DOJ Already Filing Material Support Charges After Designating Cartels as Foreign Terrorist Organizations

On February 20, 2025, the United States designated eight cartels and transnational criminal organizations (TCOs) as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). Since then, the US Department of Justice (DOJ) has already brought three indictments charging individual defendants alleged to be leaders or members of cartels or TCOs with providing material support to these newly-designated FTOs, under 18 U.S.C. § 2339B. These swift indictments suggest that US Attorney's Offices around the country are moving aggressively to bring charges in connection with the February 20 designations.  

That the DOJ has moved quickly to file material support charges against cartel and TCO members does not necessarily mean it will bring such cases against corporations. But these indictments, along with the fact that the DOJ has suspended approval requirements that previously existed for such charges and thus decentralized enforcement, underscore that the DOJ is aggressively pursuing criminal cases related to the designations and that any conduct — corporate or individual — that might violate the applicable statutes presents significant risk. In fact, the DOJ's Criminal Division recently highlighted material support to designated cartels and TCOs as a white-collar enforcement priority and expanded the Corporate Whistleblower Awards Pilot Program to provide financial incentives for whistleblowers to come forward and report this type of conduct. So companies should act now to ensure they have robust and effective compliance programs to avoid violating US law.

DOJ's Recent Material Support Prosecutions

Earlier this year, the Attorney General suspended approval requirements for the filing of material support charges under 18 U.S.C. § 2339B, certain other terrorism charges, and sanctions charges against members or associates of cartels or TCOs designated as FTOs or SDGTs.¹ Several U.S. Attorney's Offices have already moved forward with material support charges arising from the February 20 designations, announcing them as part of Operation Take Back America.

• On April 23, the DOJ announced the first case related to a newly-designated TCO, when it unsealed charges against a high-ranking member of Tren de Aragua (TdA) following his arrest in Colombia.² The case, filed in the Southern District of Texas, charges the defendant with conspiring to provide and providing material support to TdA and with conspiracy and distribution of cocaine in Colombia intended for distribution in the United States. The material support charges – which cover the period from February 20 through the filing of the indictment – allege that the defendant provided personnel (including himself) and services to TdA, a designated FTO.
• On May 13, the DOJ announced it had charged six alleged leaders of the Sinaloa Cartel in the Southern District of California with material support, narco-terrorism, and drug trafficking.³ The DOJ described a faction of the Sinaloa cartel as the "world's largest known fentanyl production network," and indicated the indictment was a "direct result" of the February 20 designation of the Sinaloa Cartel as an FTO.
• On May 16, the DOJ announced charges against a Mexican national and alleged human smuggler in the Western District of Texas for providing material support to the Cartel Jalisco Nueva Generación (CJNG), including grenades and personnel (herself).⁴ The DOJ also brought charges against the defendant for human smuggling, trafficking firearms, bulk cash smuggling, and conspiracy to possess a controlled substance.  

These prosecutions followed the March 19 announcement of terrorism and other charges against a high-ranking leader of MS-13 in the Eastern District of New York.⁵ Those charges cover an earlier time period and were brought under a different material support statute that does not require an FTO designation. But the prosecution shows a similar focus on using terrorism-related criminal statutes to pursue charges against leaders and members of cartels and TCOs.  

Quick Indictments Suggest Aggressive Approach

Given that the material support charges cover a short period of time (from February 20 until the date each indictment was returned) and that the defendants face other charges carrying more significant penalties (including substantial mandatory minimum penalties), the fact that the DOJ moved aggressively to file these charges only weeks after the FTO and SDGT designations reveals that prosecutors around the country will aggressively pursue material support violations where supported by the facts. Although it remains to be seen whether the DOJ will pursue material support charges against corporations, the DOJ's Criminal Division recently highlighted "[m]aterial support by corporations to foreign terrorist organizations, including recently designated Cartels and TCOs," as a priority area of white-collar enforcement.⁶ The DOJ also added material support and sanctions violations, as well as other offenses related to cartels and TCOs, to its Corporate Whistleblower Awards Pilot Program.⁷ Whistleblowers can now receive up to a $50 million award for reporting such corporate misconduct.

As we noted in a previous alert, paying fees to a designated organization for protection or to operate in an area they control or selling them goods or services could lead to criminal investigation and prosecution. For example, paying a designated cartel fees to transport goods through, or be allowed to operate in, a certain territory or providing financial services to, or conducting financial transactions for, a cartel-owned business could expose a company or financial institution, and its employees, to criminal enforcement risk. Businesses and their employees could find themselves the subjects of criminal investigation (or, as discussed in our prior alert, the targets of sanctions enforcement or designation). 

The material support statute is broad in scope and expansive in reach, and the DOJ has used it to prosecute companies that paid designated organizations, as set forth below:

• The material support statute's broad substantive scope: The material support statute prohibits persons from knowingly providing material support or resources to an FTO or attempting or conspiring to do so. "Material support or resources" includes any property (whether tangible or intangible) and services, including currency, other financial instruments, and financial services.
• The material support statute's broad jurisdictional reach: The material support statute has expansive jurisdictional reach, including extraterritorial jurisdiction, and applies to US persons and any person in the United States (regardless of whether they were in the United States at the time of the conduct) and to conduct that affects interstate or foreign commerce. In the 2022 prosecution of Lafarge S.A. and one of its subsidiaries (discussed below), jurisdiction appears to have been based on a single wire transfer through a US correspondent bank account and the use of US-based email accounts. US dollar-denominated transactions that clear through banks in the United States are a common way to establish US jurisdiction. And the statute would apply to corporate executives who authorized or approved their companies doing business with or providing a payment to a cartel and then traveled to the United States. Under the principle of respondeat superior, the executive's employer also could face criminal exposure.
• Prior corporate prosecutions for making payments to designated organizations: The DOJ has brought such criminal charges in the past, prosecuting Chiquita Brands International for sanctions violations for making payments for protection to an organization in Colombia that had been designated as both an FTO and an SDGT and to ensure that the organization did not cause physical harm or damage to the company's personnel or property.⁸ The DOJ also prosecuted Lafarge and its subsidiary for conspiring to provide material support to FTOs for making payments to ISIS and the al-Nusrah Front (ANF) for protection, to continue operating in areas they controlled, and to obtain economic advantages.⁹
• Duress is a narrow and limited defense: In the absence of an imminent and unlawful threat of death or serious bodily injury, duress is unlikely to be available as a defense.¹⁰ For example, the DOJ did not accept that Chiquita made payments under duress to a designated organization, at least in part because the company made dozens of payments over an extended period of time.
• The material support statute can lead to extensive asset forfeiture: A violation of the material support statute can constitute a "federal crime of terrorism,"¹¹ which, among other consequences, triggers broad asset forfeiture provisions. A violation of the statute could lead to forfeiture, for example, of any assets "derived from, involved in, or used or intended to be used to commit" the offense.¹² A violation could even result in forfeiture of "[a]ll assets, foreign or domestic[,]" of an entity "engaged in planning or perpetrating" the offense.¹³ In the Lafarge case, the DOJ used these expansive asset forfeiture authorities to forfeit $687 million from Lafarge, a sum representing the cost of the cement plant Lafarge operated in ISIS- and ANF-controlled territory. This substantial forfeiture was in addition to the criminal fine Lafarge paid.

With the DOJ's prioritization of terrorism and sanctions offenses involving cartels and TCOs and the significant financial incentives that are now available to whistleblowers under the DOJ's expanded Corporate Whistleblower Awards Pilot Program, financial institutions and other companies operating in cartel- or TCO-controlled areas or dealing with cartel- or TCO-controlled businesses will face heightened criminal enforcement risks, as well as sanctions and civil litigation risk, as discussed in our prior alert. Financial institutions and other companies should consider carefully how they conduct business in those areas and ensure that they have robust and demonstrable compliance programs with clear guidelines and protocols to avoid violating US law. These steps should include:

• Conducting risk assessments to identify areas of business operation that are high risk;
• Implementing strict know-your-customer and third-party screening, background checks, and management procedures;
• Strengthening anti-money laundering and counter-terrorism financing and sanctions controls;
• Providing training to employees in high-risk areas, geographic or otherwise, at all levels of the operation, on identifying red flags and providing guidance on how to manage and when to escalate cartel- and TCO-related risks;
• Ensuring internal reporting structures are strong and effective;
• Working with counterparties, lenders, and correspondent banks to preempt de-risking considerations;
• Establishing protocols to handle cartel demands, US government requests, and third-party queries;
• Working with local and US regulators to mitigate and manage cartel- and TCO-related risks, and to address any conflicts of laws; and
• Consulting with counsel as appropriate.

_{1 Dep’t of Justice, Total Elimination of Cartels and Transnational Criminal Organizations (Feb. 5, 2025) available here.
2 United States v. Martinez Flores, Case No. 4:25-cr-00030, Docket No. 39 (S.D. Tex. Apr. 8, 2025).
3 United States v. Noriega et al, Case No. 3:25-cr-01505-CAB, Docket No. 1 (S.D. Cal. May 2, 2025).
4 United States v. Maria del Rosario Navarro-Sanchez, Case No. 3:23-cr-01842-DB, Docket No. 225 (W.D. Tex. Apr. 2, 2025).
5 United States v. Roman-Bardales et al., Case No. 2:22-cr-00429, Docket Nuo. 18 (E.D.N.Y. Feb. 2, 2023).
6 Criminal Division Memorandum, Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime (May 12, 2025), available here.
7 Dep’t of Justice, Corporate Whistleblower Awards Pilot Program (May 12, 2025) available here.
8 Dep't of Justice, Chiquita Brands International Pleads Guilty to Making Payments to a Designated Terrorist Organization and Agrees to Pay $25 Million Fine (March 19, 2007) available at https://www.justice.gov/archive/opa/pr/2007/March/07_nsd_161.html.
9 Dep't of Justice, Lafarge Pleads Guilty to Conspiring to Provide Material Support to Foreign Terrorist Organizations (Oct. 18, 2022) available at https://www.justice.gov/archives/opa/pr/lafarge-pleads-guilty-conspiring-provide-material-support-foreign-terrorist-organizations. 
10 See, e.g., Dep't of Justice, A Resource Guide to the U.S. Foreign Corrupt Practices Act 27-28 (2d ed.) (2020) available at https://www.justice.gov/criminal/criminal-fraud/file/1292051/dl; Dep't of Justice, Foreign Corrupt Practices Act Review: Opinion Procedure Release No. 22-1 (Jan. 21, 2022) available at https://www.justice.gov/criminal/criminal-fraud/page/file/1466596/dl?inline. 
11 18 U.S.C. § 2332b(g)(5).
12 Id. § 981(a)(1)(G)(iii).
13 Id. § 981(a)(1)(G)(i).}

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