The Chicago cocaine kingpin who was a federal informant

Borderland Beat
Thank you to "CB" for sending me this article...from The Chicago Reader by Jason McGahn

Pedro Flores (left) is the U.S. government's star witness in the largest drug trafficking case in Chicago history. But should the DEA have looked the other way as he and his twin brother brought truckloads of coke into the city?

The fluster of T-Money's truck engine turning and turning but never catching, stalled out in a church parking lot in the middle of the day, was an inauspicious start to his minor role in what the Justice Department considers the most significant drug trafficking investigation in Chicago history.

T-Money was the street sobriquet assumed by a 38-year-old realtor with a fondness for blue pin-striped suits, who lived at home with his parents and made occasional forays into crime. Hunched over the wheel of his defunct vehicle, he tried his best to absorb the gravity of the failed transmission as it weighed on his urgent errand.

He placed the first call to a peer of his from church, someone he played basketball with on weekends, a hazmat driver whose after-hours dealings were concealed behind the nickname Crooked. Just before he had climbed aboard his truck, T-Money had sent his partner a jubilant text message: "Let's go baby and C the wizard." Now he was calling back, deflated.

Problem with the meet-up tonight. Car won't start. Yeah, I'll call the Twin and hopefully we can try again tomorrow.

The last thing T-Money needed was to disappoint the Twin. His car trouble had come at a delicate time. T-Money was behind on payments. And though he'd always made an effort at fellowship with the Twin, calling his dealer "baby boy" wasn't going to erase the debt he owed. One load pays for the next.

The Twin, in a seeming gesture of good faith, had offered to advance him ten more kilos on consignment—buy now, pay later—with the expectation that T-Money and Crooked would hand back the proceeds as payment for what they already owed. All they had to do was cough up 20 grand in cash and bring it with them to the meet-up.

If only it were as simple as substituting a nonstarter for a starter, T-Money would switch cars in a heartbeat and go find the Twin's man waiting at 31st and Normal. But no other car at his disposal had the secret compartment in its cargo bay, nor the Secretary of State sticker on its license plate. He locked the car and headed in the direction of the church, where he was sure to find a helpful hand to get his car to a mechanic. Such were the benefits of being the pastor's brother.

His phone was ringing. Sup, baby boy, listen . . .

Old Man steered his maroon Pontiac into a handicapped spot near the entrance to the Outback Steakhouse in Calumet. For the second night in a row, he parked and waited. On the previous night, the whole thing had gone like clockwork. The guy pulled into the spot right beside his and retrieved the bag of cash from Old Man's trunk. All Old Man had to do was pull the lever.
            (Margarito Flores)

He assumed tonight's transaction would be no different. He turned off the engine and glanced at the phone. It was past dark on a Tuesday, December 1, 2008. Old Man had arrived a half hour early; the warm colored lights of the Outback beckoned.

Twenty minutes later, he answered a call from the Twin. The guy was outside. Old Man made his way from the table to the door.

Amid a field of vehicle glass gleaming under light posts, Old Man noticed a car at the far end with the driver's-side window lowered, and made eye contact with the swarthy man sitting alone at the wheel. Whoever he was, he was ten minutes early, but why did he park so far away? Twenty kilos weighs more than 40 pounds and Old Man had a handicapped sticker on his license plate for a reason. He wasn't going to huff any 20 kilos of cocaine across a whole damn parking lot.

He squeezed back in behind the wheel of his Pontiac and drove the short distance to the spot right beside the stranger. As though he hadn't already called enough attention to himself by that point, he added a brief toot of the horn while drawing to a stop. The guy looked over.
"Twenty, right?" was all he said.

And Old Man, replying in kind: "Yeah. Trunk's open."

The guy stepped out of the car and retrieved a black duffel bag from behind his seat. He walked it briskly to the rear of Old Man's Pontiac, raised the lid, and dropped the bag with a thud.

He got back into his car and, with nary a glare in Old Man's direction, drove away.

The deal was over, and yet Old Man remained in the lot, beside the space left vacant by the driver's departure. Feeling an urge for immediate reassurance, he unlocked the trunk for a second time and unzipped the duffel bag, letting his fingers make a blind count of the duct-taped bricks inside.

So absorbed was he in the act of counting, stooped over the open trunk, that the converging task force of a dozen DEA agents caught him by complete surprise.

Too many shoppers at the Dollar Bazaar in North Lawndale had set D on edge. Too many damn people at the busiest time of day.

He gripped the steering wheel of his Porsche Cayenne, watching the ebb and flow of traffic on the corner of Roosevelt and Kedzie and wondering what he should do.

For one thing, he should never have answered his phone when the Twin started calling again. And at first he hadn't. But 40 grand is a lot to owe to someone with cartel connections in Mexico. The twins had cut him off for nonpayment four months earlier, and the special Nextel phone they'd given him hadn't rung once since then. But on the first of December, the small plastic screen lit up in his hand once again.

Fear is motivation enough, and money is money. And the Twin wanted his money, that much was clear. The calls were coming, would continue to come, until D finally answered. Time to work off your debt, D. Ten keys coming today. Twenty-eight-five each. Keep your phone next to you, dog, because this is the last time I am going to call you. I don't want to have to skip you, all right?

Something about the Twin's offer rang hollow. Ten keys in hand at the old price of $21,000 each could, through resale, have settled a debt like D's in a few days. But at $28,500 a pop, the Twin was asking too much. At such a high price, D would need to sell far more than ten kilos to pay back what he owed. "Straighten you all the way out with 50," D had offered, but the Twin dismissed it out of hand. And what more was there to say?

Now here he was, watching the shoppers in the parking lot of the Dollar Bazaar. It was too many damn people. And what did the Twin mean by "skip you"? Take a deep breath, D. You've got 40,000 reasons to go through with this.

Right on schedule, another phone call from the Twin: My guy is in a silver minivan at the McDonald's. Where are you?

D peeped the minivan from where he was parked. If the Dollar Bazaar was crowded, the McDonald's was positively swamped. But with the Twin on the phone, fear was put in check by the prospect of riches.

Not the McDonald's. That motherfucker's supercrowded. Tell him to find me at the Dollar Bazaar.

The corner location of the McDonald's was better suited for the DEA's designs on a surprise

bust. But the Dollar Bazaar ended up packing a bigger thrill. When D's inevitable panic set in, and the agents had him surrounded in a ring of unmarked vehicles, he had enough room to ram the nearest one, hop a curb, and plunge down a snowy embankment, crashing sideways into an iron fence.

They caught him struggling to climb out the driver's-side window.

An hour after D was taken into custody, JT answered a call on his special Nextel.

Dominick's grocery store. South Canal and Roosevelt. One hour.

The Twin had never been one for phone chitchat. Still, JT felt obliged to tell him he wouldn't be there to make the handoff in person. But there was no need to worry. Someone he trusted, a friend of ten years' standing, was going to pick up the load for him. Yes, the friend knew to bring the 30 grand JT owed. There might even be a little something extra in there.

JT sent his regards from the party circuit in Atlanta.

JT and the Twin had a long history of highs and lows. Back in the champagne days of '04 and '05, JT paid his birthday greetings to the twins in person at extravagant parties at their hideaway in the resort town of Puerto Vallarta, Mexico.

But JT also tended to draw the wrong kind of attention: What other young nobody from Detroit drives a Lamborghini to a Wabash Avenue jeweler, paying in cash for custom-made keepsakes for women he hardly knew?

JT ran afoul of the twins in '06, missing payments until they cut off his supply. But he drummed up a side business in Detroit in the interim, and eventually the twins came calling again. Chicago was flooded with the twins' coke, but in Detroit there was still plenty of money to be made.

Things got rocky for JT after a driver of his lost a load on the interstate. Three weeks on ice in Wayne County gets a man to thinking, and JT was considering retirement.

But the twins wouldn't hear of it. They coveted his Detroit connections; they said they needed him.

The next incoming call was from the friend of his who'd be making the pickup. He was in the Dominick's parking lot with the Twin's guy, a few paces out of earshot. Dude acting funny, he mumbled to JT. Something about the other guy didn't sit right. He was about to hand over a plastic bag of 45 grand and pick up a ten-kilo load on consignment. He needed a second opinion. Dude seems like the police.

JT disregarded his friend's suspicion as a case of cold feet and scolded him over the phone. Do the deal already.

An hour later, JT placed another call from Atlanta to confirm that all had gone according to plan. There was no answer.

Amid the 50 cell phones strewn across the conference table, the next to light up was the one with "T-Money" jotted onto its fluorescent, color-coded sticky label. The Twin, Pedro Flores, alias Confidential Source No. 1, paused a moment before answering, making sure the DEA agents in the room were ready to record. An agent from the Milwaukee bureau gave him the signal.

Yeah, tomorrow was fine. Nope, no one was going to jump ahead in line. You'll get what was promised to you. Get your car fixed. We'll push it back a day.

As each second ticked off on the digital recording device, with the DEA listening in as the evidence of a drug conspiracy continued to accumulate, T-Money could be heard blubbering out his gratitude.

Needless to say, everyone in that soundproofed room at the Kenosha County jail in Wisconsin had been expecting the call.

In all, ten customers of the Flores crew were caught in the dragnet the DEA set up in Chicago during the first week of December 2008. Taken as a group they were, by and large, the lesser dealers, men who missed payments, lost loads, men known to be sloppy when it came to holding up their end; in a word, they were disposable. They were men who had irked the Flores twins enough in times past to be included in the first sacrificial offering made to DEA.

To the extent that someone who deals in amounts of cocaine valued in the hundreds of thousands of dollars can be called a sacrificial lamb, that's what they were. To the twins and their crew, who imported two tons of coke a month into the city, the men had to be given up for the feds to absolve the twins of their own, bigger crimes.

There was a much more significant prize on the line. In Mexico, the twins ran with made men, men worth far more to the DEA than a dozen wholesale coke dealers from Chicago.

The cooperation and testimony of Pedro and Margarito Flores, the Mexican twin brothers from Little Village who imported Sinaloa cartel cocaine by the ton into the midwest, has for four years been the ace up the sleeve of the federal government in its high-stakes prosecution of Vicente Zambada Niebla, third in command of the Sinaloa cartel.

It isn't every day that the U.S. can introduce into evidence the word of two brothers who sat in on dozens of meetings with Zambada and his father, Ismael "El Mayo" Zambada (the Sinaloa boss who earned the title "Lord of the Mountain"), as trusted cartel insiders.

The first time they met El Mayo, in May 2005, the Flores twins introduced themselves as importers from the U.S. who, through intermediaries, had already sold around 20 tons of cocaine for him. El Mayo would soon declare the twins were "mi gente," a designation that Pedro interpreted for his U.S. handlers as meaning "preferred customers," paying the same low price for cocaine kilos as the highest-ranking members of the cartel.

Vicente Zambada faces charges in U.S. District Court in Chicago that he coordinated the cartel's drug shipments from Colombia to the U.S., and the team of lawyers who represent him has been attempting for nearly two years to convince the federal government to release the terms agreed to by the twins in exchange for their invaluable cooperation with the DEA. One of those lawyers, Alvin Michaelson, went so far as to accuse the feds of deliberately withholding information on the twins' deal.

The prosecution, Michaelson told Judge Ruben Castillo, won't even acknowledge that any such plea agreement exists. "They've just been pleasantly cooperating with the government for the last three years for no reason," Michaelson deadpanned.

A review of thousands of federal court records, police reports, and court testimony from cases related to the Flores cocaine operation in Chicago reveals that the Flores twins trafficked somewhere between six and eight tons of cocaine into the United States during the four-month period that they were gathering evidence for a DEA investigation of high-ranking Sinaloa cartel leaders. During the same period, August to November 2008, the twins also handled shipments of "multiple kilogram quantities" of heroin to the U.S.

While it's clear that the twins were invaluable to the federal government as witnesses against their top-level cartel suppliers, it's less clear why they were allowed to import tons of cocaine to Chicago in order to nab such middling dealers. The U.S. attorney's office in Chicago declined to comment.

The arrests no doubt offer proof of the twins' sprawling network in Chicago. And while taking out the lower-tier dealers may not have been the primary objective of the DEA, the roundup of arrests and subsequent prosecutions made for what then U.S. attorney Patrick Fitzgerald declared "the most significant drug importation conspiracies ever charged in Chicago."

A lawyer for the Flores twins made initial contact with the DEA in April 2008. The brothers were ready, the DEA said, to come in from the cold. Special agent Matthew McCarthy of the Milwaukee bureau spoke to them an estimated ten times in the weeks that followed. It was part of what McCarthy testified was "a feeling-out process" with the twins, negotiating their return from the Mexican state of Jalisco, where they were living, to the U.S., where they had been under federal indictment, handed up in U.S. District Court in Wisconsin, since 2005.

Under cross-examination during the trial of Ron Collins, a wholesale customer of the twins, McCarthy was asked if the twins were important enough to the DEA that the agency would permit them to continue importing drugs to the U.S. during the initial phase of their cooperation, from April to November 2008. "They weren't in our control," he said. "We couldn't stop them."

McCarthy met in person with the twins in Guadalajara on August 6, 2008, and again on November 6 of that year. "[T]he conversations were a matter of the twins . . . explaining essentially what their value could be to us and us explaining to them why it was important for them to turn themselves in." Asked if the twins were continuing to ship drugs into the U.S. from August to November, while they were providing information directly to the DEA, McCarthy answered, "I suspected so."

Another witness from the DEA, special agent Eric Durante from the Chicago bureau, testified that he spoke regularly on the phone with Pedro Flores and met him in person at the Guadalajara meeting on November 6. "I know they were providing information," Durante testified, "but I didn't know what they were doing besides that."

Jorge Llamas, a drug courier for the twins, had a closer view of the action than the DEA agents did. Llamas estimated that over the course of seven years he personally delivered nine tons of cocaine for the Flores twins in Chicago. He later testified against several of the wholesale customers to whom he had delivered. At the trial of one such customer, Ron Collins, Llamas confirmed that his bosses, the Flores twins, remained in business during the time they were working with the DEA.

At Collins's June 2011 trial, Llamas offered the following testimony while being cross-examined by defense attorney Frank Rubino:

Q: Let me ask you this: How many times did you pick up drugs or deliver drugs for the Flores brothers from April '08 through December '08?

A: Ooh. I don't know.

Q: Lots of times?

A: Not as much, because . . . I wasn't on the day-to-day. So it wasn't as much as prior '04.

Q: But it was still going strong, wasn't it, from April '08 to December of '08?

A: Yeah.

Rubino, who runs a law practice in Miami, learned that the Flores twins were part of the Vicente Zambada investigation only during an interview with this reporter last month, conducted after his client had been sentenced to 30 years in federal prison based on the phone recordings that Pedro Flores handed over to DEA.

At the time of the trial, Rubino was told only that the testimony of two of the biggest wholesale cocaine importers he'd ever heard of was being used to convict his client, a wholesale buyer much lower on the supply chain. To Rubino, it seemed incongruous. The DEA reports he read indicated that the twins ran an operation that supplied 2,000 kilos of cocaine per month to the U.S.; his client, by comparison, was convicted on the strength of phone recordings made by the twins for a purchase of 20 kilos.

Rubino says that in 38 years of litigating federal drug cases, with a list of clients that includes Manuel Noriega, he has never seen a case where DEA informants were shown such preferential treatment. "The government let them run wild, let them export out of Mexico [and] import in the United States all the drugs they wanted as long as they provided them information about little street dealers," Rubino said.

Of course, what Rubino didn't know was that the roundup of a dozen cocaine wholesalers in Chicago was far from all that the Flores twins delivered to the DEA. Though not public knowledge until five months after the conviction of Collins, Margarito Flores was also providing the agency with information about high-level suppliers from the Sinaloa cartel—most notably Vicente Zambada.

In a tense sidebar meeting in open court the day of Llamas's testimony, Rubino demanded to know why the DEA had cut the rather unusual deal with the Flores twins to prosecute their own customers, including his client. Assistant U.S. Attorney Halley Guren called Rubino's concern irrelevant, but Judge Virginia Kendall, evidently in the dark herself about the Zambada investigation, initially sided with Rubino: "See, but that's not true, because what's relevant is there's the DEA working with drug dealers and cooperating with them and allowing them to be free, allowing them to do their illegal trade while they are working to arrest others. It shows that they are biased, for some reason, against Mr. Collins as opposed to others, that they are arbitrarily choosing which dealers to prosecute."

Rubino recalled to me his earlier underlying suspicion that the DEA made a "scandalously favorable" offer to the Flores twins in order to make a case against lower-level wholesalers like his client: "Had they stopped the Flores brothers," he said of the DEA, "there wouldn't be any crime and then there wouldn't be anyone to arrest. It's almost like they were creating crime so that they could solve it."

After the reprimand from Judge Kendall, Guren had a difficult decision to make. Either sit back and watch while her DEA witnesses answered tough questions in open court probing the nature of the twins' cooperation, or risk enlightening Kendall about the bigger picture: the DEA's investigation of leaders of the Sinaloa cartel, including Zambada. Guren chose the latter: "They were cooperating and providing information on their suppliers," she said of the twins.

"There is a much larger DEA investigation into all sorts of customers, all sorts of suppliers with the Flores brothers' help. They were continuing their business as part of this ongoing [investigation], figuring out how to work with DEA and gathering evidence for these longer investigations, which ended up prosecuting the crew members who were doing these deliveries and the customers."

In essence, the DEA sanctioned the importation into Chicago of up to two tons of cocaine per month.

Also, despite Guren's assurances to the contrary, the "crew members" of the Flores organization, boyhood friends and close associates who worked for the twins as drug couriers, stash house workers, and cash counters, were rewarded for their similar cooperation with very lenient sentences. In every instance, the prison terms for Flores crew members departed from the low end of the statutory minimum by anywhere from a third to a half. Jorge Llamas, to cite an especially generous reward for cooperation, was given credit for time served and released.

A special forces unit of the Mexican army arrested Vicente Zambada during a raid on his safe house in Mexico City in March 2009. In 2011, Mexico granted a U.S. request to have him extradited to face criminal charges in Chicago. Zambada awaits his trial in a four-by-six-foot cell in a federal penitentiary in Milan, Michigan. Should his case go to trial, he will be the highest-ranking narcotics kingpin ever prosecuted in the U.S.

His trial date has twice been postponed, delays that stem from the unusual complexity of the case. Zambada's defense team plans to argue that their client is not guilty by virtue of a preexisting immunity agreement proffered him by U.S. authorities in exchange for sensitive intelligence on rival cartels. The U.S. denies that any such immunity agreement exists.

The whereabouts of Pedro and Margarito Flores are not publicly known. They are, however, a topic of popular speculation. A federal prison in Wisconsin is one possibility. Another, shared by a criminal defense attorney in Chicago, has the twins in protective custody at the U.S. Northern Command headquarters on Peterson Air Force Base in Colorado Springs, Colorado. Pedro Flores, the story goes, staged a brief escape from his overseers, who caught up with him enjoying a meal at a nearby McDonald's.

There is no such uncertainty as to the fate of the men who purchased portions of the cocaine loads that the Flores twins and Vicente Zambada had delivered to Chicago. JT, for one, in reward for testifying against his friend and driver, was released in March of this year. His driver will remain in prison until September 2019, which is the same month that Crooked will complete his sentence

Those who agreed to a plea bargain and kept their cases from going to trial received the most lenient sentences, between ten and 16 years in prison. Old Man will remain in prison until July 2020, D until January 2035, and T-Money until December 2025. The harshest punishment went to those Flores customers who brought their cases to trial; all were convicted and sentenced to as much as 30 years.

Cocaine seizures in Chicago, according to the DEA's figures from 2012, dropped to more than half the 2008 total. Heroin seizures, however, climbed 19 percent during that same period, and seizures of methamphetamine, also known as crystal meth, jumped 87 percent. The Sinaloa cartel is responsible for between 70 and 80 percent of the narcotics supplied to Chicago.

The question that lingers in the air after the fall of the Flores crew is how the federal mandate for a war on drugs squares with the routine law enforcement tactic of enlisting drug traffickers active at the highest level on the supply chain—and then allowing them to keep the supply lines open.

Says Rubino: "It was kind of like they let the sharks go free so they could catch some goldfish."

Note:  I have posted articles about Chapo and the Flores Twins in the past  "The Twins who Betrayed Chapo":

"The Flores twins, 31-year-old Chicago drug traffickers, had warned their father not to return to Mexico, and especially not to the drug-war-torn state of Sinaloa, home to the Sinaloa cartel, which U.S. intelligence considers one of the most powerful drug trafficking organizations in the world.

Margarito Sr. was never heard from again.

The brothers, now in U.S. custody and acting as informants in a plea deal whose details remain secret, will be the star witnesses in the Chicago trial of Jesús Vicente Zambada-Niebla, a head of the Sinaloa cartel and the biggest Mexican drug kingpin ever to be prosecuted in a U.S. courtroom. ....read full article here

Another related post  posted by Windy City Kid  "Hollywood helped Chapo's Twin Betrayers Become Major Traffickers":

"Many people have stated that the twins would not have been able to move 500+ keys a month if it wasn't for "Hollywood", he was one of their main customers for 250+ keys at a time. He was their primary distributor for the black street gangs on the southside as well as other midwestern states and east coast.

 

The twins had a number of customers in chicago and Milwaukee would be fronted 20, 50 a week. But few customers like Kiley that would be fronted 100 keys - 1/4 ton at a time.

Feds: International cocaine ring tied to Henry County" ...  Windy City Kid
 

Read Full Article Here