How El Chapo Accumulated a Net Worth of $1 Billion

While you may not be highly informed about the Mexican drug cartels and all of their major players, there is one name that you are likely very familiar with El Chapo. His full name is Joaquin Guzman Loera, but most officials drop the Loera when referring to his official name. This guy actually became famous for his ability to escape imprisonment. He is proof that physical stature plays an immensely small role in the development and sustaining of power. I was actually surprised to find that financial companies and experts keep up with the net worth of known criminals. As it turns out, drug distribution is an economy and industry in and of itself, and while it is illegal, it has a direct impact on the economic ecosystem on a global level.

Many have El Chapo’s net worth at over a billion. Even Forbes had ranked as a billionaire back in 2013; however, the publication now says that it is likely that El Chapo’s net worth has dropped below $1 billion. What is interesting is that the U.S. Government is demanding that El Chapo surrender $14 billion, and the big question is whether he has it or not.

We may never be able to answer that last question, but let’s focus on how El Chapo was able to amass such wealth in the first place.

As it turns out, Guzman was the leader (some would say that he is still the leader) of the world’s largest drug cartel. Guzman and other drug cartel and criminal enterprises in Mexico were the beneficiaries of the United States war on drugs in Columbia. While the U.S. was very successful in shutting down some of the most ruthless cartels in the world by squeezing Columbian cartels, they basically facilitated a shift in power to a more imminent threat. Where the Columbians were forced to move most of their drug products via ship and airplanes. The Mexican cartels were able to use trucks and underground tunnels to bring the drugs right into the U.S.

Not only did this immediate access to the U.S. simply the drug distribution process, but it cut the cost drastically, making drug distribution an even more profitable enterprise. Guzman has had the benefit of earning large amounts of money of a criminal career that extends over three decades.

As it turns out, there is a large discrepancy as to the actual net worth of Guzman. The U.S. government and all of its intelligence mechanisms are placing it at more than $14 billion. One would think that they know more than most financial analyst. The reason that Forbes dropped Guzman from the Billionaire status the company ascribed to him in 2013 was not that it believed his wealth had declined but simply admitted that it was too hard to verify his assets.

Not only is it believed that El Chapo ran a large drug smuggling organization, but he is believed to be behind the largest human smuggling ring in the world as well. There are those who also connect him with Middle-Eastern and European gun runners. According to a 33-page indictment filed by the U.S. Attorney’s Office, El Chapo’s criminal enterprise spans globally and impacts more than 100 countries.

It is also believed that Guzman operates his own money laundering operation that works to clean his money, but he also charges fees to other criminal organizations to clean their money as well. There are some experts that believe that the number the U.S. government is presenting is too high. While a drug lord can earn up to $20 billion per year, much of that will be used to support operations and pay for protection. Even at $20 billion per year in revenue, the drug lord may bring home less than $1 billion. Nailing down the specific surrounding Guzman’s finances has proven to be quite challenging, but I believe it is safe to say that he is worth at least a million and probably more.

Over the next year or so we will get an idea of just how much this drug kingpin is actually worth as the financials will be laid out in court documents that are public. We will see just how close we are in our estimates.

 


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