-based entity to enrich themselves by laundering illicit funds belonging to suspected drug traffickers.
With today’s action, OFAC is also targeting several individuals and entities within the HOCG network. Entretenimiento Palmero, SA de CV, a Mexico-based company owned by Arben, is central to HOCG’s operations. Mexican national Gilberto Lopez Lopez acts as its commission agent. Mexican-based Albanian national Eselda Baku (formerly Eselda Hysa), Ramiz’s daughter, serves on its Board of Directors. Other companies targeted by this action include:
Bliri SA de CV (Mexico)
Cucina Del Porto SA de CV (Mexico)
Diversiones Los Mochis SA de CV (Mexico)
El Arte de Cocinas and Beber SA de CV (Mexico)
Entretenimiento Villahermosa SA de CV (Mexico)
Entretenimiento Y Espectaculos BCSA de CV (Mexico)
Grupo Internacional Canhysamex SA de CV (Mexico)
H Hidrocarburos SA de CV (Mexico)
Hysa Forwarders SA de CV (Mexico)
LH Pro-Gaming SA de CV (Mexico)
LH Rental SA De CV (Mexico)
Operadora Alejil SA De CV (Mexico)
LH Business Operator SA de CV (Mexico)
Procesadora de Alimentos Hs SA de CV (Mexico)
Rosetta Gaming SA de CV (Mexico)
Hysa Holdings Inc. (Canada)
Rosetta Gaming Inc (Canada)
Rosetta Gaming SP ZOO (Poland)
Treasury is designating the Hysa Organized Crime Group under EO 13581, as amended, as a foreign person that constitutes a significant transnational criminal organization.
Treasury is designating Luftar Hysa, Arben Hysa, Fatos Hysa, Ramiz Hysa, and Fabjon Hysa under EO 13581, as amended, as owned or controlled by or having acted or purported to act for or on behalf of, directly or indirectly, the Hysa Organized Crime Group.
The Treasury is designating Entretenimiento Y Espectaculos BCSA de CV, Hysa Holdings Inc, and Rosetta Gaming Inc, pursuant to EO 13581, as amended, for being owned or controlled by or having acted or purported to have acted for or on behalf of, directly or indirectly, Luftar Hysa.
The Treasury is designating Diversiones Los Mochis SA de CV, Entretenimiento Palmero SA de CV, Entretenimiento Villahermosa SA de CV, Grupo Internacional Canhysamex SA de CV, H Hidrocarburos SADA, and CVCV pursuant to EO 13581, as amended, for ownership or control by or having acted or purported to act for or on behalf of, directly or indirectly, Arben Hysa.
The Treasury is designating Gilberto Lopez Lopez and Eselda Baku under EO 13581, as amended, for ownership or control by or having acted or purported to act for or on behalf of, directly or indirectly, Entretenimiento Palmero SA de CV
The Treasury is designating Bliri SA de CV, Hysa Forwarders SA de CV, LH Pro-Gaming SA De CV, and Operadora de Empresas LH SA de CV, and Rosetta Gaming SA de CV under EO 13581, as amended, for being owned or controlled by or having acted or purported to act for or on behalf of, directly or indirectly, Arben Hysa and Luftar Hysa.
The Treasury is designating Cucina del Porto SA de CV, El Arte de Cocinas y Beber SA de CV, and Operadora Alejil SA de CV pursuant to EO 13581, as amended, for being owned or controlled by or having acted or purported to act for or on behalf of, directly or indirectly, Gilberto Lopez Lopez.
IMPLICATIONS OF SANCTIONS
As a result of today’s action, all property and interests in property of the designated 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 entity that is owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more of the blocked persons is also blocked. Unless authorized by a general or specific license issued by OFAC, or otherwise exempted, OFAC regulations generally prohibit all transactions by U.S. persons in or through (or transiting through) the United States involving any property or interests in property of the 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 Guidelines for the Enforcement of Economic Sanctions 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. Prohibitions include making any contribution or offering of funds, goods, or services by, to, or for the benefit of any designated or blocked person, or receiving any contribution or offering of funds, goods, or services from any such person.
In addition, engaging in certain transactions involving designated persons today may risk the imposition of secondary sanctions on participating foreign financial institutions. OFAC may prohibit or impose strict conditions on the opening or maintenance, in the United States, of a correspondent account or a payable account of a foreign financial institution that knowingly conducts or facilitates any material transaction on behalf of a person who has been designated pursuant to the relevant authority.
The strength and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add individuals to the Blocked Persons and Specially Designated Nationals List (SDN List), but also from its willingness to remove individuals from the SDN List in accordance with the law. The ultimate goal of sanctions is not to punish, but to bring about positive change in behavior. For information about the process for seeking removal from an OFAC list, including the SDN List, or to file a petition, please refer to OFAC’s guidance on Filing a Petition for Removal from an OFAC List.
FINCEN PROPOSES SPECIAL MEASURES TO DETACH 10 KEY INSTITUTIONS FROM THE U.S. FINANCIAL SYSTEM
Concurrently, and in coordination with OFAC and the Government of Mexico, FinCEN issued a Notice of Proposed Rulemaking (NPRM), pursuant to Section 311 of the USA PATRIOT Act, identifying transactions involving 10 gambling establishments based in Mexico as a class of transactions of primary money laundering concern. HOCG operates these gambling establishments, which for years have been used to facilitate money laundering benefiting the Sinaloa Cartel.
Emine Casino, located in San Luis Rio Colorado, Sonora, Mexico
Mirage Casino, located in Culiacan, Sinaloa, Mexico
Midas Casino, located in Agua Prieta, Sonora, Mexico
Midas Casino, located in Los Mochis, Sinaloa, Mexico
Midas Casino, located in Guamuchil, Sinaloa, Mexico
Midas Casino, located in Mazatlan, Sinaloa, Mexico
Midas Casino, located in Rosarito, Baja California, Mexico
Palermo Casino, located in Nogales, Sonora, Mexico
Skampa Casino, located in Ensenada, Baja California, Mexico
Skampa Casino, located in Villahermosa, Tabasco, Mexico
To address the risks posed by these gambling establishments, FinCEN proposes in the NPRM to establish a specific measure that would: (1) prohibit covered financial institutions from opening or maintaining a correspondent account for any foreign banking institution if such account is used to process transactions involving any of the gambling establishments; and (2) require covered financial institutions to implement special due diligence on their correspondent accounts that is reasonably designed to protect against the use of such accounts to process transactions involving any of the gambling establishments.
Editorial
