MEXICO CITY | A Chinese-Mexican businessman arrested in 2007 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.</p><p> Zhenli Ye Gon&rsquo;s lawyers, who are fighting efforts to extradite him to Mexico from the United States, deny their client admitted anything illegal and called the report misinformation intended to sway public opinion against him.</p><p> The case against Ye Gon, 46, burst open in March 2007 when police raided his house and found more than $205 million in cash &mdash; mostly in $100 bills &mdash; stuffed into a closet and a wall. It was the largest drug-related cash seizure in history.</p><p> Ye Gon, who was born in Shanghai and became a Mexican citizen in 2002, was in the United States at the time.</p><p>Authorities arrested Ye Gon&rsquo;s wife, other relatives and some employees in Mexico, but Ye Gon went into hiding. His wife, Tomoiyi Marx Yu, remains in prison while she is tried on charges of using illicit funds.</p><p> 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&rsquo;s ruling party.</p><p> He said party officials forced him to store the cash with a threat that has since become famous in Mexican vernacular: &ldquo;Cooperate, or neck,&rdquo; he said with a throat-slashing motion in heavily accented Spanish. Mexican officials call the story preposterous.</p><p> Two months after the interview, Ye Gon was arrested at a restaurant in Maryland and charged in U.S. District Court with conspiracy to import drugs into the United States.</p><p> 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 United States again.</p><p> He remains in a prison in suburban Washington as he battles extradition.</p><p> The accusations against Ye Gon revolve around 96 tons of chemicals he 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.</p><p> 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.</p><p> 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 &mdash; enough for 185 million typical doses.</p><p>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 in Las Vegas gave him a Rolls-Royce.