Michele Marie Leonhart, the Administrator of the Drug Enforcement Administration (DEA), will resign following allegations that agents attended parties funded by cartels.
Michele Leonhart’s retirement was announced by Attorney General Eric Holder.
The move follows a justice department report last month alleging that drug agents attended parties with prostitutes, some funded by local drug cartels, in a foreign country.
The DEA said the incidents had happened in Colombia.
Correspondents say Michele Leonhart, who has run the agency since 2007, had been under pressure to resign since testifying to a congressional committee last week.
Following her appearance, a majority of the committee said they had lost confidence in her.
“Michele has led this distinguished agency with honor, and I have been proud to call her my partner in the work of safeguarding our national security and protecting our citizens from crime, exploitation and abuse,” Eric Holder said.
Eric Holder added that Michele Leonhart would leave the agency in mid-May.
According to the justice department report, the sex parties were held at government-leased quarters where the phones and laptops of agents were present.
It said that DEA investigators at the time had not reported the allegations because they “did not believe that the special agents’ conduct rose to the level of a security risk requiring a referral”.
The report said that several agents were also provided with money, expensive gifts and weapons.
One DEA official told investigators: “Prostitution is considered part of the local culture and is tolerated in certain areas called <<tolerance zones>>.”
Seven agents who admitted attending parties were given suspensions ranging from two to 10 days. One was cleared of wrongdoing.
The investigation had been instigated by Congress following reports from 2012 that Secret Service agents had hired prostitutes while protecting the president during a summit in Colombia.
Daniel Chong, a university student in the city of San Diego, has received $4.1 million from the US government after he was abandoned for more than four days in a prison cell, his lawyer said.
Daniel Chong, now 25, said he drank his urine to stay alive, tried to carve a message to his mother on his arm and hallucinated.
He was held in a drug raid in 2012, but told he would not be charged. Nobody returned to his cell for four days.
The justice department’s inspector is now investigating what happened.
Daniel Chong said he slid a shoelace under the door and screamed to get attention before five or six people found him covered in his faeces in the cell at the Drug Enforcement Administration’s (DEA) San Diego headquarters.
After Daniel Chong was rescued, he spent five days in hospital recovering from dehydration, kidney failure, cramps and a perforated oesophagus. He also lost 15 lb (7 kg).
Daniel Chong was one of nine people detained in the raid in April 2012. Authorities determined that they would not pursue charges after questioning him.
One of Daniel Chong’s lawyers said a police officer then put him in the holding cell and told him: “We’ll come get you in a minute.”
Daniel Chong said he thought he was forgotten by mistake.
Daniel Chong has received $4.1 million from the US government after he was abandoned for more than four days in a prison cell
“It sounded like it was an accident – a really, really bad, horrible accident,” he said.
The 5-by-10-foot cell had no windows and Daniel Chong had no food or water while he was trapped inside for four-and-a-half days.
Daniel Chong said he started hallucinating on the third day.
He urinated on a metal bench so he could have something to drink. He also unsuccessfully tried to set off a fire sprinkler to draw attention of the DEA authorities.
“I didn’t just sit there quietly. I was kicking the door yelling,” he was quoted as saying by the Associated Press news agency.
“I even put some shoestrings, shoelaces through the crack of the door for visual signs. I didn’t stay still, no, I was screaming.”
At one point, Daniel Chong admitted, he thought he was going to die. He broke his eyeglasses by biting into them and tried to carve a “Sorry Mom” farewell message. He managed to finish an “S”.
DEA spokeswoman Allison Price confirmed that the $4.1 million settlement had been reached, without providing further details, according to the AP.
The incident prompted the head of the DEA to issue a public apology last May, saying he was “deeply troubled” by the incident.
Daniel Chong’s lawyer said that as a result of the incident the DEA had introduced new policies for detention, including checking cells daily and installing cameras inside them.
Daniel Chong, now an economics student at the University of California, says he plans to buy his parents a house.
Mexican government has admitted that it mistakenly identified Felix Beltran Leon as the son of the country’s most-wanted drugs lord, Joaquin “El Chapo” Guzman.
On Thursday officials paraded before the media a man they said was Jesus Alfredo Guzman, whose father leads the powerful Sinaloa cartel.
But the arrested man was in fact Felix Beltran Leon, a car salesman, the attorney general’s office said.
The authorities had hailed the arrest as the most important in years.
Known as El Chapo” or “Shorty”, Joaquin Guzman has been in hiding ever since he escaped from prison in 2001.
The Sinaloa cartel controls much of the flow of cocaine, marijuana and methamphetamine to the United States.
Within hours of the high-profile arrest, doubts had started to be cast on the official version of events.
A lawyer proclaiming to speak for the Guzman family released a statement denying that the suspect in custody was the drug boss’s son.
Mexican government has admitted that it mistakenly identified Felix Beltran Leon as the son of the country's most-wanted drugs lord, Joaquin "El Chapo" Guzman
Felix Beltran Leon’s mother then spoke to journalists and denied any link to Joaquin Guzman or the Sinaloa cartel.
It took another few hours, while identity tests were carried out, before the government admitted it had made a huge mistake.
In less than a day, the episode has transformed from an apparent coup against one of Mexico’s biggest drug cartels to a major embarrassment for President Felipe Calderon’s administration, our reporter says.
US agencies, such as the Drug Enforcement Administration, were among those that had applauded the arrest.
On Thursday, the Mexican Navy had said that Jesus Guzman – known as “El Gordo”, or “The Fat One” – was a growing force within his father’s cartel and controlled most of its trade between Mexico and the US, where he was indicted in 2009.
El Chapo was jailed in 1993, but escaped from his maximum-security prison in a laundry basket eight years later.
The US state department has offered a reward of up to $5 million for information leading to his arrest.
If nothing else, the debacle goes to underscore how murky and confused the world of drug cartel arrests and government intelligence has become in Mexico.
With few recent photos of the main players in the drug world available, there may be more such cases of mistaken identity to come for the Mexican armed forces.
More than 55,000 people have died in Mexico in drug-related violence since President Felipe Calderon declared war on the cartels nearly six years ago.
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