A couple days ago we posted an article titled "What Does $1 Trillion Dollars look like?" Within that article we posted a series of photos that demonstrated what various amounts of cash would look like if they were laid out in real-life. We started a single $100 dollar bill and went all the way up to $1 trillion in cash. As we showed larger and larger amounts of money we obviously had to use photoshopped images. However, we did post three real-life photos that showed $226 million worth of cash that was stacked neatly in the back bedroom of a suburban home in Mexico City. After seeing those glorious mountains of money, A TON of people emailed us demanding to know more. How did this happen? When did this happen? What possible human circumstances could have unfolded to cause someone to store $226 million in cash on the floor of a back bedroom in a suburban Mexico City home??? You asked, and now we will deliver…
The story of the largest drug cash seizure of all time involves a 44 year old Chinese businessman named Zhenli Ye Gon. Back in the 1996 , Zhenli Ye Gon moved from China to Mexico to run a legitimate import/export business called Unimed Pharm Chem México. Unimed Pharm Chem México was authorized by the Mexican government to legally import thousands of metric tons of chemicals, most notably pseudoephedrine and various other ephedrine products that have many legal uses like the manufacturing of NyQuil. Pseudoephedrine and ephedrine also happen to be the primary ingredients in manufacturing methamphetamine, which is why countries regulate their distribution so strictly.
Somewhere along the way, Mr. Ye Gon allegedly began re-directing a portion of his imports from legitimate businesses to the Sinola drug cartel. The cartel then used these precursor chemicals to manufacture massive quantities of crystal meth which were then shipped to the US.
Fast forward to March 15th, 2007. Mexican drug police in conjunction with American DEA agents raid a suburban Mexico City home belonging to Mr. Ye Gon. After securing the property, the agents proceeded to check the residence room by room. Low and behold, when they opened the door to one of the back bedrooms, they were shocked to discover a mountain of neatly stacked money, three feet high and six feet wide, staring back at them. Stacked neatly and ordered by denomination, agents found enough money o make Scrooge McDuck put on his swim trunks.
The cash, was mostly in US dollars and took up nearly the entire floor space of the room. This discovery would become the largest seizure of drug cash that the world has ever seen. Weeks later when the money was officially totaled up, agents announced the take was $207 million US dollars, $18 million worth of pesos, $200,000 in Euros and $113,000 in Hong Kong dollars. So technically the take was more like $226 million. In addition to the cash, agents seized 11 Mexican gold bullion coins, many pieces of expensive jewelry, seven luxury cars and a war chest of automatic guns. Here are the photos from raid:
After hearing of the raid, Zhenli Ye Gon spent four months on the run before he was captured in a Washington DC suburb. He was taken into custody and the DEA requested he be extradited immediately to Mexico for trial.
Ye Gon claimed the he was forced to keep the cash by a violent Mexican drug cartel on behalf of the Mexican Secretary of Labor, so that the money could be used in President Felipe Calderon's upcoming re-election. Oh, and he also admitted that the total amount of dirty money he was "forced" to babysit was actually closer to $350 million. Incredibly, in 2009 the case was dismissed from the US Courts and Mr. Ye Gon was freed.
Zhenli Ye Gon was indicted in The United States in 2007, but after a series of witnesses recanted or coincidentally turned up dead, the case was eventually dismissed. As of this writing, Zhenli Ye Gon still faces charges in Mexico but the US government has not been able to force his extradition. Just last week, the United States' Fourth Circuit court of appeals began hearing arguments on why he should or should not be sent to Mexico.
The Story Gets Crazier
Last September, the Las Vegas Sands corporation (which owns several casinos around the globe) was fined $47.4 million by the US Attorney's office. What does that have to do with Zhenli? The company was being punished for failing to alert authorities to Zhenli Ye Gon's very suspicious gambling activities that occurred over a several year period. It turns out that between 2004 and the raid in Mexico in 2007, Zhenli managed to gamble away just over $125 million mainly at The Venetian (which is owned by Las Vegas Sands corp). FYI, every casino is obligated to alert American authorities of any suspicious transactions that may involve illicit money.
Between 2006 and 2007 alone, Zhenli transferred $45 million in cash to the Venetian from various banks and money exchanges located around Mexico. He proceeded to not only blow the entire $45 million, but an additional $35 million he received on credit from the casino. For a while, Zhenli was by far and away the largest all-cash-upfront gambler in the history of Las Vegas and thanks to these unprecedented losses, the casinos treated him like a God. They showered him with comped rooms, private jets, meals, cars, girls… we're talking comps that are beyond mortal imagination. In total, Zhenli lost $85 million at the Venetian and another $40 million at a small handful of nearby casinos.
For a while, this was a great deal for the casinos. They were making money hand-over-fist off one of the biggest whales in gambling history. Unfortunately, after the raid in Mexico City, not only did the money stop flowing but Zhenli refused to pay back that $35 million marker.
That marker loss combined with the $47.5 million fine were large enough to wipe out all executive bonuses at the Venetian for 2007. The losses and fines were so large that they caused shares in Las Vegas Sands to plummet. The company's CFO even had to address the Zhenli Ye Gon incident specifically during a quarterly conference call with investors.
Throughout it all, Zhenli has maintained his innocence. Which is particularly crazy when you consider that he doesn't dispute the allegation that he earned $350 million over a three year period while running Unimed. He also does not dispute that he gambled away $125 million in Las Vegas.
As we mentioned previously, Zhenli Ye Gon is currently a free man in the United States as he awaits the Court of Appeals' decision on extradition. We'll keep you posted if we hear any changes one way or the other.