The National Methamphetamine
Drug Conference

Intelligence: Trafficking Organizations

Randy Weaver, Senior Research Specialist
National Drug Intelligence Center

I will present an overview of the trends and patterns we have associated with Mexican methamphetamine organizations. This information was developed from a comprehensive review of almost 1,500 criminal investigations provided by the Drug Enforcement Administration, the California Department of Justice, Bureau of Narcotics Enforcement, and the Federal Bureau of Investigation as well as information provided by the Western States Information Network.

Randy Weaver, senior analyst of the National Drug Intelligence Center, discusses production and trafficking patterns of drug organizations.

Copies of our three baseline assessments, Hazards of D-methamphetamine Production, Effects of D-methamphetamine, and Ephedra, Potential Precursor for D- methamphetamine Production, are provided in your information packets. Thousands of these products have already been distributed to law enforcement, education and health care professionals nationwide, and we are engaging more distribution right now.

The Mexico/Methamphetamine Unit is also working toward the completion of 15 detailed organizational profiles of Mexican methamphetamine organizations. NDIC is producing a CD-ROM format nationwide directory of clandestine laboratory operations, and we are exploring methods to make that information available to law enforcement agencies at all levels nationwide. We have also produced a study for law enforcement entitled Mexican Methamphetamine: Organizational Trends and Patterns.

Production Method Many are poly-drug organizations Use the ephedrine reduction method Ephedrine or pseudoephedrine Hydriodic acid Red phosphorous

This presentation is extracted from that trends and patterns document and will discuss specific domestic and international methods of operation of these Mexican methamphetamine organizations in five different functional areas. These are: Precursor chemicals, lab operations, transportation, drug distribution and money laundering. I will conclude with some key observations concerning Mexican methamphetamine organizations.

Many of the larger Mexican methamphetamine organizations are, in reality, poly-drug organizations, and may traffic in cocaine, marijuana and heroin in addition to their methamphetamine activities. Mexican organizations produce methamphetamine using the ephedrine-reduction method, the best-known way to clandestinely manufacture bulk quantities of methamphetamine. There are three essential chemicals required for this method of methamphetamine production: Ephedrine or pseudoephedrine, hydriodic acid and red phosphorous.

Mexican organizations have managed to remain steps ahead of law enforcement in developing and maintaining sources of supply for both ephedrine and pseudoephedrine. They have answered every attempt at regulation with an almost immediate shift to an alternate source. While regulatory efforts have clearly reduced the domestic availability of ephedrine and have had some success in reducing overseas availability, the largest Mexican organizations have little difficulty obtaining bulk quantities of ephedrine.

The primary source countries for ephedrine and pseudoephedrine have fully cooperated with U.S. international control efforts. Mexican methamphetamine organizations have maintained access to bulk supplies of ephedrine and, most recently, phenylpropanolamine, by resorting to smuggling via mislabeled shipments. Despite attempts to control the commerce in pseudoephedrine and ephedrine, China and India have increased production in recent years, increasing the likelihood of illegal precursor shipments. During 1995 and 1996, smuggled shipments from Taiwan and the United States provided phenylpropanolamine to some of these drug traffickers, which they used to replace reduced supplies of ephedrine.

Many Mexican organizations operating laboratories in the United States have turned to pseudoephedrine as a substitute for bulk ephedrine. These labs are supplied with tens of millions of pseudoephedrine tablets per month by rogue chemical companies, many of which do little-to-no business with the retail drug business or the health care industries. These individuals operating networks of liquor stores and convenience stores are the primary conduit through which pseudoephedrine reaches many domestic methamphetamine laboratories. The illicit trade in pseudoephedrine is, in itself, a multimillion dollar annual industry.

The historical trends identified for ephedrine and pseudoephedrine also applied to hydriodic acid, but, more recently, trends indicate hydriodic acid is no longer the critical commodity it has been in the past. Because of the difficulty of obtaining and transporting large quantities of hydriodic acid and its increased price, many organizations now add the necessary ingredients to the reaction process, allowing hydriodic acid to be produced as methamphetamine is synthesized.

Lab Operations Trends and Patterns Mexico –larger –more secure –150–200 lbs –family owned –property United States –smaller –less secure –10–50 lbs –rented or brokered –numerous sites Approximately 5-6lbs of toxic waste per lb of meth produced

Some Mexican organizations establish front businesses to provide large-scale procurement of precursor chemicals. Others establish networks of individuals to accomplish that function. These networks use numerous automobiles and disposable individuals know as runners. Runners will purchase chemicals from any company that will sell to them, including some on the East Coast and in Midwestern states. These networks are usually established by larger organizations that specialize in bulk methamphetamine production.

The largest Mexican organizations have production operations in both the United States and in Mexico, but domestic labs differ greatly from labs in Mexico that are usually larger and more secure facilities than those in the United States. Labs in Mexico generally produce far more methamphetamine than labs in the United States, sometimes as much as 150 to 200 pounds per cook performed every other day. By contrast, Mexican organizations in the United States typically maintain three to seven locations that can be used as clandestine lab sites when necessary. Since chemicals and equipment are frequently removed from U.S. lab sites after a cook, U.S.-based cooks usually average only 10 to 15 pounds of methamphetamine per cook, significantly less than the operations in Mexico. Lab operations in the United States for non-Mexican organizations are significantly lower in terms of production capabilities.

Although that trend seems to be continuing, larger lab sites capable of producing more than 200 pounds of methamphetamine have been located in the United States. Labs in Mexico are often located on a family-owned ranch, farm, residence, or in a business. In the United States, labs may be located in an auto body shop, an abandoned mine, a deserted trailer or outbuilding, an apartment, a hotel room or in an orchard. The location of a lab site frequently depends upon the preference of the cooker, but, wherever the lab may be located, one fact remains absolutely constant: Five to six pounds of toxic waste are generated for every pound of methamphetamine produced at a clandestine lab site.

Once a lab site is located and established, organization leaders select personnel who will participate in the manufacturing operation. Methamphetamine manufacturing depends upon persons performing four specific roles. The manager of the entire manufacturing operation is the lab foreman, who is usually a cook himself and a highly-trusted member or leader of the organization. The cooker is also a trusted and usually experienced individual who oversees the actual manufacturing process. The cooker instructs and supervises the lab workers but personally performs the more sensitive tasks of mixing and heating the chemicals.

Transportation Trends and Patterns Couriers—family or friends Transport methamphetamine, ephedrine, and money Traditional transportation routes, methods Supported by larger organizations Automobiles Tractor trailers and aircraft Mail services

The least trusted individuals involved in the manufacturing process are the lab workers. They perform the physical labor and hazardous tasks associated with manufacturing methamphetamine. Security personnel are usually trusted individuals who safeguard the lab site from the other organizations and law enforcement. Security personnel also maintain watch over the lab workers and prevent them from leaving the lab site until the cooking process is complete.

Ideally, these four roles are filled by individuals from the same organization; this affords the greatest measure of security and cooperation but also results in a greater profit margin for the organization. This self-sufficient style of manufacturing methamphetamine is the goal of emerging methamphetamine organizations. While there are many cookers producing methamphetamine, only a few cookers actually possess the skill to supervise a large cook of more than 50 pounds, ensure a high-purity product and train other cookers.

These highly-skilled cookers are frequently associated with more than one production and distribution organization and often work in labs in both the United States and Mexico. Mid- to low-level Mexican methamphetamine organizations frequently exchange cookers, lab sites, precursor chemicals, and at times, even methamphetamine, but they are still very dependent upon a continuous supply of precursor chemicals.

Mexican organizations use couriers who are trusted individuals, family members, or close family friends to move methamphetamine. Couriers associated with lab facilities in Mexico frequently smuggle both methamphetamine and ephedrine into the United States and often carry cash back into Mexico. The transportation of precursor chemicals and methamphetamine into Mexico is dependent upon the same methods, routes, individuals and organizations that have historically moved other contraband through Mexico.

Distribution Trends and Patterns Normally uncut Purity 80-90% "Mexican Mafia" Outlaw motorcycle gangs Demand drove production Warehousing of methamphetamine Leaders personally involved

The preferred method of transporting precursor chemicals and methamphetamine is the automobile. These automobiles are frequently equipped with electronically-activated compartments to conceal drugs or chemicals. When transporting contraband in this manner, couriers attempt to avoid any identifiable patterns of behavior. To transport especially large loads of methamphetamine, Mexican organizations have used both tractor-trailer rigs and even private aircraft. To transport smaller amounts of methamphetamine, Mexican organizations will use mail services. The U.S. Postal Service, United Parcel Service and Federal Express have all been used to transport both methamphetamine and cash. The use of mail services allows for easier expansion of distribution to developing market areas outside the Southwestern United States, which remains the core area of operations.

Finished methamphetamine is frequently uncut until it reaches street-level distributors. Our analysis revealed an average purity level of 80 to 90 percent for even small amounts of methamphetamine, indicating that the responsibility or necessity of cutting methamphetamine rests with street-level distributors. The Mexican Mafia prison gang plays an important role in methamphetamine distribution, especially in Southern California and Arizona. The Mexican Mafia provides a connection to street gangs that methamphetamine production organizations can exploit. With established distribution throughout their ranks, outlaw motorcycle gangs are another important distribution connection for Mexican organization.

Historically, demand at the wholesale level drove the production of methamphetamine, with demand known and quantities and pricing negotiated before methamphetamine was manufactured. Recent methamphetamine seizures indicate the trend may be changing. Seizures of multi-hundred-pound quantities of methamphetamine and reports of methamphetamine warehouses suggest the larger Mexican organizations may be surpassing traditional demand-driven production requirements.

Money-Laundering Trends and Patterns Unconventional methods Desire to hold cash Distrust of banks Bulk cash transactions Smuggling money to Mexico: a major logistical challenge Dependent upon the movement of cash

Unlike their Columbian counterparts, mid- to upper-level leaders of Mexican methamphetamine organizations may be personally involved in both production and distribution. Leaders of Mexican organizations seem to prefer a more direct measure of control over every aspect of their operations. Many leaders have worked their way up the scale from street-level distribution to leadership within the organization.

Sophisticated, structured laundering of drug proceeds, as practiced by many drug trafficking organizations, is quite rare in Mexican methamphetamine organizations. Mexican methamphetamine organizations do not typically attempt to make drug proceeds appear legitimate through structured deposits and wire transfers. The leaders of Mexican methamphetamine organizations prefer instead to hold their money in cash form or invest in real property. Mexico-based organizations continually transport large sums of cash from the United States to Mexico. Because of their distinct distrust of banks and other financial institutions, leaders of methamphetamine organizations in the United States and Mexico may hide large sums of cash in secure locations, often going as far as burying containers full of millions of dollars in cash.

Directly corresponding to their preference to possess cash, leaders of Mexican organizations also prefer to conduct business transactions in cash, even very large transactions. This method of cash exchange affords them a greater degree of security and simplicity and eliminates any potentially exploitable record of criminal activity.

While their preference to possess cash and conduct business in cash terms is simple and difficult to track, it presents Mexican organizations with a significant logistical challenge, the movement of the cash itself. Larger Mexico-based organizations may move hundreds, even thousands of pounds of cash per year. And since most large cash transactions are still performed in Mexico, continuous operations depend heavily upon the physical movement of tens and, at times, hundreds of thousands of dollars in cash per trip.

Although our initial analysis focused almost entirely on the Southwestern United States, some recent trends in methamphetamine manufacturing and distribution have become apparent. Methamphetamine abuse has become a rapidly-expanding phenomenon of national proportions that poses a major threat to our economy, our society and to the environment.

The number of labs seized in the United States has risen dramatically in the past four to five years. Though smaller labs not directly associated with the Mexican organizations may outnumber Mexican labs numerically, they cannot compare with the volume of methamphetamine and, correspondingly, the volume of toxins produced by Mexican organizations.

Mexican organizations have generally supplanted outlaw motorcycle gangs in methamphetamine production and now use outlaw motorcycle gangs to facilitate their distribution activities. Couriers for Mexican organizations now routinely use domestic commercial airlines to expand distribution to new market areas. There are strong indications that the larger Mexican methamphetamine organizations are supported by even larger organizations like those led by the Arellano-Felix brothers and Amado Carrillo-Fuentes. Our analysis and recent discussions with law enforcement personnel at federal, state and local levels indicate the preeminent Mexican methamphetamine organizations are undergoing a systematic expansion to areas well beyond their core area.

In summation, the incursion of Mexican methamphetamine organizations into the illicit methamphetamine market has added a level of organization, sophistication and scope that were not the case before their ascension. Mexican organizations now comprise a major portion of the methamphetamine threat to the United States. Again, we appreciate the opportunity to participate and address this conference and, pending your questions, this concludes my presentation.

What is the extent of cooperation or conflict between U.S. organizations like the biker gangs and the Mexican gangs or organizations?

From the information we have seen thus far, it very much appears the biker gangs, in most cases, have accepted the fact that Mexican organizations can produce methamphetamine at a cheaper rate than they can themselves. In the United States, we have seen information that the Mexican organizations are actually selling to or fronting for methamphetamine biker gangs. Meth is then being distributed to other biker gangs or among these organizations in the areas of influence in the United States. NDIC has another study upcoming, another product that is going to detail some of the relationships between Mexican methamphetamine organizations and the outlaw motorcycle gangs.

Is there any evidence that restrictions on ephedrine, such as making it a prescription drug or a controlled substance or restricting the number of units for sale at any given time, have any effect on the methamphetamine production?

Absolutely. While it is difficult to comment on the level of methamphetamine production, we do know that lab seizures are increasing. From these seizures, we have seen a very distinct impact as a result of government efforts to restrict the availability of bulk quantities of ephedrine, then ephedrine tablets, and pseudoephedrine tablets: In every single instance, restriction forced these organizations to react and adapt to a different supplier of precursors. Restrictions do create complications for methamphetamine producers.

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