Drug Case : Death and Greed in a Small Town

It looked like a professional hit.

The man and woman were found lying head to head in pools of blood on the family room floor of their rambling, split-level home. Their eyes and mouths had been covered with silver duct tape. Both had a single bullet in the back of the head.

Upstairs in a black filing cabinet in a bedroom/office, sheriff’s deputies found eight kilos--more than 17 pounds--of pure cocaine in plastic bags, plus $38,000 in cash. Authorities estimate that the cocaine, had it been cut with adulterants and marketed by the gram, would have brought nearly $2 million on the street. In a safe hidden in the floor of the garage, authorities discovered another $140,000 in cash.

‘Totally Convinced’

“I was totally convinced that we were dealing with international assassins,” Placer County Chief Deputy Dist. Atty. Tom Beattie said. “I had never seen anything like this.”

The international cocaine trade had, indeed, come to quiet, mostly rural Placer County, which lies across the rolling hills of the gold country just northeast of Sacramento.

But Beattie soon concluded that the murders in the little town of Loomis last December were by no means the work of professional killers. He is also finding that the murder story, as it unravels, is far stranger, in many ways, than an international cocaine assassination.

Court records and sheriff’s reports on file here reveal a bizarre tale involving:

--A well-liked local building contractor who, by some accounts, used his own sons as helpers in a cocaine operation that was supplied by a shadowy Latin American group known only as The Organization.

--An enigmatic impostor who allegedly passed himself off as an ex-CIA agent, undercover narcotics officer and former military officer and had visions of forming a private army and equipping it with fully automatic assault rifles to kill Colombian cocaine dealers.

--A group of young, small-town misfits, some of whom saw themselves as junior Rambos, who wore camouflage outfits while allegedly casing a cocaine dealer’s home for a rip-off.

Sometime in the late 1970s, Robert Lawrence Riley--Larry to his friends--moved with his wife and three children from Los Angeles to Chico, a college and farming town about 90 miles north of Sacramento.

In Chico, the likable Riley, then in his late 30s, became acquainted and went into the building and commercial development business with Robert Steven Novak. Steve, as he is known, was in his early 30s at the time. He was a local boy, a member of a prominent Chico family, and regarded as something of a playboy.

Soon, according to a statement later made to sheriff’s deputies by Riley’s son Kelly, now in his 20s, Novak introduced Larry Riley into the cocaine business.

“Novak was dealing cocaine,” states a Placer County Sheriff’s Department summary of an interview with Kelly Riley, “and he helped (Larry) Riley make the right connections to become a dealer.

“Novak was jealous of Riley because Riley became very successful and soon became a bigger dealer than Novak. Ultimately, Riley took over Novak’s business, and Novak was soon forced to buy his narcotics from Riley.

“The Organization liked Riley better. The Organization is tied to South America where Riley receives his cocaine.”

Novak denied to authorities that he harbored any jealousy toward Riley.

Bought Restaurant

Novak also told authorities that, as Larry Riley’s cocaine business grew, Riley bought a restaurant in Costa Rica to give him an excuse to travel to Latin America for his drug connections.

While Kelly Riley’s older brother Rick denied that he or his father were in the cocaine business, Kelly told sheriff’s deputies that both brothers took part in their father’s drug operation some years ago but subsequently got out of the racket.

At about the time Larry Riley was establishing his cocaine business in Chico, he was introduced to Claudia Alice Plemmons, a tall, attractive woman in her late 20s with a wide, dimpled smile and mischievous eyes.

Soon thereafter Riley left his wife and moved into a condominium with Plemmons. The couple shared more than romance:

“He said when they first met,” reads the sheriff’s summary of Kelly Riley’s statements, “Plemmons was dealing drugs, and she had her own connections. After she and (Larry) Riley got together, she slowly cut off her contacts and joined with Riley.”

Moved to Loomis

Sometime in the early 1980s, Riley and Plemmons moved from Chico to the San Jose area and within the last few years moved to Loomis.

Although Loomis is less than 25 miles from burgeoning Sacramento, it remains a small, rural town where community events at the school are announced on placards posted at the main crossroads.

Riley and Plemmons bought a big, gray, split-level frame house secluded on several oak-studded acres at the edge of town. They were friendly enough with neighbors, but mostly they kept to themselves.

Although Riley was once briefly held by authorities on the Caribbean island of Aruba on suspicion of drug-trafficking and although Plemmons was detained at the San Jose airport when $60,000 in cash was discovered in her luggage, the couple were unknown to narcotics agents in the United States.

“He was really a sleeper,” said Edward Cazares, special agent in the federal Drug Enforcement Administration’s Sacramento office. “He wasn’t known to anybody.”

Cazares estimates that Riley was selling 20 kilos--about 44 pounds--of cocaine a month while he lived in Loomis.

Steady Customers

Sheriff’s reports indicate that one of Riley’s steady customers was his ex-partner, Novak, who by then was pushing his 40th birthday and had become a desperate, small-time cocaine dealer in nearby Sacramento, where he resold what coke he did not feed to his own habit.

“Novak came to (Larry) Riley’s home about three times a week,” says the Sheriff’s Department summary of Kelly Riley’s statements. “Riley complained that Novak clings to him.”

“Riley,” the summary adds, “did very well dealing cocaine.”

By the end of 1986, Riley and Plemmons had amassed assets of more than $11 million in real estate, cars, boats and cash, all from the sale of cocaine, according to statements made to reporters by the Drug Enforcement Administration.

Sometime within the last two years, Arthur Chen, 51, and his cousin, Yvonne Chow, 23, moved from the San Francisco Bay Area to Sacramento.

Chen is a strange and puzzling man.

Before the revolution in China, Chen’s father had worked in the Chinese government. In the early 1950s, he moved to the Bay Area with his family.

Arthur Chen, the third of four children, was then a teen-ager who habitually fabricated stories, according to relatives. In one of his favorite fantasies, he was the son of Gen. Claire Lee Chennault of World War II Flying Tiger fame. Chen was arrested at least once for impersonating a military officer, according to the FBI.

Military Records

In real life, Chen’s U.S. Army experience was limited to less than six months in 1954 before he was discharged, according to military records. Neither the reason for the early discharge nor its category was disclosed because of privacy regulations.

Despite his short military tenure, Chen bragged to relatives that while in the Army, he performed such exploits as flying an airplane under the San Francisco-Oakland Bay Bridge.

As he grew older, his stories also grew. He told relatives, friends and acquaintances that he was a CIA agent, a West Pointer, a Harvard University graduate, a fighter pilot in the Korean War, a Vietnam War veteran, a narcotics agent. Extensive interviews indicate that none of this is true.

Nevertheless, Chen was articulate, apparently intelligent and, to some people, convincing.

Shan Wang, Chen’s uncle by marriage, said his nephew was often able to talk his way into high-level executive jobs but would keep the positions only for short periods.

Much of the time, Wang said, Chen lived with his parents and slept all day.

“The only thing he does,” Wang said, “is watch TV. He learned all his tricks on TV.”

Sent Back

At one time, according to federal investigators, Chen attempted to defect to East Germany. But officials there, according to the FBI, apparently thought he was insane and sent him back to the West.

The East Germans were not the only ones to form such an opinion:

Last summer in Sacramento, according to Placer County Sheriff’s Department reports, Chen and a red-haired woman known only as Lorraine visited the home of gun and electronics hobbyist Eric Haffey.

“Chen told him (Haffey) he was putting together a group of 60 to 70 men to eliminate or terminate Colombian drug dealers,” a sheriff’s report says. “Chen wanted to pay him $50,000, plus expenses, to build a communications network between South America and the United States. Chen also talked about him (Haffey) converting an Uzi (semi-automatic assault rifle) to fully automatic.

“He (Haffey),” the report concludes, “thought Chen was insane and decided not to get involved with him.”

But Novak, ex-partner of wealthy cocaine dealer Riley, somehow did get involved with Chen.

Made Contact

Chen subsequently told investigators that he contacted Novak after the mysterious Lorraine gave him a file detailing Novak’s cocaine involvement:

“He (Chen) felt that he could use Novak to gain information about cocaine dealers,” detectives reported.

Novak, however, later gave the Sheriff’s Department a different, even stranger, version of their meeting. He said that about one year ago, Chen told him a woman named Lorraine had asked him to kill Novak.

“However,” the report says, “Chen had found that Novak was actually a good guy so he didn’t want to kill him.”

As Chen was developing his relationship with Novak, he also was meeting with federal and state narcotics agents in Sacramento to tell them that he was gathering information on drug dealers.

“He asked as many questions of us as we asked of him, almost,” said Dale Ferranto, a state narcotics agent. “That’s probably why we didn’t begin working with him.”

Hanging Around

Chen was also hanging around Novak’s cocaine-using acquaintances and asking a lot of questions, according to a friend of Novak who asked not to be identified.

“A fiftyish Oriental guy in a suit, he tended to stick out,” the friend said. “He was not the usual traffic. . . . Mr. Chen did no drugs.”

Nevertheless, said the source, Chen was very curious about drugs and Novak’s source for drugs.

Christopher Blake Anderson, 24, a strapping, handsome man of 6 feet 5 and 195 pounds, lived in Roseville, a bedroom community just northeast of Sacramento. There, he and his pal, short and slender Richard Brian Young, 25, tried to project Rambo-style images, even though neither of them had successfully completed stints in the military service, according to sources.

Anderson, who reads at the second-grade level, according to a sister, fancied himself a bodyguard, while Young was an ardent gun enthusiast who saved his meager funds to buy an Uzi assault rifle, studied gunsmithing through a correspondence course and lived on welfare payments, according to sources.

Their fantasies took a deadly turn toward reality last year when Anderson stopped on the highway and gave a ride into Sacramento to a motorist whose car had broken down. In Sacramento, the stranger introduced Anderson to Novak, and things began to happen. Anderson told deputies that Novak hired him as a bodyguard to accompany Novak on his cocaine deals and to answer the phone for him.

Shortly afterward, Anderson was introduced to Chen.

“I was confronted by a guy who was in the CIA,” Anderson told detectives.

Chen too began giving him orders, and Anderson was taken to the outskirts of town to test-fire an Uzi.

“They asked me,” he told detectives, “ ‘Do you understand there are certain things you are going to have to do?’ ”

Weapons Expert

Anderson soon turned to his good friend Young, the weapons expert, to help him do those certain things.

“Chris wanted me to go into it to make a lot of money,” Young told Placer County sheriff’s detectives. “ ‘Cause Chris wanted to get rich . . . live wealthy. To me, it didn’t matter, because I was doing real good the way I was living before.”

Nevertheless, Young accepted.

With Anderson and Young, Chen had the first recruits in his small “army” and, according to Placer County sheriff’s reports, decided to test the mettle of his troops.

“He just wanted to put us through a little bit of pressure,” Young told detectives, “to see if we could handle it.”

Using information supplied by Novak, Chen led Young, Anderson and Anderson’s brother, Bill, to a drug dealer’s apartment in Sacramento in early November, Anderson told authorities.

Chen carried a 9-millimeter handgun in a shoulder holster, and the others carried assault rifles, Young told investigators.

No Drugs Found

The group handcuffed the two occupants of the apartment, taped their eyes and stole $105, Young said. They found no drugs.

Authorities continue to investigate this incident, but so far no charges have been filed.

“Novak and Chen were planning to set up other drug dealers for robberies,” says a sheriff’s summary of an interview with Chris Anderson. “Chen wanted to get IDs and patches from the DEA (Drug Enforcement Administration) . . . and stage big drug raids as a front to commit these robberies. Chen and Novak were going to teach him (Anderson) how to sell large quantities of cocaine.”

The next target was Larry Riley.

Chris Anderson’s brother, Bill, apparently dropped out of the group, but Chris Anderson recruited two more acquaintances from Roseville.

One was John Dyer Bailey Jr., 29, who was living with his wife and parents on a small ranch near Auburn, where they had recently moved from Roseville.

A tall, lanky, easy-going man with bad teeth, Bailey wears a bracelet and a ring bearing swastikas. He says he is a Jack-of-all-trades.

Jail Stint

The other recruit was Kenneth Ernest Lee, 28, who had recently been released from a 53-day jail stint in Reno for drug possession. A muscular 6 feet 2, Lee was known around town as somebody not to mess with, although his frequent brushes with the law were for things like drunk driving and drug possession rather than violence.

Like Anderson and Young, Lee had problems in the military service. He was discharged from the Army under less than honorable conditions, according to a family member. Lee did not have a steady job.

Members of the little band apparently believed that Chen was a former colonel in the Army, one of the first American soldiers into Vietnam, a trainer of Rangers for the Army, an ex-CIA agent and an undercover narcotics officer, according to Placer County sheriff’s reports.

Novak told sheriff’s detectives that he feared Chen, and Chris Anderson indicated that he feared both Chen and Novak.

“I was told Steve has contacts . . . with the government through Chen. . . ,” Anderson told Placer County Sheriff’s Detective Jeff Jensen. “These people have ways of finding anything out they want.”

“Or they appear to, anyway,” responded the low-key detective.

“No. I know,” Anderson insisted. “When you live in Roseville for as many years as I have, you get to know a lot of people, and you know when somebody is feeding you garbage or not. . . . I’m serious. . . . They’ll take people out and (if) that means blowing a car up or blowing something up, they don’t care. I’m serious.”

Array of Weapons

Chen supplied the men with an impressive array of equipment, including assault rifles with silencers and flash suppressors, according to sheriff’s reports. At least one of the weapons apparently was fully automatic, and one was equipped with a laser sighting device, according to sheriff’s reports. It is not certain where Chen got the money to buy the weapons.

Anderson said members of the group prepared for the Riley rip-off as though they were in the Army.

“We carried it out just like the military,” he told detectives. “We went down (to the home of Riley and Plemmons in Loomis) . . . three nights. We walked the roads wearing camouflage . . . watching traffic.”

The group also held planning sessions at Novak’s home and at Chen’s house, where Chen’s cousin, Chow, a short, chubby woman, participated in the discussions, according to sheriff’s reports of interviews with several defendants in the case.

The plan, according to sheriff’s reports, involved Novak going to Riley’s home, making a cocaine buy and then reporting to the others whether the couple were alone.

Chen, Anderson, Young, Lee and Bailey were then to enter the home, rob the couple of an expected large amount of cocaine and cash and kill them, according to sheriff’s reports.

After two aborted missions to the Loomis home, Bailey dropped out of the group.

Couple Alone

Then, on the night of Dec. 2, according to sheriff’s reports, Novak visited Riley’s home and shortly afterward told Chen, Anderson, Young and Lee, who were waiting nearby, that the couple were alone.

According to sheriff’s reports based on statements by Anderson and Young, this is what happened that night at the house in Loomis:

The group, riding in Chen’s car, pulled into the driveway and, before the vehicle stopped, Anderson and Lee rolled out.

Both were wearing ski masks. Anderson carried a Mac 10 .45-caliber assault rifle, and Lee had an Uzi. The pair rushed into the house and surprised the couple, who were sitting in the family room watching television.

“I come up and put him (Riley) on the floor,” Anderson said, “and questioned him where the money was and where the drugs was. They told us there was some money upstairs in the safe and . . . they said they had coke next to the bed.”

Anderson then placed the couple in handcuffs that had been furnished by Chen and taped their mouths and eyes with silver duct tape.

Dogs Yapped

When Young, who had been on guard outside with Chen, came into the room, Riley and Plemmons were lying on the floor head to head. Plemmons’ handcuffed wrists were stretched out before her and resting on the couple’s big, friendly Doberman pinscher that had lain down beside her on a pillow in front of the fireplace. Two smaller dogs yapped at Young as Plemmons tried to shush them through the tape on her mouth.

Young was carrying his personal Uzi assault rifle from which, unknown to the others, he had removed the firing pin. He did that, he later told investigators, because he did not want to kill anyone. Chen was armed with a handgun.

Plemmons was led upstairs to the bedroom/office where she opened the safe in a closet for the intruders and was then taken back to the family room and again forced to lie on the floor. Young was left to guard the couple while the others searched for loot. They found jewelry in the safe, $1,500 in a money bag on a closet shelf, a small amount of cocaine in a bedroom and some firearms, including an Uzi, but they did not find the expected big score of cocaine and cash.

“That black filing cabinet was the only thing we didn’t unlock,” Anderson said. “I don’t know (why). It was just a feeling . . . (that) told us to leave it alone.”

After searching the house, Chen, Lee and Anderson joined Young in the family room.

“Chen beckoned to Young and then pointed at both the man and the woman,” according to investigators’ reports. “This beckoning meant that Young was supposed to shoot both the man and the woman.”

Louder Weapon

Young refused and Anderson was then chosen, but because his Mac 10 was louder than the Uzi, Chen told him to exchange weapons with Anderson.

As Young walked into an adjacent bedroom, he heard Anderson complain that Young’s Uzi would not fire.

Lee, his pockets bulging with stolen jewelry, was then appointed executioner by Chen.

“Ken . . . shot the guy in the back of the head. . . ,” Anderson said. “Yes. I stood right there. He shot the man first.”

Young, in the adjacent bedroom, heard the first shot from the Uzi. And he heard Plemmons’ muffled cries through the tape covering her mouth.

“She tried to scream,” he said. “She was probably crying at the same time.”

And then he heard the second shot.

“I guess it was ninja, I guess it was me,” Lee subsequently told a friend, Laura Rodriguez, according to a sheriff’s report. “Nobody seen us. We were ninjas. “

No one saw them, but they talked about it all over Roseville.

Lee was the first to be arrested. He was taken into custody Dec. 13 after he allegedly sold some of the stolen jewelry to a drug dealer who reported to authorities that he had received some loot from the Loomis murders.

Detectives questioned Rodriguez and other acquaintances of Lee and within days, Anderson, Young, Novak and Chen were arrested and charged, as well as Lee, with robbery and murder. Bailey and Chow were charged with conspiracy to commit robbery and murder.

Charges Reduced

Subsequently, charges against Young were reduced to residential robbery in exchange for his promise to testify for the prosecution. Bailey was released on his own recognizance, and the conspiracy charges against him were dropped in exchange for his promise to testify. Chow was released on $50,000 bail. The others remain in custody. A preliminary hearing is to begin July 6 for all defendants except Chen, whose hearing was rescheduled to Aug. 10 because his attorney was not able to appear on the earlier date.

Both Anderson and Young have given investigators detailed accounts of the crime.

Novak admitted to authorities that he was at Riley’s home the night of the crime, but has insisted that he did not want Riley robbed or killed. He contends he was pressured by Chen and Chow at the planning sessions to reveal information about Riley’s home and drug activities.

“Novak said that Riley was his livelihood and that he loved the man,” Detective Jensen wrote.

Lee, the alleged triggerman in the killings, has refused to make other than oblique remarks about the crime to investigators.

Chow maintains that she had nothing to do with the crime and that her cousin, Chen, is being used as a scapegoat.

The multimillion-dollar assets of Riley and Plemmons are expected to be tied up for a long time in court as the federal government attempts to claim them as ill-gotten drug profits.

Note From Chen

As for the strange and puzzling Chen, shortly after his arrest he sent a note asking to talk to Placer County sheriff’s detectives, insisting that he was working for the Drug Enforcement Agency.

Jensen wrote a report of his interview with Chen. Raymond Chandler could scarcely have written a better one.

“Chen asked for a moment to smoke his cigarette to think,” Jensen wrote. “During this moment of thought, Chen stated:

“ ‘You see, I know several very important people. It’s a matter of Chinese honor. Being chained up in court with pictures snapping was very embarrassing. If I admit to being connected to this Loomis thing. . . ?’ ”

“Chen sat quietly for another brief moment. I asked him what happened. . . .

“He drove to Riley’s house, he stated. ‘I went in there looking for more information on the (drug) connections. I walked in on two stiffs.’ ”

“When asked who was there, he stated, ‘Rick, Christopher and Ken. They were ransacking.’ ”

When he saw what was going on at the Riley home, Chen told the detective, he cried:

“I’m getting out of here. You guys are crazy.”