In an incident showing the massive depth of the problem at the southern border, the son of the former leader of the Gulf Cartel was caught by the feds, charged with a slew of crimes, and pleaded guilty to serious offenses, including multi-million dollar extortion and money laundering schemes. That arrested man connected to the Gulf Cartel is Carlos “El Cuate” Favian Martinez.
The original arrests came in December of 2022, when Homeland Security Investigations caught 12 men, including Martinez, in a scheme involving extorting “transmigrantes,” or people who bring used cars across the border, and then laundering the money received through the extortion scheme. More recently, on March 11, 2025, the Department of Justice announced that 8 of the accused individuals, including Martinez, had pleaded guilty.
Describing the general scheme in a March 11 press release posted to its website, the Department of Justice (DOJ) The U.S. Department of Justice today announced that eight defendants have pleaded guilty for their conduct in a long-running and violent conspiracy to monopolize the transmigrante forwarding agency industry in the Los Indios, Texas, border region near Harlingen and Brownsville, Texas.”
It then described what those who were extorted by the cartel-connected Martinez and the others were doing that led to the extortion. In that part of the press release, it noted that “Transmigrantes are individuals who transport used vehicles and other goods from the United States through Mexico for resale in Central America.” The forwarding agency business Martinez and the others monopolized helps transmigrantes complete the paperwork necessary for those cross-border transfers.
Later on in the press release, the DOJ went on to describe the crimes the cartel-connected Martinez, amongst the others, was involved in. The first of those was a violation of the Gilded Age-era Sherman anti-trust act, which he allegedly violated in trying to monopolize the transmigrante agency business along the Texas-Mexico border.
Describing that aspect of the charges to which Martinez and the seven others pleaded guilty, the DOJ noted, “The conspirators fixed the prices for transmigrante forwarding agency services and created a centralized entity known as the “Pool” to collect and divide revenues among the conspirators, limit competition from other agencies, and increase prices for their services. Market participants who were not part of the conspiracy had to join and pay into the Pool. Pool members enforced the rules of the Pool by monitoring whether forwarding agencies were charging the agreed-upon prices, including by posting prices publicly on social media, and monitoring whether agencies were paying into the Pool as required.”
That was far from all. Continuing, the DOJ noted that they used extortion to force transmigrantes into their monopoly pool. It provided, on that point, “Martinez, Calvillo, Villareal, and Carlos Yzaguirre pleaded guilty to one count of conspiracy to interfere with commerce by extortion. Martinez also pleaded guilty to one count of interference with commerce by extortion. The defendants conspired to force forwarding agencies to pay money to the Pool and to pay other extortion fees, including a “piso” for every transaction processed in the industry as well as a “fine” for operating in the market outside of Pool rules.”
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Further, it described, in reference to the extortion issue, that they used violence to enforce it, and that the cartel-connected Martinez was responsible for nearly $10 million in extortion payments. It said: “The conspirators perpetrated acts of intimidation, coercion, and violence in furtherance of the antitrust and extortion conspiracies. Defendant Martinez was responsible for at least $9.5 million in extortion payments.”
Still not done, the DOJ went on to note that Martinez was additionally involved in a money laundering scheme meant to wash the massive amount of money raked in through the extortion schemes he and the others enforced, using bank accounts controlled by his cartel-affiliated family to move and hide the money.
Describing how that happened, and that the money laundering was meant to cover up the extortion payments, the DOJ said, “Martinez and Jose de Jesus Tapia Fernandez also pleaded guilty to a money laundering conspiracy, through which they laundered extortion proceeds. Cash obtained from the extortion conspiracy was deposited into bank accounts controlled by Martinez and his family, and those deposits were made to conceal and disguise the nature, source, ownership, and control of the proceeds.”
Concluding, the DOJ noted that Martinez agreed to forfeit the properties that he appears to have bought with the proceeds, pay a large fine, and make restitution to those he extorted. It said, “Martinez agreed to forfeit four real properties and $375,000 in seized U.S. currency, to pay a fine, and to pay full restitution to extortion victims. Guerra, Miranda, Calvillo, and Villareal have also agreed to pay fines as part of their plea agreements.”