Mexican Governor Charged With Helping Cartel Smuggle Tons of Cocaine Is Extradited to U.S.
Villanueva accused of aiding smugglers, laundering cash through Lehman Bros.
May 10, 2010 — -- Mario Ernesto Villanueva Madrid, former governor of the Mexican state that holds Cancun and dozens of other Caribbean beach resorts, has been extradited to New York on charges of accepting bribes from a violent drug cartel that smuggled hundreds of tons of cocaine into the U.S. and then laundering the bribe money through Lehman Brothers.
Villanueva was extradited Saturday to federal authorities in the Southern District of New York on charges that he accepted $19 million in bribes from the Juarez cartel in exchange for allowing the cartel free rein to smuggle Colombian cocaine through the state of Quintana Roo to the U.S. Prosecutors allege that he received $500,000 for each shipment.
The former governor was also extradited on a second indictment, in which he is charged with laundering his alleged trafficking profits through accounts at Lehman Brothers in New York and elsewhere. On Saturday morning he was turned over by Mexico's Attorney General's Office to the DEA and the U.S. Marshals Service and flown by DEA jet from Mexico City to White Plains, New York.
Villanueva, known in Mexico by the nickname "El Chueco" – the crooked one -- has been in prison in Mexico since 2001 on charges of taking bribes to let cocaine traffickers, including police officers, smuggle drugs through the state. He is the highest ranking politician in Mexico ever subject to a drug-related investigation while still in office.
Now 61, Villaneuva became mayor of the area that includes Cancun in 1990, then took a seat in the Mexican Senate before being elected to a six-year term as governor of Quintana Roo in 1993.
Criminal charges were filed against Villaneuva for drug trafficking and money laundering while he was still governor, but he was immune from prosecution while in office. He disappeared two weeks before the ceremony where he was scheduled to hand over the governorship to his successor.
Villanueva then went into hiding for two years. He was believed to be in Belize for much of that time.
The former governor gave interviews while on the run in which he denied taking drug money, but admitted taking money from resort developers. In addition to the criminal charges against him, the ex-governor is remembered for spurring development of the "Riviera Maya." He was arrested in Cancun in 2001.
After Villanueva was convicted in Mexican court on money laundering charges, he served a six-year prison sentence. On his release in 2007, however, he was rearrested on a request from the U.S. for extradition on charges related to drug smuggling and money laundering.
A former Lehman Brothers investment manager has already been convicted on charges of helping Villanueva launder his profits. In 2005, Consuelo Marquez pleaded guilty to helping Villanueva launder $11 million in drug money. She had worked at the financial services firm from 1995 until she was dismissed in 2000, according to the company. She admitted in her plea in federal court that she also helped Villanueva move the money when he dropped out of sight in 1999.
A federal prosecutor said at the time that Marquez had first helped Villanueva set up offshore Lehman accounts for money allegedly received from drug traffickers, and then helped Villanueva transfer the money out of those accounts when he became a fugitive.
Lehman Brothers declared bankruptcy on September 15, 2008, in what was the largest bankruptcy in U.S. history, citing debts of almost $800 billion. In the aftermath of the bankruptcy, Barclays and Nomura acquired portions of the company, and it is now defunct.