A joint investigation by law enforcement officials helped take down a North Side drug operation that crossed into Evanston and Skokie and netted about $2.5 million over the course of the investigation, police said.
The investigation, dubbed Operation Tangled Web, targeted Black P Stones gang leaders on the North Side and focused on drug trafficking that involved gang members in Chicago and the northern suburbs of Evanston and Skokie, police said.
Law enforcement officials used court-ordered wiretaps that ultimately revealed the multimillion-dollar operation. The wiretaps focused on the dealings of Black P Stones leaders Craig "Chop" Johnson and Henry "Mix" Wiggins, who ran the operation, police said.
Their operation was found to also supply gangs outside of the Black P Stone Nation that deal drugs on the North Side.
At least 22 people were charged with calculated criminal drug conspiracy, including Melvin Foote, an original ranking member of the Black P Stones, police said.
Officials seized eight vehicles, about $58,000 in cash, 377 grams of crack cocaine and a 9 mm gun during a search warrant.
Wiggins also was charged with possession of a defaced firearm in addition to the conspiracy charge, which carries up to a 30-year prison sentence if convicted.
The Chicago Police Department's Bureau of Organized Crime, the Chicago Police Gang Investigation Unit and the FBI Joint Task Force on Gangs were a part of the sting.
Thanks to Deanese Williams-Harris.
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Sunday, February 08, 2015
Thursday, February 05, 2015
DEA Contemplated Using License Plate Readers to Track Gun Show Attendees
Recent revelations about a proposed federal law enforcement program might have some friends and families drawing lots to decide who drives to the next gun show.
Criminals rarely obtain guns from gun shows. A Department of Justice survey of state and federal inmates, found that only 0.7 percent of those polled had acquired a firearm that they possessed at the time of their offense from a gun show. Unfortunately, this didn’t stop at least one federal official from suggesting that the sophisticated tools of the modern surveillance state be turned on unsuspecting gun show attendees.
Documents obtained in a Freedom of Information Act request filed by the American Civil Liberties Union reveal that, in 2009, the Drug Enforcement Administration contemplated using License Plate Readers (LPRs) to track vehicle traffic from gun shows. A highly redacted email from an unknown DEA official suggests the program was past infancy, and stated, “DEA Phoenix Division Office is working closely with ATF on attacking the guns going to [redacted] and the guns shows to include programs/operation with LPRs at the gun shows.”
ACLU correctly points out the danger of such technology in an article on their website, explaining, “An automatic license plate reader cannot distinguish between people transporting illegal guns and those transporting legal guns, or no guns at all; it only documents the presence of any car driving to the event. Mere attendance at a gun show, it appeared, would have been enough to have one's presence noted in a DEA database.”
The proposed program is even more disturbing when placed into the larger context of the Justice Department’s ongoing general license plate tracking program. A January 26 article from the Wall Street Journal explains the broad contours of DOJ LPR surveillance. The piece states, “The Justice Department has been building a national database to track in real time the movement of vehicles around the U.S., a secret domestic intelligence-gathering program that scans and stores hundreds of millions of records about motorists.” The authors go on to explain the wide availability of the collected data, writing, “Many state and local law-enforcement agencies are accessing the database for a variety of investigations… putting a wealth of information in the hands of local officials who can track vehicles in real time on major roadways.” They further note that this national database “allows any police agency that participates to quickly search records of many states for information about a vehicle.”
According to a January 27 Wall Street Journal article focusing specifically on the gun show surveillance proposal, DEA Administrator Michele Leonhart told the paper, “The proposal in the email was only a suggestion. It was never authorized by DEA, and the idea under discussion in the email was never launched.” Further, the article stated that DOJ officials were quick to deny any BATFE involvement in the LPR scheme. However, as has been made clear by the events of the last two years, public statements by federal officials regarding the scope of federal surveillance activities should be viewed with a healthy dose of skepticism.
DEA’s proposed indiscriminate gun show surveillance places an unacceptable burden on the privacy of law-abiding citizens exercising their Second Amendment rights and even smacks of firearm registration. Further, such tactics infringe upon rights protected by the First Amendment. Gun shows are far more than just shopping opportunities for gun buyers. They are also community gatherings that often serve as venues for political expression and organizing. As such, they are subject to the First Amendment’s rights of freedom of association and to peaceably assemble and should be free from government activity that could chill free and open participation.
In recent years, the unfettered growth of the surveillance state has become an increasing threat to the privacy of gun owners, and NRA recognizes this challenge. That’s why in early 2014 NRA filed a friend of the court brief in a case challenging the National Security Agency’s mass surveillance of phone and internet data. The brief contended that the data collection program is unconstitutional on First Amendment freedom of association grounds, and that it violates statutory prohibitions against compiling gun ownership records. Likewise, NRA is investigating the recent DEA revelations and will continue to work in this area to ensure the privacy of all gun owners.
Thanks to the NRA-ILA.
Criminals rarely obtain guns from gun shows. A Department of Justice survey of state and federal inmates, found that only 0.7 percent of those polled had acquired a firearm that they possessed at the time of their offense from a gun show. Unfortunately, this didn’t stop at least one federal official from suggesting that the sophisticated tools of the modern surveillance state be turned on unsuspecting gun show attendees.
Documents obtained in a Freedom of Information Act request filed by the American Civil Liberties Union reveal that, in 2009, the Drug Enforcement Administration contemplated using License Plate Readers (LPRs) to track vehicle traffic from gun shows. A highly redacted email from an unknown DEA official suggests the program was past infancy, and stated, “DEA Phoenix Division Office is working closely with ATF on attacking the guns going to [redacted] and the guns shows to include programs/operation with LPRs at the gun shows.”
ACLU correctly points out the danger of such technology in an article on their website, explaining, “An automatic license plate reader cannot distinguish between people transporting illegal guns and those transporting legal guns, or no guns at all; it only documents the presence of any car driving to the event. Mere attendance at a gun show, it appeared, would have been enough to have one's presence noted in a DEA database.”
The proposed program is even more disturbing when placed into the larger context of the Justice Department’s ongoing general license plate tracking program. A January 26 article from the Wall Street Journal explains the broad contours of DOJ LPR surveillance. The piece states, “The Justice Department has been building a national database to track in real time the movement of vehicles around the U.S., a secret domestic intelligence-gathering program that scans and stores hundreds of millions of records about motorists.” The authors go on to explain the wide availability of the collected data, writing, “Many state and local law-enforcement agencies are accessing the database for a variety of investigations… putting a wealth of information in the hands of local officials who can track vehicles in real time on major roadways.” They further note that this national database “allows any police agency that participates to quickly search records of many states for information about a vehicle.”
According to a January 27 Wall Street Journal article focusing specifically on the gun show surveillance proposal, DEA Administrator Michele Leonhart told the paper, “The proposal in the email was only a suggestion. It was never authorized by DEA, and the idea under discussion in the email was never launched.” Further, the article stated that DOJ officials were quick to deny any BATFE involvement in the LPR scheme. However, as has been made clear by the events of the last two years, public statements by federal officials regarding the scope of federal surveillance activities should be viewed with a healthy dose of skepticism.
DEA’s proposed indiscriminate gun show surveillance places an unacceptable burden on the privacy of law-abiding citizens exercising their Second Amendment rights and even smacks of firearm registration. Further, such tactics infringe upon rights protected by the First Amendment. Gun shows are far more than just shopping opportunities for gun buyers. They are also community gatherings that often serve as venues for political expression and organizing. As such, they are subject to the First Amendment’s rights of freedom of association and to peaceably assemble and should be free from government activity that could chill free and open participation.
In recent years, the unfettered growth of the surveillance state has become an increasing threat to the privacy of gun owners, and NRA recognizes this challenge. That’s why in early 2014 NRA filed a friend of the court brief in a case challenging the National Security Agency’s mass surveillance of phone and internet data. The brief contended that the data collection program is unconstitutional on First Amendment freedom of association grounds, and that it violates statutory prohibitions against compiling gun ownership records. Likewise, NRA is investigating the recent DEA revelations and will continue to work in this area to ensure the privacy of all gun owners.
Thanks to the NRA-ILA.
Monday, February 02, 2015
#MafiaCops Cost City $5,000,000 Settlement
The City of New York on Friday agreed to pay $5 million to the family of a man killed after being mistaken for a mobster with the same name — thanks to information the killers gleaned from two former police detectives later convicted of moonlighting as hit men for the mob.
The city Law Department called Nicholas Guido’s 1986 death tragic in a statement Friday and says settling is in the city’s best interest.
The family’s lawyer did not immediately return a call from the Associated Press.
The 26-year-old Guido was shot outside his mother’s home on 17th Street in Park Slope, Brooklyn on Christmas Day 1986, according to a New York Daily News report.
Federal prosecutors said the gunmen had Guido had no ties to organized crime, but happened to share a name with an associate of the Gambino crime family who was part of a team of hit men that tried to kill Lucchese family underboss Anthony “Gaspipe” Casso three years earlier.
Casso who paid two detectives – Louis Eppolito and Stephen Caracappa — to help in eight murders, according to the Daily News report. They were accused of carrying out two of those killings themselves.
Eppolito and Caracappa were both sentenced to life in prison.
Thanks to CBS New York.
The city Law Department called Nicholas Guido’s 1986 death tragic in a statement Friday and says settling is in the city’s best interest.
The family’s lawyer did not immediately return a call from the Associated Press.
The 26-year-old Guido was shot outside his mother’s home on 17th Street in Park Slope, Brooklyn on Christmas Day 1986, according to a New York Daily News report.
Federal prosecutors said the gunmen had Guido had no ties to organized crime, but happened to share a name with an associate of the Gambino crime family who was part of a team of hit men that tried to kill Lucchese family underboss Anthony “Gaspipe” Casso three years earlier.
Casso who paid two detectives – Louis Eppolito and Stephen Caracappa — to help in eight murders, according to the Daily News report. They were accused of carrying out two of those killings themselves.
Eppolito and Caracappa were both sentenced to life in prison.
Thanks to CBS New York.
Friday, January 30, 2015
Daniel Spitzer Sentenced to 25 Years in Federal Prison for Cheating 455 Investors of $105 Million and Causing $34 Million Loss
A northwest suburban man was sentenced for engaging in a lengthy investment fraud scheme in which he and a co-defendant swindled approximately $105 million from 455 investors who invested in funds they purported to operate. The defendant, DANIEL SPITZER, pleaded guilty to 10 counts of mail fraud last July on the day his trial was scheduled to begin in Federal Court. Spitzer misused the money he raised from investors for his own benefit and to make Ponzi-type payments to investors, resulting in a loss of $33.98 million to at least 279 victims, many of them elderly.
Spitzer, 55, of North Barrington and formerly of the U.S. Virgin Islands, caused “very substantial damage,” U.S. District Judge James Zagel said in imposing the sentence today, a day after he ordered Spitzer into federal custody. The judge also ordered restitution of $33.98 million.
Spitzer engaged in an “extended act of greed,” between late 2004 and early 2010, Assistant U.S. Attorney Madeleine Murphy argued at today’s hearing.
According to court records, Spitzer was the principal officer and sole shareholder of Kenzie Financial Management; the sole manager and member of Kenzie Services, LLC; the president of Draseena Funds Group, Corp.; the manager of DN Management Company, LLC; and the manager of Nerium Management Company.
Co-defendant ALFRED GEREBIZZA, 59, formerly of Crystal Lake and Palm Beach Gardens, Fla., was the secretary and a director of Draseena and a sales agent for the Kenzie Funds, who also held himself out as a trader. Gerebizza was convicted at trial last July of 10 counts of mail fraud and six counts of federal income tax fraud. He is in federal custody awaiting sentencing.
Through these entities, Spitzer controlled 12 investment funds collectively known as the “Kenzie Funds.” Spitzer and Gerebizza offered and sold to the public investments in the various Kenzie Funds in the form of membership interests and limited partnerships. Through sales agents and various marketing materials, they informed investors and potential investors that their investments would be used primarily in foreign currency trading, that the Kenzie Funds had never lost money, and that they had achieved profitable historical returns. The defendants had to continually raise funds through the solicitation of new investors in the Kenzie Funds to make payments on investments made by earlier investors, all of which they concealed and intentionally failed to disclose to both new and earlier investors. Although Spitzer and Gerebizza falsely represented to prospective investors and current investors that different Kenzie Funds had different levels of risk and different investment strategies, they commingled the money invested in all 12 Kenzie Funds, then misappropriated a significant portion, and only invested less than one-third of the approximately $105 million raised from investors.
The defendants represented to investors that the Kenzie Funds had rates of returns ranging from 4.52 percent to 13.54 percent over the prior five years, although the bank accounts for the Kenzie Funds reflected that the total net return during that period was less than one percent. As of June 30, 2009, they represented that the Kenzie Funds were worth approximately $250 million when, in fact, the Funds collectively had only approximately $4 million in their bank accounts.
Spitzer, 55, of North Barrington and formerly of the U.S. Virgin Islands, caused “very substantial damage,” U.S. District Judge James Zagel said in imposing the sentence today, a day after he ordered Spitzer into federal custody. The judge also ordered restitution of $33.98 million.
Spitzer engaged in an “extended act of greed,” between late 2004 and early 2010, Assistant U.S. Attorney Madeleine Murphy argued at today’s hearing.
According to court records, Spitzer was the principal officer and sole shareholder of Kenzie Financial Management; the sole manager and member of Kenzie Services, LLC; the president of Draseena Funds Group, Corp.; the manager of DN Management Company, LLC; and the manager of Nerium Management Company.
Co-defendant ALFRED GEREBIZZA, 59, formerly of Crystal Lake and Palm Beach Gardens, Fla., was the secretary and a director of Draseena and a sales agent for the Kenzie Funds, who also held himself out as a trader. Gerebizza was convicted at trial last July of 10 counts of mail fraud and six counts of federal income tax fraud. He is in federal custody awaiting sentencing.
Through these entities, Spitzer controlled 12 investment funds collectively known as the “Kenzie Funds.” Spitzer and Gerebizza offered and sold to the public investments in the various Kenzie Funds in the form of membership interests and limited partnerships. Through sales agents and various marketing materials, they informed investors and potential investors that their investments would be used primarily in foreign currency trading, that the Kenzie Funds had never lost money, and that they had achieved profitable historical returns. The defendants had to continually raise funds through the solicitation of new investors in the Kenzie Funds to make payments on investments made by earlier investors, all of which they concealed and intentionally failed to disclose to both new and earlier investors. Although Spitzer and Gerebizza falsely represented to prospective investors and current investors that different Kenzie Funds had different levels of risk and different investment strategies, they commingled the money invested in all 12 Kenzie Funds, then misappropriated a significant portion, and only invested less than one-third of the approximately $105 million raised from investors.
The defendants represented to investors that the Kenzie Funds had rates of returns ranging from 4.52 percent to 13.54 percent over the prior five years, although the bank accounts for the Kenzie Funds reflected that the total net return during that period was less than one percent. As of June 30, 2009, they represented that the Kenzie Funds were worth approximately $250 million when, in fact, the Funds collectively had only approximately $4 million in their bank accounts.
Distributor for Atlantic City Dirty Block Gang Sentenced to 10 Years in Prison
An Atlantic City, New Jersey, man was sentenced to 120 months in prison for engaging in a conspiracy to distribute heroin with Mykal Derry, a leader of the “Dirty Block” criminal street gang that allegedly used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, U.S. Attorney Paul J. Fishman announced.
Aree Toulson, a/k/a “Beyah,” a/k/a “Beyeazz,” 26, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute, and to distribute and to possess with intent to distribute within 1,000 feet of public housing, 100 grams or more of heroin. Judge Irenas imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Toulson acted as a distributor on behalf of Mykal Derry, 34, of Atlantic City, helping Dirty Block distribute heroin in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court in Atlantic City.
Toulson was arrested on March 26, 2013. He and others travelled with Mykal Derry to a shooting range in Lakewood, New Jersey, on Oct. 18, 2012, where Toulson—a previously convicted felon—used, possessed, and discharged a firearm. According to filed documents, members of the group also participated in a violent altercation with rival drug traffickers at an Atlantic City casino in December 2012.
In addition to the prison term, Judge Irenas sentenced Toulson to serve eight years of supervised release.
Aree Toulson, a/k/a “Beyah,” a/k/a “Beyeazz,” 26, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to a superseding information charging him with one count of conspiracy to distribute and to possess with intent to distribute, and to distribute and to possess with intent to distribute within 1,000 feet of public housing, 100 grams or more of heroin. Judge Irenas imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Toulson acted as a distributor on behalf of Mykal Derry, 34, of Atlantic City, helping Dirty Block distribute heroin in and around the public housing apartment complexes of Stanley Holmes, Carver Hall, Schoolhouse, Adams Court and Cedar Court in Atlantic City.
Toulson was arrested on March 26, 2013. He and others travelled with Mykal Derry to a shooting range in Lakewood, New Jersey, on Oct. 18, 2012, where Toulson—a previously convicted felon—used, possessed, and discharged a firearm. According to filed documents, members of the group also participated in a violent altercation with rival drug traffickers at an Atlantic City casino in December 2012.
In addition to the prison term, Judge Irenas sentenced Toulson to serve eight years of supervised release.
Thursday, January 29, 2015
Ghazi Nasr Al-Din added to FBI's Seeking Information – Terrorism List
The FBI is seeking information on the whereabouts of Ghazi Nasr Al-Din, who was added today to the FBI’s Seeking Information – Terrorism list.
He is wanted for questioning regarding his fundraising efforts with Hizballah contributors.
Al-Din is approximately 5’7” tall and weighs about 175 pounds with a medium build. He has black hair, brown eyes, and an olive complexion. Al-Din speaks Arabic and Spanish. He has dual citizenship in Lebanon and Venezuela.
If you have any information concerning this person, please contact your local FBI office or the nearest American Embassy or Consulate or call the FBI’s toll-free tip line at 1-800-CALL-FBI (1-800- 225-5324) or contact your local FBI office.
He is wanted for questioning regarding his fundraising efforts with Hizballah contributors.
Al-Din is approximately 5’7” tall and weighs about 175 pounds with a medium build. He has black hair, brown eyes, and an olive complexion. Al-Din speaks Arabic and Spanish. He has dual citizenship in Lebanon and Venezuela.
If you have any information concerning this person, please contact your local FBI office or the nearest American Embassy or Consulate or call the FBI’s toll-free tip line at 1-800-CALL-FBI (1-800- 225-5324) or contact your local FBI office.
Wednesday, January 28, 2015
Pedro and Margarito Flores Cooperation Against Sinaloa Cartel Yields 14-Year Prison Terms; New Charges Target Cartel Top Echelon
Twin brothers Pedro and Margarito Flores, regarded as Chicago’s most significant drug traffickers who rose from street level dealers to the highest echelons of the Mexico-based Sinaloa Cartel and a rival cartel before they began providing unparalleled cooperation to the Drug Enforcement Administration (DEA), were each sentenced to 14 years in federal prison. The sentencing marked the Flores brothers’ first public court appearance since they entered protective federal custody in 2008. Their August 2012 guilty pleas to a narcotics distribution conspiracy were unsealed in November 2014. Also, federal law enforcement officials announced the unsealing of an expanded eighth superseding indictment in the case in which the Flores brothers and leaders of the Sinaloa Cartel were initially indicted here in 2009. The eighth superseding indictment and three separate new indictments announced today, add significant new defendants, including two alleged cartel money laundering associates who were arrested in the United States and extend the government’s efforts in Chicago and elsewhere to dismantle the Sinaloa Cartel under Joaquin Guzman Loera, 60, also known as “Chapo,” and Ismael Zambada Garcia, 67, aka “Mayo.”
“The persistent determination of DEA special agents and leadership in Chicago, coupled with the efforts of those in DEA offices worldwide, is having a significant impact on the global operations of the Sinaloa Cartel,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois. “This case put an end to the Flores brothers’ Chicago hub for transshipment of cartel narcotics nationwide. Our investigation and prosecution of cartel members is continuing,”
“The extraordinary work in this investigation continues,” said Special Agent in Charge Dennis A. Wichern of the Chicago Field Division of the DEA. “Agents, investigators, prosecutors and our worldwide law enforcement partners continue to expand this investigation against members of the Sinaloa Cartel ― working to bring them to justice and in doing so ― helping to make the great city of Chicago a safer place.”
“IRS Criminal Investigation is committed to working together with the DEA and the United States Attorney’s Office to fight the war on drugs,” said Special Agent in Charge James C. Lee of the Internal Revenue Service Criminal Investigation Division (IRS CI) in Chicago. “IRS CI brings, and will continue to bring, its financial expertise to disrupt and dismantle the Sinaloa Cartel’s drug trafficking organization.”
Flores Brothers Sentencing
In sentencing of the 33-year-old Flores brothers, U.S. District Chief Judge Ruben Castillo said that but for the Flores brothers’ cooperation, he would have imposed a life sentence and noted that because of the peril their ongoing cooperation poses to them and their families, they effectively “are going to leave here with a life sentence.” If the city of Chicago had walls, Judge Castillo said the brothers’ operation “devastated the walls of this city,” adding that their operation “became just a highway of drugs into this city.” But, Judge Castillo added, “it is never too late to cooperate,” which is what earned the Flores brothers a significant discount in their sentences.
Judge Castillo ordered the Flores brothers to forfeit more than $3.66 million that was seized from them and a sport utility vehicle. In addition, more than $400,000 worth of assorted jewelry, several luxury automobiles and smaller amounts of cash and electronics equipment were seized and forfeited in administrative proceedings by the DEA. The brothers left behind millions of dollars in additional assets in Mexico after they began cooperating.
The judge also placed each of the brothers on court supervision for five years when they are released from prison after serving at least 85 percent of their sentences.
Between 2005 and 2008, the Flores brothers and their crew operated a Chicago-based wholesale distribution cell for the Sinaloa Cartel and a rival drug trafficking organization controlled by Arturo Beltran Leyva, receiving on average 1,500 to 2,000 kilograms of cocaine per month. Approximately half of this cocaine was distributed to the Flores’ customers in the Chicago area, while the other half was distributed to customers in Columbus, Cincinnati, Detroit, Milwaukee, New York, Philadelphia, Washington, D.C. and Vancouver, among other cities. In total, the brothers admitted to facilitating the transfer of approximately $1.8 billion of drug proceeds from the United States to Mexico, primarily through bulk cash smuggling.
At great personal risk to themselves and their families, the Flores brothers began cooperating with the government in October 2008 and recorded conversations, including two directly with Chapo Guzman. Their cooperation resulted in indictments against leaders of the Sinaloa Cartel and the Beltran Leyva organization, as well as the complete dismantling of the brothers’ own Chicago-based criminal enterprise. In late 2008 alone, their cooperation facilitated approximately a dozen seizures in the Chicago area totaling hundreds of kilograms of cocaine and heroin and more than $15 million in cash, as well as the seizure of more than 1,600 kilograms of cocaine in the Los Angeles area that was bound for Chicago.
Further cooperation by the Flores brothers and members of their dismantled crew resulted in the convictions of more than a dozen of their high-level customers who received on average 50 to 100 kilos of cocaine per month.
“While not as high-profile as the cartel figures, the successful prosecution of these defendants made a very real difference in combating the scourge of drug trafficking that fuels so much violence and the destruction of communities in Chicago,” said the prosecutors in recommending a sentence at or near the low end of the agreed 10- to 16-year sentencing range.
“The Flores brothers (and their families) will live the rest of their lives in danger of being killed in retribution,” prosecutors stated in a sentencing memo. “The barbarism of the cartels is legend, with a special place reserved for those who cooperate.”
In 2009, the brothers’ father was kidnapped and presumed killed when he reentered Mexico despite the U.S. government warning him not to do so.
The Primary ― Eighth Superseding ― Indictment
The eighth superseding indictment unsealed today charges a total of nine defendants, including Chapo Guzman, Mayo Zambada and Guzman’s son, Jesus Alfredo Guzman Salazar, 31, aka “Alfredillo” and “Jags,” each of whom was among the initial group of co-defendants in the original indictment in 2009. Zambada and Salazar are fugitives, while Guzman remains in Mexican custody following his arrest last February.
Co-defendant, Jesus Raul Beltran Leon, 31, aka “Trevol” and “Chuy Raul,” was arrested in Mexico this past November and remains in Mexican custody. The remaining co-defendants, all fugitives, Heriberto Zazueta Godoy, 54, aka “Capi Beto,” Victor Manuel Felix Beltran, 27, aka “Lic Vicc,” Hector Miguel Valencia Ortega, 33, aka “Mv,” Jorge Mario Valenzuela Verdugo, 32, aka “Choclos” and Guadalupe Fernandez Valencia, 54, aka “Don Julio” and “Julia.”
This indictment alleges that all nine defendants conspired between May 2005 and December 2014, when the indictment was returned under seal, to import and distribute narcotics and to commit money laundering. They allegedly conspired to smuggle large quantities of cocaine from Central and South America, as well as heroin, methamphetamine and marijuana from Mexico to the United States and through Chicago for distribution nationwide. The indictment seeks forfeiture of $2 billion.
The U.S. Treasury Department’s Office of Foreign Asset Control today announced the designation of Felix Beltran, who is Salazar’s brother-in-law, pursuant to the Foreign Narcotics Kingpin Designation Act, freezing all of his assets in the U.S. or in the control of U.S. persons and generally prohibiting any U.S. persons from engaging in transactions with him. A second designation was announced today against Alfonso Limon Sanchez, an alleged Sinaloa Cartel associate under federal indictment with Zambada and others in San Diego. Other alleged cartel leaders, including Chicago defendants Guzman, Zambada, Salazar and Godoy, were previously designated drug kingpins.
Charges brought in earlier versions of this primary indictment remain pending against three additional co-defendants: Felipe Cabrera Sarabia, 44, who is in custody in Mexico; German Olivares, age unknown and a fugitive; and Edgar Manuel Valencia Ortega, 27, aka “Fox,” and Hector Miguel Valencia Ortega’s brother, who was arrested last year in the United States and is in federal custody in Chicago. His next court date is Feb. 19, 2015 for a status hearing.
In addition to the Flores brothers, Alfredo Vasquez Hernandez, 59, pleaded guilty and was sentenced last November to 22 years in prison. Two other co-defendants, Mayo Zambada’s son, Vicente Zambada Niebla, 39, and Tomas Arevalo Renteria, 45, have pleaded guilty and are awaiting sentencing in Chicago. Altogether, 18 defendants have been charged in the primary case in Chicago.
Three New Indictments
Those 18 are among a total of 62 defendants, most of whom have been convicted and sentenced, who were indicted in nearly two dozen related cases in Chicago since 2009. Two new defendants, Alvaro Anguiano Hernandez, 38, aka “Panda,” and Jorge Martin Torres, 38, were arrested separately in the U.S. in November and are facing separate indictments here alleging they were high-level money laundering associates of the Sinaloa Cartel and participated in money laundering conspiracies. Anguiano Hernandez’s indictment seeks forfeiture of $950,000.
Torres allegedly conspired to launder in excess of $300,000 of drug proceeds from Mexico to the United States to purchase, refurbish, and transfer from Ohio to Mexico, a 1982 Cessna Turbo 210 to promote the cartel’s alleged narcotics conspiracy. His indictment seeks forfeiture of $1 million.
A third separate indictment announced today charges Venancio Covarrubias, 26, aka “Benny,” of Elgin, who was arrested last October, with being a high-level cartel customer in the Chicago area. In September 2013, law enforcement, including U.S. Customs and Border Protection officers in Laredo, Texas, seized 159 kilograms of cocaine that was allegedly destined for a warehouse in Elgin leased by Covarrubias. The cocaine, wrapped in 118 brick-shaped packages, was hidden in a tractor-trailer containing a shipment of fresh tomatoes from a fictitious Mexican business called Tadeo Produce. The charges allege that during the prior year, Covarrubias wire transferred drug proceeds to Tadeo Produce while receiving narcotics disguised as tomato shipments. His indictment seeks forfeiture of $2.89 million.
The money laundering conspiracy charges against Anguiano Hernandez, Torres and Covarrubias carry a maximum sentence of 20 years in prison, a $500,000 fine, or an alternate fine totaling twice the amount of the funds involved in illegal activity. The narcotics importation and distribution conspiracy charges against Covarrubias and each defendant in the primary indictment carry a mandatory minimum sentence of 10 years to a maximum of life in prison and a $10 million fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States sentencing guidelines. The defendants against whom charges are pending are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Total Seizures Since 2008
Overall, the Chicago-based investigation of the Sinaloa Cartel has resulted in seizures of approximately $30.8 million, approximately 11 tons of cocaine, 265 kilograms of methamphetamine and 78 kilograms of heroin. Law Enforcement in Chicago has worked closely with federal agents and prosecutors in San Diego to target the senior leadership of the Sinaloa Cartel. This partnership yielded the prosecutions here as well as 14 indictments announced this month in San Diego against 60 alleged Sinaloa leaders, lieutenants and associates, including Zambada, two of his four sons and another of Guzman’s sons.
“The persistent determination of DEA special agents and leadership in Chicago, coupled with the efforts of those in DEA offices worldwide, is having a significant impact on the global operations of the Sinaloa Cartel,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois. “This case put an end to the Flores brothers’ Chicago hub for transshipment of cartel narcotics nationwide. Our investigation and prosecution of cartel members is continuing,”
“The extraordinary work in this investigation continues,” said Special Agent in Charge Dennis A. Wichern of the Chicago Field Division of the DEA. “Agents, investigators, prosecutors and our worldwide law enforcement partners continue to expand this investigation against members of the Sinaloa Cartel ― working to bring them to justice and in doing so ― helping to make the great city of Chicago a safer place.”
“IRS Criminal Investigation is committed to working together with the DEA and the United States Attorney’s Office to fight the war on drugs,” said Special Agent in Charge James C. Lee of the Internal Revenue Service Criminal Investigation Division (IRS CI) in Chicago. “IRS CI brings, and will continue to bring, its financial expertise to disrupt and dismantle the Sinaloa Cartel’s drug trafficking organization.”
Flores Brothers Sentencing
In sentencing of the 33-year-old Flores brothers, U.S. District Chief Judge Ruben Castillo said that but for the Flores brothers’ cooperation, he would have imposed a life sentence and noted that because of the peril their ongoing cooperation poses to them and their families, they effectively “are going to leave here with a life sentence.” If the city of Chicago had walls, Judge Castillo said the brothers’ operation “devastated the walls of this city,” adding that their operation “became just a highway of drugs into this city.” But, Judge Castillo added, “it is never too late to cooperate,” which is what earned the Flores brothers a significant discount in their sentences.
Judge Castillo ordered the Flores brothers to forfeit more than $3.66 million that was seized from them and a sport utility vehicle. In addition, more than $400,000 worth of assorted jewelry, several luxury automobiles and smaller amounts of cash and electronics equipment were seized and forfeited in administrative proceedings by the DEA. The brothers left behind millions of dollars in additional assets in Mexico after they began cooperating.
The judge also placed each of the brothers on court supervision for five years when they are released from prison after serving at least 85 percent of their sentences.
Between 2005 and 2008, the Flores brothers and their crew operated a Chicago-based wholesale distribution cell for the Sinaloa Cartel and a rival drug trafficking organization controlled by Arturo Beltran Leyva, receiving on average 1,500 to 2,000 kilograms of cocaine per month. Approximately half of this cocaine was distributed to the Flores’ customers in the Chicago area, while the other half was distributed to customers in Columbus, Cincinnati, Detroit, Milwaukee, New York, Philadelphia, Washington, D.C. and Vancouver, among other cities. In total, the brothers admitted to facilitating the transfer of approximately $1.8 billion of drug proceeds from the United States to Mexico, primarily through bulk cash smuggling.
At great personal risk to themselves and their families, the Flores brothers began cooperating with the government in October 2008 and recorded conversations, including two directly with Chapo Guzman. Their cooperation resulted in indictments against leaders of the Sinaloa Cartel and the Beltran Leyva organization, as well as the complete dismantling of the brothers’ own Chicago-based criminal enterprise. In late 2008 alone, their cooperation facilitated approximately a dozen seizures in the Chicago area totaling hundreds of kilograms of cocaine and heroin and more than $15 million in cash, as well as the seizure of more than 1,600 kilograms of cocaine in the Los Angeles area that was bound for Chicago.
Further cooperation by the Flores brothers and members of their dismantled crew resulted in the convictions of more than a dozen of their high-level customers who received on average 50 to 100 kilos of cocaine per month.
“While not as high-profile as the cartel figures, the successful prosecution of these defendants made a very real difference in combating the scourge of drug trafficking that fuels so much violence and the destruction of communities in Chicago,” said the prosecutors in recommending a sentence at or near the low end of the agreed 10- to 16-year sentencing range.
“The Flores brothers (and their families) will live the rest of their lives in danger of being killed in retribution,” prosecutors stated in a sentencing memo. “The barbarism of the cartels is legend, with a special place reserved for those who cooperate.”
In 2009, the brothers’ father was kidnapped and presumed killed when he reentered Mexico despite the U.S. government warning him not to do so.
The Primary ― Eighth Superseding ― Indictment
The eighth superseding indictment unsealed today charges a total of nine defendants, including Chapo Guzman, Mayo Zambada and Guzman’s son, Jesus Alfredo Guzman Salazar, 31, aka “Alfredillo” and “Jags,” each of whom was among the initial group of co-defendants in the original indictment in 2009. Zambada and Salazar are fugitives, while Guzman remains in Mexican custody following his arrest last February.
Co-defendant, Jesus Raul Beltran Leon, 31, aka “Trevol” and “Chuy Raul,” was arrested in Mexico this past November and remains in Mexican custody. The remaining co-defendants, all fugitives, Heriberto Zazueta Godoy, 54, aka “Capi Beto,” Victor Manuel Felix Beltran, 27, aka “Lic Vicc,” Hector Miguel Valencia Ortega, 33, aka “Mv,” Jorge Mario Valenzuela Verdugo, 32, aka “Choclos” and Guadalupe Fernandez Valencia, 54, aka “Don Julio” and “Julia.”
This indictment alleges that all nine defendants conspired between May 2005 and December 2014, when the indictment was returned under seal, to import and distribute narcotics and to commit money laundering. They allegedly conspired to smuggle large quantities of cocaine from Central and South America, as well as heroin, methamphetamine and marijuana from Mexico to the United States and through Chicago for distribution nationwide. The indictment seeks forfeiture of $2 billion.
The U.S. Treasury Department’s Office of Foreign Asset Control today announced the designation of Felix Beltran, who is Salazar’s brother-in-law, pursuant to the Foreign Narcotics Kingpin Designation Act, freezing all of his assets in the U.S. or in the control of U.S. persons and generally prohibiting any U.S. persons from engaging in transactions with him. A second designation was announced today against Alfonso Limon Sanchez, an alleged Sinaloa Cartel associate under federal indictment with Zambada and others in San Diego. Other alleged cartel leaders, including Chicago defendants Guzman, Zambada, Salazar and Godoy, were previously designated drug kingpins.
Charges brought in earlier versions of this primary indictment remain pending against three additional co-defendants: Felipe Cabrera Sarabia, 44, who is in custody in Mexico; German Olivares, age unknown and a fugitive; and Edgar Manuel Valencia Ortega, 27, aka “Fox,” and Hector Miguel Valencia Ortega’s brother, who was arrested last year in the United States and is in federal custody in Chicago. His next court date is Feb. 19, 2015 for a status hearing.
In addition to the Flores brothers, Alfredo Vasquez Hernandez, 59, pleaded guilty and was sentenced last November to 22 years in prison. Two other co-defendants, Mayo Zambada’s son, Vicente Zambada Niebla, 39, and Tomas Arevalo Renteria, 45, have pleaded guilty and are awaiting sentencing in Chicago. Altogether, 18 defendants have been charged in the primary case in Chicago.
Three New Indictments
Those 18 are among a total of 62 defendants, most of whom have been convicted and sentenced, who were indicted in nearly two dozen related cases in Chicago since 2009. Two new defendants, Alvaro Anguiano Hernandez, 38, aka “Panda,” and Jorge Martin Torres, 38, were arrested separately in the U.S. in November and are facing separate indictments here alleging they were high-level money laundering associates of the Sinaloa Cartel and participated in money laundering conspiracies. Anguiano Hernandez’s indictment seeks forfeiture of $950,000.
Torres allegedly conspired to launder in excess of $300,000 of drug proceeds from Mexico to the United States to purchase, refurbish, and transfer from Ohio to Mexico, a 1982 Cessna Turbo 210 to promote the cartel’s alleged narcotics conspiracy. His indictment seeks forfeiture of $1 million.
A third separate indictment announced today charges Venancio Covarrubias, 26, aka “Benny,” of Elgin, who was arrested last October, with being a high-level cartel customer in the Chicago area. In September 2013, law enforcement, including U.S. Customs and Border Protection officers in Laredo, Texas, seized 159 kilograms of cocaine that was allegedly destined for a warehouse in Elgin leased by Covarrubias. The cocaine, wrapped in 118 brick-shaped packages, was hidden in a tractor-trailer containing a shipment of fresh tomatoes from a fictitious Mexican business called Tadeo Produce. The charges allege that during the prior year, Covarrubias wire transferred drug proceeds to Tadeo Produce while receiving narcotics disguised as tomato shipments. His indictment seeks forfeiture of $2.89 million.
The money laundering conspiracy charges against Anguiano Hernandez, Torres and Covarrubias carry a maximum sentence of 20 years in prison, a $500,000 fine, or an alternate fine totaling twice the amount of the funds involved in illegal activity. The narcotics importation and distribution conspiracy charges against Covarrubias and each defendant in the primary indictment carry a mandatory minimum sentence of 10 years to a maximum of life in prison and a $10 million fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States sentencing guidelines. The defendants against whom charges are pending are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Total Seizures Since 2008
Overall, the Chicago-based investigation of the Sinaloa Cartel has resulted in seizures of approximately $30.8 million, approximately 11 tons of cocaine, 265 kilograms of methamphetamine and 78 kilograms of heroin. Law Enforcement in Chicago has worked closely with federal agents and prosecutors in San Diego to target the senior leadership of the Sinaloa Cartel. This partnership yielded the prosecutions here as well as 14 indictments announced this month in San Diego against 60 alleged Sinaloa leaders, lieutenants and associates, including Zambada, two of his four sons and another of Guzman’s sons.
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