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Federal Agents Arrest Members of Large Mexican Drug Trafficking Network



U.S. Attorney General Janet Reno announced on May 2 the latest arrests of people nationwide in an anti-narcotics operation aimed at the "Mexican Federation" of drug transporters and Colombian drug distributors (Christopher Wren, "Cocaine Web Broken Up, and Mexican Link Is Detailed," New York Times, May 3, 1996 p. A24; KRT News Service, "Feds bust 'Mexican Federation' drug ring," Star Ledger (Newark, NJ), May 3, 1996, p.4).

The investigation, code-named "Zorro II," began in November 1995. As of May 1996, the operation had seized some $17 million in cash, six tons of cocaine, a half-ton of marijuana and 730 grams of crack cocaine. Among the 136 arrested since February were key Cali cartel figures, Mauricio Gutierrez, Herman Aquilera and Pierre Remy; the alleged organizer of the Mexican transportation network, Rafeal Alapizco; and Jorge Valezquez, the alleged leader of a domestic distribution network based in Chicago. Also charged were a sergeant in the Army National Guard, and a New York City police officer, who ferried drugs to Richmond, VA for Colombian drug dealers in New York. Arrests were made in Chicago, Los Angeles, Houston, Midland, TX, El Paso and Miami.

These arrests follow the January 14 arrest of Juan Garcia-Abrego, the alleged head of Mexico's Gulf cartel that shipped cocaine from Colombia to the U.S. For more information about Garcia-Abrego's arrest, see the February 1996 issue of NewsBriefs.

The operation was part of the Southwest Border Initiative and involved the DEA, the FBI, several other federal agencies and 42 state and local agencies, including the New York Police Department. More then 90 court-approved wiretaps on telephones, cellular phones and beepers were used to gather evidence. Carlo A. Buccia, the head of the DEA's office in New York described the cooperative investigation as "the most sophisticated and the most well coordinated effort that I've ever seen."

"Most of the cocaine produced by the Colombian cartels is entering the United States through Mexico," Ms. Reno said. "Mexican individuals are not only transporting the Colombian cocaine, but they have developed their own large-scale organizations to distribute the cocaine in the United States." This is because Mexican smugglers often take payment from their Colombian cocaine suppliers in drugs rather than cash. They then sell the drugs in Mexico and the U.S..

Mexican smugglers account for as much as 70% of the cocaine and 50% of the marijuana entering the United States, in addition to substantial quantities of heroin and methamphetamine. According to Mexican Assistant Attorney General Moises Moreno Hernandez, the drug profits or "narco-dollars" flowing back to Mexico were estimated at $30 billion for 1994 (Molly Moore and John Ward Anderson, "Where the Drug Lords Hold Court," Washington Post National Weekly Edition, May 6-12, 1996, p.15).

The DEA described the drug-smuggling system. Cocaine was flown to Mexico from Colombia and then Mexican transporters smuggled the drugs into the U.S. by car and truck. The smugglers shuttled 15 to 150 kilograms per vehicle, hiding drugs in the wheel well or other small compartments. Some traffickers made as many as 20 trips a month across the border. Once inside the U.S., the cocaine was stored in Los Angeles in "stash" houses. Minus the payments of drugs to the Mexican transporters, the cocaine was turned over to Colombian distributors to sell to buyers across the U.S. Cash proceeds were shipped to Colombia through Miami, where the money was often stuffed in appliances being exported.

Mexican officials did not take part in the investigation and arrests, but Reno said that the Mexican government was concerned "about this very serious problem and is cooperating with us." The chief of the U.S. Justice Department's narcotics section, Theresa Van Vliet, said the Mexican government was not included because the case was "a domestic investigation targeting the domestic operations" of the Mexican and Colombian smugglers.

Mexico has seized eight tons of cocaine and nearly 400 tons of marijuana during the first five months of 1996, said Attorney General Antonio Lozano on June 26 in a ceremony to mark World Anti-Narcotics Day. Lozano, the first opposition leader to hold a cabinet post in modern Mexican history, said in a June 25 statement to the U.N. that the country's chief security threat was the drug trade and vowed to crack down on corrupt politicians and police (Reuter, "Drug News," America Online: DRUG NEWS, June 26, 1996).

The Clinton administration was criticized, earlier this year by Republicans in Congress, for giving certification to Mexico in the International Narcotics Control Strategy Report on March 1. For more information about Mexico's certification, see the April 1996 issue of NewsBriefs.

Cocaine smuggling leads to
growing Mexican cartels and money laundering

The drug trafficking by Mexican transporters has led to an increase in violence, drug abuse, corruption and drug cartels in Mexico, particularly in towns near the U.S. border (Molly Moore and John Ward Anderson, "Where the Drug Lords hold court," Washington Post National Weekly Edition, May 6-12, 1996, p. 15).

Last year, cities along the border reported over 1,000 murders, half of which were drug related according to local officials. In Juarez, which is across the border from El Paso, homicides were up by 25% to 295. The mayor of Juarez, Ramon Galindo Noriega, said 90 people died from overdoses in 1995, up from four or five the previous year. Galindo also claims that cartels pay as much as $500,000 to police, politicians, and government officials for protection. "I know I have policemen who are paid by the drug dealers," Galindo said. "I pay 2,200 pesos [$297] a month. A drug dealer can give $1,000 a week for protection. I can't compete."

The Juarez Cartel, reportedly the most powerful Mexican mafia organization, moves drugs from Juarez to El Paso. Headed by Carrillo Fuentes, the Juarez cartel has been expanding east since the decline of the Gulf cartel after the arrest of Garcia-Abrego. The Tijuana cartel, lead by the Arellano-Felix brothers, and the Sonora cartel control drug-trafficking west of Juarez.

Drug profits in Mexico have also created an enormous demand for money laundering. "Mexico has become one of the most important money-laundering centers in the Western Hemisphere," according to the 1996 International Narcotics Control Strategy report by the U.S. State Department (Molly Moore and John Ward Anderson, "Drug Profits Crisscrossing Border Afflict U.S., Mexican Prosecutors," Washington Post, July 8, 1996, p. A1).

According to law enforcement officials, the major factors increasing money laundering with Mexico are the easily transitted and heavily traveled U.S./Mexico border (232 million people crossed the border last year) and increasing economic ties between the two countries following NAFTA. They also cited the growing sophistication of drug mafias, the expansion of the world financial system and the relatively weak Mexican banking regulations and financial laws. The immediate goal for drug mafias is to get their money into the banking system on either side of the border without attracting the attention of law enforcement. Once in a bank, the money can be electronically transferred around the world to dozens of banks within 24-hours. According to Harold D. Wankel, chief of operations for the DEA, these transactions make "the paper trail either impossible or extremely time-consuming to follow."

The most popular method of laundering "narco-dollars" is to drive them south across the border, but sometimes the cash can be too bulky. To make the money easier to smuggle, couriers called "smurfs" visit several banks a day to convert just under $10,000 cash (the level at which banks report to the IRS) to cashiers' checks. Money exchanges used by Mexican workers in the U.S. have also been used by drug mafias by mingling drug money with legitimate dollars to convert to pesos. Another method is "dollar discounting" in which mafia bosses buy American products for Mexican businessmen with drug money in dollars already in the U.S. The businessmen then deposit 80% of the products' cost in pesos into mafia bank accounts in Mexico. In other cases, companies are set up which move drug money via falsified records as "profits" of the business.

Moises Moreno Hernandez, a top official in the Mexican attorney general's office, said that the government hopes to adopt stricter currency transaction regulations and to give police better tools for combating organized crime. One proposal in Mexico's Congress would legalize wiretapping and the use of confidential sources, and reduce sentences for those who testify against drug bosses. The bill would also create a witness protection plan.