Court Documents Lift Veil on Drug Ring Operations
The cocaine often came from Mexico in crates of fresh fish bound for Los Angeles restaurants.
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 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 members of his organization, including his wife and his 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 luxury cars.
According to court documents filed by Assistant U.S. Atty. John C. Hueston, the lead prosecutor in the case, the ring had 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 probes in five other states, was almost sabotaged, allegedly by an IRS employee in Laguna Niguel who has since been indicted for disclosing confidential information about the probe to a friend. The friend in turn allegedly offered to pass that information along to members of the drug ring for $10,000 cash. The friend has also been indicted.
Some attorneys for the defendants said they were unable to comment 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. “It will take months before we learn what the actual charges against our clients are.”
Dougherty said 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 faces a mandatory life sentence. The others face penalties ranging from 20 years to life.
According to court records, Ramirez, 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.
In April 1996, undercover Drug Enforcement Administration agents arranged a deal for Ramirez to pay nearly $1 million--in two separate payments--for 100 kilograms of cocaine, according to court documents.
Under the deal, Ramirez 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, a car containing $472,000 in cash was exchanged for the other rental car holding 100 kilograms of fake cocaine provided by law enforcement.
Ramirez never discovered the cocaine was fake because a California Highway Patrol officer quickly intercepted the rental car, seizing the “drugs” and arresting the driver, records state. Although the fake drugs had been confiscated, Ramirez still made good on his promise to pay the balance, handing over nearly $400,000 the next month to undercover agents in Chicago, according to court records.
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 made from his cellular phones and his San Dimas home.
Transcripts of those tapes revealed that Ramirez’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 fish were bags of cocaine, records say. This smuggling method reduced the chances of detection by U.S. Customs agents, Hueston said at a pretrial hearing, because the agents are mindful of the prospects for spoilage if they thoroughly search perishable food shipments.
Ramirez and his underlings shipped most of the drugs 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’s ring allegedly relied on a Fontana trucking company to transport the drugs to the Midwest, and occasionally to ferry the proceeds back to California.
Prosecutors say Ramirez and his wife, Evelyn, used 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.”
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.
On July 10, about 150 law enforcement officers showed up almost simultaneously at sites in San Dimas, Chino, Ontario and Colton, arresting Ramirez and suspected members of his ring.
Trial for Ramirez and his alleged cohorts has been set for April 14.
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