— MAHATMA GANDHI In the early 1990s, three brothers from the border town of Matamoros, Tamaulipas—Julio, Sergio, and Pablo Villarreal Guajardo—inherited a scrap steel business from their father. The operation made its profits by purchasing low-quality steel that had been discarded due to some defect and then reselling it. Jorge Leipen Garay shared the story of these three brothers with me, and it is well-known that as the brothers built up the company, which came to be known as Grupo Villacero, they developed relationships with crooked employees in the purchasing and sales divisions of two of its main suppliers: Fundidora Monterrey, a quasi-governmental iron and steel company, and Hylsa, a Mexican steel mill that today is called Ternium. The brothers pressured these employees into making superficial holes and tears at the heads or tails of the pristine rolled metal sheets, instantly converting high-quality steel to scrap. The Villarreals would then buy this lightly damaged metal for a vastly reduced amount and resell it at premium prices.
