I was born in Tijuana in 1961. I was there for about four years and came back
to the US. My brothers were born in the US. On my mom's side, I came from an
upper middle-class or upper-class family. My grandfather was an appellate
judge in Mexico. My dad's a Texan. So from kindergarten on--actually, from
nursery school on--I was in San Diego and lived your normal upper middle-class
life that regular American kids do.
'Steve' grew up in the San Diego/Tijuana area and was involved in drug
trafficking and money laundering with Mexican cartels. He asked FRONTLINE to
protect his identity. This is the edited transcript of an interview conducted in 2000.
On that part of the border, there's kind of a transnational family
structure. Do you breach both sides?
When you live in San Diego and Tijuana, especially in San Diego, you go across
that border like it's one big city. And you don't realize the privilege you
have in doing that. It just seems to be tedious because they put this border
there. I had an aunt whose house was on a mountainside in Tijuana. We'd call
her and ask, "What's the border look like?" And she would look with her
binoculars out her window and go, "Oh, stay wherever you're at," or "Go have
dinner," or "Come over to the house. The line's at least two hours right now.
Don't even try. Wait until it dies down." This is before radio. Now there's
a radio that every 15 minutes tells you how many cars there are. And this is
before the DEA and everybody put up on the American side so the border is long
now on both sides. It used to be that the only borderline you would make was
coming from Tijuana, Mexico, into San Diego.
And in those days, when Tijuana and San Diego were smaller towns, you guys
and your families were really part of an elite?
Well, yes. We all went to the country club in Tijuana. And then, Tijuana was
probably half a million, a million people, at the most. And most of those
people . . . weren't upper middle-class. Our uncles . . . were somebody in
society, so that your name was very well known. . . . Who you married was very
important, who you hung out with, who was at the country club. Those families
were very special, and it was a very small town when it came to the privileged
And you all went to the same high school in San Diego?
Well, most of us all went to Augustine. It's an all-boys school. Most of the
girls went to Our Lady of Peace. If you went to school in Tijuana, you went
to. . . an elite school. There are other ones, but at that time everybody went
there. For example, my father went to Augustine, my little brother went to
Augustine, I went to Augustine. And almost everybody of the elite from Tijuana
went to these schools.
So, if you got pulled over by a cop, they'd either recognize you, or as soon as
they saw your license, they'd know who your father was or your uncle was or
somebody like that. So, pretty much at that age in those days, you had free
license to do whatever you wanted to. Even if you were caught drunk, even if
you hit a telephone pole, they'd call your parents or your uncle first. They
wouldn't put you in the same prison cell or the same jail cell in the county
jail. They would take you to the office and then call your parents or your
uncle and say, "Let's fix this. We have a problem here. Let's take care of
this business here," without making a big thing out of it. So you were very,
very privileged. That's something that's almost unheard of now.
And eventually you became an attorney?
Right. I got tired of being a stockbroker, went to law school and
became an attorney. My intention was to become a securities attorney. As a
stockbroker, I'd see them. They were getting paid as much as me, or more, and
weren't out doing as much hustling as I was. I was living in planes and hotels
at the time. I opened my office right next to an MCC, right across the street
from the federal courthouse, so it was just perfect. That's the best location
there is in San Diego to have a law office for criminal defense--ninety-eight
percent of my cases were drug traffickers, drug trafficking charges.
So you had ninety-eight percent drug trafficking cases, because
that's what was in the MCC?
Yes. So then they send me a client. They tell me how much to charge, because
they already interviewed this client. They know what he owns, what he has, how
much cash is available. And so they tell me by phone, "Steve, just charge him
ten grand. It won't be a problem." I charge him ten grand, which to me at
that time was just an unbelievable amount of money. And, lo and behold, he
comes with a shoebox, puts it on my desk, and he goes "Count it."
And I opened it. I got that aroma of dirt, so that money must have been
buried. And in fact, later on, when we tried to use money counters, a lot of
times it wouldn't work because the money was either wet or it had dirt on it
because of the ways they hide the money and where they hide the money. But
anyway, he gave me the $10,000 as my first drug client. And from then, I never
looked back. It was big clients. Money. Cash coming in. I had $40,000
almost every day in the bank account, in my trust account, of money that was
coming in all the time. And it was all drug trafficking. I knew when it was
the pot season and I was going to get border bust cases, I had to charge less.
If I knew it was coke season, it was going to be more coke cases, and I could
charge more. Then when crystal meth cases started coming in, they were so
penalized I knew I could charge even more. They were usually were white guys,
at that time. And the coke guys were either Mexican or Colombians. And the
pot guys were almost always Mexican. And so we knew how to price. We knew the
seasons. We knew the dry seasons. We learned the pot world and the cocaine
world and the drug world just by being attorneys, because we could tell after a
while, cyclically, what kind of clients we were getting. And that's how I
started. That how I started being a defense attorney.
So you're making good money, and a lot of clients coming in?
Very good money. Right.
And you started traveling into Mexico?
Well, first I started with Colombia. A lot of them would say, "Okay. If you
need that kind of money, it's not a problem, but you need to fly to Cali or
Medellin or Bogota and meet my brother or my father or my wife or my sister and
talk to them. Tell them exactly. Take the paperwork. Show them what's going
on. Plus, you're going to save my life, so they know I didn't steal this.
They'll know how the bust went down." So my job was to go down there and make
sure that people understood what's going on.
To understand that they didn't get ripped off?
Right. For example, once I flew down to Cali to meet a client that owed me $2
million. Before we arranged the $2 million, I had to get the okay from his
brother. And so I flew to Cali, Colombia. I get there and I have a room. I
stay the first night. It was great. Hey, I'm going to Colombia and this is
exciting. I'm young and I'm getting a lot of money and this is really cool
stuff. This is what you dream about in law school.
So I get there. The second day they pick me up, take me in a cab, put me in
another car, put this black thing around my eyes like a bandage, and tie it.
And they go, "We're sorry. I hope you understand." Not a problem. Something
in me knew. . . I was never really scared. I was an attorney trying to help
them. Why would they hurt me? And they put me in a car. They go, "Now don't
get worried. We're going put you in a helicopter and you're going to hear the
thing and we're going to go to my uncle's ranch." I said, "Okay. Fine."
About 15, 20 minutes later, I land and I'm on this beautiful ranch. I don't
even know why they call it a ranch. It looked like a mansion. It had like a
little miniature zoo and it was just fabulous. It was like the "Lives of the
Rich and Famous," and more. Just incredibly beautiful homes. But they call
I met the people there and pulled out my briefcase, pulled out the indictments,
went through the photos, through the evidence. Meanwhile the person's just
sitting there. Very unemotional, just looking at you and studying you. They
know they got you. You're out in the middle of nowhere. If you're a fed or
something, you're never going to go back, but maybe they'll let you go back.
They're not going to say anything.
So I stayed there for about four, five days, and then went back. They said,
"If you come through with what you say and you give that result, we'll pay you
$2 million." And lo and behold, my whole thing with this client at that
particular time--he was a very high person with cocaine in the archives of the
US Attorney's Office, in fact I think they were partners of Pablo Escobar--he
had already had an attorney in Beverly Hills. He had already cut a deal for
ten years. There were nine or twelve of them--I can't really remember--in the
case and it was a package deal, which they all must sign or nobody signs and
they all go to trial. It's a package deal. It's not individual.
And he told me "Any year you get me less than ten years, I'll give you a
million dollars, up to five million." And I said, "Okay." I didn't think I
could get him five years off, but I'm sure I could get him something. And if
not, I didn't lose anything. I got a beautiful trip. And lo and behold, the
day of pleading comes. And I hold out. So everybody's totally pissed off,
including the US Attorney, the judge. Everybody's going berserk. Now you're
talking nine trials--one trial with nine co-defendants, nine top attorneys.
You're talking a month, six weeks, a two-month trial, for sure. Nobody wants
that. The US Attorney's Office is just, like, yelling at me. Finally, we
agree upon eight years. So everybody got 10 years and my client got eight. He
was happier than could be, and they owed me $2 million. And this same client
later on facilitated me in my other ventures. The big boys had talked with
each other inside MCC that I could be trusted. So now I was flying to Culiacan
Tell me about Culiacan.
Culiacan is considered like when Al Capone lived in Chicago or New York.
The drug traffickers, Felix Gallardo, Caro Quintero, all the big boys that are
said to be big boys from Culiacan in Sinaloa. There's a place called Tierra
Blanca--White Dirt? But what they mean by it is that there's so much cocaine
being trafficked at Tierra Blanca that it's called "the white town."
So it's like the capital of narcotrafficking in Mexico?
Yes. So, now I'm going down there and I'm meeting people. I'm also going down
to the prisons in Mexico to meet some of the very top cartel members that are
still running the cartel from inside. They have these beautiful cells. But
they have 12 of them. One is a dining room. One is a theater room, and I'm
talking high-tech theater stuff. That was one cell. The other cell was for a
party. One cell was for the lover, the other cell was for the wife. It's just
immaculate. They have their own rose garden. . . . They were paying the right
people to live very nice. So now I'm staying with these people. I'm like
almost one of them. And my whole thing at this time was to get clients,
because these guys have guys going down all the time.
You talked again about contracts, about moving a load from Colombia or from
Mexico . . .
Well, the load is a whole different animal, and it depends on what kind of
load. Coke is worked one way, pot is worked another way, crystal meth is
worked another way, heroin is worked another way. I really worked pot and
coke. A cocaine load, obviously, originates in Colombia. And if you go
backwards, the load's already facilitated to you in the United States. New
York has the highest price. L.A. has the cheapest price. L.A.'s really like
the marketplace. As it goes to New York and other places, it gets more
expensive. At the time I was doing this, it was $16,000 a kilo.
So the Colombian will tell me, "I have 500 kilos or 200 kilos or 100 kilos."
Anything under 100 kilos is not really worth the risk to do. So usually it's
300-500 kilos--half a ton, a little less. And they say, "The going price is
$16,000. I'll give it to you at $15,500. You'll make 500 bucks a kilo." "No,
come on, man. Don't be doing that to me. I've got to pay my people off. By
the time I pay everybody off, I'll be making $100 a kilo. It's not worth it to
me. If it's going at $16,000, give it to me at $13,000." So again you
negotiate. You reach a price. Let's say it's going at $16,000; they'll give
it to me at $15,000. So now I make a deal. You're going to front me that
cocaine, because nobody can buy 500 kilos. If you get a client that can buy
500 kilos and pay you at the same time, it's Uncle Sam who is buying it from
you. You're going to get caught at the same time. Nobody does that. Nobody
has that kind of cash available. Or if they do, they're not going to move it.
People are buying from 5, 50, 100. To me, it's on credit.
Now I make a contract. Let's say you're the Colombian. I make a contract with
you. I need seven days to move it and have the money here, in LA, back to you.
Let's say the people that moved it for me had clients. This guy's going to buy
50, this guy's going to buy 10, and my best client is going to buy 100. . . .
The shit that got all smashed up is what the crack dealers will buy to make
crack out of it. So you have different clients for different type of
The kilos come stamped. The best was Rolex. They used to come back with a
stamp from Colombia stamped Rolex. Ones were stamped with Clinton, ones were
stamped with Bush. . . . Sometimes it got crushed, though. So that stuff
people didn't really want to buy you sold to the crack dealers because they
don't care. They're going to break it down anyway, and make crack with it. So
now you make the deal. "Seven days." "No way. You're going to sell it and
resell it, work it yourself. You've got three days." "I can't do it in three
days." So you settle on five. Now I have five days to just sell my stuff, so
they're giving you half a ton, 300 kilos, on credit, for five days. And I have
to have that cash back in five days.
Sometimes a load goes down. You'd better have the indictment. You'd better
have everything that that client, the guy that went down with it, to show the
Colombian, "That load got busted. Here it is." They'll hire an attorney--like
me, at the time--to represent that client. I make sure he doesn't snitch, make
sure that everything he said is true, the amounts of kilos. And if he's going
to snitch, don't say, "I'm working for the cartel." Find out what he's going
to snitch about, and let the cartel know what he's snitching, so they can move
the numbers and their things around.
So as soon as he's done being debriefed, I'm calling the cartel and letting
them know what he got debriefed about. So that's if you get it in LA. You can
get it in Mexico, probably about half the price in Mexico. But then
you've still got the transportation cost to get it to the border and jump it.
The other way is for you to go to Colombia and get it. That's the best way, if
you have the means to do it. And the means to do it, for example, in my case,
was . . . to have a boat, a little bit smaller than a tuna boat, which hold
about seven tons in a double hull of the boat. And the first time we did it,
we did it for three tons.
You go down there, and there's different ways. You can either buy it on credit
at $1,500 a kilo--you've got to sell it at $16,000. It sounds like a lot of
money, but there's a lot that happens and a lot of people you've got to pay
between getting it in Colombia that they're not going to give it to you in
Colombia, and I'll explain that to you, to get it to the United States. That's
a long process.
But you go down there. You could either buy it for $1,500 a kilo, $2,000 a
kilo. You negotiate the price. But it's very, very low. There's so much
coke, they have hoards of it. Or you go, "Look. My boat can take three tons.
Half of it will be yours; half of it'll be mine. I will move your ton and a
half and sell it. The going price is at $16,000. I will sell it at $15,500
for you. And I will sell my load. When it's all done and sold, I give you
your money. I keep my money. And that's it." So you get it free, basically.
It's not really free, because you're going to spend most of your money
transporting and paying to get it to the United States.
So that's another way of doing it. A lot of times they'll go, "Okay. But sell
it at $16,000, at the going market price." "Okay." Hands shook. If it moves
up there, we're staying at that price. Now you're taking a chance, because the
market can get glutted and that goes down to $14,000. That happened to us
once. We got stuck with kilos, 150 kilos at $16,000 that we still had left and
the market fell to $14,000.
It sounds like a commodities business.
It is a commodities business. It is exactly a commodities business, but
you're not moving pork and you're not moving cows and you're not moving
petroleum. You're actually moving coke, in that case, or pot in another case.
It is a commodity, especially with the cocaine business. It is a commodity. .
In my case, we took two boats, and they flew their planes out to a place called
the Scorpion Triangle, which is about three hundred miles in international
waters, in front of Panama. They bombarded the kilos. They seal them in a way
that they can take the shock and they won't burst open, and they're also
waterproof. It looked like we're fishing out there. Our men, our captains,
are actually out there fishing. They dump the loads into the ocean and go out
in to pick it up--put it in the hull, and then dump all the fish we're
catching. We make it look as good as possible. And you have a decoy boat. So
one boat picks up and fishes. The other one's fishing. If, for any chance,
there's a Coast Guard coming--because usually it's the US that'll bust you--if
you see a Coast Guard coming or something, and submarines have done the busts
sometimes--that decoy starts hauling ass. Everybody goes after that boat.
That other ones goes and just finds a cove or something, somewhere to hide out
of international waters.
So that's the way we would do it. Then you bring that boat up. Again, you pay
somebody not to look at the radar for a certain amount of time at a certain
hour at a certain day. He charges very much, and sometimes they won't do it on
credit. Sometimes you've had to pay him up front. So to work that kind of
load of three tons, you'd better have $2 million-$3 million dollars that you're
going to invest before the load even gets dumped onto you. You'd better have
everything and everybody already set all the way through the chain, all the way
to L.A. That means you'd better have everybody paid, from interception to
federales to Mexican marines--everybody paid along the coast--stashers,
protection, everything. Because now it better work like a Swiss clock.
Nothing better go wrong. And it always does, but you know that, your idea is
to run it.
So you've got money out there already. You've got a million and a half, $2
million out before it even gets dumped in the ocean to you. And now it gets
dumped. Now you load it. And you bring it all the way up, in my case, out to
Rosarito, about three miles out. You bring it to shore in Zodiacs, to a very
affluent mansion, to a very dignified person that's above suspicion. And we
stash it there. We still got everybody paid off. We got the Mexican marines
that patrol Rosarito and Encinada and those areas paid off. We got air
surveillance paid off. We got the patrol cars that are going to carry some of
it. We got the truckers that are going to come in.
The patrol cars? What are you talking about?
Federale caminos. Usually, you don't pay the driver--you pay the comandante.
And when we get into the pot, we'll have exactly how we pay the army to bring
in airplanes into a clandestine field. We've done that before too. That's
another way. But the first time I did it in a big way was through boats. If
you're going to bring it in to Tijuana, you've have to pay the
Arellanos. That's their property. That's their place, and you've have
to tell them, "I'm bringing in so much. What are you going to charge me?"
Tell me about the Arellanos
Historically speaking, they started off as a family from Culiacan. They
moved to Tijuana and had very good contacts that could insure your load would
be safe. But you had to pay for it, obviously. Usually you already dealt with
them. You don't arrive with the load. You've already talked to them, and
usually you've told them it's a little less. Or sometimes you're honest, if
they're going to be present. And you don't know if they are or not. That's
another risk you take. But a lot of times it's "la bravada," it's called. You
don't tell them. And you hope everybody kept quiet and you hope nobody that's
working for you has ties to the Arellanos. The biggest problem is somebody
saying something stupid, somebody opening their mouth, in other words.
So almost like an insurance company? They would insure that you would be
safe . . .
Yes, but an insurance company doesn't hurt you or cause you harm if you don't
pay. They just bring a lawsuit. The Arellanos are very amicable people, very
fair people. If you let them know you're going to bring a load, they'll even
help you bring the load in. However, if you don't and they find out, they'll
probably kill you or kill someone of your family.
The two most dangerous points is when you receive it in the water or the plane
comes in from Colombia, and the second most dangerous point is getting it
across the border. And everything has a cost. For example, if I drop a load
in Mexico and it gets busted, usually I can figure out a way to pay the right
person to get my load back. But that was more money I had to spend. That's
why I said it cost $3 million to just get the three tons of coke before you
even sell ounce one. That's because you'd better have a million in cash for
emergencies. Two million dollars you pay to captains. And it's not just the
captain. It's him and his crew. There's got to be an engineer on there, and a
navigator, and a mechanic.
What happens when you cross the border?
Most of the loads you bust are pot. Twenty percent of your cars are going to
get busted at the border. The other eighty percent is going to get through. I
know that, because that's how I used to do it. I used to send 12 cars at a
time. The way I figured, as long as six cars--fifty percent--got through, I
was making a good profit. I'd bring in cars from the gangbangers, stolen cars,
and I'd make them legitimate in Mexico from junkyards. Now they're a legit car
that cost them $200--a brand new Suburban, a brand new Cherokee with
professionally made stash holds. I had a guy who actually trained the dog for
the DEA, who would make sure that his dogs were trained not to smell my loads.
I'd just flood the thing. I'm only one of hundreds that would do that. It's
the cost of business. You're making so much money that it's a cost of
A lot of times, you do go broke, though. There is that risk. Not every drug
dealer is rich, and not every drug dealer stays rich. I want to make sure
that's clear, so that kids don't think they can get into this business and
they're going to get rich. That's not the way it works. It takes a long time
to make real money in this business. It takes a long time, it's very risky,
and it's very hard. It takes investment. It's a business. It takes know-how.
Just because you become a drug dealer does not mean you make money. A lot of
times you lose your ass and you're broke, and you're selling your legitimate
stuff to pay off the load you lost.
You said before that you called yourself a "junior." How did that help you
deal with the Arellanos?
The Arellanos were very entrepreneurial in that they lured these kids into
working the trade. And they had contacts with the comandantes. They had
contacts with top people that they could pay off. For example, a comandante
doesn't have to pay off his soldiers. What he can say is, "Next week we're
going to have combat practice and then go north," because you're bringing in
your load through the south. It's above suspicion. You pay that general or
that comandante. He takes his troops out to the sticks to do their little
mission practice or whatever during the time you're bringing in that load. But
unfortunately, there are different people from . . . different groups, the
state, the federal army, marines. . . . So, depending on where you're bringing
your load in, you've got to take care of these groups. Sometimes one group,
sometimes all, depending.
But by the time you get working well, you've already met everybody and
everybody knows everybody. It's a very small circle. Everybody knows
everybody. And that's where the problems start occurring, because before it
was the drug dealer who lived and went to those restaurants, to those clubs.
And the juniors and their families went to those restaurants and to those
clubs--separated. When the juniors became involved, they started mixing.
People didn't like that. People from good families started getting killed.
People didn't like that.
For the first time, the heat started coming down on the government, from people
that had a voice. And that's what started this big trend of real heat.
Everything started coming out to the open. Because now real people, powerful,
legitimate people, were bringing in heat to tell the government, "What the hell
are you doing about this problem? Now they're sucking in our kids. Now
they're sucking in our culture. Now they're mixing with our crowds. Put a
stop to these guys."
But they didn't.
Of course not. They pay for protection. When you have a lot of money, you can
pay the right people at the right time.
Why would the children of the small privileged group in Tijuana, like
yourself, get involved with the Arellanos, who are killers?
The definition for "killers" that's used in the media is different than the
reality of killers, of killing. There are contracts made. And when people get
killed, it's because those people ripped off a load or did something they
weren't supposed to in the verbal contract, and were given umpteen chances to
fix that problem. Or there's a snitch. That's just a rule: you snitch,
you die. So when you say "killer," it's not like people are out there, like
the gangs were for a while there, doing these drive-by shootings and killing
all these innocent people. No. If innocent people are killed, it's not
intentional. It does happen at times, and I'm not defending anybody, but I
don't like the way sometimes they say, "Ah, these guys just kill everybody."
No, they kill for a purpose.
But why would you get involved with these people?
There are several reasons. One is Hollywood--the fame. It's not the juniors'
fault that they made all these gangster movies and they portrayed everybody so
romantically, like the Godfather--Al Pacino, the Corleones, Scarface. They
make all these romantic movies. Everybody loves these characters. So they get
to junior. And junior is a 22-year old, 25-year old or a 30-year old--still
young, dumb, barely starting off on his own. But they like the Porsches,
that's the problem. And now all of a sudden, since the mixture of classes . .
. Before, you would see somebody with a brand new Porsche, and think, "Ah, drug
dealer." All of a sudden, when it started getting mixed, you couldn't do that
anymore. You couldn't say, "Wow, look at so-and-so with the Porsche. Probably
his dad bought it for him, or their business is going good." Now you couldn't
just say "drug dealer." You had to be careful, because maybe that guy wasn't a
drug dealer. Maybe he was. But he's above suspicion because his dad owns a
You're already privileged. You live in a nice area of Tijuana or San Diego,
Bonito, L.A., La Jolla, Coronado or something. You're driving a decent car.
Your tuition is being paid. You're going to a nice school. But you're not
driving the Porsche, the Lamborghini, the Ferrari, the Mercedes, the new Beamer
that just came out. And you want that. And guess what? A couple of your
friends that you grew up with have that, and they're dealing with these guys.
You know somebody that can help them out, so you talk to them. And before you
know it, you're involved with it. Now you're involved. Now you're in.
In ninety-five percent of the cases, the parents don't know. The parents
believe the kid's business is going well. He's got a business, he just became
a dentist and his practice is going well. Or he has a stereo shop and the
stereo shop is going real well and he got a great deal on this car and that's
why he's got a new Mercedes. It's a fallacy that you can't get out. You can
get out. Nobody cares. The fewer people, the better; it's less competition.
It's not like that Cosa Nostra thing, "Oh, you're in. Now you can't get out."
Bullshit. You can get out any time you want. As long as you've finished your
contracts, you don't owe anybody, and you're okay.
Why aren't the Arellanos taken out or replaced?
Why the Arellanos haven't got caught, I don't know. But the $2 million the
government offered is just a joke. Unless you really have it well planned and
well devised and you actually trust the government to pay you, you're not going
to get involved in trying to take them out. And they don't travel by
themselves. For example, when the Arellanos go have lunch at Puerto Escondido
in Rosarito, it's closed down, either by the feds or just by all the Arellanos'
people. They might come in a helicopter, have lunch, and they're gone.
They're not that accessible. It's not like, "Oh, they're down the street on a
certain block, on Fifteenth Street, in that white mansion." They've hit their
mansion several times. But a lot of times they have somebody along the chain
of authority that intercepts the message that they're going to hit a certain
house or they've been seen. And they'll get the message before it happens. So
the house gets hit, and they're in another one of their houses.
What about corruption on the US side?
If you get a corrupt US Customs agent, when I was in the business, they were
charging, I believe it was 30 grand a carload. And they don't care what it is
in the car. It could be a body; it could be drugs; it could be a hundred
kilos; half a kilo, a ton. Obviously, usually you're paying up front 30 grand.
And usually you're packing that car to the hilt, getting it across. And he'll
fly you. He'll let it go by. There is definitely corruption in the Customs
You also got into money laundering as part of your activities. What does
Money laundering is taking cash money--Benji, Benjamin Franklins, fives,
twenties, tens, hundreds--and making them into paper. That's all money
laundering is. It's taking cash money and then reducing it to paper money.
Once it's reduced to paper money, anybody will accept it. Not everybody--in
fact, very few people nowadays--will accept cash money, especially in large
amounts. It's a whole art form to convert it from cash money to paper money.
And paper money could be off of wire transfers, when I say paper money, because
it'll be paper at some point in time in somebody's account or in somebody's
ledger. On the US side, you have very sophisticated, smart DEA agents and
Secret Service agents and IRS agents and even very smart canine agents looking
for the money. Everybody wants the money.
It's a very high commodity. And it's not just the dollar figure amount. It's
all the work that went into taking loads of drugs from a certain origin in
Mexico or Colombia all the way into the United States, stashing it, selling it,
breaking it down. Ah, just so many things go into it that, by the time you
actually have cash, there's been a lot of work. In fact, probably one quarter
to half of that money has been spent. In other words, if you're bringing in $9
million, out of that $9 million, it probably cost $3 million to $4 million to
make that $9 million. So whoever receives that $9 million has to pay a lot of
people that are still owed money. When a load of money goes down, it's a lot
of headaches for a lot of people, because a lot of people are owed money. A
lot of people fronted their services
How did you do it?
Let me give you a realistic scenario. My Mustang convertible held $5 million
in $20 bills in the trunk. That's about as much as I ever got into it.
Crossing the border going south, as soon as I get into Mexico, I'm a money
launderer. I haven't yet converted the money, but I took the money out of the
country illegally. You have to declare anything over $10,000.
You just make sure there's nobody checking the border. You have your guys out
there looking to see if somebody's going to go through or not. In other words,
if they see that there's DEA out in San Ysidro, that means there's nobody up in
Otay. And just dial you on your beeper and put all sixes, the sign of the
devil: don't cross right now. So you know if they put seven in, that's the
good luck number: let your money go through. There's nobody checking. The
Mexican guys? Don't worry about them. We'll take care of them. They know us.
That's taken care of.
The business works on the basis of contracts?
Everything is a contract. Just like a commodities contract, except it's
verbal, but it's signed by your blood, basically. If you breach a contract,
you'd better have a good reason, and you'd better fly down to Colombia--or
Mexico, if you're dealing with a Mexican cartel--and show your face and explain
For example on the money laundering side, you say, "I can take the cash and I
can have the cashier's checks in five days at seven percent." They'll go, "No.
Three days at five percent "No. Six days at 6.5 percent." "Okay. Done. Six
days at 6.5 percent." Boom. So by this time when you're doing this, you're in
contact with the bank at the same time. "When can we do it?" Because sometimes
they get audited, and so that we have to shut down. Sometimes it's, "Don't
come on the first or on the fifteenth because we can't give you any
cashiers,"--the girls who count the money. They don't trust the machines, or
the machines have problems because the money's wet, or the money has drugs on
it. There are all kinds of problems with the money-counting machines. Half
the money can't be counted in the money-counting machine, because something's
wrong with that bill.
So the girls count it. You have to sit there, and you literally don't move
your eyes for four or five hours at a time while these girls are counting. If
you even just cough, those girls are so good, that two, three hundred dollars
are on the floor. You didn't even see them do it. So in four, five, six hours,
two days, three days straight of counting money, these girls'll take you for
ten grand. They are good.
So you count the money. And what happens is sometimes you can only move so
much out in that three-day span. Meanwhile, these Colombians are forcing more
money and more money and more money on you, "Move this money. Move this
money." But the banks can only take so much at a time. So now you're using
their vaults. It got to the point where I had a special number, that when I
would drive up to the bank I had the actual code, so the bank's door would open
and I could drive in like the Brinks trucks would do. And they'd send their
And this is in Tijuana?
Right. So you get this backlog of money in the vaults. The Colombians
would get that counting all mixed up, because you're not just dealing with your
loads. Now you're out laundering money for a lot of different Colombians or a
lot of different loads. So we're trying to keep the accounting. And I go,
"You want me to launder the money? I'll launder the money. I'll send a wire
transfer or cashier's checks. But don't tell me to remember that Joaquin sent
you $200, 000 and Gerald over here sent you a million and this guy sent you
$250. I can't keep track of that stuff. I'm taking the money and I'm making
sure it's going out."
And then that's when the problems sometimes occur. "Well, there's money
missing." "Well, how much is in the vault?" The banks are very professional.
They can't be letting you in the vault all the time counting money. People are
looking and wondering, "Why does this guy get so much attention? This guy just
walked in the vault and he's counting money in there." The banks have to be
careful, too. So it's a problem, with these backlogs of hundreds of thousands
of dollars in the vault, and more money coming in. You've got cars sitting
outside in the parking lot with $2 million, $3 million in the trunk, money in
the vault, and transfers going out. It's very complicated shit at times.
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