Kung Pao Taco Kingpin

A Chinese-Mexican "businessman" arrested after police found a $205 million stash of cash in his Mexico City mansion has told U.S. prosecutors he sold tons of a chemical used to make methamphetamine on the black market. Or did he?

Zhenli Ye Gon's lawyers, who are fighting efforts to extradite him to Mexico from the United States, vehemently deny their client admitted anything illegal and call the report misinformation intended to sway public opinion against him. Because he's already got it bad enough as a Chinaman south of the border.

The information was given to Mexican authorities "informally" and U.S. officials have not yet provided transcripts of the conversations or specifics of Ye Gon's account. "We know that in the interviews he had with prosecutors in the United States, he admitted his responsibility in the commission of the crimes he was accused of," said a source in the Mexican AG office.

The case against Ye Gon burst open in March 2007 when police raided his house in Mexico City's fanciest neighborhood and found more than $205 million in cash — mostly in $100 bills — stuffed into a closet and a wall. It was the largest drug-related cash seizure in history, and the best use of walk-in closet space.

Ye Gon was born in Shanghai and became a Mexican citizen in 2002, but was in the United States at the time; he kept a mistress and a Lamborghini in Las Vegas, and had to take a spin in both from time to time. The U.S. Drug Enforcement Administration says Ye Gon lost more than $120 million gambling over the years, and Ye Gon himself spoke of betting $150,000 a hand at baccarat. He said he was such a treasured customer that the Venetian Resort Hotel Casino gave him a small token of its appreciation: a Rolls-Royce.

Authorities arrested Ye Gon's wife, other relatives and some employees in Mexico, but Ye Gon himself was already in hiding. His wife, Tomoiyi Marx Yu, remains in prison while she is tried on charges of using illicit funds; she says she did not know about the money. As a fugitive, Ye Gon gave an interview to the AP in May 2007 in which he claimed much of the money found at his house was a campaign slush fund belonging to Mexico's ruling party. He said party officials forced him to store the cash with a threat that has since become famous in Mexican vernacular: "Cooperate, or neck," he said with a throat-slashing motion in heavily accented Spanish. Mexican officials call the story preposterous - their English would not be as good.

Two months after the interview, Ye Gon was arrested in Maryland and charged with conspiracy to import drugs into the United States. The case was tossed after one prosecution witness recanted and another refused to testify. The Federal Court judge, who had criticized prosecutors for taking months to reveal the witness problems, ordered that Ye Gon never be charged in the U.S. again. He remains in a prison in suburban Washington as he battles extradition.

Prosecutors in Mexico believe their case is much stronger because they won't have to prove Ye Gon conspired to move the drugs into the United States. Given the legendary status of Mexico's judicial and police systems, I doubt they'll have to prove much of anything. Mexican prosecutors plan to use Ye Gon's conversations with U.S. prosecutors as evidence in Mexico. The accusations revolve around 96 tons of chemicals Ye Gon imported from China in 2005 and 2006. Ye Gon, who owned a pharmaceutical factory west of Mexico City, told the AP that import records prove they were legitimate chemicals intended for use in cold medicines. Mexican prosecutors say he never made any medicine, instead using his factory to transform the chemicals into pseudoephedrine and selling it to drug gangs for hundreds of millions of dollars for use in the manufacture of methamphetamine.

Other detailed information Ye Gon provided was about the black market sales, admitting he sold the chemicals for $1,100 to $1,400 per pound ($2,400 to $3,000 per kilogram). Import documents show the chemicals cost Ye Gon less than $22 a pound ($49 a kilogram), meaning his margin in the operations in question would have been more than $200 million. U.S. drug agents call Ye Gon one of the largest pseudoephedrine traffickers in the Western Hemisphere and say he provided the gangs with enough chemicals to make 41 tons of methamphetamine — enough for 185 million typical doses, or a regular Lindsay Lohan weekend.