Big Business: "The paper trail linking a US fuel trader to a notorious Mexican cartel"
From Reuters, May 27:
Mystery customers. Missing permits. Inaccurate customs declarations. Investigations in the U.S. and Mexico. Documents shed light on an alleged fuel smuggling racket.
Ikon Midstream, a Houston-based petroleum trader whose offices were raided last month by U.S. authorities,
is under investigation in Mexico in connection with fuel smuggling,
according to three Mexican security sources with direct knowledge of the
matter and four Mexican government security documents viewed by
Reuters.
The
probe is part of ongoing investigations into maritime shipments of
petroleum products that were brought to Mexico from the U.S. and Canada
in an alleged scheme to evade a hefty tax due on these imports, the
documents and sources said.
Ikon
Midstream is among the “central pieces” in a suspected scheme linked to
one of Mexico’s most powerful crime groups, the Jalisco New Generation
Cartel (CJNG), and Mexico’s attorney general’s office has opened an
investigation into the company “based on testimonies, documents and
surveillance,” according to one of the documents.
Mexico’s attorney general’s office did not respond to requests for comment.
The
Texas trader’s export of diesel aboard the tanker Torm Agnes is being
scrutinized for potential cartel links, as is Ikon Midstream’s purported
relationship with a suspected CJNG-related trucking company that helped
offload the vessel’s cargo in the ports of Ensenada and Guaymas,
according to the security sources and the document.
Smuggled
fuel and stolen crude oil have become the second-largest source of
revenue for Mexico’s cartels behind narcotics, according to the U.S.
government.
Two
of the documents laid out the operations and players in the alleged
racket. Among them, Ikon Midstream was allegedly a supplier of petroleum
products that moved through a complex web of importers, transporters,
distributors and facilitators in Mexico. The other two documents
contained summaries of the probes. The four documents were created in
March and April and their authenticity was confirmed by the security
sources.
Asked
to comment about the investigations, Ikon Midstream Executive Director
Rhett Kenagy said in a May 12 email to Reuters that there was “not a
single shred of documentation to back any of it up” and that the company
was “not going to respond to accusations grounded in hearsay.”
Homeland
Security Investigations, the primary transnational investigative agency
within the U.S. Department of Homeland Security, executed a criminal
search warrant at Ikon Midstream’s Houston offices on April 14, a DHS
spokesperson told Reuters in an April 17 statement. “This is related to
an ongoing investigation into criminal activity,” the statement said.
DHS did not elaborate, and it did not comment on whether it was
coordinating with Mexican authorities.
Excerpt
from an April 17, 2026, statement to Reuters from the U.S. Department
of Homeland Security
about a raid made earlier that week by its
investigative unit at the Houston offices of Ikon Midstream.
Ikon
Midstream has repeatedly denied wrongdoing. In an April 24 statement to
Reuters, the fuel trader said it “has never knowingly provided, and
does not knowingly provide, material support or resources to CJNG.”
Regarding the raid by Homeland Security Investigations, Ikon Midstream
said in its statement that “an investigative action by law enforcement
is not itself a finding of wrongdoing.”
Mexican
authorities have announced the arrests of at least 16 people since
September in connection with fuel smuggling. While officials have said
they’ve uncovered a “criminal structure” behind the alleged illicit
activity, they haven’t publicly named the detainees or said anything
about their possible connections to CJNG.
In an October report,
Reuters chronicled how diesel exported by Ikon Midstream aboard the
tanker Torm Agnes made its way into the hands of Intanza, a Mexican
company that authorities there suspect is a front for CJNG. Intanza has
no listed phone number, website, social media presence or physical
location that Reuters could find.
That
story detailed how Mexican cartels earn billions of dollars annually by
smuggling fuel, mainly from the U.S. to Mexico, in what boils down to a
massive tax dodge: Diesel, gasoline and naphtha are claimed in trade
paperwork to be lubricants to avoid a steep import duty that Mexico
charges on these imported fuels.
Smuggled
fuel and stolen crude oil have become the second-largest source of
revenue for Mexico’s cartels behind narcotics, according to the U.S.
government, which has ramped up efforts to crack down on the illicit
trade. The Trump administration designated CJNG as a foreign terrorist
organization in February 2025.
Import-export
paperwork for these transactions is often incomplete or faked by
smugglers, who use front companies to facilitate these deals and enlist
established oil industry players to help, some actively colluding,
others acting unwittingly, trade experts, tax authorities and law
enforcement officials told Reuters.
Ikon
Midstream sued Reuters for defamation on November 14 in a district
court in Texas, contending the news agency made “categorically false”
statements about its business in the October article. Reuters stands by
its reporting and is contesting the suit.
Ikon
Midstream said it never did business with Intanza. Following
publication of Reuters’ October report, Ikon Midstream provided Reuters
with internal company documents that showed the Torm Agnes cargo plus
three other 2025 shipments of diesel and naphtha aboard the tanker Torm
Louise were sold to a Mexican customer named Azteca Cone.
Azteca
Cone, like Intanza, is part of the same alleged scheme and is likewise
under investigation for fuel smuggling and suspected links to CJNG,
according to the three Mexican security sources and two of the
government security documents.
Azteca
Cone cuts a mysterious figure in the fuel industry. Just like Intanza,
Azteca Cone has no listed phone number, website or physical location
that Reuters could find....
