U.S. Treasury Sanctions Fentanyl Precursor Network Linked to Sinaloa Cartel's Los Chapitos

Treasury Targets Fentanyl Supply Chain

WASHINGTON – On Monday, October 6, 2025, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced sanctions against a significant illicit fentanyl supply network. The action targets eight Mexican individuals and 12 Mexico-based companies accused of providing precursor chemicals to the Sinaloa Cartel's Los Chapitos faction, a group heavily involved in the production and trafficking of fentanyl into the United States.

Under Secretary for Terrorism and Financial Intelligence John K. Hurley emphasized the gravity of the situation, stating, 'This network supplies illicit fentanyl precursor chemicals to the Sinaloa Cartel, a terrorist organization responsible for a significant portion of the deadly drugs trafficked into the United States.' He also noted that 'Over 500,000 Americans have died of fentanyl poisoning,' underscoring the national security priority of stopping the drug flow.

Key Entities and Individuals Sanctioned

The primary target of these sanctions is Sumilab, a laboratory supply company based in Culiacán, Sinaloa, Mexico. Sumilab had previously faced sanctions in May 2023, but Treasury officials reported that the company continued its operations by removing signage and changing tactics. The Favela López family, including siblings Víctor Andrés, Francisco, Jorge Luis, and Gabriela Favela López, along with partners Jairo Verdugo Araujo and Gilberto Gallardo García, were identified as being behind Sumilab's operations.

Other individuals sanctioned include Martha Emilia Conde Uraga, described as a longtime Sinaloa Cartel-affiliated chemical broker, and Cesar Elias Lopez Araujo. These individuals and entities are accused of using various businesses, including pharmaceutical, laboratory, chemical, cleaning, and real estate companies, to procure and supply precursor chemicals to the cartel.

Impact and Broader Context

The sanctions impose a freeze on all assets of the designated individuals and entities that are within U.S. jurisdiction and prohibit U.S. persons from engaging in transactions with them. This measure aims to disrupt the financial networks supporting the cartel's illicit activities.

The Sinaloa Cartel was designated as a Foreign Terrorist Organization (FTO) and a Specially Designated Global Terrorist (SDGT) by the U.S. Department of State on February 20, 2025. Its Los Chapitos faction was also designated by OFAC on June 9, 2025, under counterterrorism and counternarcotics authorities. Fentanyl, largely produced from precursor chemicals sourced from China and manufactured in Mexico, is considered the leading cause of death for Americans aged 18 to 45. The DEA has noted that while the Sinaloa Cartel has produced fentanyl since 2012, Los Chapitos has made it a cornerstone of their criminal enterprise.

Continued Efforts Against Fentanyl Trafficking

This latest action is part of an ongoing effort by the U.S. government to combat the fentanyl epidemic. Under Secretary Hurley reiterated the Treasury Department's commitment to 'dismantling the complex financial networks that support these terrorist organizations,' aligning with President Trump's stated priority of stopping the flow of deadly drugs into the country.