Record 20 Tons of Cocaine Seized : Tip Leads to $6 Billion Worth of Drug Stashed in Sylmar Building

In what was described as the largest narcotics haul ever, federal agents seized almost 20 tons of cocaine--worth up to $6 billion on the street--at a San Fernando Valley warehouse, officials said Friday.

The Drug Enforcement Administration said the seizure represents about 5% of the world’s annual production of the drug--more cocaine than growers in Peru, the world’s largest supplier, can produce in a month.

“This is not just powder on the table,� said Donald Hamilton, a DEA spokesman in Washington. “It’s more like powder on the football field.�

Three men believed to be Mexican nationals were arrested in the Los Angeles area--two of them at luxury hotels--and about $10 million in cash was seized at a warehouse in Sylmar during raids that began about 10 p.m. Thursday, according to DEA agents.

Additional Arrests

Three additional arrests reportedly occurred in Las Vegas Friday. The Las Vegas Sun newspaper said that three Los Angeles men, one of them a former Mexican customs official, were arrested by DEA agents at an expensive Las Vegas hotel in connection with the seizure. The men were charged with importation and distribution of narcotics, the Sun said.

Los Angeles authorities said further arrests were expected.

The raids followed a tip from a neighborhood businessman who saw activities that “didn’t look quite right� at the warehouse where, according to authorities, an import business dealing in inexpensive ceramics, paintings and other bric-a-brac was operated as a front.

The officers who raided the warehouse said that despite the enormous value of the drugs and cash inside, no one had been left to guard the place and the door was secured with a single, $6 padlock.

“Either they feel awfully secure, or this (loss) isn’t that significant to them,� said John Zienter, special agent in charge of the DEA’s Los Angeles office. “I don’t know which, but either gives me the shivers.�

Saying they feared a possible attempt by drug traffickers to recover their contraband by force, Los Angeles police dispatched a SWAT team to the warehouse to provide extra security after the raids.

The cocaine was to be held as evidence and then burned, officials said. The cash was deposited by federal officials in a downtown bank Friday afternoon.

“This seizure should put to rest any further speculation that Los Angeles is, in fact, the major pathway for cocaine entering the country,� Ralph Lochridge, a local DEA spokesman, said.

Lochridge said the suspects, who were not identified, will remain in federal custody over the weekend and probably will be arraigned Monday on state smuggling charges.

Employees of a construction business adjacent to the warehouse at 12898 Bradley St. said about four or five Spanish-speaking men--friendly, well-dressed, clean-cut and “well mannered�--rented the place about two years ago and began doing business.

‘Lot of Money’

“They said they were dealing in paintings, velvet paintings,� said David Barron, owner of the construction business. “They seemed to be making an awful lot of money. They were too well-dressed to operate a warehouse business.�

Federal agents declined to identify the informant who tipped them, but Curt Hazell, a deputy district attorney in Los Angeles, described him as someone “with great instincts for business practices, who knows when he is seeing something about a business like this that is not right.�

Hazell said that after the informant called authorities Wednesday, the DEA, the Los Angeles Police Department and an interagency task force that includes representatives of the Treasury Department, the U.S. Customs Service and the Arcadia, Bell, Huntington Park and Maywood police departments, began surveillance of the warehouse.

The one-story warehouse is located in an industrial park in Sylmar, a developing district on the northern edge of Los Angeles.

On Thursday, Hazell said, the surveillance team saw a car leave the warehouse, and team members followed it to East Los Angeles, where the driver got out and another man got in.

“It was the coming together of two organizations, a distributor and a buyer,� Hazell said, declining to explain further.

Stopped Car

The first man returned to the warehouse, but officers said they stopped the car and arrested the second man, who gave his name, sarcastically, as “Ronald Reagan.�

Hazell said the surveillance team obtained a warrant and searched the car, finding 20 kilograms of cocaine in the trunk.

Moving swiftly, the investigative team obtained search warrants for the warehouse and for a luxurious penthouse apartment in the 4700 block of Sepulveda Boulevard in Sherman Oaks, but by the time the officers arrived at each location, all the occupants were gone.

Hazell theorized Friday that when the car was stopped, “an alert probably went through the system, and they left.� He said the suspects all carried beepers and they all moved on a tight, rigidly controlled schedule.

The search at the Sherman Oaks apartment turned up little, but Dist. Atty. Ira Reiner said that when the officers entered the warehouse in Sylmar and shined their flashlights about the room, “they couldn’t believe their eyes.�

There, amid plastic owls, plaster figurines, pinatas and a painting of Christ walking on the water, were boxes containing thousands of one-kilo packages of cocaine, stacked in piles up to eight feet tall. Stacked against one wall, in cardboard boxes and black gymnasium bags, was approximately $10 million in cash, most of it in $20 and $100 bills.

At a small office at the front of the building, agents found records indicating that the drugs had come from the infamous Medellin and Cali cartels in Colombia.

“The leads here are endless,� Reiner said. “The investigation is continuing.�

Zienter said the drugs apparently entered the United States at El Paso, Tex., probably in hidden compartments in two tractor-trailer rigs the ring was believed to have been using.

One of the trailers was still parked by the warehouse door on Friday. Agents said the front 15 feet or so had been partitioned off as a secret compartment in which cocaine could be hidden from inspectors, making it appear only bric-a-brac was being hauled.

Mike Holm, a DEA agent in Los Angeles, said the SWAT team was called in to guard the warehouse because “we had a large amount of money and drugs in there.�

“We know the Colombians have made threats against law enforcement agencies,� he said. “We wanted SWAT.�

The Medellin cartel has been blamed for a recent wave of violence against officials in Colombia.

As some of the officers secured the warehouse and began itemizing its contents, others fanned out to search for missing suspects, at least some of whom had remained under surveillance.

Seek Others

One was arrested early Friday at the Beverly Hills Hotel. Another was arrested at about the same time at the Marriott Hotel in Woodland Hills. Officials declined to say how many more people they were seeking.

Agents said the confiscated drugs will be inventoried at the warehouse before being taken to a federal facility for safekeeping.

Heavy security was employed Friday afternoon as the seized cash was deposited at a downtown Los Angeles bank. Shortly before 2 p.m., a small force of heavily armed DEA agents--accompanied overhead by two police helicopters--blocked traffic on Main Street while depositing the money at a Bank of America branch.

Charles P. Gutensohn, chief of the Drug Enforcement Administration’s cocaine investigations section in Washington, said Friday that the Sylmar drug bust appeared to have uncovered a major hand-off point used by Mexican smugglers to deliver cocaine to Colombian distributors, whose networks extend across the United States.

The record discovery also makes clear that patterns of international cocaine smuggling have shifted dramatically, Gutensohn said.

Colombian drug cartels used to control cocaine shipments from start to finish, employing their own operatives to move the drug from processing plants in the Colombian jungle across the Caribbean and then into the United States.

Major Routes

But crackdowns off Florida have pushed major importation routes westward, and the Colombian cartels now subcontract some of the smuggling duty to Mexican middlemen. These middlemen are responsible for moving drugs through Central America and over the Southwest border into the United States.

The smugglers then deliver the cocaine to Colombian traffickers in major cities. Gutensohn said the traffickers maintain control over profitable distribution routes.

Los Angeles police said the total amount of cocaine seized in Sylmar was 39,600 pounds, or 19.8 tons. That is the equivalent of about 90 million “rocks�--the crystalline, pea-sized chunks of the drug commonly sold on the street.

In pure form, the tonnage would hold a retail value of about $2 billion, but since cocaine is usually adulterated to about one-third strength, law enforcement officials estimated the street value at $6 billion.

Until the seizure in Sylmar, the largest haul occurred on March 10, 1984, when officials seized 11 tons of cocaine in Tranquilandia, Colombia. The largest previous seizure in the United states came last Nov. 17, when agents recovered about 4.35 tons of the drug in Ft. Lauderdale, Fla.

The Sylmar haul--weighing about a much as the trash in two fully laden Department of Sanitation trucks--was roughly four times the total amount of cocaine seized throughout Los Angeles in all of 1988.

Hurt Ring

Despite these staggering figures, a law enforcement source in Mexico said the loss of the cash could hurt the drug ring more than the loss of cocaine.

“There’s a glut on the coke market,� said the source, who requested anonymity. “You need money and you need it to be liquid to pay for your infrastructure. The coke you can replace.�

Nonetheless, several law enforcement figures, among them Los Angeles Police Chief Daryl F. Gates, said the amount seized was sufficient to affect the cocaine market, at least temporarily.

“It’s going to bring tears to some people’s eyes,� Gates said. “The price is going to go up.�

Contributing to this article were Times staff writers Paul Feldman, Andrea Ford, John Johnson, John Kendall, Patricia Klein Lerner, Amy Pyle and George Ramos in Los Angeles; Douglas Jehl in Washington, and Marjorie Miller in Mexico City.