Feds: business linked to Cartel

(San Benito News/Ray Quiroga)

NEWS Staff Report

RIO HONDO, TX—Two family members with ties to a local business have been charged with allegedly conspiring to materially support a Mexican cartel previously designated as a foreign terrorist organization, conspiracy to commit money laundering, and related smuggling charges.

The superseding indictment, returned May 22, alleges Maxwell Sterling Jensen, 25, of Draper, Utah, and James Lael Jensen, 68, of Sandy, Utah, conspired to provide material support to the Cartel de Jalisco Nueva Generación (CJNG) in the form of U.S. currency. The Secretary of State designated CJNG as a foreign terrorist organization on Feb. 20.

“This case underscores the more aggressive and innovative approach the Southern District of Texas is taking towards combating the scourge of drug cartels,” said U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas. “This strategy focuses not just on the traffickers and trigger-pullers directly employed by the cartels, but also targets their confederates and enablers. Whether you are handing the cartel a gun, providing a car or safe house for smugglers, or putting money in the cartel’s pocket, you will be held to account.”

As previously reported in the NEWS, the Jensens allegedly operated Arroyo Terminals, an enterprise based in Rio Hondo.

Both are also charged with allegedly conspiring to conduct financial transactions to conceal and disguise the nature and source of the proceeds of illegally smuggled goods, crude oil. They also said to have aided and abetted the fraudulent entry of approximately 2,881 shipments of oil in violation of the Tariff Act, according to the charges.

“Cases like this highlight the often-dangerous relationships between alleged unscrupulous U.S. businesses and terrorist organizations,” said Special Agent in Charge Craig Larrabee of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) San Antonio. “Through strong collaborations and relentless investigative work, we and our partners exposed a possible large-scale operation that allegedly attempted to move millions in illicit crude oil and launder the proceeds. HSI remains committed to protecting our economy and holding offenders accountable.”

“What began as a Drug Enforcement Administration (DEA) drug trafficking investigation evolved into a multifaceted case involving an alleged complex criminal operation generating millions of dollars from crude oil – the largest funding source for Mexican drug cartels,” said Acting Special Agent in Charge William Kimbell of DEA Houston. “Given the charges have profound implications for both the United States and Mexico, we will continue to explore all leads and identify any believed to be involved. The collaboration with federal law enforcement, prosecutors, and state agencies proved critical to unraveling these alleged crimes and will continue until such operations are destroyed.”

“It is a top priority of the FBI to eliminate foreign terrorist organizations by depriving them of the funding they need to operate and by seizing their most valued assets,” said Special Agent in Charge Aaron Tapp of the FBI San Antonio Field Office. “Together with our law enforcement partners, we will use every resource and capability at our disposal to ensure violent cartels and anyone who corruptly facilitates their operations are held accountable to the American people and unable to establish a foothold in our communities.”

“Our commitment to taking down drug cartels and organized crime leverages IRS Criminal Investigation’s (CI) specialty in forensic accounting that identifies the alleged money trail and shuts down the flow of cash, just like we did in this case,” said acting Special Agent in Charge Lucy Tan of IRS-CI’s Houston Field Office.

“Some of our best special agents are using their law enforcement expertise to build unshakeable cases to ensure criminals are taken off the streets and their ill-gotten gains are returned to the American people.”

At the time of the initial arrests, authorities seized four tank barges containing crude oil, three commercial tanker trucks, an Arroyo Terminal pickup truck, and one personal vehicle. The Arroyo Terminal property in Rio Hondo, crude oil contained Arroyo Terminal storage tanks, and additional real properties are also sought for forfeiture. The superseding indictment also contains notice that the United States will seek a $300 million money judgment upon conviction.

The conspiracies to provide material support and to commit money laundering both carry a maximum sentence of 20 years in prison. If convicted of aiding and abetting the smuggling of goods into the United States and doing so by means of false statements, both men would also face maximum penalties of 10 and five years in prison, respectively. James Jensen also faces one count of money laundering spending which carries an additional maximum penalty of 10 years in prison, upon conviction.

With the exception of the money laundering charge which has the possibility of up to a $500,000 fine or twice the value of the property involved, the remaining counts carry a maximum $250,000 potential fine.
The investigation was a joint effort among many law enforcement partners to include FBI, ICE-HSI, and DEA with substantial assistance of IRS-CI along with U.S. Customs and Border Protection, U.S. Marshals Service, and Texas Department of Public Safety.

Operation Liquid Death involved the combined efforts of DEA, FBI, ICE-HSI, IRS-CI, and others, and is part of Operation Take Back America. This nationwide initiative marshals the full resources of the Justice Department to repel the invasion of illegal immigration, achieve the total elimination of cartels and transnational criminal organizations, and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department’s Organized Crime Drug Enforcement Task Forces (OCDETFs) and Project Safe Neighborhood.

Assistant U.S. Attorneys (AUSA) James Sturgis and Laura Garcia for the Southern District of Texas are prosecuting the case. AUSAs Mary Ellen Smyth and Tyler Foster for the Southern District of Texas are handling seizure and forfeiture matters.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Jensens’ attorney has gone on record declaring their innocence and said his clients are looking forward to their day in court.

Federal agents raided an area business last Wednesday, charging the owner and family members with five counts of allegedly importing fraudulent crude oil, all felony offenses.

According to eyewitnesses, agents were spotted, in mid-April, in the act of raiding Arroyo Terminals, which buys and sells crude oil.

Sally M. Sparks, a spokeswoman for the U.S. Drug Enforcement Administration, confirmed that the agency was operating in the vicinity.

According to online sources, Arroyo Terminals purchased about 7.7 acres near Rio Hondo in 2016.
“The company specializes in domestic and cross-border acquisitions of various blends of crude oil,” according to the Arroyo Terminals website, which has since been pulled down. The website’s prompt now reads, “Private Site,” when accessed at the time of the raid.

On paper, Arroyo Terminals stores crude oil near the Arroyo Colorado and transfers that oil to barges which, in turn, transported crude oil to buyers.

“The company owns and operates its own fleet of 30,000 barrel barges, which gives us unique capabilities to transport and market our crude oil product,” read the Arroyo Terminals website prior to being restricted.
According to court records, on April 17, a grand jury indicted James Lael Jensen, who owns Arroyo Terminals. According to his LinkedIn profile, he’s listed as Arroyo Terminals’ Owner and lists The University of Utah and Brigham Young University as school he’s attended.

From 2022 to 2025, he purchased 2,880 shipments of crude oil that had fraudulent customs paperwork, according to the indictment.

The fraudulent paperwork claimed the crude oil was actually “waste of lube oils” and “petroleum distillates,” according to court records ascertained by the NEWS.