Attorney General Eduardo Medina Mora said the money was connected to one of the hemisphere’s largest networks for trafficking pseudoephedrine, the main ingredient in methamphetamines. He said the ring had been operating since 2004, illegally importing the substance and selling it to a drug cartel that mixed it into the crystal form and imported into the United States.

Accounts differ on whether he was arrested while in a restaurant in Silver Spring or at his home in Rockville. [UPDATE: It appears that he was arrested in Silver Spring and was staying at a house in Wheaton. So, Rockville may not be able to claim this celebrity.]

Ye Gon denies the charges. He says that the pseudoephedrine was intended for prescription medications his company, Unimed Pharm Chem de Mexico SA, was going to be making in a new factory in Toluca, Mexico. He also says that $150 million of the cash in his home belongs to Mexico’s ruling political party and that he was ordered to hold it, hiding it behind walls and in closets. If true, this would be significant as president Felipe Calderon has become known for vigorously fighting drugs, sending soldiers into the streets in crackdowns on traffickers and their networks.

Officials, including Calderon himself, dismiss Ye Gon’s accusation as “fiction.” Mexico’s labor secretary, Javier Lozano Alarcon, whom Ye Gon said made the threat on behalf of the party, denies the claim and is considering a defamation suit. Ye Gon’s account of the money has changed over the months since it was seized.

According to USA Today and the Dallas Morning News, methamphetamine production has been moving from the U.S. to Mexico:

As a U.S. crackdown against meth labs and precursor chemicals has been drying up domestic production in recent years, the Mexican cartels are enthusiastically filling the void, U.S. and Mexican officials say. Moreover, officials say, meth has advantages for the cartels over even highly profitable cocaine. It is a highly addictive drug that can be made at home, smuggled easily and reap huge profit margins.

In part due to the supply from Mexico, officials say, meth crackdowns have not resulted in a noticeable decrease in meth use in the U.S., though some local law enforcement officials say they have seen a slight drop.

(Images USA Today, Banderas News.)

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