Prosecutors say families running the oil terminal in Texas have received 2,881 shipments of smuggling oil connected to Cartel de Jalisco Nueva Generalization.
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MEXICO CITY – The American family who runs a Texas oil company near the border has been charged by U.S. officials in a long-standing operation that smuggled thousands of shipments of oil stolen by drug cartels, federal prosecutors announced Friday.
James L. Jensen, wife Kelly A. Jensen, sons James L. and Zachary G. Jensen are all charged in connection with the scheme. James Jensen is the operator of Arroyo Terminal, a Rio Hondo-based company that receives and distributes crude oil cargo.
According to the US Lawyer’s Office for the Southern District of Texas, the total number of 2,881 Jensen companies received from May 2022 came from Mexican smugglers linked to the Cartel de Jalisco Nueva Generalization. Experts previously told USA Today that CJNG organized crime groups are Mexico’s most extremists and are essentially turning the region into Warzones.
The lawsuit against Jensens has designated the CJNG, the Sinaloa cartel and other criminal groups as terrorist groups as authorities aim to put great pressure on US cartel smuggling drugs in February under President Donald Trump.
“This case highlights the more aggressive and innovative approach the Southern Texas region is taking towards its fight against the drug cartel tragedy,” said U.S. lawyer Nicholas J. Gandhi. “This strategy focuses on targeting Confederates and enablers as well as traffickers and trigger pullers directly employed by cartels.”
Most of the charges are against James and Maxwell Jensen, who are in prison for up to 20 years for money laundering. They will be collectively faced for up to 15 years if convicted of contraband assistance and bemuneration under false statements. Jensens’ attorneys did not respond to repeated requests for comments.
According to the Treasury, oil smuggling is a multi-billion dollar business for cartels. Drug Enforcement Agency officials called it “the biggest source of funding for Mexican drug cartels.”
The move by US officials to crack down on Texas companies dealing with smuggling oils says the practice has been a widespread problem for years with devastating consequences south of the border.
“The story is that everything is happening in Mexico and in America is all drug-related,” Jess Perez Caballero, a researcher with the Mexican government, told USA Today. “But it’s impossible to support this kind of complex business without these links.”
Mexican smugglers rely on American refiners, small oil producers and distributors to make money from theft.
“It’s a good start to realize that the US is not a passive actor in this business,” Caballero said. “It’s as active as Mexico.”
What is the fee for Jensens?
Jensens has been operating the Arroyo Terminal in Riohondo, Texas since 2020, according to James Jensen’s Linkedin page.
Terminals are key distribution points in the oil economy, storing oil that travels between producers and refineries.
Prosecutors allege that from May 2022 to April 2025, Jensen’s Texas Terminal served as a vital road for oil smuggled from Mexico, according to the indictment. The family has received a total of 2,881 shipments of stolen oil, a court filed a request.
The indictment alleges that it was shipped using fraudulent certified papers and labels containing “lubricating oil waste.”
The father has faced up to 10 years due to money laundering spending. According to the money, he used money from the smuggling business to buy a 2024 GMC vehicle.
Kelly and Zachary Jensen are being charged with money laundering conspiracy. Kelly is also charged with conspiracy to spend money laundering.
The items they were ordered to confiscate included oil, tractor trailers, GMC vehicles, a Chevrolet Stingray registered with Kelly Jensen, and barges for Utah real estate where the family has roots.
Mexican and American smuggler relationship
Experts say the family is not the first to face charges in Texas related to cartel oil smuggling.
Ramanan Krishmurti, a researcher at the University of Houston, said the practice has been going on for years in many small oil businesses.
Smugglers rarely reveal it without a huge increase in border crossings with oil on the US on boats, or with very high traffic on borders.
According to Krishnamoorti, the typical scheme brings smuggling oil to operations “mama and pop” across Texas. The oil is then added to its own supply, and by the time it reaches the refinery, it can be difficult to convey the difference.
The total amount of smuggling oil is “literally a decline in the ocean,” Krishmurti said. But “it’s important for cartels in that they can steal and sell it.”
According to the Treasury, the Americans involved can make $5 million per barge of smuggled oil.
Oil is then shipped to markets around the world from Japan and India to Africa and even Mexico.
Deep Seat Problems in Mexico
Guadalupe Correa Cabrera, a researcher at George Mason University and author of a book on the Los Zetas Cartel, said the issue of oil smuggling in Mexico has been around for many years.
Mexican state oil company Pemex has a legacy of corruption scandals, and oil smuggling is just one of the accusations against operators. The company dates back to the nationalisation of all private oil companies in the country in 1938.
Correa-Cabrera said scrutiny of US involvement is delayed.
“Someone needs to improve this crude oil or gas condensate,” she said.
She praised US authorities for chasing Americans involved in helping them fight the cartel. But she fears that organized criminal groups will be blamed on deeper issues.
“The participation of the cartel is not as important as we imagine,” Correa Cabrera said. “It’s not like stealing an 18-wheeler, it involves knowing about pipes, pipe monitoring, and really specialized knowledge.”
She said the smuggling operation is likely to depend on everyone, from pipeline engineers to military officials responsible for watching the border.
“The story and coverage are directed towards the cartel,” she said. “But without all these other parts, I can’t imagine this going to happen.”
