Ylitalo was appointed
Ambassador to Paraguay by
President Richard Nixon on July 22, 1969, and presented his letter of accreditation to
Alfredo Stroessner on August 14 of that year. Within sixteen months of Ylitalo's assumption of the mission in
Paraguay, a major point of contention in
Paraguay – United States relations came to light when two pounds of
heroin were seized at
Miami International Airport, aboard a plane from Paraguay in December 1970.
Narcotics came to dominate the remainder of Ylitalo's tenure as Ambassador, becoming a topic that was always discussed in his conversations with Paraguayan officials. In April 1971, the
Bureau of Narcotics and Dangerous Drugs successfully infiltrated the smuggling operation and found that
Auguste Ricord was controlling the operation, which had smuggled five thousand kilograms of heroin into the United States between 1965 and 1970. The Paraguayans detained Ricord, but, much to the dismay of the United States, refused to extradite him. With the Paraguayan refusal to extradite, the embassy responded by expressing "profound disappointment and concern with the decision of the court", noting that "the accused is one of the heads of the international heroin trafficking industry, who has brought misery and death to thousands of youths in the United States and around the World." President Nixon threatened, in January 1972, to cut off foreign aid to Paraguay if Ricord was not extradited, but Paraguay still did not relent. With the Paraguayan refusal to extradite Ricord, Ylitalo was coming under fire from the American press for being too close to Stroessner. When he noted that there was insufficient evidence to directly connect Stroessner and others in the regime to direct participation in drug trafficking, the attacks against him from the press increased in their severity. Unable to secure Ricord's extradition and increasingly becoming a target for media attacks, Ylitalo was recalled by President Nixon on September 11, 1972. ==Life after the ambassadorship==