A report by Paraguayan newspaper ABC details the Mexican Sinaloa Cartel's unsuccessful attempt to establish a precursor chemical trafficking network in the country in 2008.

The report, published on August 3, outlines how the Sinaloa Cartel attempted to set up an Asuncion-based operation to smuggle ephedrine to Mexico in 2008. Ephedrine is one of the principal precursor chemicals used to make methamphetamine.

Work began in September 2008 when Mexicans Juan Jesus Preciado (pictured, center) and Juan Sevilla arrived in Paraguay, visiting several of the country's cities posing as businessmen wanting to set up a chain of restaurants. They eventually settled in a hotel in Asuncion where they were joined by Jorge Almanza Guzman (right in photo) and Leobardo Gaxiola Lopez (left), also from Mexico.

Preciado had smuggled ephedrine over the border from the Argentine city of Clorinda in a laptop, according to ABC. The men then packed the substance in plastic bags and hid it in a shipment of Argentine tea. However, on the first run, on October 1, 2008, Gaxiola was arrested at Asuncion's Silvio Pettirossi International Airport with just over five kilograms of ephedrine. He confessed to being part of a larger network operating out of the Asuncion hotel, leading to the arrest of Preciado and Almanza, along with a Paraguayan who had been complicit in the smuggling ring. Juan Sevilla had left the country one day before Gaxiola's detention, thus evading capture.

Preciado was later extradited to Argentina, where he had earned the nickname "King of Ephedrine," thanks to his prominence in the illicit trade. Gaxiola and Almanza were sentenced in July this year to 12 years in a Paraguayan prison.

InSight Crime Analysis

The trafficking of ephedrine from Argentina to Mexico has been on the rise since Mexico made the drug illegal in 2007. According to a 2009 MSNBC report, Mexican cartels exploit the comparatively lax regulations in Argentina, setting up front companies to import ephedrine and send it on to Mexico for methamphetamine production. Between 2006 and 2007 Argentina's ephedrine imports rose from 5.5 tons to 28.5 tons.

The Sinaloa Cartel is believed to have a presence in Argentina, with their leader, Joaquin "El Chapo" Guzman, even rumored to have lived there for a time until March last year. This has, to date, not been replicated in Paraguay, though the 2008 arrests show that the cartel views the country as an important transhipment point for moving precursors. Another Mexican national was arrested in Paraguay in 2010 with some 30 kilograms of ephedrine, which he was reportedly planning to ship to Mexico.

Part of the reason Paraguay is a useful transit hub is due to the country's high level of corruption in the police and military. Two former officials have been detained this year for involvement in cocaine smuggling and there have been reports of Paraguay's military allowing Brazilian traffickers to operate with freedom, even supplying them with weapons.

In June, Paraguayan authorities made their largest ever seizure of drug precursors, confiscating 27,650 liters of sulfuric acid, enough to produce 8 tons of cocaine.