Vigilante leader Hipolito Mora (seated)

The killing by Mexican navy commandos of bizarre Michoacan gangster Nazario "The Craziest One" Moreno will prove a short lived victory for both the government and the "self-defense" militias it has deputized.

Neither Moreno's passing nor the militias' ever growing presence across the state will bring peace to Michoacan any time soon.

In fact, the body of Moreno, founder and ideological anchor of both The Familia Michoacana and Knights Templar criminal organizations, was scarcely cold before militia factions that had spent a year trying to kill him turned on one another Monday.

At least several hundred gunmen loyal to Luis Torres, a 30-something vigilante commander known as "El Americano" because of his California birth, swarmed the town of La Ruana to successfully force militia founder and spokesman Hipolito Mora to flee.

El Americano accuses Mora of involvement in the weekend murder of another La Ruana militia leader known as El Pollo, (The Chicken), and of failing to return to their rightful owners unspecified properties confiscated from the Knights Templar. Mora in turn accuses El Americano of being a Templar loyalist in disguise. 

"I fought for my town and for my town I will die," Mora told reporters hours before hopping a federal police helicopter out of La Ruana after nightfall Monday. "Let anyone who has the guts follow me. We aren't going to give up." 

However, state prosecutors arrested Mora late Tuesday for involvement in the murder of El Pollo, a lime farmer and alleged former Templar named Rafael Sanchez, who had become a minor militia leader in La Ruana and was Mora's long term rival, according to media reports.

After Mexican federal officials decided in late January to openly ally themselves with the militias against the Knights, President Enrique Peña Nieto and his top aides are up now to their necks in the dispute.

"It would be the last straw if now we have this problem and we have a clash between them," Interior Minister Miguel Angel Osorio Chong told reporters Monday during a visit to a hospital in Buenavista Tomatlan, not 15 kilometers from where the militia factions were facing off.

The murder of El Pollo might have sparked the militia standoff in La Ruana, but the militias' internal tensions have been growing alongside their victories against the Knights for months.

Some factions were unhappy with the late January alliance that Mora and other militia leaders agreed to with Alfredo Castillo, the man Peña Nieto has tasked with imposing peace in Michoacan. That irritation was magnified by another agreement last Thursday in which the militia leaders promised to purge their ranks of suspected criminals and slowly disarm.

Operating out of Buenavista, a municipality that includes La Ruana, El Americano's men have proved among the more effective militia units in the drive to take Apatzingan and other towns away from the Knights.

Federal officials are hoping to broker peace before things get really embarrassing.

"We can't permit a confrontation," Castillo told journalist Ciro Gomez Leyva in a radio interview Tuesday morning. "We'll seek dialogue, negotiation. The use of force has to be the last resort. We are going to continue any effort to avoid conflict."

The militia showdown has sullied what might have been a long round of back slapping over Moreno's death early Sunday.

The Knights leader, who the Mexican authorities had said was killed battling federal police in December 2010, was finally actually gunned down by marines Sunday morning on a mountain road outside the town of Tumbiscatio, officials say.

Residents of Michoacan's Tierra Caliente, an agricultural and narcotics-producing region anchored by Moreno's home town of Apatzingan, had insisted all along that the crime lord was very much alive and running the Knights from the shadows.

Militia leaders had repeatedly offered to lead troops to Moreno, more widely known as El Chayo, and other Knights leaders.

SEE ALSO: El Chayo Profile

Moreno's continued existence "was always an open secret," Castillo told Televisa's journalist Carlos Loret de Mola on Monday. "People, civil society, repeatedly told you about this person, recognizing him as the head, the indisputable leader of this criminal organization" 

Indeed, Moreno was killed in the same area identified to Insight Crime as his area of operations last May by a security analyst in Morelia, Michoacan's capital. The marines pinpointed Moreno's exact location by tracking his radio signals.

Moreno's death won't quickly break the Knights. It remains unclear how much he was involved in the gang's operations in recent years. Templar lieutenants -- including Servando "La Tuta" Gomez and Enrique "Kike" Plancarte -- remain at large and presumably active in the business.

The militias have taken over about a quarter of Michoacan's municipalities, mostly in the western half of the state. But the Knight's retain a hold on many other areas.

"The sad thing about this is they are going to use the self defense forces like cannon fodder," the Morelia security analyst said. "Some of the remaining Templar leaders have united, disguising their gunmen as self defense members and continuing to operate."

InSight Crime Analysis

In standing up to the Knights Templar and other gangs, Michoacan's vigilante militias have achieved more in a year than state and federal officials managed in a decade.

Yet the militias were born of original sin.

Many fine and civic minded people undoubtedly joined up in the hope of bringing peace to their communities. But a lot of dodgy characters, whose background and intentions are far from clear, flocked to them as well.

Officials have accused militia leaders from the outset of ties to the Jalisco Cartel-New Generation (CJNG) and other rivals of the Knights. Federal troops arrested dozens of well-armed gunmen in La Ruana last March, less than two weeks after Hipolito Mora formed the first militia there, accusing them of just such affiliations.

The links with organized crime are hardly surprising. Gangsters have battled for more than four decades to control Michoacan's narcotics trade and other illegal rackets, which pour billions of dollars into a relatively impoverished state.

Militia leaders have repeatedly pointed out that their fight isn't against drug trafficking. They simply want to stop the kidnappings, shakedowns and land grabs that have become common place under the Knights in recent years.

In that light, present events in the Tierra Caliente can be seen more as a civil war within the Familia Michoacana, the criminal organization founded in early 2006 by Nazario Moreno and Jose de Jesus Mendez, alias "El Chango."

SEE ALSO: El Chango Profile

Moreno is from Apatzingan, Mendez from the village of Aguaje, a few miles south of La Ruana. The towns are no more than 30 miles apart in a region knitted together by extended families, but riven with small town feuds.

The Familia's founders worked in the 1990s as smugglers and enforcers for Carlos Rosales, alias "El Tisico," an old line Michoacan gangster aligned with then-Gulf Cartel kingpin Osiel Cardenas. 

At Rosales' request, Cardenas sent his enforcers from the Zetas gang to drive the Milenio Cartel out of Michoacan around the turn of the century. But following the arrest of Cardenas in 2003 and of Rosales the next year, the Zetas began taking control of narcotics and other vice trades, turning El Chayo and El Chango against them. By around 2008, The Familia dominated most of the state and especially the Tierra Caliente.

Moreno and Mendez agreed to split the state between them. El Chayo took control in most of the eastern half, including the capital of Morelia and the port of Lazaro Cardenas. El Chango presided over most of the Tierra Caliente and the rest of western Michocan.

The Familia fractured following El Chayo's supposed death in December 2010. El Chango fought for control with La Tuta Gomez and Kike Plancarte, who renamed their faction the Knights Templar. El Chango lost after many of his gunmen were killed or switched allegiance to the Knights.

After his June 2011 arrest, El Chango told federal interrogators that he was a simple drug trafficker who disagreed with the Knights' increased focus on kidnapping and extortion in Michoacan communities -- much the same view that has been echoed by some militia leaders.

Most of the towns "liberated" in the past year by the self defense forces had been part of El Chango's dominion.

The Knights Templar are likely finished as a criminal enterprise, at least in the Tierra Caliente and other Michoacan regions where the militias have taken control. But organized crime will just as certainly continue to flourish across the state.

Castillo and other federal officials can claim a dollop of success if they lessen the carnage perpetrated by the Knights and other thugs, including those still calling themselves the Familia Michoacana.

But Michoacan's narcotics industry remains largely unscathed. And the rise of the militias has created a large new pool of ambitious young gunmen with few other profitable prospects.

Real victory remains distant, at best.

*This article was updated on March 12, 2014

Investigations

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