The one on Pound Road in rural Gaston, just south of Columbia, is a brown-and-white trailer, with a gravel driveway and woods out back. Here, federal law enforcement officers surprised Frediberto Pineda, who had 10 kilos of cocaine worth $350,000 in his possession.
February 5, 2009
The two-bedroom stucco house at 3304 Drew St. in Glassell Park was once the center of one of the most menacing drug marketplaces in Los Angeles.
From the house, Maria "Chata" Leon, an illegal immigrant, her family and associates controlled drug and gang activity on the street for years, police said.
During at least two raids at the house, according to court documents, officers found guns and drugs as well as surveillance cameras, laser trip wires and a shrine to Jesus Malverde, a Mexican folk hero whom drug traffickers have made their patron saint.
Known as the Satellite House, for the enormous black satellite dish that once stood in the driveway, the home "was a terrifying monument to the power of the Avenues gang" that dominated the two blocks of Drew Street, said City Atty. Rocky Delgadillo.
But all that was history Wednesday morning.
As police and city officials looked on, a Caterpillar excavator took a bite out of the roof, then ate its way through the rest of the structure, and a half-hour later the Satellite House was rubble.
In 2007, Delgadillo's office -- using its TOUGH program to go after houses used as gang hangouts -- won a lawsuit to close the house as a public nuisance.
When the owners -- who city officials allege are straw men covering for Leon and her family -- didn't make repairs, the city's Building and Safety Commission approved plans to demolish it.
Eusterbio Renteria watched the destruction of the house that he said was the source of much family pain. "They should have done this 10 years ago," said Renteria, who has lived on Drew Street since 1972 and watched two of his sons join the gang, using the house as a hangout.
His son Carlos is in prison. According to a law enforcement report, he was heard on a surveillance tape requesting that a friend send him a photo of the Satellite House because he wanted to tattoo it on his body.
A few yards away, Los Angeles Police Officer Steve Aguilar also watched the demolition.
"It feels good," said Aguilar, who patrolled Drew Street for five of its worst years and recently became a detective in another part of the city. "It's been a long time in the making."
The 12-square-block enclave around Drew Street was among the city's most dangerous for years, police said.
Hooded gang members lurked behind parked cars and on apartment balconies, police and residents said. At night, tires squealed and gunshots echoed while neighbors huddled in their homes.
Some years, the street accounted for up to 20% of the violent crime in the 30-square-mile Northeast Division, police said.
For such a small area, Drew Street absorbed more than its share of city resources.
Police used special task forces, undercover drug operations and constant patrols to attack the gang problem. Drew Street's graffiti-scarred trees were regularly trimmed to give cops better visibility. Graffiti removers visited daily, to negligible effect. Street lights were covered with bulletproof glass.
Still, a stubborn culture of criminality reigned, largely because of a web of families from Tlalchapa, Guerrero, in the Tierra Caliente, a region of Mexico known for its violence. Police estimate that members of dozens of these extended families belonged to the Avenues gang and had built a network that proved hard to dismantle.
The neighborhood drew wider attention after a wild shootout between police and gang members last February.
The incident started when a car full of Drew Street gangsters allegedly shot and killed a former Cypress Park gang member outside an elementary school. Police later spotted the car on Drew Street. Maria Leon's son, Daniel, fired an assault rifle at the officers, who fatally shot him. Two others were arrested and charged with murder.
Since then, police and other law enforcement agencies have focused intensely on Drew Street.
In April, Maria Leon was arrested by federal agents and charged with illegally re-entering the country. The mother of 13 had previously been convicted of felony drug, firearms and child endangerment charges in three separate cases dating back to 1992.
In June, hundreds of heavily armed police and federal agents stormed into the neighborhood and arrested 28 people in an attempt to root out the Avenues gang members who had ruled the area with near-impunity.
A sweeping indictment named 70 defendants -- mostly connected to the Drew Street clique of the larger Avenues gang. Of those named, 26 were already in custody.
In December, suspected members of the Drew Street clique, Guillermo Hernandez, 20, and Carlos "Stony" Velasquez, 24, Leon's nephew, were arrested and charged with the Aug. 2 killing of Juan Abel Escalante, a Los Angeles County sheriff's deputy who lived in Cypress Park.
Residents and police say things have calmed down considerably on Drew Street.
But neighbors are still afraid to talk openly for fear of retaliation.
"It's notable how it all got better," one resident said. "You don't see the guys in the street. There's no races, no noise at night. That anxiety, that desperate feeling of wanting to leave -- it's gone."
Violent crime -- which includes homicide, rape, robbery and aggravated assault -- has dropped significantly in recent years, according to LAPD statistics. On Drew Street and the immediate surrounding neighborhood, the number of violent incidents has fallen from 98 in 2000 to 26 last year.
Recently, police solved a robbery of a nearby store largely based on information collected from residents. "That wouldn't have occurred a year or two years ago," said Capt. Bill Murphy of the Northeast Division.
Teachers at nearby Fletcher Drive Elementary School find their students better rested now that gunshots and police helicopters don't wake them at night, said Maria Manzur, the school's principal.
"There's a more calming effect throughout the school," she said.
On Wednesday, police and city officials were eager to cast the drop in neighborhood crime and the demolition of the Satellite House as a sort of Drew Street victory.
But some residents fear that the gang culture hasn't been entirely uprooted in a neighborhood crowded with apartments and poor people.
They also fear that police will eventually be drawn elsewhere.
But Police Chief William J. Bratton tried to allay those fears Wednesday. His department is hiring 1,000 new officers, he said, and many are expected to be placed in highly stressed neighborhoods such as Drew Street.
"We have never left," he said. "We're here to stay."
December 22, 2008
Reporting from Mexico City — For a B-team, Los Mapaches sure seemed to be living it up. The soccer club from the small town of Nueva Italia in western Mexico had the finest vehicles, new uniforms every game and unusually high salaries.
Little wonder, then, when the team's owner was arrested and accused of laundering millions of dollars for one of Mexico's most powerful drug gangs.
The team was one of many covers, federal prosecutors allege, that Wenceslao Alvarez, alias El Wencho, used to hide and move millions of dollars for the so-called Gulf cartel.
In the Mexican government's bloody, 2-year-old war on drug traffickers, one component of the trade remains largely untouched: money laundering. The network that helps turn ill-gotten gains into legal tender is a crucial linchpin that enables traffickers to live large, expand their operations deep into the U.S., pay off cops and politicians and buy increasingly sophisticated weaponry.
"You can arrest thousands of [traffickers] but if you don't touch the financial enterprises, the business just goes on . . . and becomes more violent," said Edgardo Buscaglia, an expert on organized crime who has advised both the United Nations and Mexican officials.
Until the government goes after traffickers' cash, Buscaglia and other critics say, the networks will continue to grow and fortify themselves, no matter how many state security forces are thrown at them.
Money-laundering is the process of concealing the origin of illicit drug profits by funneling them into businesses (legitimate or fake), real estate and financial institutions.
Estimates vary widely, but as much as $20 billion is laundered and stays in Mexico annually, with up to four times that amount continuing to other destinations, experts and Mexican officials say.
Some of the money is stuffed in suitcases and walked across the border into Mexico, or hidden in cargo containers and shipped. But investigators also suspect international courier services are moving the cash.
Banking controls are notoriously lax in Mexico, making it easier for money to be wired or deposited into accounts, then spent on goods or services. All-cash transactions are common, especially for big-ticket items such as mansions, and Hummers and armored BMWs, and to pay the legions who work for the drug mafias. The money also is increasingly being sunk into artwork, gems, gold and commodities.
Every year, the U.S. Treasury Department blacklists scores of individuals and companies, most of them Mexican or Colombian, believed to be involved in money-laundering or other activities supporting drug-trafficking networks.
Rarely has the Mexican government acted on the information. Mexican authorities cannot easily confiscate traffickers' property and assets, a practice common in the U.S. and one that helped give the Colombian government an upper hand in cracking that country's cartels.
"It is a very powerful tool against narco-traffickers because it hits their interests -- their purchasing power and their ideal way of life," Colombian Vice Minister of Defense Sergio Jaramillo Caro said during a recent meeting here of Latin American public security officials. A new law that would give Mexicans that authority has been passed only in Mexico City; a national version is languishing in Congress.
The two main agencies that investigate and prosecute suspected money launderers are hamstrung and underfunded. The Finance Ministry's Financial Intelligence Unit and the attorney general's office are required to communicate with each other in writing, a clumsy process, and they are not allowed access to federal police reports, financial records or other key databases to build organized-crime cases.
The case of the Mapaches (Raccoons) was more exception than rule. Federal agents arrested El Wencho in October while he was in Mexico City at the headquarters of a top soccer club. In addition to the Mapaches, El Wencho's holdings included car dealerships, an avocado export firm, hotels and restaurants, prosecutors say.
The alleged money-laundering operation, which authorities say extended into six U.S. states and parts of Central and South America, came to light in September as part of a U.S. federal indictment that named top leaders of the Gulf cartel and led to the arrests of more than 500 people in the U.S., Mexico and Italy.
An estimated $7.6 million of El Wencho's assets were seized by U.S. authorities in Atlanta and other U.S. cities, according to a senior Mexican official who did not want to be named because such investigations are kept secret until a formal indictment is issued. Mexican and U.S. agents spent a year tracking El Wencho's movements through tapped telephones and other surveillance, the official said.
The official said the soccer team was more of a "whim" and not particularly effective at laundering large amounts of money because it was too junior. It may have been a way for El Wencho to curry favor in Nueva Italia, a typical ploy of traffickers who do good works for their hometowns as a way to buy loyalty and protection.
Shrouded in secrecy
Mexican officials say their financial system is relatively unregulated, shrouded in secrecy laws and so complex that it is difficult to penetrate. But critics wonder if politicians blanch at changing those laws because too many of the country's elite would be implicated.
They note that the interior minister, the second most powerful person in the Mexican government, once helped defend a prominent banker who was acquitted in one of the few high-profile laundering cases to reach the courts.
There is also a general, if unspoken, tolerance of laundered money among many Mexicans, who reason that if the dollars have passed through other hands, it no longer is dirty money.
"It has been relatively useless to try to determine the amounts of money being laundered in Mexico," President Felipe Calderon told Congress last month. An official report that Calderon submitted to lawmakers said the Finance Ministry had detected 60,000 suspicious financial transactions in the 12-month period ending in June. But only 0.5% ended up in court.
A handful of money exchange houses are being prosecuted, but the gradual dollarization of the Mexican economy has diminished the role of exchange houses in suspect transactions, experts say.
Five years ago, Mexican authorities arrested accused money-launderer Rigoberto Gaxiola. Yet, from prison, he continued to wash money for traffickers from Sinaloa, the cradle of Mexican drug-running, as recently as summer, U.S. and Mexican officials say. At that point, the U.S. Treasury Department's Office of Foreign Assets Control blacklisted Gaxiola along with 17 associates, including his wife and three children, and 14 of his businesses. However, the Mexican government has not made further arrests, shut down the businesses nor announced any other sanctions.
Efforts to obtain comment from officials of the Financial Intelligence Unit or from investigators with the attorney general's office were unsuccessful.
U.S. officials, meanwhile, worry that money-laundering operations could have deeper security implications.
"Once you've set up the scheme, you can launder anything," a senior U.S. law enforcement official said, speaking on condition of anonymity because of security concerns. "Human slavery, arms trafficking -- even terrorists."