Special Report
by the
McClatchy Company's
California Newspapers
ber 8, 2000




Meth has a cost/profit ratio that would engender envy in almost any business. Before it's sold, a pound of meth is usually "stepped on," or diluted with another agent. Diluting meth increases production: A pound of pure meth can become 4 pounds, and a $2,500 investment can become $20,000 in two days' time.

When you make a lot of meth, it can bring in big money, a fact not lost on some of the most powerful members of the worldwide drug trade.

In the early 1990s, drug agents reported that drug groups based in the Mexican state of Michoacan were overwhelming the meth trade by flooding the market with a superior and cheaper product. Biker groups, which once controlled the trade in California, were vastly outnumbered and unable to put up a challenge. Speaking in Fresno in April, Robert Brady, a member of the State Department who studies drug trafficking, mocked the bikers "for letting outsiders come in and take over. It would be like some outsiders going to Medellin, Cali or Bogota and taking over the cocaine trade."

Indeed, most of the meth in the Central Valley -- and most of the meth in America -- isn't made by Beavis and Butt-head, cooked in a coffeepot or strained through someone's kidneys.

It's made and distributed by loosely organized "families" in California who have roots in Mexican organized crime groups. Some groups operate merely as investment bankers, bankrolling operations for a percentage of the profits, or they exact a price for meth ingredients smuggled into the state through their territories in Mexico.

"The dominant 'families' in meth in California [one based in the San Jose area, the other in Orange County] aren't truly organized crime groups in the sense that there is in the Mafia," says Ron Gravitt, chief of the state Bureau of Narcotics Enforcement's clandestine lab unit. "There is no real hierarchy with them. ... The standard is they are tied together by familial and geographic ties in Mexico.

"It's our belief, based on our experience in the field and talking to other states, that 90 percent of the meth manufactured in this country is manufactured by Mexican national drug organizations," says Gravitt, who has been fighting the drug trade for 13 years. "The majority of that is being manufactured in California, and some is being manufactured in Mexico and smuggled into California and then shipped throughout the U.S."


Meth became attractive to Mexican cartels in the early 1990s. Groups such as the Amezcua Contreras cartel in Guadalajara and the Arellano Felix brothers in Tijuana already dominated marijuana and had joined with Colombian drug lords to distribute cocaine. But because coca leaves, the key ingredient in cocaine, aren't grown in Mexico, they had to split profits with the Colombians who controlled production. With meth, they soon figured out, they could control every aspect, from manufacture to sale.

"From a business standpoint, they came up with a brilliant idea," says Guy Hargreaves, a DEA special agent and meth expert. "Methamphetamine allowed them to cut out the South American percentage. They put meth in with their cocaine shipments, and people developed a taste for it because it lasts longer . They can make it themselves in the United States, and they don't have to pay millions of dollars in overhead for planes and pilots and boats and smuggling bribes. All they need is $10,000 in chemicals, and they can make $100,000 worth of meth."

Police routinely and randomly search alleged meth-rich neighborhoods in Michoacan, Mexico, in an effort to more aggressively fight the drug trade.
Bee Photographer- Craig Kohlruss

They make far more than $100,000 worth. Precisely how much is anyone's guess, and law enforcement officials refuse to make one, at least not for the record.

"I could tell you that we bust maybe 25 percent of the big labs," says one federal agent, "but I could be way off. If we do, that means there are 800 super labs making at least 10 pounds . . . at $5,000 a pound . . . well, do the math."

So let's do the math: 800 super labs at 10 pounds each at $5,000 a pound equals $40 million. Assume they cook 10 pounds a month -- a conservative estimate -- and you have $480 million a year. Then factor in that $5,000 a pound is the wholesale price, and that grams sell for $90 each. There are 28 grams in an ounce, and 16 ounces in a pound . . . and it's just a guess, but it sounds like a multi-billion-dollar business the size of California's retail book and record, florist or jewelry industries.

To keep the industry booming, meth manufacturers need supplies, workers and cooking locations, and from a drug lord's perspective, the Central Valley is a prime place in which to operate. Mexican operators can blend into the large Latino population. The Valley offers a rural setting for manufacturing without drawing attention, and yet it's close to major population centers and transportation routes. Chronically high jobless rates ensure a ready work force for what amounts to highly lucrative, if exceedingly dangerous, work.

Big-time Valley meth makers run efficient operations. They control their own supplies, such as red phosphorus, hydriodic acid, iodine, Freon and hydrogen chloride gas. Though many are either illegal or closely monitored in the United States, they are widely and legally available worldwide, and big syndicates have established pipelines to gather and transport them.

In the 1990s, the Amezcua Contreras cartel established a network that included suppliers from the Czech Republic, Germany, Switzerland, Italy, India, Thailand and Japan. Lax chemical controls in Mexico and Canada make obtaining chemicals relatively easy. In Los Angeles and Oakland, some chemical companies provide supplies to meth manufacturers through elaborate schemes that make sales appear legitimate.

And they control a network of workers: runners, chemical manufacturers and meth cooks. Often a family operation will specialize in one chemical and deal with a chemical broker who deals with specialists. Specialists often deal only with the organizer. The organizer orders chemicals, usually by phone, and runners transport the goods to a cook site.

Depending on the operation, a cook can do it with one helper or 10. Larger labs try to limit the margin for error by the cooks, or "mopes," by prepackaging ingredients in premeasured, idiot-proof containers.

The average Mexican national lab, says the BNE's Gravitt, makes a minimum of 20 pounds and as much as 100 in one cook cycle. Sometimes they do one cook and then move. Or they may cook at a site for a couple of years.

That variation aside, one common ingredient in many Mexican national meth labs is the origin of the chef: the state of Michoacan.

The young man is nervous during interrogation.

The detective senses it. The story just doesn't add up. Why would anyone pay someone $1,000 just to drive three men from Long Beach to Porterville in Tulare County?

"I'll tell you this right now, once you tell me the truth you're gonna feel like a man," he tells the suspect.

"All I want to do is go home to my wife and kids," he replies.

The suspect, who claims he was on his way to visit his uncle in Fresno when he was caught up in a meth bust, begins to cry.

"Why are you treating me like a criminal?"

A long minute passes. Backed into a corner, the suspect gives something up: He was paid to bring the two men up "to cook."

"To cook what?"

"I don't know. They just say to cook."

This dance is about to come to an end.

"You told me you are from Michoacan. What part of Michoacan?"


Now the detective knows for sure. Javier Ochoa is part of the meth trade.

It's 45 minutes before midnight, and traffic is heavy on the sidewalks of Apatzingan. Bumpy, paved streets in the city's center are lined with hundreds of narrow storefront shops selling everything from new clothes to washing machines to caskets. Sidewalks are crowded with strollers.

A dressmaker watches the foot traffic. "I love living in Apatzingan," Rosalba Conchola says. "It's full of life. It's not dangerous, unlike the United States."

Music, Mexican and American, blares from passing cars, many of them new- or late-model American pickups or BMWs. There are obvious signs of money here, but there are no obvious signs as to why. It's simply understood. The chief products in this gritty farming town are mangoes, papayas, watermelons and meth. And a steady supply of meth makers.

Like some rap music in urban America, much of the popular music in Michoacan romanticizes the drug dealer. Sidewalk booth vendors in Apatzingan do a good business selling "Druga Corredos," the Mexican equivalent of gangsta rap. One song begins: "I am here across the border in America, and I have drugs for you . . ."

Apatzingan anchors the "Michoacan Trail," a pipeline that moves north through Guadalajara to Tijuana, pumping not only the product, but the people who cook it, across the California border and into the Central Valley.

"Yes, it is true," says police officer Ramon Lopez-Valencia as he slowly shakes his head. "The young people want to be crystal dealers."

Says Mike Huerta of the DEA in Arizona: "It's like they have some kind of mini academy down there in Apatzingan where they train people to cook and send them to California."

Apatzingan's police department is in the partially abandoned Palacio Municipal, a tattered two-story colonial with peeling paint, fresh graffiti and plenty of men with automatic weapons. (Across the street is the main plaza, the cathedral and the shining star of the city -- the building where on Oct. 22, 1814, Mexico's first constitution was signed.)

Fernando Fernandez-Castaneda, Apatzingan's police chief, is 23, stands about 5 foot 5 with his boots on and weighs about 130 pounds. His silver ballpoint pen sticks out of his white, blue-striped dress shirt. He wears gray slacks. Atop his burgundy vinyl-topped desk is a Samsung computer loaded with Microsoft Word. He wears no gun, but 3 feet to his left is an AK-47.

Fernandez-Castaneda smiles frequently and talks softly. He says he is determined to do something about meth in his town. "Crystal is a gigantic problem here. It has been for years," he says, as police officers armed with machine guns and pearl-handled revolvers amble outside his office. "We just used to take it all out of the country, but now the locals are consuming it, and it is very worrisome.

"We can spot the obvious drug men, and they don't care that we know what they do."

Their hair is neatly cropped, he says, and they wear gold chains and bracelets and ostrich-skin boots. They drive new pickups with fancy wheels.

During a routine raid of what Fernandez-Castaneda calls meth-rich neighborhoods, the chief runs into 23-year-old Jose Manuel. The two grew up in the same barrio. For the last six months, Manuel has a new passion -- snorting crank.

"It makes me feel excited," Manuel says, "makes me want to move."

"Is it hard for you to get it?" he is asked.

"I'll will show you how hard it is. I'll be back in 10 minutes." But Manuel, on a bike, needs a ride to score, and the chief, eager to show how common meth is, orders an officer to give Manuel a ride. After a few minutes, the chief is eager to continue the raid, so he and 22 officers in four pickups cruise along bumpy dirt roads, randomly stopping to search young men, who submit quietly.

Three crucifixes mounted with suction cups hang from the chief's windshield. A fourth lies near the gearshift -- to ensure his safety, he says. Jesus takes the place of seat belts. "It's like a university for crystal down here," says Fernandez-Castaneda, who estimates there are 10 major labs in Apatzingan and countless smaller ones. "They learn to cook and go to California."

After searching suspects in three neighborhoods, the police come up empty.

When the police arrive back at the station, Manuel shows off what is left of the quarter gram of meth he has copped for about $5. As he extends the dope, half covered in plastic wrap, the wind blows. The dope and the plastic wrap swirl out of his hand in a graceful arc, floating like a parachute to the pavement. Manuel grabs at it but misses, and the drugs fall to the concrete. He is last seen trying to sort the crystal from the dirt.

A short while later, a 17-year-old boy wearing a worn Cleveland Indians baseball cap sits on the chipped front steps of an apartment building. His old green bike rests next to him. He delivers for a nearby pharmacy but admits he wants his own type of pharmaceuticals.

"Yeah, I want my own organization one of these days," says Pablo Hernandez Rodales, taking off his cap to wipe sweat off his forehead. "I'm going to have me a new truck and five girls.

"You know, they are never going to stop the crystal now."

Rigoberto is hanging out at Aldo's, a nightclub near Roeding Park in Fresno. Several men surround him, bragging about Michoacan. "Arriba, Michoacan!" several shout.

Rigoberto says he has helped out on several meth cooks when work was hard to find in the citrus fields. "When your family is starving and they are offering big money, what are you going to do?" he asks rhetorically. "You think about taking care of your family."

The man who approached him, he says, was from his hometown, Aguililla, in Michoacan.

Traffickers, midlevel dealers and cooks look for people from their hometowns, places like La Ruana and Tepalcatepec and Apatzingan, because they know their families -- and they know how to get revenge if workers talk to cops.

At Aldo's, the fellas are getting a little boisterous as they think about Michoacan. Beer is guzzled, a few chests are punched, shots are downed. Sometimes they drink to the memories of all their friends and relatives who are locked up for cooking and transporting meth.

And sometimes they drink to the guys who get away with it, to the guys who make big money, hold onto it and get out of Central Valley fields. To the guys who make it back to Michoacan.

For months, in the spring and summer of 1997, a joint drug task force in Des Moines, Iowa, tails a suspect. With near biblical patience, they wait and watch, watch and wait.

July 7 is the lucky day. Bobby Stockdale, a 54-year-old Fresno native, parks at a Motel 6 on Des Moines' south side. For the past two years, he has racked up 94,000 miles on his van, making runs from California to Oklahoma to Iowa. Stockdale hands over the van's keys to Frank Amezcua Jr., (a member of the Amezcua Contreras cartel, one of the four biggest in Mexico).

Among the van's other features: It's loaded with 15 pounds of meth. Agents move in.

Three years later, they still brag about the arrest. "Yeah, we took down one of the Amezcuas," boasts a police lieutenant named Jobe.

So much meth is produced in the Central Valley by large syndicates that supply outweighs demand.

"It used to be that almost all of their product stayed in California," says the BNE's Gravitt, who estimates that less than half of the meth made in California by big organizations stays here. "The organizations . . . started filtering their meth into the established pipelines, and the pipelines tend to be the old farmworker routes. It went from California into Oregon and the Yakima Valley in Washington . . . and then it moved east. They are in at least 30 of the 50 states now."

"They sold to everyone they could in the western half of the country, and now they're looking for new markets," says Brent Eaton of the DEA in Miami, who estimates 90 percent of Florida meth has a California connection. "The demand is growing."

And it's growing, say Eaton, Gravitt and others, because meth makers followed a traditional marketing process -- flood new areas with their product so users develop an appetite for it. In the mid-1990s, California traffickers first snaked along freeways into the heartland, where cornfields and cow pastures spill from the horizon.

They began dropping meth into Iowa, a state perceived to be solidly rooted in traditional values, insulated from the drug-soaked excesses of either coast. Here, the children of farmers have led the country in standardized test scores for nearly two decades. The state has one of the country's highest literacy rates and one of its lowest unemployment rates.

Thanks to California's Central Valley, it also has a major meth problem.

More than 85 percent of the processed meth in Iowa is channeled through an intricate, organized pipeline from California. Investigators believe six families in the Des Moines area are connected to meth syndicates in California, coordinating shipping schedules, quantities and prices.

It's profitable. "A pound . . . purchased in California for $5,000 sells for at least $18,000 in Iowa," according to the DEA.

"These people are businesspeople," says Bruce Upchurch, a former DEA agent who now serves as Gov. Thomas J. Vilsack's drug policy coordinator in Des Moines. "It's not a haphazard operation. In terms of organized crime -- meth -- I don't think there is any place [in Iowa] that hasn't had some cases."

The rise of organized Mexican meth trafficking coincided with a demographic shift in the state. More Hispanic immigrants were arriving in the early 1990s to work in the meatpacking plants of Marshalltown, Waterloo, Columbus Junction and Storm Lake.

Workers and their families formed distinct communities separated from the rest of Iowa by language, race and culture. These areas became convenient covers for Hispanic distributors, providing fertile ground for recruiting traffickers. Some immigrants who travel the Midwest to work in the meatpacking plants are paid thousands of dollars to transport meth.

"The traffickers who were highly organized effectively used that cover to come in with large amounts of dope," Upchurch says. "To some degree, they're still doing that."

But that hasn't been the only approach. A Des Moines restaurant owner, Roberto Gallardo Chavez, operated an interstate distribution ring that imported at least 480 pounds of meth into Iowa from California during a two-year period. He also gave a few customers who frequented his restaurant samples of imported meth, hoping they would come back for more.

Chavez, a federal grand jury said, coordinated the pick up and delivery of California meth using "load cars" and "mules" -- family friends, customers, people off the street. He also worked with his nephew Esequie Gallardo, who joined the operation a few months after he moved to Iowa from California in 1998.

In a 1994 case, Des Moines narcotics agents who searched the home of a newly arrived Bolivian man found $75,000 in cash -- and the man started talking. He told police he was the accountant for Alfredo Arroyo Cervantes, a Fresno drug-ring leader who later was convicted. The ringleader, he said, hired "mules" to smuggle pounds of meth from the West Coast into the Midwest. A 60-pound delivery had been selling for $2 million.

The agents followed the man's directions to a "stash house" -- a trailer in North Des Moines. Buried in the back of the trailer, underneath a pile of baby clothes, hampers and diaper bags, they found 55 pounds of meth tightly packed in boxes. It was the largest meth seizure in Iowa history.

Investigators traced it from the Des Moines trailer to Fresno. Less than two months later, Fresno police and DEA agents raided two labs and seized assault rifles, bulletproof vests and more than 300 pounds of chemicals -- mainly ephedrine and red phosphorus. Half a dozen people in California and Iowa were arrested.

"This one case really opened our eyes," Upchurch says. "In the early '90s, we were behind the eight ball. Since then, we have scrambled to catch up. We're still catching up."

While initially America's heartland was hit hardest by the expanding meth trade, California's meth tentacles are reaching nationwide, according to DEA reports obtained by The Bee under the Freedom of Information Act:

In 1999, a meth lab capable of producing 80 pounds per cook was busted in Opelika, Ala. It was the first super lab bust east of the Mississippi River. Four men from Michoacan were convicted and sentenced to federal prison.

This year, the DEA reported a "significant increase" in meth availability in western Michigan, increased meth smuggling by Mexican traffickers in western Kentucky and meth becoming the "drug of choice" in rural Oklahoma, western Colorado and North Dakota. In Colorado, the majority of the meth seized came either from Mexico or "from large-scale laboratories in California," according to the DEA.

In the first three months of this year, no Mexican meth traffickers had been encountered in Greensboro, N.C., "but by the second quarter of 2000, the prevalence of Mexican trafficking organizations in Greensboro was unmistakable."

In 1991, none of the women arrested in the Omaha area tested positive for meth, but in 1998, 13.6 percent tested positive. In Missouri, two meth labs were seized in 1992; in 1997, 421 labs had been seized.

Meth cases in the Washington, D.C., area "increasingly show evidence of ties to Mexican or California-based Mexican methamphetamine traffickers and producers."

And, the DEA reported, "methamphetamine continues to be abused by nearly all social classes in the Fresno area."

If the meth trail were linear, disrupting it would be far easier for law enforcement. But as soon as one branch is discovered, it seems, another sprouts.

The newest, narcotics agents say, is the Middle East connection: groups or individuals with ties to Syria, Jordan, Israel, Yemen and other Middle Eastern countries, who supply pseudoephedrine tablets used to make meth, usually through the ownership of convenience stores, wholesale grocery supply companies and distribution outlets for medical supplies. Middle East tablet dealers buy a case for $600 to $800, then sell it to meth makers for $3,000 to $4,000.

This year in Fresno, the DEA says, there have been 10 major pseudoephedrine cases involving connections from the Middle East. "We currently have two major cases where we are continuing the investigation because the money trail leads back to Syria and Israel," says DEA agent Ed Cazeras in Fresno.

"It's probably the hottest topic for us right now," says Craig Hammer of the BNE in Orange County. "Middle Easterners are public enemy No. 1 in the meth trade."

In a 1998 case, a Sacramento-area businessman, Abdel Razzaq M. Daas, was sentenced to eight years for selling more than 2 million tablets used to make meth. From his Rose Garden Distributing No. 2, he sold silk roses, condoms and 262 cases of pseudoephedrine to convenience stores. The tablets were enough to make 130 pounds of meth.

`On July 29, an eight-month DEA investigation culminated with arrests nationwide of eight men from Syria, Israel, Jordan and Saudi Arabia, who drug agents say ran a nationwide ring that supplied pseudoephedrine tablets to Mexican meth organizations in California.

"This is the most substantial, most important thing we have done to combat meth since we started battling meth," says Jack Riley, a DEA official in Washington.

Five days after the bust, tablet prices had risen in the Central Valley.

"They were like OPEC, setting prices, detailing the transportation of the pseudo," says Riley.

Authorities became aware of the group when they discovered records showing several distributors were shipping more pseudoephedrine than would be necessary if everybody in the United States came down with a cold.

During the investigation, called "Operation Mountain Express," the DEA arrested 160 people (including some in Fresno), seized $8 million cash, 83 pounds of meth and 10 metric tons of pseudoephedrine capable of producing 18,000 pounds of meth with a wholesale value of $100 million.





-Chapter 6-