Aug. 11--SAN ANTONIO -- U.S. officials returned $2.4 million in stolen oil proceeds to Mexico on Tuesday as part of an ongoing probe into cross-border petroleum smuggling.

For years, criminals south of the border -- including members of Mexico's drug cartels -- have siphoned off thousands of gallons of oil from government-run pipelines. Some of that contraband has been smuggled into the United States and sold to businesses on the black market, U.S. Immigration and Customs Enforcement Assistant Secretary John Morton said.

The sum handed over to Mexican authorities Tuesday came from the first U.S. oil executive to admit his role in the fuel trafficking ring, but authorities do not expect it to be the last as the investigation continues.

"People are going to jail and fines are going to be paid," Morton said in a speech at the 2009 Border Enforcement Security Task Force Conference in San Antonio.

U.S. INVOLVEMENT

Donald Schroeder, president of Houston-based Trammo Petroleum, pleaded guilty in May to purchasing millions of dollars worth of natural gas condensate -- a petroleum precursor -- that was illegally tapped from pipelines managed by Petroleos Mexicanos, Mexico's state-run oil monopoly also known as Pemex.

Prosecutors allege he arranged for the product to be shipped north on barges departing from the Port of Brownsville after it was smuggled in tanker trucks through Valley ports of entry.

As part of his plea agreement, Schroeder paid the $2.4 million returned to Mexico on Tuesday. His company, which made in excess of $600,000 in profit from the sales, agreed to pay another $2 million in fines to the U.S. government, Morton said.

Authorities remained tight-lipped Tuesday about the other U.S. businesses currently under investigation, but court filings identify two more Texas firms that have attracted scrutiny from federal agents.

In March, ICE investigators seized $40,130 from Houston-based Continental Fuels which they say came from the sale of stolen condensate illegally exported from Mexico, according to a forfeiture affidavit filed in a Houston federal court. The company -- which also operates out of the Port of Brownsville -- did not return calls for comment Tuesday.

A similar affidavit shows that agents seized another $102,525 that same month from Valley Fuels Ltd., a San Antonio-based firm which operates offices in McAllen, Houston and Washington, D.C. A spokesman for the company declined to discuss the businesses' role in the ongoing investigation.

Federal prosecutors would not confirm either company's involvement. But Assistant U.S.