The "conservative" estimate represents the total amount of cocaine, cannabis and heroin a jury found Joaquin Guzman to have trafficked into the US, multiplied by the average prices of the drugs, according to a filing by prosecutors in federal court.
The US Attorney's Office in Brooklyn asked a judge to order Guzman to forfeit the massive sum.
It was not immediately clear what assets, if any, the US could seize to satisfy the judgment. A spokesman for the prosecutors declined to comment.
"This is largely an academic exercise as the government has never located or identified a penny of this $12.7bn in proceeds supposedly generated by Mr Guzman," said Jeffrey Lichtman, a lawyer for the drug lord.
Guzman, 62, was convicted in February on all 10 counts he faced, after jurors heard evidence from more than 50 prosecution witnesses offering an unprecedented look at the inner workings of his Sinaloa Cartel.
He faces life in prison at his scheduled 17 July sentencing.
US district judge Brian Cogan denied his motion to set aside the verdict and hold a new trial which Guzman's lawyers had argued that a new trial was needed after Vice News published an interview with one of the jurors, who said that the jury disobeyed court orders during the case.
Guzman made a name for himself in the 1980s by building cross-border tunnels that allowed him to move cocaine from Mexico into the US faster than anyone else.
He spent much of his career on the run, moving from one hideout to another in the mountains of Sinaloa, guarded by a private army, and twice escaped from maximum-security Mexican prisons.
He was finally captured in January 2016 and extradited to the US to face trial.
Despite Guzman's arrest, the Sinaloa Cartel still has the biggest US distribution presence of Mexican cartels, followed by the fast-growing Jalisco New Generation Cartel, according to the US Drug Enforcement Administration.
Together, they are the biggest producers of drugs sold on US streets.
Additional reporting by Reuters