Processing Magazine

US returns $2.4 million in stolen oil money to Mexico

August 12, 2009

According to the Associated Press, Mexico has received $2.4 million that was forfeited by a U.S. oil importer after the company president admitted knowingly buying and reselling petroleum products stolen from Mexico''s oil monopoly. Assistant Homeland Security Secretary John Morton attended an event in San Antonio with Mexico''s tax administrator, Alfredo Gutierrez Mena, to mark the return of the cash paid by Houston-based Trammo Petroleum. Both men said the investigation was an example of the countries working together on cross-border crime. In addition to the restitution, Trammo agreed to pay a separate $2 million fine to the U.S. government, said Assistant U.S. Attorney Jim McAlister, the prosecutor on the case against Trammo Petroleum President Donald Schroeder. Schroeder pleaded guilty in May to buying and reselling $2 million worth of condensate, a crude petroleum product used for blending. According to court documents, in January Schroeder participated in a call with an unnamed oil company employee about the problem of importing stolen condensate. Nearly three weeks later, Schroeder arranged for a barge to be loaded with the stolen product in Brownsville and shipped for resale, the federal indictment says. In June 2007, Immigration and Customs Enforcement agents were told about allegedly stolen petroleum products entering the U.S. from Mexico, and an investigation began. Only Mexico''s state oil monopoly Petroleos Mexicanos, or Pemex, can sell and distribute petroleum products from Mexico, which is heavily dependent on oil sales to fund its budget. Ten federal search warrants have been served on bank accounts in Texas as part of the investigation, though authorities declined to say whether more indictments were pending and were reluctant to talk about details of the case. Companies like Trammo work as resellers of crude oil that goes to refiners. McAlister said it can be difficult for investigators to determine who in the process is aware of a stolen product''s origins. Officials at the event declined to comment on how widespread oil theft is in Mexico, but Mexican President Felipe Calderon has said previously that drug cartels have extended their operations to include stolen oil. Pemex officials are adding security measures and extra guards to catch the thieves but say the problem is growing.