Ye Gon: Where have all the millions gone?

Nine years ago, “Operation Dragon” resulted in the largest cash seizure in Mexican history. More than a few Mexican would like to know what happened to the 205 million dollars (in US dollars, Euros and Mexican pesos) seized from Mexican-Chinese businessman Zhenli Ye Gon.

“Hold, or hang, ” the explanation Ye Gon used with an AP reporter when he claimed he’d been holding the money for a political operator, who threatened him if he didn’t cache the cash in his home was repeated everywhere in Mexico, in political cartoons, in comedy routines, printed on tee-shirts, as a refrain in satircal song lyrics and even appropirated by narco-gangsters in their taunting messages.

The cash was found in Ye Gon’s mansion in March 2007. The images of massive piles of dollar bills that filled a room of the Attorney General’s Office (PGR, for its initials in Spanish) was seen around the world. The government of Mexico presented Operation Dragon as the most devastating blow ever to the coffers of drug trafficking.
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So… where’s the money?

Under present Mexican law, the government can only appropriate the goods of someone accused of drug trafficking when he has been found guilty. Ye Gon has not yet been sentenced either in Mexico, nor in the United States (where he fled, only losing his bid to avoid extradition back to Mexico last week). However, in 2007, when the money was transferred to the Mexican government under then existing regulations that gave the owner of confiscated money 90 days after notification to claim his or her money. After 90 days, seized goods were considered abandoned property and could be transferred to the government.

Neither Ye Gon, nor his legal representatives claimed the seized assents, according to the Servicio de Administración y Enajenación de Bienes (SAE), which has authority over abandoned and seized property.

That does not mean that the cash sat in a vault for three months, waiting for the owner to claim it. A few days after showing off the loot for the media, the PGR deposited the hundreds of thousands of individual bills in the military bank, Banejército, as the only facility able to store that amount of cash. Banejército later transferred the money to the headquarters of Banco Santander in Mexico, this in order to certify and count the money again.

Sandander transferred the physical cash to an undisclosed Bank of America location in the United States, reportint to SAE that about $21,000 was counterfeit. The Mexican government used about a half-million of the seized cash to pay Bank of America for their services, including transportation expenses and taxes.

The SAE report indicates that BofA did not physically return the money but made an equivalent digital transfer back to Santander. In late April 2007, Santander made their own digital transfer, returing the money to Banjército. Mexican authorities explained in the report that for security resons, no Mexican bank can have $ 205 million sitting around in cash.

Although at this juncture, Ye Gon still had two months to claim his assets, the most intriguing part of the SAE report, is an enigmatic note that says the “did not constitute proof” of Ye Gon doing anything illegal. Although both the US Drug Enforcement Agency and the PGR concluded that the 200+ millions were probably drug profits, the PGR felt it was unnecessary to keep the cash as physical evidence in their investigation of Ye Gon. So far no one has offered an explanation.

Ninety days passed since the raid on the Ye Gon mansion in las Lomas. SAE published the required legal notice in the major Mexican newspapers, but no one stepped forward. So, the next step, under the then-extent law holding that contraband seized in the course of a narcotics investigation should be used to combat drug trafficking, the money was split with a third each for the PGR, the Ministry of Health and a Judicial board overseeing court modifications. In theory, the PGR pursues drug traffickers, the judiciary sanctions them, and the Ministry of Health serves victims of drug trafficking, including and especially people with addiction problems.

Each institution received about 68 million dollars. The PGR balance sheet indicates that the procuratorate invested about eight million dollars in equipment for operations and research and around 20 million in remodeling and purchase of office buildings and about same amount in security systems for buildings. Another million dollars was spent on vehicles and the rest was used to cover property amd sales taxes from the new purchases. To date, the PGR has not revealed their buying criteria let alone the benefits of these in the war on drugs.

According to their reports, the Ministry of Health used the money to build 240 rehabilitation centers throughout the country and distributed the rest to the states for anti-addictiion progams. There are no reports to indicate whether the centers and the budget increase had any impact on addiction rates in the country.

The Council of the Judiciary deposited its part in an investment fund used to renovate courts, provide training to the judiciary and generally “improve services”. In a memorandum delivered to Univision the Council said it was not possible to know specifically which money they have spent came from the Ye Gon haul, or to separate it from other funds.

The original seizure also included about 5,700 articles of values, including furniture, jewelry and automobiles. Also unclaimed, there auctioned by SAE, netting about 63 million pesos or US$ 6 million US at the time.

Additional Ye Gon properties, including his mansion in Las Lomas, remain in custody of the agency. Ye Gon’s former neighbors say the Mexican government has tried to use the place for PGR offices, but the neighborhood association has thwarted all their efforts.

Today, the ostentatious mansion is abandoned as Mexican judicial authorities continue to look into the origin of the fortune.

(Translated, with changes for clarity, from “Que Paso con el dinero decomisado al chino Zhenli Ye Gon, los 205 millions de dólares”, Narcoviolencia.com.mx)