DAMN! THE CHINESE KNOW HOW TO GET THAT GWOP! POLICE SEIZED $205 MILLION IN CASH FROM A MAN WHO SOLD CHEMICALS TO MAKE METH!

MEXICO CITY – 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, a top Mexican official told The Associated Press.

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.

Mexico's deputy attorney general in charge of extraditions, Leopoldo Velarde Ortiz, said U.S. prosecutors told him about conversations with Ye Gon in which he said he sold tons of a chemical used to make methamphetamine on the black market.

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, Velarde said.

"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," Velarde told AP in an interview this week.

Asked whether Ye Gon, 46, had admitted selling methamphetamine precursors on the black market, Velarde said: "That's it, exactly."

Spokeswoman Laura Sweeney said the Justice Department would have no comment.

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.

Ye Gon, who was born in Shanghai and became a Mexican citizen in 2002, was in the United States at the time; he kept a mistress and a Lamborghini in Las Vegas.

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 New York 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.

Two months after the interview, Ye Gon was arrested at a restaurant in Maryland and charged in U.S. federal court with conspiracy to import drugs into the United States.

U.S. District Judge Emmet Sullivan threw out the case in August after one prosecution witness recanted and another refused to testify. Sullivan, 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. Mexican prosecutors are hoping Ye Gon's conversations with U.S. prosecutors can be used as evidence in Mexico.

Ye Gon's lawyers accuse Mexican authorities of deliberately putting out false information.

"We believe this is misinformation on the part of the Mexican government in preparation for his possible arrival there," said Eduardo Balarezo, one of Ye Gon's attorneys in Washington. "This is why we're fighting his extradition. We do not believe he can get a fair trial there. We believe Mexico is trying this case in the media."

Asked whether Ye Gon had made the admission to U.S. authorities, Ye Gon's lawyer in Mexico, Rogelio de la Garza, said: "I assure you this is a complete lie."

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.

In court documents, 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.

A person familiar with the case, who spoke on condition of anonymity because he was not authorized to discuss it, said Ye Gon met over many days in late 2008 and early 2009 in a conference room at the Department of Justice with at least two prosecutors, one Drug Enforcement Administration agent and Ye Gon's lawyers, including Balarezo. Balarezo denies the conversations took place; two others allegedly present said they could not comment.

The source said Ye Gon provided detailed information 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.

The source also said Ye Gon provided the names of some of his buyers, though he would not disclose their identities to the AP out of fear they might take revenge on people involved in the case. Mexican officials have linked Ye Gon to the powerful Sinaloa Cartel.

Velarde stressed that Ye Gon's admission was made during informal interviews and not in open court. As such, he said, it did not constitute an official confession. Still, he described it as potentially useful if Mexican officials are successful in winning Ye Gon's extradition.

"If we decide we need that evidence for our case, then we'll have to make a formal request to the U.S. government that it send us those interviews with the prosecutors," he said.