Federal authorities arrested five individuals in Norcross early Tuesday morning for allegedly laundering over $1 million into Jalisco New Generation — a Mexican drug cartel that’s been designated as a foreign terrorist organization under the Trump administration.
U.S. Attorney General Pam Bondi was expected to visit Atlanta to announce the arrests and “major developments” in a separate federal investigation, but canceled the night before.
Michael Herskowitz, chief of the Narcotics Section at the U.S. Attorney’s office in Atlanta, alleges law enforcement observed traffickers delivering drug proceeds to a middleman for two months last year, who then transferred the cash to a mother and daughter to launder using a licensed money service business in Norcross called “Pulga La Esperanza.”
“Agents with the Internal Revenue Service Criminal Investigation analyzed the money service business’ transactions and determined that the cash was wired to Mexico but was transferred in small increments so as to not raise suspicion by federal regulators,” Herskowitz said.
A total of seven people were indicted by a federal grand jury on drug trafficking and money laundering charges on April 1. They include Sandra Beatriz Hernandez Chilel, Karina Beatriz Perez Hernandez, David Miranda Vinalay, Jerome Lewis and Irving Joel Hernandez, who were arrested Tuesday.
Over 100 pounds of fentanyl — enough to kill 3.5 million people — as well as $320,000 of suspected drug proceeds, guns and jewelry were seized during the arrests, according to Jae Chung, acting special agent in charge of Atlanta’s division of the Drug Enforcement Administration, who said the case demonstrates “our ability to leverage every tool in the federal arsenal to attack and dismantle dangerous drug trafficking and money laundering networks operating in the United States and abroad.”
In February, eight organizations, drug cartels and other groups — including the Jalisco cartel — were added to theU.S. State Department’s list of foreign terrorist organizations, opening the door for possible financial sanctions against the groups and anyone aiding them.
The label is unusual because it deploys a terrorist designation normally reserved for groups like al-Qaida or the Islamic State group that use violence for political ends, not for money-focused crime rings such as drug cartels. Businesses, banks and buyers could fear possible U.S. prosecution if they knowingly or unknowingly have any transactions that touch the world of the cartels.
But, Steven Schrank, special agent in charge of Homeland Security Investigations in Georgia and Alabama, said it allows agents to focus “not only on the drugs but on the people pulling the strings.”
In a second indictment handed down in September, federal authorities are offering a reward of up to $8 million for information leading to the arrest of two brothers, Johnny Hurtado Olascoaga and Jose Alfredo Hurtado Olascoaga, who are accused of being co-leaders of La Nueva Familia Michoacana (LNFM) and responsible for its resurgence over the past decade, according to Herskowitz.
The brothers, also known by their nicknames “Pez” and “Fresa,” face money laundering and drug trafficking offenses. They are believed to be in Mexico.
“These men were directing the movement of heroin, cocaine, methamphetamine and fentanyl into the United States, while coordinating how drug proceeds would make their way back to Mexico,” Schrank said.
According to prosecutors, the investigation into LNFM began in 2021 when federal agents identified cartel members distributing large quantities of methamphetamine in metro Atlanta. Authorities say the cartel worked with U.S.-based associates to move drugs across the border and launder the proceeds back to Mexico.
LNFM has already been labeled as a foreign terrorist organization and a specially designated global terrorist group. And on Tuesday, the U.S. Treasury Department sanctioned the Olascoaga brothers and two other family members, Ubaldo and Adita Hurtado Olascoaga, upping its pressure on their alleged operations.
“It is our hope that these multimillion-dollar rewards will encourage people to come forward with what they know about the Olascoaga brothers, both here in the United States and in cities and towns in Mexico, who are most impacted by the cartels’ violence,” Herskowitz said.
