FOR SALE: ONE LEOPARD-SKIN ROLEX AND MAYBE SOME FROZEN SHARKS

All Were Seized From Drug Lords in Mexico, Along With a Secret Hot-Tub Lair

MEXICO CITY -- When a Mexican drug lord gets busted, what happens to
his emerald-encrusted pistols?

The answer lies at a little-known branch of the Finance Ministry that
manages the over-the-top mansions, armor-plated Hummers and other
assets seized in the Mexican government's escalating war on drug
cartels. The agency is called the Asset Administration and Disposal
Service, or SAE as it's known for short in Spanish.

"You realize that the mansions in movies like 'Scarface' aren't
exaggerations," says Omar Yaffar, a 36-year-old manager at the
agency. "The real thing can be more amazing." Mexico's Narco-Bling

One recent Thursday, Mr. Yaffar went to check out a house the agency
is about to take over from Mexico's Federal Police, who last year
surprised a group of Colombian drug traffickers as they partied in
the chalet-style hideout. If the defendants are convicted, their lair
likely will be auctioned off.

The three-story house is like Hansel and Gretel meets Pablo Escobar,
replete with gingerbread-like carvings featuring Christian and
Buddhist figures, goats, fish and other animals. The grounds are a
labyrinth of garden trails among man-made ponds fed by waterfalls.
The compound also has stables, a suit of armor and a disco with stripper pole.

Some of the traffickers were caught in a cave-like underground
hot-tub complex about the size of a backyard swimming pool, featuring
faux stalactites and a fireplace. A glass skylight allowed bathers to
gaze up at lions or a pair of albino tigers that dwelled in a cage on
the roof. video Collecting Mexican Drug Lords' Bling 2:45

A Mexican agency gathers up and sells off the possessions of drug
lords who have been arrested as Mexico cracks down on drug trafficking.

"Some people have barking dogs living next door, but imagine lions,"
says Mr. Yaffar.

Police at the scene said the neighbors apparently never complained
about the lions' roars, perhaps because they thought better of
tangling with the big cats' owners. The alleged traffickers'
menagerie -- including not only lions and tigers, but panthers and
one gorilla -- was donated to zoos.

From the outside, alleged drug figure Zhenli Ye Gon put up a modest
facade. Mr. Ye, a Chinese-Mexican businessman whom U.S. and Mexican
authorities have charged with knowingly providing precursor chemicals
to the methamphetamine trade, lives on a quiet lane in Mexico City's
wealthy Lomas neighborhood. His three-story home, largely hidden from
the street, was built to look like it has only two.

Inside his home, investigators found $205 million in cash hidden in a
secret room hidden behind Mr. Ye's dressing-room mirror. When he was
arrested, he had just received a shipment of Versace dinnerware to go
with his Baccarat wine glasses and Lalique Champagne flutes, all of
it still in boxes.

Mr. Ye denies the charges, and U.S. prosecutors have moved to scrap
their case against him, which would open the way for extradition to
Mexico to face similar charges. Mr. Ye's lawyers say he plans to
fight extradition.

His lawyers also say they are pleased with the SAE's stewardship of
Mr. Ye's property, which their client can recoup if his name is
cleared. But they are less happy that the Mexican government already
spent the $205 million seized from him, as is permitted under Mexican law.

The globalized drug trade can put SAE agents in tricky diplomatic
situations. When a delegation of Chinese investigators interested in
the case came to Mexico, Victor Aznar, a senior SAE official, said it
was all he could do to keep the Chinese from pocketing dragon
statuettes and other objects during a tour of the house.

"They kept pleading with me that it was evidence they needed to take
back to China," says Mr. Aznar. "I politely told them, 'no.' "

Officials at the Chinese embassy in Mexico didn't return phone and
email messages seeking comment.

SAE agents deal with an astonishing variety of goods, from Boeing
DC-10 aircraft used to ferry drugs, to herds of cattle grazing on a
trafficker's ranch. In July, when customs officials discovered a
shipment of cocaine hidden in the bellies of frozen sharks, the
officials called the police to pick up the drugs. The SAE was called
in to deal with the sharks.

The sharks (which remain frozen) may be sold to fish markets if it
can be determined that they are safe to eat, and were fished legally.
Otherwise they will be destroyed.

Perhaps reflecting proximity of death for many drug traffickers,
often the jewels have religious themes, such as a palm-sized gold and
diamond necklace ornament depicting St. Jude, the patron saint of
hopeless causes.

Works by some of Mexico's most important artists, such as Diego
Rivera and Rufino Tamayo, also sit in the vault, awaiting auction.
Proceeds from the auctions are evenly divided among the attorney
general's office, the health ministry and the court system.

The fact that the artwork, jewels and cars seized by police have made
it into a government vault marks a change from the past. As recently
as the 1990s, before the SAE was created, assets seized by police had
a way of disappearing, government officials say. The SAE also manages
and disposes of assets from corporate bankruptcies and illegally
imported goods like knockoff clothing.

The agency is considered a model of efficiency and transparency,
according to experts on Mexico's economy. Regular auctions of
confiscated goods happen at upscale hotels, and over the Internet
using eBay's online auction software. Defense lawyers for alleged
drug traffickers say even their clients like the agency: They now
have a better chance of recovering their belongings if they win their
legal cases.

Some alleged drug traffickers attempt to buy back their stuff. To
prevent this, the agency doesn't accept cash and keeps a registry of buyers.

Ricardo Hernandez, a 36-year-old SAE agent, says he is still unnerved
by what he saw at a house in one of Mexico's roughest neighbors,
where kidnappers held the sister of a famous Mexican singer.

The dingy house was decorated as a monument to evil. A painting of
the Last Supper hung on the wall, the faces of Jesus and his
disciples distorted in horrifying ways, he said. One room appeared to
be a shrine to Santa Muerte, a grim reaper figure worshipped as a
saint by Mexican criminals. Bizarre elf figurines were placed about.

"I don't like seeing kidnappers' houses," Mr. Hernandez says. "That
really affected me."

SAE agents, dressed in white shirts and ties, usually stand out at
crime scenes among federal cops wearing bullet-resistant vests and
ominous ski masks to hide their identities.

That doesn't mean they never see action. In 2006, Mr. Yaffar traveled
in a convoy of armed federal police to take control of five ranches
in Sonora, a northern state, whose owners had been arrested.

When they arrived at the first ranch, they found it still occupied by
armed men. One officer thrust an assault rifle into Mr. Yaffar's
arms. "If they come at us, start firing," Mr. Yaffar recalls being told.

Luckily, the men were arrested with no shots fired.

The other four ranches were occupied only by some cattle that had
wandered in from neighboring ranches. That brought a new challenge,
Mr. Yaffar says: Persuading the police officers to help him clear the
cows off the property.