Trial Exposes Odd Ties in Mexico Drug War

When a top Mexican or Colombian drug lord is captured, events normally go something like this: He gets extradited to the U.S. and makes a closed-door deal with prosecutors to give information on the drugs trade while getting a reduced sentence in return. The public finds out little to nothing of the details. The upcoming Chicago trial of the son of one of Mexico's top drug lords has broken all the rules. This time, Jesús Zambada Niebla is going mano a mano with U.S. prosecutors, with both sides trading allegations that have raised eyebrows across the U.S.-Mexico borderIn pre-trial motions, Mr. Zambada alleges the U.S. government lets the Sinaloa cartel, Mexico's most powerful criminal organization, to import tons of illegal drugs into the U.S. in exchange for information on other cartels.

Mr. Zambada, 36 years old, is no ordinary accuser: He is the son of Ismael "El Mayo" Zambada, the co-head of the Sinaloa cartel alongside Mexico's most famous trafficker, Joaquin "El Chapo" Guzmán.

The U.S. government has flatly denied the claims. But it has acknowledged in court filings that it received information for years from a close associate of the two Sinaloa cartel chieThe pretrial wrangling provides a rare glimpse of both the inner workings of the Sinaloa cartel and the complex and ambiguous relationships that drug traffickers and law-enforcement agents have with the informants who act as the couriers between the two camps.

Mr. Zambada's allegations come at a time when doubts are growing about the U.S.'s role in Mexico's drug war as well as Mexican President Felipe Calderón strategy in the conflict which has claimed more than 46,000 lives in the last five years.

Jesús Zambada was arrested in Mexico in early 2009, after a controversial meeting with U.S. law enforcement agents at a Sheraton Hotel next to the U.S. embassy in downtown Mexico City. He was extradited to the U.S. in 2010. Mr. Zambada's federal trial in Chicago is set to begin sometime this year. Mr. Zambada's claims were made as part of his legal defense in pretrial legal filings reviewed by The Wall Street Journal.

Mr. Zambada doesn't deny drug trafficking. Rather, he says he did so with the permission of U.S. drug-enforcement agents and was promised immunity as part of an agreement with the U.S. government.Both Mr. Zambada's defense lawyers and U.S. prosecutors declined to comment. Mr. Guzmán and Ismael Zambada are fugitives.

So far, the Chicago court filings have provided startling revelations. U.S. officials as well as Mr. Zambada, for instance, say that one of the Sinaloa cartel's top officials has been a U.S. informant for years.

The alleged informant, Humberto Loya, a Mexican lawyer, has long been a top confidant of Mr. Guzmán and Ismael Zambada, the Sinaloa cartel chiefs, according to sworn affidavits. Mr. Loya's location is unknown. A U.S. federal indictment of Mr. Loya and other top Sinaloa cartel capos in 1995 described Mr. Loya's alleged role in paying off Mexican government officials and altering judicial documents to protect the cartel.

"El Mayo" Zambada on left and "El Chapo" Guzman on right

Once, according to the indictment, Mr. Loya allegedly paid a Mexican police official $1 million to free Mr. Guzmán's brother from custody.

In 2000, Mr. Loya agreed to cooperate with U.S. law enforcement officials by providing information on drug trafficking operations of rival cartels, according to a pretrial court filings submitted by prosecutors.

A different Drug Enforcement Administration agent said that Mr. Loya gave the tip that led to Mexico's largest cocaine bust—the 2007 seizure of 23 tons of cocaine belonging to the rival Juarez cartel, according to an affidavit submitted by Patrick Hearn, a Washington-based U.S. prosecutor.

In 2008, the DEA's Mexico City chief David Gaddis recommended that the U.S. drop Mr. Loya's 1995 indictment. Prosecutors followed his recommendation.

"It was the only time I had ever been involved in asking for a dismissal of an indictment against a cooperating defendant," wrote DEA agent, Manuel Castañón, in an affidavit.

Mr. Loya's alleged role is central to Jesús Zambada's defense. Mr. Zambada's lawyers argue that the U.S. provided their client and top Sinaloa cartel figures with immunity in exchange for information through Mr. Loya from "at least" 2004.

"Under that agreement, the Sinaloa Cartel under the leadership of [Mr. Zambada's] father, Ismael Zambada and "Chapo" Guzmán were given carte blanche to continue to smuggle tons of illicit drugs ... into ... the United States and were protected by the United States government from arrest and prosecution in return for providing information against rival cartels," Mr. Zambada's lawyers wrote. "Indeed the Unites States government agents aided the leaders of the Sinaloa Cartel."

U.S. prosecutors reject the claims as "simply untrue."

They also noted that Mr. Guzmán and Ismael Zambada have been indicted in absentia several times, and both have been placed on high priority "kingpin" lists by the U.S. government. Jesús Zambada himself was also indicted in 2003.

Over the years, many top drug traffickers, especially from Colombia, have worked out agreements with U.S. prosecutors to turn themselves in and provide information in exchange for a reduced sentence. Such deals, however, are complicated. In most successful cases, the trafficker chooses a U.S. lawyer, often a former prosecutor who is trusted by current prosecutors. After numerous meetings, often in third countries, both sides reach a deal. It is rare for there to be a trial.

In an affidavit, Mr. Castañón, the DEA agent, wrote that Mr. Guzmán, the drug lord, asked Mr. Loya in 2009 to set up the meeting in Mexico City between Mr. Zambada and the DEA at the behest of Mr. Zambada's father, Ismael Zambada. The elder Zambada wanted his son out of the business, Mr. Hearn, the prosecutor, wrote. In exchange, he said, Jesús Zambada would cooperate with the U.S. government.

In Chicago, where in 2009 he was again indicted for drug trafficking after his extradition to the U.S., Mr. Zambada is also accused of trying to obtain rocket-propelled grenade launchers and bazookas, which U.S. officials allege were to be used on attacks on U.S. and Mexican government installations. "I want to blow things up," Mr. Zambada said, according to testimony in a court filling from another confidential informant.

The Department of Justice approved an initial meeting between the DEA and Mr. Zambada which was supposed to take place on March 17, 2009, the U.S. government says. Mr. Zambada drove to Mexico City to meet with DEA agents who flew in from out of town.

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Vicente being extradited to the United States

What happened at the meeting is in dispute. But the court filings reflect that both sides agree things went awry and the DEA station chief canceled the meeting at the last minute.

Mr. Castañón, the DEA agent, wrote in his affidavit that the agents met with Mr. Loya at the Sheraton Hotel next door to the U.S. embassy to tell him the meeting was off. But Mr. Loya, who was "visibly nervous," returned to the hotel shortly after with Jesus Zambada, surprising the agents.

Mr. Castañón wrote in his affidavit that he told Mr. Zambada he couldn't make any promises, but discussed future cooperation. Mr. Zambada's defense attorneys assert that the agents told him they would quash the Washington indictment in exchange for more information against rival cartels.

The next morning, Jesús Zambada and five bodyguards were arrested by Mexican army troops, who, an army spokesman said, responded to anonymous complaints from neighbors in one of Mexico City's toniest neighborhoods about the presence of armed men in vehicles.

Mr. Zambada is now being held in solitary confinement in a four-foot-by-six foot cell in a maximum security prison near Detroit, his lawyers said in a court filing.