Court Records Give Rare Look at Operations of Drug Ring

The cocaine often crossed the border with Mexico in crates of fresh fish bound for Los Angeles eateries.

Once in the United States, the drugs were loaded into small planes and big-rig trucks, transported cross-country and eventually sold to street gangs in the Midwest.

The drug proceeds were funneled back to the Southern California dealers, sometimes in cars stuffed with hundreds of thousands of dollars that would stop off in Las Vegas.

There, court records state, the reputed kingpin and his relatives would play high-stakes slot machines programmed to pay back 96% in winnings, patiently toiling for jackpots that would make the drug money appear legitimate.

The drug ring’s operations were brought to a halt recently when authorities arrested the reputed ringleader, Fernando Ramirez-Cortez, and 14 other members of his organization, including his wife and mistress, records state.

The bust stripped the alleged drug traffickers of $5 million in assets, including more than $1 million in cash, a luxury motor home valued in excess of $138,000, and fleets of pricey cars and Jet Skis.

Under forfeiture laws, a consortium of Orange County law enforcement agencies participating in the seizures can ultimately sell off the loot and use the proceeds to support their crime-fighting activities.

According to court documents filed by Assistant U. S. Atty. John C. Hueston, the lead prosecutor in the case, the ring bought and sold at least a ton of cocaine in the last year alone.

The documents, including thousands of pages of wiretap transcripts, provide a rare public glimpse into the workings of a major drug ring. They depict an underworld that supported suppliers and street sellers from Colombia to Chicago.

The investigation, which triggered separate investigations in five other states, was reportedly almost sabotaged by an IRS employee in Laguna Niguel who has since been indicted on a charge of disclosing confidential information about the probe to a friend, who allegedly offered to tell what he knew to members of the drug ring for $10,000 cash. The IRS employee’s friend has also been indicted.

Some attorneys for the defendants said they were unable to comment at this time, because they were still wading through the evidence presented by prosecutors.

“The government has dumped 800 audiotapes and [35,000] pages of transcripts on us,” said Villa Park attorney William A. Dougherty, who represents Ramirez-Cortez. “It will take months before we learn what the actual charges against our clients are.”

Dougherty noted that his client and the other defendants have pleaded not guilty to the 23-count indictment, which includes charges of cocaine trafficking, money laundering and conspiracy.

If convicted, Ramirez-Cortez faces a mandatory life sentence. The others face penalties ranging from 20 years to life.

According to court records, Ramirez-Cortez, 40, has been targeted by drug investigators since September 1992, when two men who had delivered $150,000 in cash to undercover officers posing as drug dealers were followed to his home.

The probe escalated in April 1996 when undercover Drug Enforcement Administration agents arranged a deal for Ramirez-Cortez to pay nearly $1 million in cash--in two separate payments--for 100 kilograms of cocaine, according to court documents.

Under the deal, Ramirez-Cortez and the supposed drug suppliers were to exchange rental cars, one loaded with the cocaine and the other with currency.

When the swap took place in Santa Ana on April 30, 1996, Ramirez-Cortez’s green Ford Contour, containing $472,000 in cash, was exchanged for the other rental car holding 100 kilograms of fake cocaine provided by law enforcement.

Ramirez-Cortez never discovered that the cocaine was fake, because minutes after the exchange a California Highway Patrol officer intercepted the rental car and seized the “drugs,” records state.

Although the drugs had been confiscated, Ramirez-Cortez still made good on his promise to pay the balance due, handing over nearly $400,000 the following month to undercover agents in Chicago, according to court records.

Ramirez-Cortez’s ability to come up with scads of cash on demand motivated law enforcement officials to intensify their surveillance of his organization, records state.

Hueston and Assistant U. S. Atty. John C. Rayburn Jr. of the U. S. attorney’s Santa Ana office, headed a team of investigators from federal and local law enforcement agencies that eventually obtained court permission to listen in on telephone calls Ramirez-Cortez made from his cellular phones and his San Dimas home.

Transcripts of those tapes revealed that Ramirez-Cortez’s most loyal drug supplier was Segundo Valenzuela, a resident of Mexicali, Mexico, who owned a wholesale seafood business that shipped fresh seafood to Los Angeles restaurants, court records state.

Hidden among the dead fish were bags of cocaine, records state. This smuggling method lessened the chances of detection by U. S. Customs agents, Hueston said at a pretrial hearing, since the agents are mindful of the prospects for spoilage when they thoroughly search perishable food shipments at the U. S.-Mexico border.

Ramirez-Cortez and his underlings shipped most of the narcotics to dealers in Chicago, Detroit and Milwaukee, where a kilogram of cocaine sells for almost twice the price it commands in Southern California, records state.

Ramirez-Cortez’s ring relied on a Fontana trucking company to transport the drugs to the Midwest, and occasionally to ferry the drug proceeds back to California. In March, Illinois state police stopped one of the company’s trucks and seized a cardboard box containing $114,000 destined for Ramirez-Cortez, according to court records.

Prosecutors say Ramirez-Cortez and his wife, Evelyn, also had a novel way to launder some of his drug proceeds.

At a court hearing last month, Hueston said the couple won jackpots by playing the $100 and $500 slot machines at Las Vegas casinos and would collect casino checks for the winnings, which they deposited in their bank accounts to create “an apparent legitimate source of income,” the prosecutor said.

Russell Guindon, a research analyst with the Nevada Gaming Control Board, said high stakes slot machines on the Las Vegas strip pay back about 96% of what gamblers put in.

“If a player sits there and plays long enough, there’s some possibility that they’ll get most of their money back,” Guindon said. “But it’s a player by player event.”

Jack Leon, a spokesman for MGM, one of the casinos where the Ramirez-Cortez clan played the high-line slots, said there are no guarantees players would win their bets.

“It all depends,” Leon said. “If they’re lucky they’ll win some money.”

In early July, federal agents believed they had enough information to take down Ramirez-Cortez’s organization, according to court records. But the years-long probe almost came unraveled when the IRS employee, who had overheard investigators discuss the case, passed the information on to a friend.

The friend, a 27-year-old Oceanside resident, contacted Ramirez-Cortez and offered information about the probe in exchange for $10,000, Hueston said.

Two days later, on July 10, about 150 law enforcement officers showed up almost simultaneously at sites in San Dimas, Chino, Ontario and Colton, arresting Ramirez-Cortez and suspected members of his ring.

The agents seized three homes, four motor homes, 12 vehicles, computers and an Ontario business Ramirez-Cortez allegedly used to launder money.

The IRS employee and his friend were charged last week with obstruction of justice and disclosing confidential information.

Trial for Ramirez-Cortez and his alleged cohorts has been set for April 14.