Agents: Group Moved $15 Million in Drugs

More news from the indictments, arrests and seizures of a criminal organization in New Mexico that had ties to the CDS.

By Scott Sandlin
Albuquerque Journal

The massive drug organization taken down last week in the Albuquerque area had moved $15 million or more in drugs and had ties to drug kingpin Chapo Guzman and the Sinaloa drug cartel in Mexico, federal agents said Friday.

Documents unsealed late Friday also show that funds from the Varela organization, named for lead defendant Homero Varela, provided cash toward 40 gun purchases, including 20 fully automatic AK-47s, Beretta pistols and .308 rifles. Varela allegedly provided the $73,000 to repay a drug debt to the purchaser, who was a drug trafficker engaged in an ongoing war against a rival cartel.

During a briefing Friday, agents painted a picture of a large organization operating in New Mexico that used racehorses and real estate to hide its illegal drug dealing.

“This was a huge organization with a big impact on drug sales in Albuquerque,” said Drug Enforcement Administration Special Agent in Charge Keith Brown.

The firearm transfer took place last March at a Love’s Truck Stop in Las Cruces but was intercepted by undercover agents, who recovered the weapons.

Varela, a Mexican citizen and lawful permanent U.S. resident, surrendered this week and remains in custody, pending a detention hearing next week.

The nine-month, multi-agency investigation culminated in the arrests of 13 of 15 defendants named in a grand jury indictment, plus an additional defendant, and the seizure of 26 kilos of cocaine, over 500 pounds of marijuana, and over $165,000 in cash.

“It was an extremely significant group bringing methamphetamine and marijuana to Albuquerque for redistribution, and the proceeds went back south to Mexico,” Brown said.

Brown said a law enforcement stop of Ramon Gonzalez Sr. last November in El Paso gave a snapshot of the organization’s breadth: Gonzalez at the time had 26 kilos of cocaine and 550 pounds of marijuana. The wholesale value was close to $1 million.

“From what we gather, that was not unusual. It was something they did (regularly),” he said. “The amount of drugs and the amount of money was incredible.”

Law enforcement officials said Varela used the racehorses he owned as well as bank accounts and real estate to launder the cash from drug sales.

Gabriel Grchan, IRS criminal investigation assistant special agent in charge in Phoenix, said some of the proceeds from the millions in drug sales went into horse racing and purchase of horses, including eight found at a Torrance County ranch when search warrants were executed last week.

Wiretaps, which must be authorized by a district court judge, were also used in the course of the investigation. The intercepted calls made it clear that, at the time of the November stop, Varela was expecting a shipment and would be aided by Ramon Gonzalez Sr. and Ramon Gonzalez Jr., and a relative, Andres Gonzalez, because Varela was on a planned trip to Mexico at the time.

Gonzalez Sr. is described as a legal permanent resident long active in area drug trafficking and owner of homes on Coors Road and in Edgewood, as well as a horse training facility in McIntosh.

Operations such as those in Albuquerque feed the cartels and keep them running, officials said. For instance, in one incident, $112,270 in cash was seized on its way back to Mexico.

The Sinaloa cartel, the world’s largest and most powerful drug trafficking organization, has been headed by Joaquín “Chapo” (Shorty) Guzman since 2003.

Cash in girdle
A search warrant affidavit says agents who had been keeping tabs on Varela and co-defendant Roy Madrid saw a woman with Chihuahua plates arrive and leave Madrid’s home in Albuquerque’s South Valley in a Toyota RAV4. When State Police made a traffic stop of the vehicle near Hatch, they obtained consent to search and found three bundles of cash strapped in an elderly woman’s girdle. The woman was later released, but learning of the seizure prompted Madrid and Varela to change their phones.

Hundreds of thousands of dollars more was being invested in bank accounts and property, agents said, and busts like the recent one take out trusted members of the organization.

“Drugs is pure capitalism,” Brown said, noting that Albuquerque firefighter Steve Chavez, one of those arrested, is believed to have been involved in distribution of drugs in Tampa, Fla., and laundering the money in New Mexico. Almost $350,000 is alleged to have gone through Albuquerque bank accounts that Chavez’s wife was not aware of.

Grchan said horse racing does not appear to have been a significant source of income for the organization, despite the fact that Varela listed it as such.

According to the IRS, Ramon Gonzalez Jr. reported losses from horse racing the last three years, and Varela had grossed about $32,000 in 2011 from racing.

But Brown said the horse racing illustrates the linkage of activities.

The cocaine and marijuana seized in November was in a horse trailer pulled by Gonzalez Sr., one of the owners of the Torrance County ranch where cocaine was found.

“Businesses often serve to disguise the illegal stuff, so they can have something they can say they’re making money from,” Brown said. “The two businesses were combined financially and structurally.”

Federal tax records showed Varela with income solely from horse racing and a rental property, but the search warrant affidavit says that his “lifestyle … is simply not possible on such a small annual income” of $27,000 to $33,000 a year.