DRCNet Response to the
Drug Enforcement Administration
The Supply of Illicit Drugs to the United States
In 1994, cocaine hydrochloride (commonly referred to as cocaine) was readily available in virtually all major U.S. cities. Trafficking was managed primarily by Colombian drug mafias that exerted control over the Andean source nations potential cocaine production of 820 to 855 metric tons. In 1994, 303 metric tons of cocaine were seized worldwide. U.S. Federal law enforcement agencies seized 115 metric tons of cocaine during the year, according to the Federal-wide Drug Seizure System (FDSS). Colombian drug mafias-loose consortiums of independent groups-directly managed all aspects of the cocaine trade, from coca cultivation to Andean Ridge cocaine production 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.
At the U.S. wholesale level, the Colombian drug mafias operated cocaine distribution and drug money laundering networks comprised of multiple cells functioning in a number of major metropolitan areas. They maintained meticulous records and used the latest technology--computers, pagers, and facsimile machines-in their daily operations. Their actions were coordinated on a daily basis by key managers in Colombia.
Colombian cells remained in contact with North American criminal organizations and maintained relationships with third-country traffickers as well. During the last several years, Colombians have used Mexican and Caribbean-based transportation groups to ship cocaine to the Southwest and Southeast United States, respectively. Primary U.S. bulk distribution centers included southern California, southern Texas, New York City, and southern Florida. From these centers, the cocaine was shipped throughout the United States for delivery to lower level distribution groups in secondary source cities. Chief among those groups were African-American street gangs and ethnic Dominican, Cuban, Haitian, Jamaican, Mexican, and Puerto Rican criminal groups that controlled retail cocaine and crack sales.
In 1994, cocaine prices ranged from $10,500 to $40,000 per kilogram nationally. Kilogram prices in virtually all major metropolitan areas remained at the lower end of the price range. Average purity for cocaine at the gram, ounce, and kilogram levels has remained high for the past several years. Average purity at the gram (retail) level for 1994 was 63 percent. The average purity per kilogram (wholesale) was 83 percent for the same time period.
Prices for kilogram quantities of cocaine in Europe fell as Colombian traffickers inundated European markets. Nigerian trafficking groups moved cocaine from Brazil to the African continent and on to Europe. Eastern European nations such as Poland emerged as new transit zones.
Large cocaine seizures, often metric-ton sized, occurred in the source and transit regions in 1994. Traffickers continued to use intermodal means of transport and often concealed larger shipments in commercial maritime containerized or bulk cargo. Traffickers also are believed to have experimented with the use of semi-submersible and fully-submersible 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.
Since June 1995, three Cali drug mafia kingpins-Gilberto Rodriguez-Orejuela, Jose Santacruz-Londono, and Miguel Rodriguez-Orejuela-have been arrested by the Colombian authorities. The Colombian Government is to be commended for these arrests. The long-term value of these actions, however, only can be evaluated in accordance with the successful prosecution of the criminal eases against these Cali kingpins. The Rodriguez-Orejuela brothers and Santacruz-Londono must be incarcerated for a lengthy period of time under conditions that do not allow them to continue their drug operations.
Heroin available in the United States was produced in four source areas: Southeast Asia (principally Burma), Southwest Asia/Middle East (Turkey, Pakistan, Lebanon), Mexico, and South America (Colombia). In 1994, worldwide opium production fell to 3,409 metric tons due primarily to drought in Southeast Asia. However, opium poppy cultivation in Southwest and Central Asia expanded.
The U.S. market was dominated by high-purity Southeast Asian heroin, which remained prevalent in the Northeast and along the East Coast. Ethnic warlord armies in Southeast Asia produced abundant supplies, which were transported by independent brokers and shippers. Links between suppliers and brokers connected overseas Chinese criminal populations to ethnic Chinese wholesale distributors in the United States. United States-based ethnic Chinese groups consorted with local criminal organizations through connections initially established in U.S. prisons. Nigerian and West African groups smuggled Southeast Asian heroin internationally and distributed it in the United States through contacts with United States-based criminal groups.
Middle Eastern traffickers smuggled Southwest Asian heroin to ethnic enclaves in the United States. Lebanese, Israelis, Pakistanis, Turks, and Afghan groups all were involved in supplying the drug to United States-based groups for retail distribution.
Virtually all of the heroin produced in Mexico was destined exclusively for distribution in the United States. Black tar heroin was produced by Mexican traffickers and sold in the western United States by Mexican-American criminal networks.
South American heroin, produced in Colombia, was readily available in the Northeast and along the East Coast, and was trafficked primarily by independent Colombian traffickers. In fact, data obtained from DEA's Domestic Monitor Program (DMP), a retail level heroin purchase program, indicated that the availability of South American heroin was steadily increasing in Northeast U.S. cities. Although South America ranked far behind Southeast Asia as a source region for heroin destined for the United States, it appeared that Colombian drug traffickers expanded their foothold in the U.S. heroin market.
Heroin was readily available in many U.S. 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. Growing domestic demand was reflected in high worldwide opium poppy cultivation, opium/heroin production, and trafficking.
Nationally, in 1994, Southeast Asian heroin ranged in price from $100,000 to $260,000 per kilogram. Southwest Asian heroin ranged from $75,000 to $200,000. Wholesale-level prices for Mexican heroin were the lowest of any type, ranging from $50,000 to $250,000. South American heroin sold for $85,000 to $180,000. The wide range in kilogram prices reflected variables such as buyer/seller relationships, quantities purchased, purchase frequencies, purities, and transportation costs.
On the street, heroin purity was directly related to availability. Retail heroin purity was tracked by the DMP. For 1994, the nationwide average purity for retail heroin from all sources was 40.0 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 1994, the retail purity of South American heroin was the highest for any source, averaging 59 percent, followed by Southeast Asian heroin with an average of 39.7 percent. Southwest Asian heroin averaged 35.9 percent at the retail level and Mexican heroin averaged 27.0 percent, almost double its 1991 average.
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 was 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 Southeast Asian and South American heroin in 1994 was 60.9 percent and 71.0 percent, respectively. Of all of the DMP cities, Philadelphia, with an average of 64.3 percent, recorded the highest average purity of retail heroin during the same time period.
Seizures of heroin in excess of 100 kilograms continued to occur in Southeast Asia, but no such large seizures occurred in the United States during 1994. Worldwide seizures of heroin amounted to about 23.8 metric tons. In the United States, 1.3 metric tons were seized. 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 and Thai authorities limited the flow of goods and services to the Shan State. Khun Sa was dealt a serious blow in November when Thai police arrested several key Shan brokers. Khun Sa shifted operations to make greater use of Laos and possibly Cambodia and Vietnam to ship heroin westward. Nigerian courier organizations continued to smuggle large quantities of heroin to the United States, making use of transit locations in Asia, Africa, and Europe. Russian organized crime expanded its worldwide activities and involvement in the heroin trade.
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 United States, spurred by the smoking of marijuana-filled cigars known as blunts. Marijuana from Mexican sources (whether grown in-country or transshipped from other sources) supplied more than 50 percent of the marijuana available in the United States. However, drug law enforcement reported a continued increase in shipments from Colombia, Venezuela, and, possibly, Jamaica. Domestic cultivation supplied approximately 25 percent of the U.S. market.
Cannabis was cultivated illicitly in the United States in remote locations, occasionally on public lands. Major domestic outdoor cannabis cultivation took place in Alabama, Hawaii, Kentucky, Tennessee, and California. Significant quantities of marijuana also were produced domestically in indoor growing operations, where sophisticated agronomic techniques were used to enhance potency and production. Effective eradication of outdoor crops, fear of detection, drought, plant disease, and theft also contributed to increasing illicit indoor cultivation.
Domestic cultivators have increased (THC) content-the primary psychoactive component-through selective breeding and cloning. Moving operations indoors permitted growers to use advanced cultivation techniques and produce crops year round. Most indoor operations grow potent sinsemilla, the unpollinated female plant. The number of indoor operations seized in 1994 was 3,209, compared to the record high of 3,849 seized in 1992.
Mexican polydrug trafficking organizations have smuggled marijuana into the United States for over 20 years and were responsible for between 50 and 60 percent of the marijuana available in the United States during 1994, with all of it smuggled across the Southwest border. In addition to the Mexican organizations, marijuana traffickers from Colombia, the Caribbean, and the Far East smuggled the drug to the United States. These traffickers used cargo vessels, pleasure boats, and fishing boats to transport marijuana shipments via traditional maritime routes.
Mexican polydrug organizations employed a wide variety of transportation and concealment methods for smuggling marijuana. Shipments of 50 kilograms or less were smuggled by pedestrians, who crossed at border checkpoints, and backpackers, alone or in "mule trains ", who crossed at more remote locations. Mexican traffickers also concealed marijuana in an array of vehicles, including commercial vehicles, private automobiles, pickup trucks, vans, mobile homes, and horse trailers that were driven through ports of entry. Shipments larger than 50 kilograms, ranging up to multithousand kilogram amounts, usually were smuggled in tractor-trailer trucks. Once the marijuana was successfully smuggled across the border, traffickers consolidated the shipments at central sites in cities such as Tucson, Arizona; El Paso, Houston, and McAllen, Texas; Los Angeles, California; and, Las Cruces, New Mexico. From these distribution hubs, marijuana was shipped to cities in the Midwest, North, and along the Gulf Coast and eastern seaboard.
Domestically, 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 (5 to 10 individuals) controlled distribution at the retail level. Domestic street gangs, as well as ethnic groups (usually immigrants from source countries), made for a wide range of retail dealers.
Prices for marijuana, which vary in accordance with quality, 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 $400 to $600 per pound in 1984, sold for $285 to $4,000 per pound in 1994.
IX Sinsemilla in 1984 sold for $1,200 to $2,500 per pound, compared to $900 to $9,500 per pound in 1994. One of the primary factors influencing price was potency, which has increased substantially for both commercial grade and sinsemilla, with THC content averaging 4.30 and 7.41 percent, respectively, in 1994.
The term "dangerous drugs"; refers to the broad category of illicitly manufactured controlled substances, other than cocaine, heroin, and marijuana. Dangerous drugs include depressants, stimulants, hallucinogens, and controlled substance analogs. Domestic clandestine laboratories were responsible for the overwhelming majority of illicitly manufactured dangerous drugs available in the United States.
Methamphetamine, a stimulant produced and distributed primarily in the western United States, was the most prevalent clandestinely manufactured controlled substance in the United States. Other significant dangerous drugs of abuse included the hallucinogens d-lysergic acid diethylamide (LSD), phencyclidine (PCP), 3,4-methylenedioxy-methamphetamine (MDMA), the stimulant methcathinone, and the depressant flunitrazepam. In addition, throughout the United States, criminals engaged in a wide variety of techniques to acquire and sell legitimately produced controlled substances and pharmaceuticals .
During 1994, 306 clandestine dangerous drug laboratories were seized, marking the first year that the number of seizures had increased since 1989. Laboratories came in all sizes and were found in a variety of locations, from sophisticated underground hideaways to motel rooms, kitchens, bathrooms, and garages. The most productive laboratories were located in secluded rural areas, a safe distance from the metropolitan distribution chains they served. Operators ran the gamut from high school dropouts to chemists with doctoral degrees.
In 1994, 263 methamphetamine laboratories were seized, primarily in the western and southwestern United States where most of the nation's methamphetamine production was centered and availability was highest. Methamphetamine production and distribution networks also were established in some of the rural regions in the East, such as southern Pennsylvania.
Numerous individuals, groups, and organizations, from independent entrepreneurs and outlaw motorcycle gangs to Hispanic polydrug trafficking organizations, manufactured and distributed methamphetamine. Outlaw motorcycle gangs influenced production in certain areas, such as California, Colorado, and Texas. In California, Mexican traffickers dominated the large-scale production and distribution of methamphetamine in the San Diego, Riverside, San Bernardino, and Fresno areas. Limited evidence suggested that Mexican traffickers attempted to expand their operations to other areas of the western United States.
"Ice", is a large-crystal form of d-methamphetamine hydrochloride, identical in both chemical and pharmacological properties to the powder (small crystal) form of methamphetamine. Although ice trafficking has remained prevalent in Hawaii since 1988, it has not emerged as a major drug problem in the continental United States. Much of the ice methamphetamine available in Hawaii was manufactured in clandestine laboratories in the Philippines, Taiwan, and China. In 1994, most of the ice available domestically was smuggled by ethnic Korean traffickers.
LSD was available in retail quantities in virtually every State, and availability increased in a number of States. LSD production facilities in all likelihood were located on the West Coast, in the San Francisco, northern California area, and the Pacific Northwest. Since 1977, only six LSD laboratories have been seized by DEA. The last seizure by DEA of an active LSD manufacturing laboratory in the United States occurred in 1981 in Bellevue, Washington.
Distribution of LSD is unique within the drug culture. A proliferation of mail order sales has created a marketplace where the sellers are virtually unknown to the buyers, providing the highest-level traffickers with considerable insulation from drug law enforcement operations. The vast majority of users were white, middle-class high school and college students who are attracted by the low prices and who perceived the drug as harmless.
PCP production appeared to be centered in the greater Los Angeles metropolitan area. Los Angeles-based street gangs, primarily the Crips, continued to distribute PCP to a number of cities in the United States through their cocaine trafficking operations. They posed a particular problem because of their propensity for violence. PCP abuse peaked in the early to mid-1980's, and was supplanted by the use of crack cocaine. However, there are recent indications that PCP abuse has increased somewhat in a limited number of cities. PCP laboratory seizures since the mid-1980's have ranged from 3 to 21 per year, totals considerably less than the high of 79 reported in 1978. Nine PCP laboratories were seized 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. Three MDMA laboratories were seized during 1994 in the United States.
MDMA was popular among college students, and also was used at all-night dance parties, principally by middle-class youths. Dosage units of MDMA, often sold in tablets, varied from 55 to 150 milligrams. Retail prices ranged from $6 to $25.
Recently, there has been 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 one of the greatest adverse effects of Rohypnol is amnesia. 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. Street names for Rohypnol included "Rophies", "Ropies", "Ruffes", "Roofies", and "Roches".
Controlled substance analogs present a unique problem to drug law enforcement. Most analogs were produced domestically by independent laboratory operators in relatively small quantities. New analogs may emerge at any time. For instance, during 1992, DEA investigated a methamphetamine-like analog called methcathinone, which originated from clandestine laboratories in northern Michigan. In response, DEA arranged for methcathinone to be placed in Schedule I of the Controlled Substances Act in October 1993. Twenty methcathinone laboratories were seized during 1994, compared with 22 confiscated in 1993. Methcathinone production and distribution, originally limited to Michigan's Upper Peninsula region, spread throughout much of the Midwest in 1994.
Legitimately manufactured controlled substances frequently were diverted to the illicit market. Illegal or fraudulent prescribing and dispensing, and theft from legitimate channels were used 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. Diversions commonly involved depressants such as benzodiazepines, particularly alprazolam and diazepam.
Money laundering methods vary by country and regions of the world due to a number of factors, including: the perhaps most importantly, variations in enforcement pressure. The continuing evolution in money laundering legislation and economic developments worldwide have spawned a new generation of money laundering methods.
In 1994, United States-based drug traffickers shipped their profits out of the country in smaller amounts. This was reflected in DEA's undercover proprietary money laundering operations.
Money launderers' exploitation of casinos continued to grow as the proliferation of casinos in the United States was not matched by a growth in resources to monitor them. River boat casinos became popular and Native Americans opened casinos in almost every State. Nevada's casinos still are exempt from Federal currency transaction reporting.
Various ethnic groups in the United States new to money laundering have introduced their own methods or have revised older methods. Ethnic Pakistanis have established businesses in the United States that service 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; they also used the casinos to launder illicit proceeds that were generated from a variety of criminal activities. Other money laundering methods that have drawn attention recently include: the use of 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 drug deposits.
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