The Drug Dealers Next Door
Crime: Cartels exploit L.A.'s size and diversity to set up operations even
in pricey suburban homes,
turning area into a hub of Mexican narcotics trade.
By STEVE BERRY, Times Staff Writer
In the dead of night, a man pulled his van into a driveway in a peaceful
Santa Clarita neighborhood and
quietly opened a multimillion-dollar stash house for one of the most violent drug cartels in Mexico.
He had picked a neat two-story home in Valencia to store millions in income from drug deals before the
money was shipped to Mexico. It was in an area where, on a typical day, gardeners manicure the lawns,
children play on brightly colored scooters and many narcotics agents and police officers make their homes.
Two officers--a married couple--lived next door.
Neighbors said the newcomer and his wife were neither friendly nor unfriendly. They didn't host streams
of visitors at odd hours. Once every week or two, they hired a gardener to mow their lawn.
Like chameleons, the drug dealers quietly blended in. The Los Angeles megalopolis makes blending in
easy, and that is one of the key reasons it has become a major nationwide distribution and shipment hub
in the huge Mexican drug trade, according to court records and interviews with top law enforcement
officials and academics who have studied the burgeoning scourge.
The Southland is a vital connection for the cartels. It links them with their markets in California and
across the country. With the area's huge, scattered population of Mexican Americans and immigrants
from Mexico, cartel operatives can hide in plain sight. Whether in the barrio, in middle-class white
suburbia or in upscale Westwood, they know how to melt into the milieu.
The toll this drug trade takes on the region can be measured in addiction, murders, robberies and
burglaries by addicts and drug dealers--and in the fear felt by suburbanites who find themselves living
near a major distribution or money-storage point.
"I've seen them in neighborhoods where the cheapest house is over $1 million and in neighborhoods
where they are less than $100,000," said Cmdr. Al Scaduto, former head of the narcotics bureau at the
Los Angeles County Sheriff's Department.
And for people with roots in Mexico there is an added burden.
"The idea that, apart from the professional drug trafficker, that somehow the larger [Mexican
American] community is highly supportive of this activity is guilt by association," said Dr. Wayne
Cornelius of the U.S.-Mexican Study Center at UC San Diego.
"I've interviewed hundreds of immigrants, and they are very fearful that their children will be exposed
to drugs in American schools," he said. "Among the negatives they face here, it's at the top of the list,
along with finding employment, housing and learning English."
Federal intelligence reports say Los Angeles has become one of the four or five primary bulk cocaine
distribution centers in the country, along with Chicago, Houston, New York City and southern Florida.
The Los Angeles area has become crucial to the Mexican and Colombian cartels, federal officials say.
The region's role is more important than ever because the Mexican traffickers are gaining increasing
control of their Colombian cocaine supply and beginning to deal directly with sources in Peru and Bolivia.
With their already well-established home-grown trade in marijuana, heroin and methamphetamines, the
Mexican cartels are solidifying their dominance of the drug market in California and elsewhere west of
At the same time, they are increasingly supplying Eastern markets, often directly from the Southland.
Key Spot on Trail
Everything about this region--its rich mix of neighborhoods and social classes, its multiethnic
population of 16 million, its proximity to the border and its web of freeways, even its geography and
weather--contributes to the area's critical spot on the narco trail.
If the drug business is viewed as a corporation, Los Angeles is a major regional market and
distribution center, where the product moves down the chain through several levels before reaching the
user by way of gangs and individual street dealers.
Corporate headquarters are in Mexico. That is where decisions are made on production, processing
and exporting to the regions, such as Southern California.
The L.A. area is also a money hub. Once the drugs are sold, the proceeds are brought back to the
Southland and stored pending transport to Mexico.
The Valencia home was one such stash house. When federal and local law enforcement
officers--acting on a wiretap lead--bashed down the door, they found guns, $2.6 million in drug proceeds,
a drug ledger and a money counter. Unknown to the neighbors, the site was a storehouse for one of the
largest drug cells of the murderous Tijuana cartel run by Benjamin Arellano Felix and his three brothers.
Two men arrested there worked for Jorge Castro, a 32-year-old resident of the Mexican state of
Sinaloa who federal officials say is a high-ranking member of the Arellano mob.
With a 55-member gang, Castro ran an operation that distributed drugs to 15 cities across the United
States, authorities said.
"He was like a chief executive officer and a chief financial officer," said one DEA investigator. "He
was the dope and money man." Castro worked out of his home in Sinaloa or out of Tijuana.
He took orders directly from personal representatives of the Arellano brothers on such matters as the
quantity of a shipment, the price and which cell head to send the drugs to, the investigator said. Los Angeles
was the national headquarters for his operation, and he relied on eight men here to carry out his orders. They
in turn directed dozens of others spread throughout the country.
Castro's gang was one of at least 262 Mexican drug organizations that federal and local officials say
they have dismantled or severely disrupted over the last three years in the Los Angeles area.
Mirroring the practices of other ethnic-oriented criminal organizations in the U.S., the Mexican
operations here rely heavily on relatives or residents who still have family members in Mexico.
In this respect, crime experts say, the Mexican drug operation follows a classic American pattern of
criminals immersing and protecting themselves in a population of their own ethnic group with which they
share a language, family ties and connections with hometowns in the old country.
"Organized crime has always used this kind of thing," said David F. Musto, an expert on the history of
drug abuse from Yale University's School of Medicine. "You have it in Italian groups, Jewish groups, the
Irish organizations in Chicago. There's been a long history of people working within their own ethnic
groups because they know and understand them. . . . You are all on the same wavelength. Also, it
makes it more difficult [for law enforcement] to infiltrate them."
Operatives of the Mexican criminal organizations have lived in Los Angeles, Orange, San Bernardino,
Riverside and Ventura counties for decades, deftly exploiting the region's ungovernable vastness to
import drugs and ship them throughout the region or to markets nationwide.
There are so many ways for traffickers to get in, blend in and get out that officials concede they
cannot police the trail and all its branches.
"Plug up one leak and another springs up," Scaduto said.
Everything that makes the region a hub for legitimate businesses applies equally well for the illegal
ones, whether based locally or anywhere in the world.
Just the size of its market and diversity of its tastes make it perhaps the most lucrative spot on the
Drug-use studies show that narcotics preferences vary along ethnic lines. The region's ethnic mix,
combined with the size of its market, helps the drug business weather economic problems such as
changing tastes, fluctuations in production and law enforcement actions along the narco trail.
If law enforcement could totally shut down the Mexican connection, Asian or European drug
organizations could quickly fill the vacuum and make use of family and religious connections available in
the Los Angeles region, federal authorities say.
So big is the market that even local drug organizations can find their own niche in this disparate
region and work independently of Mexico's crime mobs.
For example, federal authorities say John David Ward, 28, of Orange took no orders from Mexico
when he was running an 11-member drug gang in Orange County that specialized in methamphetamines,
prescription drugs and cocaine. One of his top associates was allegedly the president of the Orange
County Hells Angels, Howard "Rusty" Coones, who has pleaded not guilty to federal drug conspiracy
Ward, who also has pleaded not guilty, would sometimes broker deals involving a drug organization in
Mexico, but he was not subservient to it, said Orange County Deputy Dist. Atty. Jeff Ferguson.
Moreover, he used local residents to arrange shipments of methamphetamines, prescription drugs and
cocaine across the country, and he laundered drug proceeds through local businesses and relatives, court
In a major case late last year involving the designer drug Ecstasy, the accused distributors were of
Middle Eastern descent, and they looked to Paris, not Tijuana, for their supply of the hallucinogen. In that
investigation, U.S. customs agents and San Bernardino County sheriff's deputies caught up with a
100-pound Federal Express shipment that had been sent from a Paris furniture company and was being
delivered by two drug couriers.
They told authorities they were hired by a Syrian man to deliver it to an Egyptian man in Westwood
who had arranged the shipments from France.
That investigation, which is pending, eventually became the biggest Ecstasy seizure in U.S. history,
customs officials said. Authorities eventually arrested six people and seized 700 pounds of Ecstasy
valued at $30 million.
Nevertheless, the Mexican cartels have the competitive advantage in the drug business here, and
they still reign supreme.
Castro's gang was so big in the Los Angeles area that it could sustain huge losses and continue
operating without much of a pause, said Assistant U.S. Atty. Beverly Reid-O'Connell. The ring lost more
than $15 million and 3.5 tons of drugs in a series of raids throughout the country between late 1997 and
Castro and several of his gang members traveled frequently between Sinaloa and Los Angeles to run
the business. On one of those trips six months after the Valencia raid, he and four others were arrested.
All have pleaded guilty, and Castro was sentenced in late March to 17 years. Five others who were
indicted with him are still at large.
The fact that such organizations flourish here is why officials say the busiest strand in the spider web
of air, land and sea corridors still emerges out of Mexico.
Under throat-burning clouds of exhaust spewing from thousands of cars and buses crossing the San
Ysidro port of entry, the drug war becomes a game of hide-and-seek, one that will be played out from
there northward into the neighborhoods of Los Angeles.
Every day more than 41,000 cars carrying close to 91,000 people cross the border at San Ysidro. An
additional 21,000 people just walk across.
The crossers are tourists, Mexican shoppers and workers or drug mules. The drug mules sit nervously
in the lanes, trying not to attract attention and hoping the K-9s will not sniff around their tires.
On a typical day on the border recently, Buster, a chocolate Labrador retriever, stopped at the car of a
young female driver and started pawing the left rear tire.
Inside the passenger area, a cross bearing the words "God Is Love" and a child's doll seemed--in the
law enforcement context--like contrivances for blending in rather than images of innocence. Authorities
later would send the woman back to Mexico, despite the fact that inspectors found 28 vacuum-packed
bundles of marijuana weighing 83 pounds distributed among the four wheels and a spare tire. Customs
officials said prosecutors felt they couldn't prove that she knew about the drugs.
Meanwhile, back in the lanes, inspectors meandered, chatting with drivers and peering into faces.
Inspector Brad Nielsen, a 10-year-veteran, said anything can set off his internal drug alert--shifting eyes,
uncertainty in the voice, a visibly pulsing blood vessel in the neck, even the number of keys dangling from
Nielson pointed south into Tijuana at people standing along a white fence in front of a row of
pharmacies and gift shops.
"That's where the spotters stand," he said. They study the dogs and inspectors' tendencies, such as
time spent per car. "They'll sometimes taunt us, and yell, 'Hey, your dogs missed a load we just sent
through,' " Nielsen said.
The smugglers change tactics so much, inspectors say, that officials constantly have to try to
outguess them. That means many innocent people get tagged in this game.
Jim Benes, an inspector who closely examines cars singled out by the lane and booth inspectors, was
suspicious of Rosa Riojas, 36, of San Ysidro, partly because she wore a tight, clinging dress revealing
plenty of cleavage. It's what flirters sometimes wear, hoping to distract inspectors from their work, he
said. But Riojas' car was clean.
She rolled her eyes when told of the reasons she sparked suspicion. "I feel very frustrated," she said.
"I have never done anything outside the law. This is about three times [that she has been pulled over]. I
understand it's a job, but I just feel sometimes they are overbearing."
No tractor-trailers are allowed into the U.S. at San Ysidro, but at the other four ports of entry on the
California-Mexico border, a combined 1 million big rigs cross annually, with many of them hiding drugs.
No one knows for sure how much slips across in the cars and trucks. A rule of thumb used by law
enforcement agencies is that 90% of production makes it to market. Inspectors made close to 5,000
seizures and found 395,000 pounds of drugs coming from Mexico at San Ysidro and the other four ports
of entry last year, up 43% since 1996.
The few who still try to sneak by on foot between those four crossings attempt to blend in with
groups of illegal immigrants or hide among the scrub oaks and manzanita brush in Mexico and wait for
Loners throw duffel bags packed with up to 50 pounds of drugs over the 10-foot steel wall that lines
segments of the California-Mexico border and hike through dry creek beds, canyons and railroad beds to
drop-off points. Then they scurry back across the border.
A huge boost in Border Patrol manpower in recent years put a stop to free-flow illegal immigration and
destroyed the drug smugglers' ability to blend in with it.
All along the wall, powerful lights turn night into day. Patrolling hills and valleys farther north, an agent
seldom rides more than five minutes before encountering a colleague. From summits, infrared scopes scan
the hilly landscape, peering down into draws and shadows of the moonlit hills. Throughout the vastness,
hundreds of hidden ground sensors record any movements nearby.
Beyond the front-line defenses and a few inland border checkpoints, the freeway system provides
virtually limitless combinations of routes into and through the Los Angeles area. They are the lifelines for
drug cells, giving operators fast, efficient connections to their scattered stash houses and, eventually, to
routes out of the region.
"It's difficult to surveil the cars as they come into the Los Angeles area," said Deputy Chief Michael
Stodelle of the San Bernardino County Sheriff's Department and former head of a local, state and
federal drug task force. "And it's easy to lose them in the crowd."
In addition to the freeways and surface roads, drug traffickers sometimes take advantage of the
region's long coastline. Federal drug reports say at least 28 drug organizations have been linked to
Smugglers mix with offshore pleasure craft, according to a 1998 report by the National Narcotics
Intelligence Consumers Committee. When night falls, they slip across the water to the small bays, hidden
coves and inlets with their drug cargoes.
Small boats dash out to larger "mother ships" to bring loads to shore, said Dick Flood, chairman of an
anti-drug task force's efforts in what is called the Los Angeles High Intensity Drug Trafficking Area
(comprising L.A., Orange, Riverside and San Bernardino counties). The task force, overseen by the
White House, includes local, state and federal agencies.
The seaports are also vulnerable spots in the nation's line of defense.
"That's a real issue for customs," Flood said. "Very few drugs are seized from the ports, but that
doesn't mean they aren't coming in from there."
John Hensley, former agent in charge of the Customs Service's Los Angeles office, agreed. He said
inspectors can examine only 2% to 3% of cargo containers entering the ports. Each month, about
400,000 enter at the ports of Los Angeles and Long Beach.
Nevertheless, Hensley and his successor, Fred Walsh, say overland routes are the most traveled
paths on the narco trail to the stash houses and meth labs of the Los Angeles area.
A wary voice came from a darkened room behind the iron-mesh security door of a home in a low- to
middle-income area of San Fernando. The town, where about 90% of the 23,682 residents are Latino, is
snuggled between the Golden State and Foothill freeways, two major arteries on the trail.
The man behind the security door talked quietly about the house next door where, federal authorities
say, members of a Mexican drug organization used to meet regularly.
This was a "quiet, peaceful neighborhood" of law-abiding citizens when he and his wife moved here
28 years ago, he said. It still is, at least as far as he knows, despite what happened next door, the man
said, after he finally emerged from behind the security door. A scraggly beard hid much of his
weather-beaten face. He didn't want to give his name.
They lived there two years and never bothered anyone, he said. One resident was a man, another a
woman who stayed inside almost all the time. A couple of other men may have lived there as well, but
he wasn't sure.
The bearded man said the neighbor was courteous but never offered more than a polite nod when
In October 1998, federal, state and local officers--acting on wiretap information--swarmed around
the house hoping to find drugs. They seized five firearms, including an AK-47 assault rifle, and $8,000 in
suspected drug proceeds and empty wrapping materials.
Earlier, they had arrested three men, who were using the house to run a small Mexican drug cell
headed by Jose Luis Moreno, 21, of Sylmar. Moreno and one of his associates have pleaded guilty and
their sentencing is pending. Charges against the third were dismissed.
Agents said the Moreno cell stored drugs several blocks away at another house, which they also
raided. There, they found 140 kilograms of cocaine and marijuana, a money counter and $200,000 in
cash. Investigators say the gangsters used the first site as their meeting place.
They had cookouts in the backyard, the neighbor said. It was just men, "never any women," sitting
around the barbecue, drinking beer, talking quietly, music playing softly in the background. They were
friendly but never invited him over.
"I didn't think much about it at the time," he said.
His reaction to his quiet neighbors was much like that of residents in the Valencia neighborhood
where Castro's operatives lived.
The couple who took care of Castro's drug money also were from Mexico. But the neighborhood
was almost entirely white.
Nevertheless, with several middle-income, professional Latino families living there also, the arrival of
another did not catch anyone's attention, said Lou Latka, who moved into the home a few months after
Across the street, Ilona Valaida, a mother of five, said the exposure to the seamier side of life was
"This is a family neighborhood, and there are a lot of kids here," she said. "What if there had been
some kind of shootout or something?"
The Castro organization also operated a stash house in Industry on Siesta Street, just one block from
a major commercial and industrial strip. It's part of a low-income neighborhood that is almost entirely
Latino. There are lots of kids there too, but few manicured lawns.
A retired tire factory worker, whose backyard abutted a stash house, said the Siesta Street residence
isn't the only scene of a drug bust in his neighborhood. Standing at a fence along his driveway, he nodded
furtively toward a house across the street where a rooster strutted about the frontyard.
Federal and local law enforcement officers raided that house about four or five months ago, he said.
Lowering his voice to a whisper, he alluded to the house next to his. Police raided it about eight months
ago. He doesn't call police. He once complained about a noisy party. "Someone shot at my house," he
"I don't feel too good about this. But what can you do."
Such feelings of helplessness and fear are about the only factors shared by the residents of the
Industry, Valencia and San Fernando neighborhoods.
The Mexican cartels' role in Southern California got a major boost in the late 1980s, when their
relationship with the Colombia crime organizations changed.
While the Colombians supply the eastern United States directly or through the Caribbean, they have
usually worked through Mexican mobs to feed the Los Angeles area, and from here much of the
Midwest and some parts of the East.
Traditionally, Colombians had paid Mexican organizations to merely transport drugs across Mexico
and over the southwest border, at which point the Colombians would take over.
But by 1989, the Mexican groups had started requiring the Colombians to pay them in cocaine. Now
the Mexicans command as much as 50% of the load. That realignment cleared the way for them to
become the dominant cocaine power in the western United States, making their distribution cells, storage
arrangements and money-laundering operations even more important.
With those hard business advantages, no other supplier in the world could compete here with the
Mexicans. The federal Drug Enforcement Administration estimates that 60% to 70% of the nation's
cocaine supply enters the U.S. through or by permission of Mexican drug organizations. The FBI
estimates that slightly more than half of that amount either winds up or passes through the Los Angeles
area, and the rest is shipped directly to other U.S. locations.
The cartels also supply Mexican-grown black tar and brown powder heroin to feed most of
California's and the rest of the West's heroin addiction.
They dominate the methamphetamine trade nationwide too. Taking advantage of looser government
restrictions on precursor chemicals than those in the United States, they supply meth ingredients in
California and operate the biggest labs on both sides of the border. They have made the region "the meth
pharmacy for the rest of the country," said Michelle Leonhart, agent in charge of the DEA's Los
Angeles field division.
Meth labs range from "Beavis and Butthead operations" that produce less than a pound in one 12- to
14-hour cook-off to more sophisticated labs yielding 20 pounds.
Hensley said that California has about 65% of the working meth labs in the U.S. and that three out of
four of those are in the Southland.
Most of the largest labs have been found in rural Los Angeles County, said Ed Manavian, director of
an interagency drug enforcement clearinghouse. In the last quarter of 1999, they found nine laboratories
in the county capable of producing 20 pounds of meth in one cook. They also shut down 47 smaller labs
and 201 stove-top operations across L.A., Orange, San Bernardino and Riverside counties.
As for marijuana, much is home-grown, but Mexican drug cartels supply most of what is seized in
this area. U.S. Customs Service agents on the Mexican border seized 385,000 pounds of marijuana last
year, a 55% increase over 1997.
The Arellano brothers in Tijuana dominate the drug paths into California. In addition to controlling the
Baja Peninsula, they operate in Jalisco and Michoacan, the states of origin for the largest proportions of
Mexicans and Mexican Americans living in Los Angeles County, a situation that gives drug traffickers a
large community in which their drug cells can blend.
Hundreds of Cells
Hundreds of drug cells work the Los Angeles area, each operating independently of the others, with
the leader taking orders directly from representatives of the drug lords in Mexico, said Lou Riegal,
assistant special agent in charge of the FBI's Los Angeles office.
Many of the cell leaders live on both sides of the border. For the most part, state and federal officials
believe that the people operating in the Los Angeles area are four or five ranks below the top of the drug
hierarchy. They deal in quantities of 100 to 500 kilograms of cocaine (220 to 1,100 pounds) at a time,
amounts several levels above those that street and motorcycle gangs sell to street dealers.
In such large organizations, workers specialize. Some are experts in finding stash houses. Others
focus on recruiting people to move the drugs. Still others transport and launder money. They even have
communication specialists who know where to find the discreet cell phone vendors who don't ask
questions or demand a lot of identification from their subscribers.
Often, some specialists freelance and work for several different cells.
The cells are tightly knit and almost impossible to infiltrate, federal officials say, because they rely on
family ties and long associations.
Castro used a brother-in-law of one of his key workers to distribute drugs, collect money and send it
to Mexico, court papers say.
One of his drivers, apparently lacking a local address, registered his drug-smuggling car to his sister's
And one of his transport operatives arranged a layover at the home of a worker's grandmother during
a money run to Mexico.
Family Loyalty Pivotal
"One of the things Latin culture points to is family loyalty," said Leo F. Estrada, a demographer at the
UCLA School of Public Policy.
He said families are often large and binational. The strong bonds are not confined to parents,
grandparents and children, but envelop in-laws, aunts, uncles, cousins and even godparents in both
"Families travel on both sides of the border to keep in touch," he said. "They go to all the weddings,
birthdays, funerals. It's a relational system that builds up over time."
Flood, the state narcotics bureau officer, said Mexican drug organizations are very selective within
the Mexican community in hiring cell operatives.
"In some areas--Sinaloa is one of them--[drug trafficking] has been an industry for years, and when
they employ people who come from there, they don't have to train them, because they have been around
the business all of their lives. They know what to do," he said.
"They still have ties down there, so these organizations just feel more comfortable using people who
come from the areas [of Mexico] they control."
They follow the "Sicilian Mafia model," he said. "The family won't give you up."