Flores drug indictment gives clues to Mexican cartels

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By Steve Fainaru and William Booth
Thursday, December 31, 2009

The Flores brothers had never looked like much in the eyes of local narcotics agents. But by the time it all came crashing down this year, the drug-distribution network allegedly run by the 28-year-old twins from the Mexican American barrios of Chicago was one of the largest and most sophisticated ever seen in the U.S. heartland, according to interviews and federal indictments.

Pedro and Margarito Flores allegedly operated as an American annex to a major Mexican drug mafia, and their arrest and the dismantling of their purported network opened a window on how powerful Mexican cartels operate in the United States, distributing cocaine and heroin with the corporate efficiency of UPS, while back home competitors are tortured and beheaded.

The fortunes of the Flores twins changed because the war on the cartels being waged in Mexico with U.S. help has reshaped the criminal landscape in both countries, generating unprecedented violence but also contributing to the kinds of vicious splits and betrayals that helped in the brothers' arrests, according to narcotics agents and federal indictments.

The sprawling drug operation was essentially a $700 million-a-year distributorship for the Sinaloa cartel, the largest criminal organization in Mexico. It used tractor-trailers to import two tons of cocaine each month for distribution from Chicago warehouses, with cash proceeds shrink-wrapped and shipped back across the border.

The crackdown launched by Mexican President Felipe Calderón has cost more than 16,000 lives and been widely criticized in both countries as ineffective in reining in the drug barons and slowing the flow of drugs into the United States. But the campaign has exposed networks such as the one allegedly run by the Flores brothers, which shipped cocaine from Los Angeles to Chicago and then distributed it to cities across the Midwest, according to interviews and the indictments.

Other than the indictments, few court papers have been filed in the case. The Flores brothers are in U.S. custody; attempts to reach their attorneys were unsuccessful.

Chicago is hardly alone as a home to Mexican cartels; the traffickers operate in 230 U.S. cities, the Justice Department says. But the competition in Chicago might be unusually fierce, with each of the five major Mexican cartels vying for business.

"Much like any legitimate corporation, the drug organizations utilize Chicago as both a distribution and trans-shipment point for their product," Stephen A. Luzinski, acting special agent-in-charge of the Drug Enforcement Administration office here, said in an interview. "The extensive accessibility to various modes of transportation, as well as the large and diverse population with an established customer base, makes Chicago an ideal location as a hub."

The family business

Pedro and Margarito Flores were born into a Mexican immigrant family with strong ties to the narcotics trade. Chicago detectives say their father ran drugs for the Sinaloa cartel, as did an older brother. The family melded into the culture in rough neighborhoods such as Little Village and Pilsen, where the Latin Kings and Two-Six gangs fight for turf.

The brothers eventually took over a barbershop and a Mexican restaurant called Mama's Kitchen. They moved to a more expensive neighborhood and drove better cars. But unlike in Mexico, where high-level traffickers are household names, the twins had low profiles.

In Chicago, "you are only as good as your connection," said a former drug dealer who served 10 years in prison and spoke on the condition of anonymity because of security concerns. And the Flores brothers reportedly had the best connections in town.

Authorities said the brothers worked for two factions of the Sinaloa cartel. One was headed by Joaquín "El Chapo" Guzmán, the most wanted man in Mexico, recently named by Forbes magazine as the 41st most-powerful person in the world. The other was by Arturo Beltrán Leyva, whose self-appointed nickname -- the Boss of All Bosses -- frequently appeared on messages displayed next to mutilated corpses.

Factional trade, warfare

As described in court documents, the brothers' reach extended deep into Mexico, where Guzmán, Beltrán Leyva and their associates used Boeing 747 jets, private aircraft, submarines, container ships, fishing vessels and speedboats to consolidate enormous shipments of cocaine from Central and South America, including Colombia and Panama.

The Sinaloa cartel in Mexico was tasked with getting the drugs across the border for pickup in a warehouse outside Los Angeles. The Flores brothers allegedly employed dozens of operators to bring the drugs north, including truck drivers who concealed the contraband amid shipments of fruit, vegetables and other consumer goods, and off-loaded cocaine and heroin in the Chicago area at nondescript warehouses, condominiums and brick duplexes managed by their criminal gang. The drugs were split into smaller quantities and "fronted" to customers, who would pay after they sold the contraband on the street.

But the two Sinaloa factions split last year over the Mexican government's arrest of Beltrán Leyva's brother. The resulting violence consumed several Mexican states and, ultimately, Chicago, as the factions fought over "control of lucrative narcotics trafficking routes into the United States, and the loyalty of wholesale narcotics customers, including the Flores Brothers," according to an indictment filed in U.S. District Court for the Northern District of Illinois.

The brothers were said to be caught in the middle, with both Sinaloa factions threatening violence against them to maintain control over the critical distribution network. Ultimately, U.S. authorities were able to infiltrate the purported Flores crew, setting up sham cocaine sales to make dozens of arrests and to seize more than three metric tons of cocaine.

Pressure on both sides

It is not clear whether the Flores brothers are cooperating with the authorities, but they face life in prison if convicted, and authorities are seeking the forfeiture of more than $1.8 billion. In August, Patrick J. Fitzgerald, the U.S. attorney for the district, called the indictments "the most significant drug importation conspiracies ever charged in Chicago."

Authorities and people familiar with the drug trade say violence in Mexico and increased enforcement -- symbolized by the Flores case -- are having a dramatic effect on Chicago street sales, at least for now. The wholesale price for a kilo of cocaine -- about 2.2 pounds -- has surged in the past 18 months, from $18,000 to $29,000 and often more, according to authorities.

U.S. officials declined to discuss specifics of the case or whether information from the investigation helped lead Mexican authorities to Beltrán Leyva, who was killed this month during a two-hour gun and grenade battle with Mexican forces in the city of Cuernavaca.

But Anthony Placido, chief of intelligence for the DEA, said in an interview that pressure on both sides of the border has forced the cartels to rely increasingly on inexperienced operators such as the Flores twins.

"There have always been gatekeepers -- people who use their familial relationships to facilitate the movement of drugs across the border," Placido said. "Those people used to be gods, and they would control an area for years. Now they often last months before they are arrested or assassinated.

"What that creates is opportunities for a 28-year-old who . . . isn't worried about dying," he said.