Cocaine Cache Traced to Mexican Middleman : Record Seizure Also Sparks a High-Level Review of Official Drug Volume Estimates

In the week since a record 19 tons of cocaine was seized at a Sylmar warehouse, investigators have traced the cache to a Mexican middleman who was believed to have been distributing as much as three tons of the drug a week through Los Angeles.

Federal prosecutors disclosed in court documents Friday that the Sylmar storehouse of cocaine was allegedly controlled by Rafael Munoz, a Juarez, Mexico, resident who remains at large. A federal investigator close to the case said, “We consider Munoz to be a premier godfather involved in the importation of multi-ton quantities of narcotics into the United States.”

Ledgers seized Sept. 28 along with the drugs show that at least 60 tons of cocaine and $80 million in cash passed through the northern San Fernando Valley warehouse in the last year, prosecutors said.

The ledgers and other evidence have provided authorities with a blueprint on the workings of an international drug distribution system, and may lead investigators to more distributors and help them trace drug money to legitimate businesses and banks where it is laundered.

The world’s biggest cocaine bust, meanwhile, has compelled the Bush Administration to launch an urgent review to determine whether estimates of the total volume of cocaine flowing into the United States may have been vastly understated.

The Office of National Drug Control Policy, headed by drug czar William J. Bennett, launched the inquiry this week after the extraordinary seizures of cocaine in Sylmar, Texas and the Gulf of Mexico--34 tons in all.

The expression of no confidence in official estimates comes in reaction to the magnitude of the seizures. In a single week, law enforcement officers have seized more than 8% of the 400 tons of cocaine that the United States believes represents maximum annual world production.

Some unofficial estimates by the Drug Enforcement Administration have put U.S. annual consumption of cocaine as low as 100 tons, which would mean that 34% of that total has been confiscated in one week.

The decision by Bennett’s office to question the validity of current estimates contrasts with the statements of some other Administration anti-drug officials. Some have suggested that the United States is capturing a large percentage of cocaine because Colombian traffickers have embarked on a risky strategy to shift unusually large volumes of cocaine to the United States in order to escape a crackdown in their own country.

By contrast, one senior Administration official involved in the anti-drug effort said: “The most likely scenario is that there’s a hell of a lot more cocaine in the United States than people thought before.”

Court Appearances

As U.S. officials tried to grapple with implications of the record cocaine seizures, six suspects arrested in connection with the Sylmar raid appeared in court in Los Angeles and Las Vegas on Friday.

In Las Vegas, new details of the Sylmar drug operation emerged at a federal court detention hearing for Carlos Tapia Ponce, 68, and, Hector Tapia Anchondo, 38, the father and son believed to be Munoz’s lieutenants in the United States. They were arrested at a Las Vegas hotel a day after the Sylmar warehouse raid.

Authorities believe the drug network shipped Colombian cocaine by truck from Mexico, through El Paso to Los Angeles.

“The organization responsible for the cocaine seized at the warehouse is headed by a Mexican named Rafael Munoz,” federal agents stated in an affidavit filed in support of the charges against Ponce and his son.

The function of Munoz’s organization, the affidavit continued, “is to provide transportation and storage for loads of cocaine coming from Colombia via Mexico to the United States.”

Long Investigation

A federal investigator in Texas said Munoz and his lieutenants allegedly worked together for several years smuggling marijuana, cocaine and heroin across the border. They have been under investigation in Texas since 1984, the investigator added.

Much of the information contained in the affidavit was provided by James Romero McTague, 41, of El Paso, who was arrested in Los Angeles after the Sylmar warehouse raid. The document states that McTague, who is related through marriage to Anchondo, was recruited a year ago as a supervisor of the Sylmar warehouse.

McTague told investigators that 60 tons of the drug were distributed through the warehouse in the last year and the dispersal was increasing. McTague also told authorities that the 19 tons of cocaine just seized there could have been distributed in six weeks, or about three tons a week.

Assistant U.S. Atty. Thomas Green in Las Vegas said Ponce and a third suspect, Romero Mauricio Monroy, 36, who was arrested in Los Angeles, also gave statements to investigators. But Ponce’s defense attorney, David Chesnoff, said the three men are no longer cooperating with authorities.

According to the prosecutor, Monroy confirmed that the father and son were major figures in the drug ring that transported 100 to 500-kilo shipments of cocaine from Mexico to Los Angeles. Ponce admitted being involved in narcotics trafficking and reported he got $5,000 for each of the several weekly trips to the Sylmar warehouse, the prosecutor added.

Held Without Bail

After the hearing, Ponce and Anchondo were held without bail on charges of conspiracy and possession of cocaine with intent to distribute. While being led from the courtroom, Anchondo turned to five family members in the audience and winked.

In Los Angeles on Friday, state charges were dismissed against McTague, Monroy and two other defendants, Hugo Fernando Castillon, 32, of Sherman Oaks, and Miguel Gonzalez, 34, of Panorama City. The action was taken so that the four could be charged instead with federal crimes that carry stiffer penalties.

All four remained jailed without bail on suspicion of drug possession and are expected to be arraigned Tuesday in federal court. Authorities said they also expect Ponce and Anchondo to be brought to Los Angeles from Las Vegas.

Information from the suspects and several neatly kept ledgers, along with memos, phone records and a computer seized during the investigation, have provided investigators with a crash course in drug trafficking.

Since the night that members of a multi-agency task force entered the unguarded warehouse and found the record cache of cocaine, investigators have engaged in an almost frantic paper chase, tracing leads obtained from records found in the warehouse and other locations used by the drug ring.

Ledgers Found

The keys to the chase are the seized records, particularly the 8-by-10-inch ledgers found during raids in Los Angeles and El Paso. In those books, transactions of the drug network were carefully recorded.

Already the focus of a team of 40 DEA and local narcotics investigators, experts from Washington and the El Paso Intelligence Center are expected to come to Los Angeles next week to share information and study the bounty of paper work.

“The ledgers are a phenomenal find,” said Huntington Park Police Detective William Huffman, a member of the task force conducting the investigation. “The real treasure of this is getting all of that tonnage off the street. But the records are the bread and butter. They will be a source for us to get a lot of major violators.”

Records found during raids at the Sylmar warehouse and a luxury apartment in Sherman Oaks where Ponce lived led investigators to more warehouses and homes in El Paso, Juarez, and Las Cruces, N.M. More records were found in those locations, including the computer in a home owned by Anchondo.

Investigators are attempting to trace the records to customers of the warehouse and hope other documents will provide insight into what happened to the enormous amounts of cash the warehouse took in.

“There’s an awful lot of analytical investigative work ahead,” said John Zienter, special agent in charge of the DEA office in Los Angeles.

The ledgers and other records offer detailed accounts of cocaine transactions, according to sources familiar with them. They list amounts of cocaine sold and dates of sale. Buyers are listed by nicknames in the ledgers and by numbers or alphabetical letters on other documents, authorities said.

Authorities said the Sylmar warehouse was the final stop on a smuggling route called “The Trampoline,” in which drugs are moved from Colombia to Mexico and “bounced” up into the United States through places such as El Paso.

DEA officials in Texas said most of the suspects arrested after the Sylmar raid were familiar with the route and had been the subject of investigations in that state dating back to the mid-1980s.

“We were investigating some of these suspects, but we didn’t know the magnitude of their operation,” said Reynaldo Sepulveda of the DEA’s El Paso office. “If I had known the magnitude, I would have been on their doorstep every day.”

Agents believe that the suspects were originally marijuana dealers and distributors whose established transportation routes, vehicles and manpower were adopted by the Colombian cocaine cartels sometime within the last four or five years.

“The Colombian cartels entered into a marriage with the Mexican marijuana traffickers who already had trafficking methods and routes in place,” said Phil Jordan, DEA special agent in charge of the Dallas division. “The marriage was necessary because of pressure on their operations in Florida and along the East Coast.”

Authorities believe that while working for Munoz, Anchondo was the leader of the operation in El Paso and oversaw his father in Los Angeles.

Anchondo, according to DEA investigators, owns a 5,000-acre ranch with 1,000 head of cattle in a mountainous area of Mexico called Rio Dosa. Married and the father of a young son, Anchondo has lived in recent years in a home in a middle-class El Paso neighborhood.

Anchondo, who has a bachelor’s degree and has done work on a master’s degree in psychology at the University of Mexico, was described by relatives and friends as a loyal family man whose personal motto is “Think positive, positive and positive.”

In El Paso, the thing neighbors recall most about Anchondo is the constant stream of expensive-looking cars that stopped for only a few minutes at a time in front of the red brick home he bought on the west side of town three years ago.

They also remember how he angered a lot of people in the neighborhood by building an eight-foot-high white wrought-iron fence around the house, which was always guarded in his absence. The fancy cars, the fence and the security, they said, just didn’t seem to fit in the area of modest homes.

Quick Visits

“I’ve seen people wait for him to come home, then run in, run out, get in a car and drive away,” said a neighbor, who asked not to be identified.

Another neighbor, John Moore, was amazed at all the cars and vans he saw parked on Anchondo’s property over the last three years--vehicles that were washed and waxed in his driveway every weekend by a cadre of housekeepers. “He bought cars the way everyone else buys underwear,” Moore said.

Last week, DEA agents armed with search warrants passed through the security gate and raided Anchondo’s home. They seized documents and money-counting machines they said were evidence of his drug business, as well as a computer. In the back yard, agents were greeted by a startled and uncaged macaw that screeched “Hello!” as it strutted near a new swimming pool and sauna.

Authorities in El Paso and Juarez have searched a total of 13 other homes and warehouses believed used by Anchondo and the other suspects. One of the warehouses in El Paso, allegedly leased by the group through one of McTague’s relatives, contained thousands of velvet paintings, clay pottery and pinatas similar to those found amid the boxes of cocaine stored in the Sylmar warehouse.

Authorities have said drugs found in Sylmar were hidden in secret compartments built into truck trailers containing boxes of the cheap bric-a-brac used as a cover.

A similar ruse was discovered in El Paso.

In one warehouse, a telephone card file in the front office did not contain a single entry, the stapler on the front desk had no staples, and an inventory ledger containing a single list of pinatas received at the business was not signed or dated.

In Los Angeles, the men who operated the Sylmar warehouse lived in comfort, though not in luxury.

At the apartment complex next to the Sherman Oaks Galleria, where Ponce and others had resided since March, the foyer features a grand piano. Their two-bedroom, $1,725-a-month penthouse suite had marble floors, plush furniture rented at $1,000 a month and a massive stereo system.

Ponce, who federal drug enforcement officials said is a former inspector with Mexico’s metals and metallurgy department, told friends at the apartment complex that he was a retired engineer from Vera Cruz who was now in the marble business.

Neighbors said the apartment residents appeared to be working men, leaving early each morning, often carrying portable phones. They were well dressed. When Ponce approached the Lincoln sedan he had recently obtained, neighbors said, the other men would scramble to open the car door for him.

Nine days after authorities discovered the warehouse where those men allegedly stored vast quantities of cocaine, the ripple effect of the historic seizure has been slight on the streets.

Hours after the seizure, Los Angeles Police Chief Daryl F. Gates predicted that the price of cocaine on the street would be driven up. But this week, narcotics investigators said that scenario has not yet come to pass: an average size 1/5 gram “rock” of crack cocaine still can be purchased for as little as $20, a price that is considered the lowest in the country.

Lt. Gary Rogness, head of street narcotics enforcement in the San Fernando Valley, said an artificial cocaine “drought” could be soon created in Los Angeles by greedy drug dealers who sit on their supplies, waiting for a natural price increase to occur.

“Some guy sitting out there with two or three kilos, his Dow-Jones industrial just rose 500 points,” Rogness said. “The same rock that was selling for $20 this week, may be worth $75 a week from now.

“And people will pay for it at that amount,” he added. “They just have an insatiable appetite for that stuff.”