Mr. Cienfuegos, who had served as Mexico’s defense minister from 2012 to 2018, was charged in Brooklyn in October with laundering money and trafficking heroin, cocaine, methamphetamines and marijuana from late 2015 through early 2017 on behalf of the H-2 drug cartel, an offshoot of a larger and older criminal mafia, the Beltrán-Leyva organization.
The charges were the result of a multiyear inquiry that investigators called Operation Padrino, or Godfather — a reference to what they claim was Mr. Cienfuegos’ nickname in the underworld. The investigation, which began in late 2013, was bolstered, court papers say, by a sprawling wiretap that covertly captured thousands of BlackBerry messages, some of which are said to implicate Mr. Cienfuegos in chatting and orchestrating meetings with cartel leaders.
Officials say that Mr. Cienfuegos helped the H-2 cartel, which has committed horrific acts of violence as part of its smuggling business, with its maritime shipments. In exchange for lucrative payouts, the officials say, Mr. Cienfuegos also directed military operations away from the cartel and toward its rivals.
At the court hearing on Wednesday, Mr. DuCharme said his office remained confident in the strength of its investigation and “stands behind the case.” But under questioning by Judge Amon, he admitted that the decision to drop the charges against Mr. Cienfuegos had been made “at the highest level of the Justice Department,” identifying Mr. Barr by name.
One of the people familiar with the matter said that the prosecutors who had built the case against Mr. Cienfuegos were “devastated” that their superiors had decided to drop the pursuit of him in U.S. courts. Though Mr. Barr suggested in a news release on Tuesday that Mr. Cienfuegos would be “investigated and, if appropriate, charged” in Mexico, it remained unclear what would happen once he was repatriated, which could happen as early as Wednesday evening.
Edward Sapone, Mr. Cienfuegos’ lawyer, said that he and partners had believed from the start of the case that their client’s arrest was unjust because it violated a treaty under which the U.S. government had agreed to notify the Mexican government in advance about the arrest of any high-level suspect.