Blog dedicated to reporting on Mexican drug cartels
on the border line between the US and Mexico

Thursday, July 28, 2011

Suspicion in Mexico's Sinaloa cartel

Why were drug smugglers' cocaine shipments being seized all over the U.S.? The boss in Mexico was demanding answers. He had no idea he was being targeted by the DEA's Operation Imperial Emperor.

By Richard Marosi and Tracy Wilkinson, Los Angeles Times
Reporting from Calexico, Calif., and Badiraguato, Mexico
Last of 4 parts

The towering iron gates opened onto a palm-lined driveway that led past the family church, a twisting water slide and two man-made lakes, one stocked with fish, the other with jet skis. With its soaring twin bell towers, each topped by a cross, the estate in the emerald hills outside Culiacan, Mexico, had an almost surreal grandeur. It reminded Carlos "Charlie" Cuevas of Disneyland, without the smiles.

Cuevas, a drug trafficker from Calexico, Calif., had been summoned there by Victor Emilio Cazares, allegedly a top lieutenant in the Sinaloa cartel. Cazares was said to be upset by a rash of recent drug seizures by U.S. authorities.

In one of them, police had raided a stash house in Paramount, southeast of Los Angeles, and confiscated nearly 455 pounds of cocaine, worth about $3.3 million. Cuevas had come under suspicion, and not only because he handled the shipment. Raised in California, he was an outsider. He couldn't claim Sinaloan roots. The boss and his heavily armed cronies would make fun of his American-accented Spanish and call him a derogatory term for Mexican Americans.

Cuevas' drivers and lookouts were also suspect. He had been ordered to bring them to Mexico for questioning. He hadn't.

Cuevas feared his boss — he'd guzzle Pepto-Bismol for his frequent gut eruptions — but this time he stood firm."I'm so sure it's not one of my guys that you can kill me if it's one of them," Cuevas said.

In the shadows
The confrontation reflected the frustrations of a cartel in confusion. Cocaine shipments were being seized all over the U.S.: by New Jersey and New York police, California Highway Patrol officers, Oklahoma state troopers and others. The array of agencies was a cover for the main force behind most of the busts: the Drug Enforcement Administration. Cazares didn't know it, but he was a top target in one of the largest DEA investigations ever of a Mexican organized crime group. Operation Imperial Emperor was peeling back layers of a drug distribution ring with hundreds of truckers, packers, money couriers and stash house operators across the U.S.

Local police made arrests while DEA agents stayed in the shadows, piecing together evidence and listening to cellphone chatter. Keeping the DEA's involvement quiet was key.

A major trafficking suspect like Cazares didn't sweat local busts, but a federal investigation would put him on alert. Wiretaps would go silent, evidence would disappear, suspects would flee. The DEA was allowing the drug pipeline to continue running so agents could expand their target list. There would be busts and seizures of drugs and money, but no knockout punch.

The government was trying to bleed the organization to death. It wouldn't be easy.

The cocaine economy gushed millions of dollars a week in revenue for a reputed kingpin like Cazares, whose contacts reached from Colombia to the South Bronx. Cocaine purchased from South American producers for about $3,600 a pound was sold for $7,200 in Los Angeles and $9,000 in New York.

The biggest expense was shipping. Cuevas earned about $250 a pound moving the cocaine across the U.S.-Mexico border to distribution hubs in the Los Angeles area. Trucking cells charged as little as $250 a pound for shipments to the East Coast. By air, a pilot from Carlsbad, John Charles Ward, charged $450 per pound.

The Sinaloa cartel bosses, unlike the Colombian traffickers of the past, didn't control the entire distribution system. Cazares allegedly partnered with local criminal groups — Orange County gang members, Italian Canadian mobsters, Dominicans in the Northeast — to get the drugs to users.

Profit margins at the wholesale level were staggering: One ton of cocaine, after transportation costs, could yield $5.4 million. Over three years, Cazares had allegedly smuggled an estimated 40 tons into the U.S., generating more than $200 million in profit. And that created another logistical challenge: getting the money back to Mexico.

That was handled by Cazares' sister, according to federal agents and an indictment filed by Los Angeles County prosecutors. Blanca, a society-page fixture in Culiacan nicknamed "the Empress," allegedly controlled currency-changing houses in Tijuana and other border cities, where drug proceeds sent via courier from Southern California were converted to pesos. The cash was divided into amounts of less than $10,000 and deposited in banks along the border.

Blanca Cazares could withdraw or transfer the funds at will, distributing profits to associates, distributors and her brother.

Gentleman rancher
In the mid-1990s, Victor Cazares was an illegal immigrant with big dreams living in a run-down cottage in the city of Bell, southeast of Los Angeles. When police arrested him with a baggie of drugs, he said he worked as a $50-a-day landscaper and admitted a fondness for cocaine. He vowed to quit.

"The defendant's plans are to work and become a Christian," his probation officer wrote in his report.

By 2005, Cazares had moved back to his homeland, where he kept one of his promises by building a church on his 25-acre estate in Mexico's historical drug-trafficking heartland of Badiraguato, outside Culiacan. He cultivated a reputation as a generous gentleman rancher, and the Mexican government gave him more than $129,000 in subsidies to raise cattle.

Cazares trucked in locals to harvest his fields of tomato, pepper, eggplant and squash, paying them twice the normal wage.

"He was a good neighbor. He gave people work. He'd pass by, wave a greeting," said Guadalupe Rubio, who lives in a village near the hacienda.

Cazares allegedly was a primary distributor for Joaquin "Chapo" Guzman, the Sinaloa cartel's leader and the most wanted trafficker in the world. Yet in many ways, he acted more like a vice president of shipping for a U.S. manufacturing firm, obsessing over logistics and cost control.

While cartel soldiers waged war in Mexican border cities, killing hundreds of rivals and police officers, workers in the U.S. primed the drug pipeline in anonymity, driving small cars, renting modest houses and leading low-profile, generally peaceful lives.

Spilling blood on U.S. streets was avoided. Disputes were taken care of in Mexico, where discipline or vengeance could be meted out in the lawless countryside outside Culiacan.

Meet Gato
By 2006, the money was pouring in, and Cazares tried to track every penny, the DEA investigation found. He called key associates in the U.S. at all hours and took weekly inventories of cocaine shipments moving across the country.

When authorities intercepted cocaine or money, Cazares demanded that subordinates produce proof of seizure: news clippings, police reports, court documents. If the seizure resulted from good police work, the load was written off as a cost of doing business. If it was deemed the fault of the distributor, Cazares demanded compensation.

Determining fault sometimes required extreme methods, or at least close interrogation. In such cases, Cazares called meetings at his estate, as he did after the March 2006 bust near Los Angeles.

Cuevas had arranged delivery of three cocaine loads from Mexicali to a distribution cell in Paramount. The cell was overseen from Mexico by a man known to his subordinates only as Gato, Spanish for "cat."A few hours after the delivery, police raided the cell's stash house.

Eligio "Pescado" Rios, who ran the stash house, fled to Mexico to avoid arrest. Once across the border, he was captured by cartel enforcers. Believing he might have caused the bust through carelessness or deliberate betrayal, they tied him to a bed and beat him for several days.

Afterward, Cazares was no closer to understanding why the raid had happened. So Cuevas was summoned for questioning. Perhaps the answers would help determine who should pay for the seized drugs and whether anyone else deserved a beating, or worse.

Walking through Cazares' mansion, Cuevas marveled at the gleaming glass living-room floor that sat over an indoor-outdoor pool. Cazares took special pride in parading his dancing horses, and children could frolic in a playground filled with swing sets and climbing structures.

Cazares and Cuevas were joined by a third man who wasn't introduced and who remained silent. Cazares began grilling Cuevas about the Paramount bust, suggesting that someone from his cell had been followed or had turned informant. He said that according to Gato, Cuevas' crew was at fault.

Cuevas blamed Gato. At which point, Cazares introduced the silent man next to him: Gato.

A heated argument ensued. Cuevas' drivers had delivered the drugs, but Gato's stash house operator had received the shipment. Neither man wanted to be on the hook for $3.3 million. Cazares eventually stepped in.

He seemed impressed with Cuevas' mettle. After all, Cuevas had traveled to Sinaloa knowing he might not return, and he'd stood up for his crew, even the ones too frightened to travel with him. In the end, Cazares decided not to impose any punishment. It was the practical, business-over-bloodshed approach that exemplified the cartel's distribution side. He needed Gato and Cuevas to continue working together, to keep the drugs flowing. And Cuevas still owed him money for past seizures.

Intimidation did have its place, however. Before Cuevas was allowed to go home to California, he was shown the room where Rios had been beaten. The mattress was still bloody.

Time to move
When Cuevas returned to Calexico, the DEA resumed its surveillance of him. For more than a year, the operation had provided valuable intelligence, but now agents worried that their cover had been blown.

A car dealer in San Diego who fixed the brakes on Cuevas' BMW had alerted him that agents had installed a tracking device in his car.

Fearing that Cuevas would flee the country — he had been house-hunting in Culiacan — the task force decided to move in. On the morning of Jan. 20, 2007, a SWAT team broke down Cuevas' back door and arrested him in his underwear. About two dozen members of his crew were arrested that day and in a raid the following month.

A series of sweeps targeted other players in the supply chain, from South Gate to the South Bronx. In all, authorities charged 402 people, seized 18 tons of cocaine and marijuana and $51 million in cash and property during the 20 months of Operation Imperial Emperor.

Cuevas pleaded guilty to drug distribution and conspiracy charges, testified against some of his former associates and was sentenced to 13 years in prison — much less than some other defendants.

As for Cazares, a federal grand jury indicted him in February 2007. Mexican federal agents spotted him and his family in downtown Culiacan later that year. But he was protected by 20 heavily armed bodyguards, and authorities backed off.

Mexican soldiers descended on his estate a few months later, but Cazares apparently had been tipped off. Three men were seen fleeing over a wall. The Mexican government seized the property.

A few months later, officials gave it back for reasons that are unclear.

Still, the agents could take pride in Imperial Emperor's achievements. Their late-night stakeouts, dumpster-diving excursions and tedious phone surveillance, conducted in a bunker-like room littered with takeout menus, had yielded significant results.

They had developed an extraordinarily detailed picture of how the cartel smuggled drugs into and across the U.S. They had disrupted its distribution system and inflicted substantial financial losses. They had laid the groundwork for a follow-up campaign, Operation Xcellerator, which resulted in 755 additional arrests.

But the sense of accomplishment was tempered by the realization that the cartel's regenerative powers could trump even the most vigorous enforcement efforts. When Cazares' indictment was announced, then-DEA Administrator Karen Tandy said "Today, we ripped out this empire's U.S. infrastructure … and tossed it into the dustbin of history."

More than four years later, the cartel continues pumping drugs through the Calexico border crossing.

Since Cuevas' arrest, several other smuggling crews have sprung up, and the port is still considered one of the main entry points for cocaine on the Southwest border.

Cazares' whereabouts are unknown. At his estate, the manicured lawns and palm-lined grounds are still carefully tended. Villagers say his mother comes by on occasion and opens the whitewashed church, which is filled with stained-glass windows and decorated with paintings of angels and a serene Jesus.


  1. great article, thanks

  2. CDS just lost 60 tons of weed in durango this Tuesday.

  3. Why can't every article be this detailed? Well probly cuz mexico doesn't keep very good records or have much freedom of information. Oh well

  4. And the bloodshed continues. Cazares will never be brought to justice that's a dam shame. Great article.

  5. "A few months later, officials gave it back for reasons that are unclear."

    That is why Mexico is a shit hole, its rotten to the core...

  6. They should have tanks and blackhawks rolling through Sinaloa smashing ALL of those narco hideout palaces... They need to smash every one of them and then smash ALL of the narco shrine cemeteries and then kill every single one of the narco cartel members!

    But they wont because the Mexican government is ran by the cartels, its all a pathetic joke being played on the U.S., Mexico is a failed country full of evil monsters that have no morals or values and would sell their own mothers for $100 USD...

    The good hearted law abiding people of Mexico do not stand a chance against the corrupt evil rotten groups that are calling the shots. Its like that spiral in the toilet right after flushing, it just continues to swirl around and around, that is what its like watching this nonsense play out in Mexico...

    The federal police recently attempted to kill Julian Leyzaola and because he has stood up to them now they are cutting funding to the city of Ciudad Juarez, saying authorities there haven’t followed reporting rules!

    Its not looking good to be a Mexican stuck in Mexico these days...

  7. Yes I liked this one too. I remember when Imperial Emperor and Xcellerator originally happened and knew they were huge operations.

  8. Great article. Exceptional.

    However, I have to suspect that the U.S. has something to do with this article and their attempt to stop the Sinoloa Cartel from purging potential fringe/insiders.

    In other words, this sounds like an article by the U.S. to make these guys believe that the U.S. had them targeted so that they wont purge inside molls.

    Too bad the U.S. isn't doing this to help stop all the evil, instead they seem to be supporting all the murders going on by supplying/allowing these parasites to kill relentlessly.

    Just imagine all the young lives that have been lost - for what? So some fat parasite can live in luxury?

  9. Thanks for posting. For years and years I have read stories like this one. How can these intelligence agencies be so clever yet dope is at an all time high? For years and years there has been corruption on both sides of the border. The drug war in Mexico is about eliminating the middle man not the drugs. Corporate entities want more of the drug profits.

  10. and we give Mexico money for their silly war on drugs? We do all the dirty work, give the intelligence, the Mex authorities find the leader and because of incompetence, they don't act. When will the US realize it's a game to extort more money from the USA?

  11. Texcoco Mex said.

    Anon 5:35PM Cazares will never be brought to justice that's a dam shame. Are you sure about this? Blanca Margarita Cázares Salazar was arrested she is the sister of this guy. She was arrested for money laundering.

    Day after day I see people writing about how fucked up and full of corruption Mexico is and some times they say is U.S was there things will be diferent.

    I wonder if U.S is the most sophisticated contry and has the best equipped police force in the world the world why they have not been able to stop the drug distribution in they U.S.

  12. Sounds like the Sinaloa cartel has been quietly Infiltrated by outside forces, Trojan Horse style.

    Suena como el cártel de Sinaloa ha sido infiltrado reservado por las fuerzas exteriores, estilo del Trojan Horse.

  13. Texcoco - why have they not been able to stop drug distribution?? Thats like asking "why cant they stop murder?" even if you elminated every drug in the country in the blink of an eye, all you'd have to do is drive some more up from mexico. What do you expect? Search every single car that enters the country, top to bottom? Not a great use of the "best equipped police force in the world". I'm not even saying the war on drugs is a good idea, its not (in its current incarnation). But to ask "why havent they been able to stop drug distribution" is like saying "why cant they stop drunk driving? All you have to do is arrest all the drunk drivers!" What is this - Minority Report?

  14. Great article and great series of articles overall.


  16. Ive been called that name not cool

  17. Pocho's not that bad. It could b worse

  18. This article/story illustrates the exact reason, why the war on drugs can never be won. There is a reason why Cazares was never apprehended and was allowed to keep his property and possessions...someone was payed off! His personal freedom probably wasn't guaranteed but it's funny how he was "tipped" off before the authorities moved in. It seems to me, initially he went into hiding until the "payoffs" were done and he was probably advised to stay out of sight. I mean c'mon even before the operation in the U.S. was taking place, no one knew what Cazares was about? And what's the story with this guy building a church? It seems over the top sacrilegious considering what he is involved in.

  19. I don't understand it. You can buy weed on Craigslst in California but it is illegal everywhere else.

  20. It will never be won!!
    Anyone know anything about US History? The US Constitution 18th Amendment? Prohibition? It was ratified on January 16, 1919 and repealed by the 21st Amendment in 1933. In the over 200 years of the U.S. Constitution, the 18th Amendment remains the only Amendment to ever have been repealed.

    We're talking $50+ billion a year tax free drug industry! The US doesn’t have the money\resources to fight the war on drugs let alone make a dent! The only war on drugs in within the drug cartels themselves!

    The corruption in Mexico is too deep and wide spread for anyone to make any difference! That’s just the plain truth\fact!

    It’s kind of like immigration. There is too much money to be made exploiting cheap labor for immigration in the USA to be seriously enforced!

    Drugs will never be legalized because there is too much money to be made illegally by too many powerful people that wont let it happen. They will brain wash you to think it would harm society.

  21. Time has clarity for each human mind not to endure the already worse era of in society full blown currupted world. Discrimination still exsist.ignorance,education,unity.the drastic change to female leadership is coming to take 'place now. Will take charge ,in and with the highest exerted valor.

  22. Such a great read who wrote this ?!
    We need you back on bb


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