Updated at 8:20 p.m. ET: MEXICO CITY -- Mexican troops have arrested two suspects in the killing of a U.S. Border Patrol agent and the wounding of a second officer in Arizona, Mexican security officials said on Wednesday. 

The two suspects were detained in a Mexican military operation in the city of Agua Prieta, in Mexico's northern Sonora state, a few miles from the spot where Nicholas Ivie was shot dead early on Tuesday while responding to a tripped ground sensor, a Mexican Army officer, who declined to be named, told Reuters.

Ivie was among three agents who were patrolling on foot about five miles north of the international border when gunfire erupted. A second agent was also wounded while the third, a woman, was unharmed.  

The agents had been patrolling in an area near the border town of Naco, well-known as a corridor for smuggling, and the Cochise County Sheriff's department has said that tracks were found heading south after the shooting.

Related: Feds examine whether friendly fire killed border agent

Ivie was a 30-year-old father of two who grew up in Utah and was active in the Mormon Church. He had been an agent for four years.

A Mexican police official in Naco, across the border from the Arizona town of the same name, confirmed the arrests, which occurred in the early hours of Wednesday.

U.S. officials refused to comment on the report of the arrests to NBC News.

It was the first fatal shooting of an on-duty Border Patrol agent since December 2010, when Brian Terry was killed in a shootout with bandits near the border. Terry's shooting was later linked to the government's "Fast and Furious" gun-smuggling operation, which allowed people suspected of illegally buying guns for others to walk away from gun shops with weapons, rather than be arrested.

Two Border Patrol agents were killed last year in an accident during a car chase with smugglers near Phoenix.

Reuters and The Associated Press contributed to this report.

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Reuters

Federal police officers escort Sandra Avila after her arrival at the airport in Toluca, in this photograph released by the Attorney General's office on Aug. 9, 2012.

Mexico have handed "Queen of the Pacific" Sandra Avila, Mexico's highest-profile female drug smuggler," over to United States authorities to face trafficking charges north of the border.

Avila, arrested in Mexico in 2007, allegedly helped build up the Sinaloa cartel in the 1990s with the gang's leader Joaquin "Shorty" Guzman. She won her nickname for pioneering smuggling routes up Mexico's Pacific Coast into California.

The Mexican federal attorney-general's office said she would face cocaine possession and distribution charges in Florida.

Avila, who was given into the custody of U.S. officials in Toluca, was nabbed on organized crime and money-laundering charges in Mexico and had fought extradition by claiming she would be tried for the same crimes twice.

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Previously, prosecutors in Mexico had tried unsuccessfully to bring drug smuggling charges against her, the BBC reported.

Avila is the niece of Miguel Angel Felix Gallardo, known as the godfather of the Mexican drug trade.

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According to the BBC, the director of the prison where she was being held was fired in 2011 because a doctor had been allowed in Avila's cell to give her Botox injections.

The country's drug war has claimed more than 55,000 lives since President Felipe Calderon sent the army out to battle drug gangs in late 2006.

Reuters contributed to this report.

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BEIJING -- Chinese police detained almost 2,000 people in a nationwide sweep on fake drugs, seizing more than $180 million worth of counterfeit products and destroying some 1,100 production facilities, the public security ministry said on Sunday.

The operation, involving around 18,000 police officers, discovered fake or adulterated drugs purporting to deal with illnesses ranging from diabetes to high blood pressure and rabies, the ministry said in a statement on its website (link in Chinese).

The suspects went so far as to advertise their drugs online, in newspapers and on television, and the drugs caused problems ranging from liver and kidney damage to heart failure, it added.

"The criminals' methods were despicable and have caused people to boil with rage," the ministry said.

On Sunday, the ministry released a statement saying it would offer rewards of up to $8,000 for any information about fake drug operations, The New York Times reported.

Read more news from China on Behind The Wall

The Chinese government has repeatedly promised to tighten regulatory systems after safety scandals involving fish, drugs, toys, toothpaste, children's clothes, tires, drugs and milk fortified with melamine, used in the manufacture of tabletops.

But little has been done apart from a few, highly publicized arrests. Tackling the issue has not been helped by China's confused and still developing regulatory environment, corruption and the high profits counterfeiters can rake in.

Earlier this year, Chinese consumers recoiled at stories of drug capsules tainted with chromium, long-term exposure to which can cause serious organ damage.

Striking images from China on PhotoBlog

While it hailed the success of the latest raids, the ministry warned it was too soon to be able to rest on their laurels.

"The crime of making fake drugs is still far from eradicated, and criminals are coming up with new schemes, becoming craftier and better able to deceive," it said.

Chinese students use IV drips while test cramming

The ministry called on consumers to only use above board pharmacies and hospitals and not "easily believe advertisements".

Bloomberg Businessweek reported that as much as 30 percent of drugs in developing countries are counterfeit, with China and India the biggest suppliers of fake drugs, according to World Health Organization estimates. 

Reuters contributed to this report.

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Ernesto Benavides / AFP - Getty Images, file

A police officer stands amid packages of cocaine seized along with other materials in anti-drug operations in Peru, during a presentation to the press in Lima on May 18, 2012. More than 1.5 tons of cocaine were confiscated.

Peru has again become the top producer of pure cocaine in the world, outpacing Colombia, where output fell by an estimated 25 percent in a year, according to a White House report issued Monday.

Drug czar Gil Kerlikowske, director of the Office of National Drug Control Policy, said Monday that potential cocaine production in Colombia was down by 72 percent since 2001. Colombia now ranks third, behind Bolivia in addition to Peru.

"Potential production of pure cocaine in Colombia is down to 195 metric tons (in 2011) from 700 metric tons in 2001, the lowest production potential level since 1994 and the first time since 1995 that Colombia is producing less cocaine than either Peru or Bolivia," Kerlikowske said in a speech at the Center for Strategic and International Studies. 

In the 1980s and 1990s, Peru was the leading producer of cocaine. 

The United Nations Office of Drugs and Crime released an estimate last week that Colombia could produce 345 metric tons of cocaine in 2011. 

Kerlikowske' s office said the drop in Colombia cocaine production has coincided with a decline in U.S. cocaine overdose deaths, positive workplace drug tests, the purity of cocaine available for street purchase and domestic cocaine seizures. 

"Let me add some context to these results. They didn't happen overnight, there was a sustained effort requiring nearly a decade of steady, strategic pressure across more than one administration in both the United States and Colombia." 

But while he called the decrease in production in South America was encouraging, he said the fight against Mexico's drug cartels "pose a significant challenge."

"These numbers are certainly heartening, but they should not distract us from the fact that the transnational criminal organizations that supply cocaine are a threat to civil society everywhere, as we've seen with our southern neighbor Mexico," he added. "This Administration condemns the gruesome drug-related violence and is committed to partnering with the Mexican government to disrupt the cartels that commit such brutality."

Mexico's drug war: No sign of 'light at the end of the tunnel'

Plan Colombia
Kerlikowske said the decline in Colombian cocaine production is largely the result of Plan Colombia, a $7.5 billion U.S.-backed effort launched in 1999 to help the South American government crack down on a left-wing insurgency and drug organizations. 

"The results are historic and have tremendous implications, not just for the United States and the Western Hemisphere, really globally," Kerlikowske said. 

Mariana Bazo / Reuters, file

An anti-narcotics worker burns a bag containing cocaine during a drug incineration in Lima, Peru, on June 27, 2012.

"We don't just have a far safer Colombia, we have a vibrant Colombia that is an active partner in helping with the drug and criminal issue in the region," he added.

Colombia President Juan Manuel Santos said the decline is part of his country's overall strategy of cutting off funding sources for drug traffickers. Speaking in the town of Rio Negro, north of Bogota, Colombia, he said it was good news that Colombia is now third in cocaine production. 

Defense Minister Juan Carlos Pinzon said the government is also making strides in seizing cocaine, pointing to the confiscation of about 300 tons of the drug in the last two years. 

U.S. Ambassador Michael McKinley told El Tiempo newspaper that "the numbers demonstrate historic advances in ending the fight against drugs in Colombia." 

Speaking Monday, Kerlikowske said while the decline in Colombian production is a positive development, it is not a sign that powerful and deadly drug cartels are going out of business. Instead, he said, these groups, including those waging a drug war against each other and the government in Mexico, will "turn to anything illegal that makes money."

The Associated Press contributed to this report.

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Luke Macgregor / Reuters, file

A HSBC bank logo is highlighted by the sun in London in this file photo taken March 1, 2010.

A "pervasively polluted" culture at HSBC allowed the bank to act as financier to clients moving shadowy funds from the world's most dangerous and secretive corners, including Mexico, Iran, Saudi Arabia and Syria, according to a scathing U.S. Senate report issued on Monday.

The report [link to PDF here] which comes ahead of a Senate hearing on Tuesday, said large amounts of Mexican drug money likely passed through the bank. 

HSBC's U.S. division provided money and banking services to some banks in Saudi Arabia and Bangladesh believed to have helped fund al-Qaida and other terrorist groups, according to an Al-Jazeera story on the report.

While the big British bank's problems have been known for nearly a decade, the Senate probe detailed just how sweeping the problems have been, both at the bank and at the Office of the Comptroller of the Currency, a top U.S. bank regulator which the report said failed to properly monitor HSBC.

"The culture at HSBC was pervasively polluted for a long time," said Senator Carl Levin, chairman of the U.S. Senate Permanent Subcommittee on Investigations, a Congressional watchdog panel.

The report comes at a troubling time for a banking industry reeling from a multi-country probe into the manipulation of global benchmark rates. Last month, rival British bank Barclays agreed to pay a $453 million fine to settle a U.S.-British probe into the rigging of the benchmark interest rate known as the London interbank offered rate, or Libor.

Lax controls
The report caps a year-long inquiry that included a review of 1.4 million documents and interviews with 75 HSBC officials and bank regulators. It will be the focus of a hearing on Tuesday at which HSBC and OCC officials are scheduled to testify.

Banks pulling out of rate-setting panels in wake of Libor scandal

In a statement emailed to NBCNews.com, the bank said: 

We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong. We believe that this case history will provide important lessons for the whole industry in seeking to prevent illicit actors entering the global financial system.

The report also contained strong criticism of the OCC, saying the regulator failed to crack down on the bank despite multiple red flags, allowing money laundering issues "to accumulate into a massive problem".

The failings and lax controls inside HSBC included an inability to properly monitor $15 billion in bulk cash transactions between mid-2006 and mid-2009, inadequate staffing and high turnover in the bank's compliance units, the report said.

HSBC ignored risks in doing business in countries such as Mexico, a country rife with drug trafficking, it said.

Between 2007 and 2008, HSBC's Mexican operations moved $7 billion into the bank's U.S. operations. According to the report, both Mexican and U.S. authorities warned HSBC that the amount of money could only have reached such a level if it was tied to illegal narcotics proceeds.

The focus of the Senate probe was HSBC's U.S. operations, which has its main office in New York. HSBC used the U.S. unit as a selling point to clients outside the United States, touting its ability to handle U.S. dollar transactions.

Red flags
The report described that among HSBC's problems was the bank's compliance division being unable to battle the suspect money. High turnover of top compliance officials made it difficult for reform to take hold, the report said. Employees were "overwhelmed" by a mounting number of suspect transactions that needed review.

HSBC, according to the report, helped move money for a Mexican foreign-exchange dealer called Casa de Cambio Puebla that served as a hub for laundered proceeds, according to the report.

Banks' bad behavior may be scaring away investors

Between 2005 and 2007, there was a "growing flood" of U.S. dollars moving between the exchange house and HSBC, setting off red flags inside HSBC. Some bankers said the transfers were legal. One said the money came from Mexican landscapers working in the United States and routing money back home to their families.

HSBC ultimately closed the account in November 2007 after it received a seizure warrant from the Mexican attorney general seeking money tied to the exchange dealer, the Senate report said.

Some of the money that moved through HSBC was tied to Iran, the report said, which would violate U.S. prohibitions on transactions linked to it and other sanctioned countries.

Between 2001 and 2007, more than 28,000 transactions were identified by an outside auditor for HSBC that potentially could have run afoul of laws that prohibit transactions with sanctioned countries. Of those, 25,000 involved Iran. A smaller number required additional analysis to determine if violations of U.S. regulations had occurred, the report said.

In 2010, Wachovia agreed to pay $160 million as part of a Justice Department probe that examined Mexican transactions, according to a BBC report, which also said ING last month agreed to pay $619 million to settle U.S. government allegations that it violated U.S. sanctions against Cuba and Iran.

Reuters contributed to this report.

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LONDON -- The heir to the Tetra Pak drinks-carton fortune has been arrested in connection with his wife's death, reports said Friday, but police have had to delay questioning him while he is treated for alcohol withdrawal.

The body of American-born Eva Rausing, 48, was found Monday in the couple's London home. Police have said the death is being treated as unexplained, but her husband, Hans Christian Hausing, 49, remains in police custody.

The Telegraph quoted Detective Inspector Sharon Marman as telling Westminster Coroner's Court on Friday: "We have not yet been in a position to interview Mr. Rausing. He has been arrested on suspicion of her murder and we await notification of when he would be fit to be interviewed by police." 

Although the detective used the word "murder," the Guardian reported that the official inquiry remains an investigation into an "unexplained death." One of the theories being examined, the newspaper said, was that Rausing died of a self-administered overdose.

Struggles with substance abuse
Eva Rausing, a mother of four, was one of the wealthiest women in Britain at the time of her death. Her husband's family is worth an estimated $6.7 billion, according to The Telegraph. The family was ranked as Britain's 12th richest in the 2011 Sunday Times Rich List.

Police found Eva Rausing's body in the couple's west London home after arresting Hans Christian Rausing for driving erratically. Reports suggest she had been dead for up to a week before her body was found.

Police struggle to shed light on US-born heiress' death

British tabloids have documented Eva and and Hans Christian Rausing's long struggles with substance abuse.

In 2008, Eva Rausing was arrested outside the U.S. Embassy in for reportedly trying to bring crack cocaine and heroin into building in her handbag. Police later found small amounts of cocaine, crack and heroin in a search of the couple's house. They were charged with drug possession but prosecutors later agreed to drop the charges in exchange for formal police warnings.

Before the embassy arrest, Eva Rausing's good looks and beautiful clothes — along with her husband and his friendly, bear-like countenance — had made the Rausings welcome participants on the London philanthropic scene. She was on several charity boards, focusing on those that helped fight drug addiction, but also serving on Prince Charles' Foundation for the Built Environment.

Evidence suggests that Eva Rausing's drug use intensified in the years since the embassy arrest. Recent photographs showed that Eva Rausing had become quite gaunt, and her once stocky husband also recently appeared thin and furtive, bearing only a slight resemblance to his former self.

Liz Brewer, a friend of Eva Rausing, told Britain's Sky News that Rausing's problem had been "pushed under the carpet" for too long.
"She was totally addicted, obviously, and was trying to get off it," Brewer said. 

The Associated Press contributed to this report.

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MEXICO CITY - Jesus Alfredo Guzman, to be the son of Mexico’s most wanted drug gang boss “El Chapo,” it believed to have been captured, officials in the country said Thursday.

A man suspected to be Jesus Alfredo was held in the western state of Jalisco on Thursday morning, the Navy said in a statement.

His father Joaquin Guzman - nicknamed “Shorty,” or "El Chapo" in Spanish - escaped a Mexican jail in a laundry cart in 2001 and runs the Sinaloa cartel, arguably the country's most powerful gang. 

Drug violence in Mexico has exploded over the last decade, and there have been more than 55,000 drug-related killings since President Felipe Calderon took office in December 2006. 

One killed every half hour in Mexico drug-related violence

Thursday's arrest comes just over week before Mexico votes for a new president. The ruling National Action Party has lost support due to the drug violence ravaging the country. The constitution bars Calderon from running for re-election. 

The U.S. Treasury said last month Americans were banned from doing any business with two of Guzman's sons, who were identified as Ivan Guzman and Ovidio Guzman, under the terms of the Foreign Narcotics Kingpin Designation Act. 

Cross-border methamphetamine trade booms amid Mexico's 'war on drugs'

Reuters contributed to this report

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Agencia el Universal / GDA via AP

President Felipe Calderon named Tomas Angeles Dauahare deputy defense minister upon taking office in December 2006.

Two Mexican generals, including the former deputy minister of defense who helped lead the escalation of the country's war against drug gangs, are being investigated for ties to the drug trade, according to local reports on Wednesday.

Mexican soldiers on Tuesday detained Tomas Angeles Dauahare, who served as the army's second in command until he retired in 2008, and Roberto Dawe Gonzalez, who led an elite unit in the state of Colima, and turned them over for questioning to the country's organized crime unit, officials told Reuters.

"The generals are making a statement because they are allegedly tied to organized crime activities," the official at the attorney general's office told the news service on condition of anonymity.

President Felipe Calderon named Dauahare as deputy defense minister upon taking office in December 2006, and the general retired in March 2008, according to a military spokesman, who said no arrest warrant had been issued for the two generals and said they were only being questioned at this point. 

Mexico's drug war: No sign of 'light at the end of the tunnel'

Dauahare, who once was considered a potential minister of defense, left the military in "through the back door" in 2008 under a veil of secrecy, according to Spanish-language news agency EFE (Link in Spanish). Francisco Armando Meza replaced Dauahare, according to Mexican newspaper Cronica (Link in Spanish).

EFE reported that in January, 2008, Dauahare said in a speech that groups of criminals had been recruiting members of the army and air force, in particular deserters. 

Desertion, he said at the time, "has always happened. It has increased as of this decade, with workload, absence from home, wages, contributing to the phenomenon," EFE reported. 

Calderon has staked his reputation on bringing Mexico's drug gangs to heel, sending in the army out to fight them at the beginning of his term. 

Violence has spiraled since then and around 55,000 people have fallen victim to the conflict, eroding support for Calderon's conservative National Action Party (PAN), which looks likely to lose power in presidential elections on July 1. 

On Tuesday, a former Mexican law enforcement official who worked closely with U.S. authorities in the drug war pleaded guilty in federal court in San Diego to aiding members of a violent Tijuana-based cartel, including helping traffickers get away with a double homicide in 2010.

18 beheaded bodies found near popular Mexico tourist site

Jesus Quinonez was convicted of participating in a federal racketeering conspiracy and could face a maximum sentence of life in prison.

In his plea, Quinonez admitted sharing confidential information with the Fernando Sanchez Arellano drug gang while he worked as an international liaison for the Baja California state attorney general's office.

He is the highest-ranking of four former or current Baja California law enforcement officials arrested in the case and was a primary contact in Baja for U.S. law enforcement agencies. 

A total of 43 defendants were named in the federal racketeering complaint alleging murder, kidnapping and other crimes. Four are still fugitives, and one is awaiting trial. About half of those arrested are U.S. citizens, U.S. Assistant Attorney James Melendres said. 

Msnbc.com’s F. Brinley Bruton, Reuters and The Associated Press contributed to this report.

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Alejandro Acosta / Reuters

Forensic technicians handle bags containing human remains found in two abandoned vehicles near Guadalajara, Mexico, on Thursday.

MEXICO CITY -- Police found the decapitated and dismembered bodies of 18 people near Mexico's second-largest city, Guadalajara, on Wednesday, in what appeared to be the latest atrocity by the country's most brutal drug cartel. 

Thought to have been carried out by the Zetas gang, it was one of the biggest mass beheadings in the recent history of Mexico, where decapitations have become alarmingly common.

The bodies and heads were stuffed into two vehicles abandoned on the side of a highway in the small town of Ixtlahuacan de los Membrillos, said Tomas Coronado, chief prosecutor for the state of Jalisco. 

Ixtlahuacan de los Membrillos is located 18 miles south of the center of Guadalajara on the road to Lake Chapala, a site popular with foreign tourists and U.S. retirees.

Money, drugs, guns and gangs: Child actors shame Mexico

Some of the bodies had been refrigerated before they were dumped, Coronado said.

A policeman at the scene in Ixtlahuacan said some victims had been so badly mutilated that officers could not determine whether they were male or female.

The officer said a note by the bodies was signed by the Zetas cartel, a criminal militia led by former Mexican soldiers and blamed for some of the worst atrocities in Mexico's drug war.

Cross-border methamphetamine trade booms amid Mexico's 'war on drugs'

"They are clearly messages between rival groups that are in conflict," Coronado told The Associated Press.

The AP reported that the vehicles, described as minivans, were towed to government offices to unload the bodies.

Guadalajara, known for its high-tech industry, mariachi bands and tequila, has been a strategic base for drug traffickers since the 1980s. 

Violence has flared in the once-tranquil city as the Zetas moved in to challenge the smuggling turf of other gangs in western Mexico.

One killed every half hour in Mexico drug-related violence

Soldiers arrested a high-ranking member of the powerful Sinaloa cartel in the city in March, causing his supporters to block streets with 25 burning cars and trucks.

Slideshow: Narco culture permeates Mexico, leaks across border

Mexico's drug war is also part of a drug culture with roots in music, movies and even religion.

Launch slideshow

Attacks between the Zetas and their rivals have flared up across Mexico since the beginning of the year. 

On Friday, nine corpses were hanged from a bridge in the border city of Nuevo Laredo just hours before 14 bodies were dismembered and shoved into garbage bags and ice boxes. 

Five days of intense battles in western Sinaloa state last week also left 34 dead, adding to the body count in Mexico's drug war, which has killed more than 50,000 people in the past five years.

Msnbc.com staff and Reuters contributed to this report.

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