In the late 1970s, the Lehder-Jung partnership began to diverge, due to some combination of Lehder's megalomania and his secret scheming to secure a personal Bahamian island as an all-purpose headquarters for his operations.

Lehder built a 3,300-foot (1,000 m) runway protected by radar, Bodyguards, and Doberman attack dogs for the fleet of aircraft under his command. In the glory days of his operation, 300 kilograms of cocaine would arrive on the island daily, and Lehder's personal wealth mounted into the billions. He accumulated such staggering wealth that on two occasions he offered to pay the Colombian external debt. In 1978, he made an offer to do so to President Alfonso López Michelsen, in exchange for a free space for drug trafficking; in 1982 through Escobar, by then a Colombian Congressman, Lehder did so again, this time in an attempt to prevent his extradition.

Lehder was one of the founding members of Muerte a Secuestradores ("MAS"), a paramilitary group whose focus was to retaliate against the kidnappings of cartel members and their families by the guerrillas. His motivation to join the MAS was to retaliate against the M-19 guerrilla movement, which, on November 19 1981, attempted to kidnap him for a ransom; Lehder managed to escape from the kidnappers, though he was shot in the leg. He was one of the most important MAS and Medellin Cartel operators, and is considered to be one of the most important Colombian drug kingpins to have been successfully prosecuted in the United States.

After Brian Ross's September 5 1983 report, on the U.S. television channel NBC, made public the corruption of Bahamian government Leaders, Lehder could not return to Norman's Cay. The government had frozen all his bank accounts and taken over his property and possessions, and he went from being a Billionaire to nearly bankrupt. While on the run in the jungle, he got sick with a fever. Escobar sent a helicopter for Lehder and brought him back to Medellín, where he received medical attention to save his life. Even so, he was left very weak. When Lehder recovered, Escobar hired him as a bodyguard.

The April 30, 1984 assassination of Rodrigo Lara Bonilla, the Colombian Minister of Justice, initiated the beginning of the end for Lehder and the Medellín Cartel. Lara had campaigned against the cartel's activities, and his murder marked a change in Colombian politics. President Belisario Betancur, who had previously opposed extraditing any Colombian drug lords to the United States, announced that he was now willing to extradite. Lehder's was the top name on the crackdown list.

Having captured one of the Cartel's most powerful members, the U.S. government used him as a source of information about the details of the Cartel's secret empire, which later proved useful in assisting the Colombian government to dismantle the Cartel. In 1987, Lehder was extradited to the United States, where he was tried and sentenced to life without parole, plus an additional 135 years. Now all of the other cartel Leaders knew what would happen if they were extradited, and soon afterward, the Medellín Cartel organizations split up. These smaller organizations, especially Escobar's, were later attacked by the Cali Cartel, the Colombian police/army, and soon by the U.S. government, as well. A violent war began as the Medellin Cartel Leaders tried to protect themselves by fighting back.

In 1992, in exchange for Lehder's agreement to testify against Manuel Noriega, his sentence was reduced to a total of 55 years. Three years after that, Lehder wrote a letter to a Jacksonville federal district judge, complaining that the government had reneged on a deal to transfer him to a German prison. The letter was construed as a threat against the judge.

Within weeks of sending that letter in the fall of 1995, Lehder was whisked away into the night, according to several protected witnesses at the Mesa Unit in Arizona. While many believe he could have been released, others disagree. Lehder's brother, Federico Guillermo Lehder, who operated on the periphery of the Business, might have been mistaken for Carlos, thus causing the reports of Carlos' being free and living overseas.

Lehder's ongoing legal battles confirm that he remains imprisoned in the U.S. He is not likely to be released anytime soon. On July 22 2005, he appeared in the U.S. Court of Appeals for the 11th Circuit to contest his sentence. Lehder appeared pro se, arguing that the United States failed to carry out its obligations under a cooperation agreement he had entered into with the United States Attorney's Office, after he held up his end of the deal. (United States v. Lehder-Rivas, 136 Fed. Appx. 324; 2005).

In May 2007, he requested the Colombian Supreme Court to order the Colombian government to request his release from the United States because of the violations of his cooperation agreement.

In May 2008, Lehder's Lawyer declared to El Tiempo that a habeas corpus petition had been filed, alleging that Lehder's cooperation agreement had been violated and that "a court in Washington" had less than 30 days to respond to the notice.

On June 24 2015, Lehder wrote a letter to the President of Colombia Juan Manuel Santos, in which he requests mediation with the United States to be allowed to return to Colombia.