Utah Family Conspired With Jalisco Cartel in Cross-Border Fuel Scheme, Indictment Says

Last month, a Utah family was arrested and indicted on federal charges in connection with a scheme to smuggle hundreds of millions of dollars in crude oil from Mexico into the United States. As authorities continue to investigate the case, prosecutors say one of the family's closest associates in the smuggling operation was none other than the Jalisco Cartel.

James Lael Jensen and his wife, Kelly Anne Jensen, were arrested on April 23 after being accused of conspiring with Mexican criminal organizations to smuggle nearly 2,900 shipments of stolen crude oil into the U.S., falsely labeling it as "waste oil" to bypass import regulations.

According to an expanded indictment filed this week, James and his son, Maxwell Jensen, "knowingly conspired and agreed together to provide material support and resources, namely U.S. currency, to the Cártel Jalisco Nueva Generación, which was designated as a foreign terrorist organization on Feb. 20, 2025."

As reported by Mexican news outlet Milenio, prosecutors said the Jensens became involved in the scheme as early as May 2022. The father and son now face five federal charges, including money laundering, fuel trafficking and conspiracy to support a terrorist organization.

They are scheduled to be arraigned May 29 in U.S. District Court for the Southern District of Texas, in Brownsville. If convicted, they could face up to 20 years in prison and be required to forfeit approximately $300 million in assets.

Meanwhile, Kelly Anne and another son, Zachary Jensen, are also accused of participating in the smuggling ring by operating three companies that purchased stolen oil from criminal organizations in Mexico.

"The crude was acquired from companies that operated solely with the authorization of Mexican criminal organizations," the indictment states.

Once inside U.S. territory, the Jensen family allegedly laundered the illegal petroleum by selling it to clients under the guise of it originating from legitimate sources.

Authorities said the crude oil was smuggled into the country using falsified invoices, generating at least $47 million in laundered funds.

Prosecutors allege the proceeds were deposited into Wells Fargo and Bank of America accounts controlled by Jensen-owned companies. The funds were later transferred to accounts held by alleged Mexican suppliers, who prosecutors revealed were actually intermediaries for criminal organizations such as the Jalisco Cartel.

'Huachicoleo' costs Mexico billions each year

Fuel theft—known in Mexico as huachicoleo—typically involves illegal taps on pipelines owned by the state oil company Petróleos Mexicanos (Pemex).

Thieves, often aided by corrupt officials, siphon fuel to sell on the black market, disguising it as waste oil or other legal cargo. The stolen oil is frequently blended into semi-refined fuel that can damage engines and has caused deadly explosions.

This illicit trade has led to massive financial losses for Pemex and the Mexican government. Authorities estimate fuel theft costs Mexico more than $3 billion each year.