ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Wednesday, February 26, 1997 TAG: 9702260053
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
What began with the bust of a Melrose Avenue Northwest used car lot in 1991 led investigators all the way to the world's main suppliers of cocaine, concluding last month with indictments in Roanoke against several key figures in Colombia's Cali cartel.
Drug informant Javier Cruz, a convicted killer who smuggled cocaine under the auspices of his Roanoke car lot, is among them. Cruz was named for his role as a cocaine trafficker before 1991, when he was arrested and became an informant for the U.S. Drug Enforcement Administration.
Prosecutors say his undercover work - here and in his native Colombia - was crucial to the investigation, dubbed "Operation El Cid."
The U.S. Attorney's Office released two indictments naming 41 people Tuesday morning, hours before a previously scheduled hearing in which The Roanoke Times asked a judge to unseal the entire file on the case. The file has been secret for six years.
"Among those indicted are significant figures within the Cali cartel, long suspected of being suppliers of cocaine in the United States but never previously indicted in this country because of a lack of evidence," U.S. Attorney Bob Crouch said. "This investigation has produced the evidence necessary for indictments."
The key to the case was money laundering by DEA agents, who moved "dirty" money for the cartel for three years to gain the traffickers' trust. In the process, they collected $47million owed to the cartel and funneled it into traffickers' bank accounts or out of the country for them.
Crouch stressed that every aspect of the investigation followed U.S. Department of Justice policy and was regularly reviewed "at several levels" in the department.
Justice Department officials characterized the six-year operation as "extremely significant" in gathering information that was used by drug agents around the country.
The indictments were returned by a federal grand jury this month and in January. Several of the defendants are local residents, but at least half are in Colombia. Addresses were not available for all of those charged. It is "unlikely" the Colombians will be tried in Roanoke, a Justice Department prosecutor acknowledged, as the United States does not have an extradition treaty with the South American country.
The case will be prosecuted in U.S. District Court in Roanoke because the investigation began here, when Cruz's Like New Inc. car dealership came under scrutiny in 1990. Cruz, who used the alias "Luis Florez," came to Roanoke in 1989 as a fugitive. He was wanted on a first-degree murder charge for the shooting of Charlotte, N.C., resident Mark Garrett.
Roanoke was a transportation hub for the traffickers as well as a storage area for millions of dollars worth of cocaine before it was repackaged for smaller deliveries, according to the indictments. But prosecutors said "a very small percentage" - maybe 20 kilograms - stayed in Roanoke.
Cruz was the transportation coordinator for a Colombian trafficker in New York, Leonardo Rivera-Ruiz. Cruz used his car dealership as a front to buy vehicles that he modified for smuggling cocaine. He used a stash house in Bent Mountain to stockpile huge shipments of cocaine.
After Cruz was arrested and faced a life sentence, he agreed to cooperate with the government, as did Rivera. The pair began by setting up money-laundering transactions from their cells in the Roanoke County-Salem Jail, using special phone lines equipped with Miami area codes.
Cruz then was allowed to plead guilty to a reduced charge of involuntary manslaughter in Garrett's death.
Cruz and Rivera contacted cartel sources and arranged to pick up money the DEA helped them "sneak" out of the country. DEA agents in Roanoke posed as shady businessmen willing to launder drug proceeds.
"Our initial approach was to completely gain the confidence of the Cali heads to establish a money-laundering operation for them so they'd move their money to the United States," said Peter Gruden, a Washington DEA special agent who heads the regional division that includes Roanoke.
During the operation, the DEA handled more than $47million, helping the traffickers collect drug debts in the United States and returning the money to Colombia or to bank accounts designated by cartel leaders, Gruden said. The DEA charged a 6 percent to 7 percent fee for its services, keeping several million dollars, he said.
"Of the $47million, we probably sent $42million back," he said. "The rest was used to finance the operation. They financed their own demise."
At a news conference Tuesday, prosecutors displayed pictures of semi-submersible, submarinelike vessels that they said were used to smuggle cocaine into the United States and that were seized as a result of this investigation.
Although Cruz pleaded guilty to the charges against him in 1995, he was re-indicted this year as part of a "superseding indictment" that combines the original 1991 charges with new charges against additional suspects investigated since then.
Cruz will not face any additional charges and remains free until the cases of the other defendants he may have to testify against are resolved.
After working undercover for the DEA in Cali, Cruz and his new wife returned to the United States in 1995 and opened Temptations restaurant and nightclub in Roanoke County.
Cruz left Roanoke after newspaper stories about his case appeared last fall.
Of the 41 people indicted, only four are in custody. The government hopes to have as many as 12 rounded up in the next few weeks. Several of the higher-level cartel members are in custody in Colombia on other charges.
At a hearing Tuesday afternoon before U.S. District Judge James Turk, The Roanoke Times sought to open the entire case file, which has remained sealed from the public since 1991.
The U.S. Attorney's Office opposed releasing the original 1991 indictment to the public, but did not oppose releasing the rest of the file. A prosecutor argued that the names of three people named in the 1991 indictment should not be released because one is dead, one has been deported, and one was such a minor player that the government chose not to name him in last month's superseding indictment.
Turk said he would rule on the newspaper's motion by the end of the week.
Assistant U.S. Attorney Joe Mott said it was a coincidence that his office released the indictments the morning of the newspaper's hearing. He said the news conference was scheduled before the newspaper filed its motion two weeks ago.
LENGTH: Long : 125 lines ILLUSTRATION: PHOTO: 1. (headshot) Javier Cruz, a convicted killer, used hisby CNBRoanoke used car lot to smuggle cocaine. 2. CINDY PINKSTON STAFF.
U.S. Attorney Bob Crouch (left) and DEA special agent Peter Gruden
describe "Operation El Cid" at a news conference Tuesday. "Of the
$47 million" handled in the money-laundering sting, "we probably
sent $42 million back," to the drug ring, Gruden said. "The rest was
used to finance the operation. They financed their own demise."
Prosecutors, showed pictures of semi-submersible, submarinelike
vessels that they said were used to smuggle cocaine into the United
States. The vessels were seized because of this investigation.
color. Graphic: Map by Andrew Svec. color.