DRCNet Response to theDrug Enforcement Administration
The Supply of Illicit Drugs to the United States
DRCNet Response to the
Drug Enforcement Administration
The Supply of Illicit Drugs to the United States
Executive Summary
In 1995, major changes occurred in the illicit drug trade, many of which were brought
about by aggressive drug law enforcement. In Latin America, the Cali Drug mafia
experienced setbacks with the arrests of key leaders. The Shan United Army in the Far East
experienced increased pressure that eventually led, in early 1996, to the surrender of
Khun Sa to Burmese central authorities. In Southwest Asia, key arrests of major
traffickers were followed by their extradition to face charges in the United States.
Yet, challenges remained. Just to our south, drug gangs in Mexico transported cocaine to the United States and produced not only heroin and marijuana, but increasingly methamphetamine for the U.S. market. These groups expanded their foothold in the United States, replacing outlaw motorcycle gangs as the principal suppliers of the drug. Couriers controlled by West African criminals continued to flood through U.S. airports with high-quality Southeast Asian heroin, and South American heroin suppliers increased their U.S. market share, particularly in the Northeast.
In major urban areas, and in many smaller cities and towns as well, drug distribution was accompanied by increasing numbers of homicides and drug-related violence. The following summarizes, by drug and in the area of drug money laundering, the major events and trends of 1995.
In 1995, drug mafias based in Colombia directly managed virtually all aspects of the cocaine trade, from acquisition of cocaine base, to cocaine production in South America and transportation to wholesale distribution in the United States. These organizations, as well as other smaller groups, were serviced by a complex infrastructure that transported cocaine by land, sea, and air conveyances principally to the United States and Europe. Part of this infrastructure included Mexico- and Caribbean-based transportation groups used to ship cocaine to the Southwest and Southeast United States, respectively.
In June 1995, three Cali mafia drug lords, Gilberto Rodriguez-Orejuela, Jose Santacruz-Londono, and Miguel Rodriguez-Orejuela, were arrested by the Colombian authorities and, in March 1996, Santacruz-Londono was killed during a confrontation with the Colombian National Police after he had escaped from prison. Polydrug trafficking gangs in Mexico that served as transporters for the Colombian groups played a more significant role in the cocaine trade. The fact that gangs in Mexico lacked an established trafficking infrastructure in cocaine source countries, however, remained a substantial impediment in 1995 to their international expansion. Nevertheless, the Mexican gangs emerged second only to the Colombians in terms of power, sophistication, and scope of international operations.
The Cali drug lords continued to operate their drug empires from behind prison walls by shifting day-to-day control of their organizations to trusted lieutenants or relatives still at large. A new generation of relatively young North Coast, North Valle del Cauca, and Cali traffickers conducted more independent action.
Potential cocaine production in 1995 is estimated at 780 metric tons compared to a revised 1994 estimate of 760 metric tons, while the amount of cocaine seized worldwide amounted to approximately 230 metric tons compared to 303 in 1994. Operation Breakthrough, a DEA-managed comprehensive coca cultivation and cocaine base processing research project, estimated an actual cocaine production amount of 715 metric tons in 1995. U.S. federal law enforcement agencies seized 120 metric tons of cocaine in 1994, according to the Federal Drug Seizure System (FDSS). FDSS figures for 1995 indicate that U.S. federal authorities seized 98 metric tons of cocaine.
Traffickers continued to use intermodal means of transport, and often concealed larger shipments in commercial maritime containerized or bulk cargo. They also used fishing vessels to convey multimetric-ton shipments from Colombia to Mexico. Traffickers also used specially designed vessels to smuggle cocaine from Colombia to northern Caribbean islands or Puerto Rico. General aviation aircraft and large- capacity cargo airplanes, to include jets, were used to convey cocaine to Mexico from South America.
Many trafficking gangs operating from Mexico routinely were paid from 40 to 50 percent of the cocaine shipment in product by Colombian suppliers. In so doing, these organizations gained a foothold in the lucrative cocaine wholesale business in the United States. Mexico-based trafficking organizations also stepped up alliances with cocaine suppliers in Peru and Bolivia. Two record-setting cocaine seizures in Peru demonstrated that gangs operating from Mexico were dealing directly with traffickers in Peru and Bolivia, independent of any links to Colombia-based drug organizations.
The drug mafias in Colombia continued to dominate wholesale cocaine distribution in the United States through what is recognized as a sophisticated organizational structure. Cocaine wholesale-level distribution and drug money laundering networks were comprised of multiple cells functioning in a number of major metropolitan areas. These cells maintained meticulous records and used available technology, including personal computers, pagers, and facsimile machines, in their daily operations. U.S. operations were coordinated on a daily basis by key managers in Colombia. Primary U.S. bulk cocaine distribution centers included southern California, southern Texas, New York City, and southern Florida. From these centers, cocaine was shipped throughout the United States for delivery to lower level distribution groups in secondary source cities.
Distribution groups were comprised chiefly of the African- American street gangs and the ethnic Dominican, Cuban, Haitian, Jamaican, Mexican, and Puerto Rican criminal groups that controlled cocaine and crack sales at the retail level. Gangs, including the Crips, Bloods, and Dominican gangs as well as Jamaican "posses," were primarily responsible for widespread cocaine and crack cocaine- related violence. The migration of gang and posse members to smaller U.S. cities and rural areas resulted in increases in drug-related homicides, armed robberies, and assaults in those areas.
The price and availability of cocaine in the United States remained relatively stable. In 1995, cocaine prices ranged from $10,500 to $36,000 per kilogram nationally. Average purity for cocaine at the gram, ounce, and kilogram levels remained high. Average purity at the gram (retail) level for 1995 was 61 percent. The average purity per kilogram (wholesale) was 83 percent for the same time period.
Crack continued to be used in epidemic or near-epidemic proportions in most major cities. The number of hard-core crack users in the United States remained relatively high and stable.
Heroin was supplied to the United States from four source areas: Southeast Asia (principally Burma), Southwest Asia/Middle East (Afghanistan, Lebanon, Pakistan, and Turkey), Mexico, and South America (Colombia). In 1995, worldwide opium production was 4,157 metric tons, an increase over the 1994 worldwide opium production total of 3,409 metric tons. Opium production in Southeast Asia, estimated at 2,157 metric tons in 1994, increased to 2,561 metric tons in 1995.
In the Golden Triangle, the Shan United Army, headed by drug lord Khun Sa, found itself under increasing pressure as the Burmese Army attacked its positions while Thai authorities limited the flow of goods and services to the Shan State. Khun Sa reportedly shifted operations to make greater use of Laos, and possibly Cambodia and Vietnam, to ship heroin westward. From Southeast Asia, the heroin was transported to international markets by independent brokers and shippers. These brokers provided suppliers with connections to ethnic Chinese criminals in the United States who acted as wholesale distributors. These United States-based groups supplied local criminals who distributed heroin at the retail level. Nigerian and West African groups, meanwhile, smuggled Southeast Asian heroin internationally and distributed it in the United States through their own contacts with United States-based criminal groups.
Importation and distribution of Southwest Asian heroin was much less centralized than that for Southeast Asian heroin. In the United States, a number of ethnic groups from Southwest Asia and the Middle East were active in the importation and distribution of heroin. These included ethnic Afghans, Greeks, Iranians, Israelis, Lebanese, Pakistanis, and Turks. Much of this heroin was smuggled to ethnic drug distribution groups in the United States.
Virtually all of the heroin produced in Mexico was destined exclusively for distribution in the United States. Drug gangs in Mexico remained inveterate polydrug smugglers. They produced and/or transported large quantities of heroin, cocaine, marijuana, and methamphetamine into the United States on a daily basis. Black tar and brown heroin were produced by traffickers in Mexico and sold in the western United States by ethnic Mexican-American criminal networks. Organizations controlled from Mexico made distribution at the wholesale level; local U.S. gangs often managed street sales.
South American heroin was distributed primarily by independent traffickers from Colombia. These criminals established themselves in the U.S. heroin market by distributing high-quality heroin frequently above 90 percent pure and by undercutting the price of their competition. Most reporting indicates that heroin traffickers from South America, particularly Colombia, expanded their efforts to supply multikilogram quantities.
In 1995, seizures of heroin in excess of 100 kilograms continued to occur in Southeast Asia and Europe, although no such large seizures were made in the United States. Worldwide seizures of morphine base/heroin amounted to about 32 metric tons in 1995, with 1.3 metric tons seized in the United States by federal law enforcement authorities.
The U.S. market continued to be dominated by high-purity Southeast Asian heroin prevalent in the northeastern United States and along the East Coast. In the United States, heroin was readily available in many cities, as evidenced by the high level of retail purity. Indicators reflected significant use in many East Coast cities, due to increased availability of high-purity Southeast Asian as well as South American heroin.
Data obtained from the DEA's Domestic Monitor Program (DMP), a retail-level heroin purchase program, indicated that the availability of South American heroin steadily increased in northeast U.S. cities. Although South America still ranked behind Southeast Asia as a source region for heroin destined for the United States, it appears that drug traffickers from Colombia expanded their foothold in the U.S. heroin market.
Nationally, in 1995, Southeast Asian heroin ranged in price from $70,000 to $260,000 per kilogram. Southwest Asian heroin also ranged from $70,000 to $260,000. Wholesale- level prices for Mexican heroin were the lowest of any type, ranging from $50,000 to $250,000. South American heroin sold for $80,000 to $185,000. The wide range in kilogram prices reflected variables such as buyer-seller relationships, quantities purchased, purchase frequencies, purities, and transportation costs.
During 1995, the nationwide average purity for retail heroin from all sources was 39.7 percent, much higher than the average of 7 percent reported a decade ago, and considerably higher than the 26.6 percent recorded in 1991. The significant rise in average purity corresponded directly to the increase in availability of high-purity Southeast Asian and South American heroin.
In 1995, the retail purity of South American heroin was the highest for any source, averaging 56.4 percent, followed by Southeast Asian heroin with an average of 44.6 percent. Southwest Asian heroin averaged 35.3 percent at the retail level and Mexican heroin averaged 29.7 percent, almost double the 1991 average for Mexican heroin.
Heroin purity at the street level was generally highest in the northeastern United States, where a large percentage of the nation's user population lives. New York City is one of the major importation and distribution centers for Southeast Asian and South American heroin. The average purity at the street level in New York City for these heroin sources during 1995 was 58 percent and 76 percent, respectively. Of all of the DMP cities, Philadelphia, with an average of 70.9 percent, recorded the highest average purity of retail heroin for all sources during the same time period.
Marijuana was the most widely abused and readily available illicit drug in the United States. A resurgence of marijuana trafficking and abuse took place in urban centers across the nation. Sources of supply in Mexico provided more than 50 percent of the foreign marijuana available in the United States. At the same time, drug law enforcement reported a continued increase in shipments from Colombia, Venezuela, and Jamaica.
Domestically, marijuana distribution was controlled by a variety of groups and individuals, ranging from large, sophisticated organizations that controlled cultivation and interstate trafficking to small independent traffickers operating on the local level. State and local drug law enforcement officials reported that small groups of 5 to 10 individuals controlled distribution at the retail level. Domestic street gangs and ethnic groups (usually immigrants from source countries) made for a wide range of retail sellers.
Cannabis was cultivated illicitly in the United States in remote locations and frequently on public lands. Major domestic outdoor cannabis cultivation areas were found in Tennessee, Kentucky, Hawaii, California, and New York. Significant quantities of marijuana also were produced domestically in indoor grow operations. The number of indoor operations seized in 1995 was 3,348, compared to the record high of 3,849 seized in 1992. The controlled environment of indoor operations enabled growers to use sophisticated agronomic techniques to enhance potency and production.
Prices for marijuana, which vary in accordance with potency, availability, source of origin, and/or proximity to the point of entry into the United States, have increased dramatically during the past decade at the high end of the price range. Commercial grade marijuana that sold for between $400 and $600 per pound in 1984, sold for between $300 and $4,000 per pound in 1995. Sinsemilla in 1984 sold for between $1,200 and $2,500 per pound, compared to prices of between $800 and $8,000 per pound in 1995. One of the primary factors influencing price was potency, which has increased substantially for both commercial grade and sinsemilla, with THC content averaging 3.33 and 6.66 percent, respectively, in 1995.
A recent trend in marijuana use, the smoking of hollowed out cigars referred to as "blunts," was confined to younger users and may have been responsible for an increase in cannabis-related emergency room visits.
The term dangerous drugs refers to the broad category of illicitly manufactured controlled substances, other than cocaine, heroin, and marijuana, and licit controlled substances diverted to the illicit market. Dangerous drugs include depressants, stimulants, hallucinogens, and controlled substance analogs. Clandestine laboratories are responsible for the overwhelming majority of illicitly manufactured dangerous drugs available in the United States.
Domestic methamphetamine production, trafficking, and abuse were concentrated primarily in the western and southwestern regions of the United States; however, methamphetamine was also available in the Midwest and some portions of the South and Southeast. Methamphetamine laboratories operating within Mexico and California are the primary sources of supply for all areas in the United States.
Although independent trafficking groups continue to produce methamphetamine, Mexican polydrug trafficking families dominated wholesale methamphetamine distribution in the United States in 1995. Trafficking organizations based in Mexico operated large-scale laboratories and saturated the western U.S. market with high-purity methamphetamine. These groups became a source for methamphetamine in Hawaii, challenging traditional Asian suppliers. In building and securing market share, these groups frequently employed draconian measures, leading to increased street-level violence.
Areas of the Pacific Northwest, the Midwest, and areas as far east as Atlanta experienced a dramatic increase in the availability of methamphetamine that was supplied by trafficking gangs from Mexico. In addition to domestic production, methamphetamine increasingly was produced in Mexico and smuggled into the United States. Domestically, federal seizures of methamphetamine laboratories exceeded 300. State and local authorities, particularly in the West, also seized a significant number of methamphetamine laboratories. Restrictions on the availability of essential chemicals used in domestic methamphetamine production continued to limit production in the United States and led to attempts to produce the drug from over-the- counter medications containing ephedrine and pseudoephedrine.
According to the latest information available from the Drug Abuse Warning Network (DAWN), the estimated number of nationwide emergency room drug abuse episodes involving methamphetamine has increased dramatically since 1992, following significant decreases that had begun in 1990. According to DAWN statistics, the areas hardest hit by methamphetamine abuse included San Diego, Phoenix, San Francisco, Los Angeles, Dallas, Denver, and Seattle. Los Angeles and Phoenix in particular have experienced dramatic increases in the number of methamphetamine-related episodes since 1991.
Traditionally, methamphetamine use was associated with white males between the ages of 19 and 40. DAWN reporting shows that this population continued to dominate the data. However, reporting from epidemiologists and treatment personnel revealed shifts in use profiles. There were reports of increased methamphetamine use among college students and young professionals at all-night dance parties called "raves."
LSD was available in retail quantities in virtually every state, and availability increased in a number of states. LSD production facilities are thought to be located on the West Coast, in the northern California and Pacific Northwest areas. A proliferation of mail-order sales created a marketplace where the sellers are virtually unknown to the buyers. The vast majority of users were white, middle-class high school and college students attracted by the low prices and who perceived the drug as harmless.
PCP production was centered in the greater Los Angeles metropolitan area. Los Angeles-based street gangs, primarily the Crips, continued to distribute PCP to a number of U.S. cities through their cocaine trafficking operations. They posed a particular problem because of their propensity for violence. Six PCP laboratories were seized in 1995, compared to nine in 1994.
MDMA is related to methamphetamine and is known by several street names such as ecstasy, XTC, clarity, essence, and doctor. MDMA was shipped by independent traffickers by post or express mail services from source areas in Texas and the West Coast to distributors across the country. Three MDMA laboratories were seized during 1994 in the United States, while two were seized in 1995. MDMA is popular among college students, and often is found at the all-night raves. MDMA, often sold in tablet form, was found in dosage units of 55 to 150 milligrams. Retail prices ranged from $6 to $25.
In 1995, there was an influx of flunitrazepam (Rohypnol) tablets into the Gulf Coast and other areas of the United States. Rohypnol is a benzodiazepine manufactured in Colombia, Mexico, and Switzerland by Hoffmann-LaRoche, but not legally manufactured or marketed in the United States. Rohypnol is reported to be 7 to 10 times more potent than Valium and produces amnesia as a serious side effect. The street price for Rohypnol was generally $5 per dosage unit, although prices of $6 to $8 also were reported. Wholesale prices ranged from $1.25 to $3 per tablet.
Controlled substance analogs presented a unique problem to drug law enforcement. Most analogs were produced domestically by independent laboratory operators in relatively small quantities. During 1992, the DEA first encountered methcathinone, a methamphetamine-like analog that originated from clandestine laboratories in northern Michigan. In response, the DEA arranged for it to be placed in Schedule I of the Controlled Substances Act in October 1993. Twenty methcathinone laboratories were seized during 1994, with another 19 seized in 1995. Methcathinone production and distribution, originally limited to Michigan's Upper Peninsula region, spread throughout much of the Midwest.
Abusers of dangerous drugs also used legitimately manufactured controlled substances diverted to the illicit market. Illegal or fraudulent prescribing and dispensing, as well as theft from legitimate channels, were employed to divert these drugs. Major sources of domestic diversion shifted from the wholesale to the retail level. Domestically, organized groups of "doctor shoppers" operated interstate, often ranging across four or five states in search of sources. Diversion commonly involved depressants such as benzodiazopines, particularly alprazolam and diazepam.
In 1994 and 1995, U.S.-based drug traffickers shipped their profits out of the country in smaller amounts than in previous years. Worldwide, money laundering methods varied by country and region of the world due to a number of factors, including the relative sophistication of banking and financial centers, and the existence of underground banking systems that operated largely along ethnic ties. Money laundering methods continued to evolve in response to variations in law enforcement pressure.
Ethnic Pakistanis established businesses in the United States that serviced Southwest
Asia's Hundi underground banking systems. Invoice manipulation was used to move
drug proceeds into and out of the United States. Russians newly arrived in the United
States closed real estate deals with cash carried in shopping bags and used casinos to
launder illicit proceeds generated from a variety of criminal activities. Other money
laundering methods that drew attention included the use of the following: swaps
(international currency transactions); payable- through-accounts held by foreign banks in
U.S. banks; "smart cards" for structuring deposits and transferring money
internationally; and cyberbanking for instant multinational layering of deposits.
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