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DEA links Mexican cartels to drugs in Colorado and Denver's fentanyl epidemic

Photo courtesy of the DEA Rocky Mountain Field Division


  • Breaking News Reporter

  • March 12, 2024 Updated Mar 13, 2024

  • From the Denver Gazette


Agents from U.S. Drug Enforcement Administration's Rocky Mountain Field Division on Thursday seized more than 50,000 pills of fentanyl and more than 50 pounds of methamphetamine in metro Denver, one of the biggest drug busts this year so far.  

Little else is known about the details of the operation.

What authorities told The Denver Gazette, however, is they're confident the drugs can be traced back to one of two major Mexican cartels operating in Colorado.


“When folks hear cartel, they're like, ‘Really? In Colorado?'” Acting Special Agent in Charge David Olesky said. “They are here. You can’t think that it’s so far away."

He added: "Don’t think Colorado is immune from the things we talk about at a national level.”

In interviews with The Denver Gazette, DEA agents outlined sophisticated operations from the two major Mexican cartels, which they blamed as being responsible for the majority of the fentanyl that makes its way into Colorado, and the constant battle against the drug that has led to nearly 70% of the 112,000-plus overdose deaths between June 2022 and June 2023.

"It's everything we do," Olesky said.

“Our ultimate goal in every case is to tie it back to the cartel,” Field Intelligence Manager Scott Rowan added.

 

Susan Fryer, group supervisor for the Front Range Task Force, a specialized collection of local departments and the Front Range High Intensity Drug Trafficking Areas program, said the bust is connected to one of the two Mexican cartels making up for the majority of drug trafficking in the United States. 

Fryer oversaw the undercover operation that yielded 50,000 fentanyl pills.   

The two groups, the Sinaloa and Jalisco New Generation cartels, are heavily involved in the fentanyl and methamphetamine distribution in Colorado, according to the agency.

“You might be focusing on a single distributor here, but if it’s elicit fentanyl, it will trace back to one of them," Rowan said of the cartels. "You may have to go back a few levels. An operation here may stem back to California and Arizona before Mexico, but it will go back there.”

Olesky compared the concept to a major business chain, in which the Mexican cartels run the headquarters, distributing the goods to multiple smaller operations — the local "storefronts" akin to a "fast food" chain — in every major city.

He added that the relatively close proximity to the Mexico border, just a few hundred miles south, helps springboard new trends from cartels, especially through Interstate 25 and Interstate 70, the "main arteries of the state" for both transportation and drug trafficking, he said.

For example, when the division heard about rainbow-colored fentanyl pills in Southern California in 2022, agents found them in Colorado within 24 hours.

Agents said local dealers and the cartels are motivated by the financial gain.  

"With respect to the price per fentanyl pill — at the retail level we are talking dollars, but at the wholesale level we are talking cents," Olesky said. "This is not a million-dollar business. It is a multi-billion-dollar enterprise."

Money and laundering

Fentanyl, used legitimately as a medical anesthetic, is a synthetic opioid that has become a dominant player in the illicit market and is increasingly being mixed into other substances. It's cheaper and produces a stronger, more fleeting "high," according to experts. But its potency in small quantities makes it unlike any other substance that preceded it in the drug supply.

Precursory chemicals for the creation of synthetic fentanyl come from China, according to the agency. These ingredients are often shipped to Mexico, where the pills are then created in makeshift laboratories and shipped up north to the U.S.

This provisional method of production leads to an ever-changing potency of each batch, the agency said. 

Laboratory testing by the DEA found that seven out of 10 fentanyl pills seized contained a lethal dose. 

They often come disguised as blue M30 oxycodone pills. 

“Fentanyl has affected every demographic. It’s affected every walk of life. Everyone knows someone wo has died from fentanyl,” Rowan said.

Last year, 522 people died from drug overdoses in Denver alone, the most since tracking began in 1923, according to the city's medical examiner. And while final numbers for overdose deaths statewide won't be available until this summer, the Colorado Department of Health and Environment recorded 1,454 total drug overdose deaths among Colorado residents from 2023, thus far.

Consider this: A kilogram can generate 500,000 pills of fentanyl, which is sold for around $8,000 in Mexico. The cost of manufacturing a pill can be as little as 2 cents. The wholesale price in Colorado now sits around $1, meaning an $8,000 investment can lead to hundreds of thousands of dollars in profits.

The smaller dealers then sell the pills for $5-10 in Colorado, offering yet another significant profit margin to people at the tail end of the distribution chain. 

In some states like Montana, according to the agency, a single pill can sell for around $60, a major incentive for drug operations to begin spreading westward. 


Alongside the profit, the reasons the drug has become so popular among both dealers and users is the lack of stigma around the drug itself, Rowan noted. 

Fentanyl comes in pill form, compared to needles and pipes. It's akin to the vitamins people take every day, according to Rowan.

Along with the ease of use, the drug does not require land or sun to create, unlike the growing process of cocaine and heroine.

The 'money brokers'

Though direct traffickers from the cartel remain a priority for the agency, authorities are targeting money launderers that help facilitate the illicit trade, as well. 

"Money launderers are just as culpable for the fentanyl poisonings and overdoses impacting our nation as those physically handling the drugs," Olesky said. "We are focused on going after the cartel's money. It's the only thing they care about."

Olesky detailed the way that cartel money laundering works, using various methods and applications, such as crypto currency, and money apps like Venmo and Cash App.

The most significant and common laundering practice, though, involves transferring money through "purchased" goods from the U.S. — like clothing and electronics — which are then shipped to Mexico in plain sight, with the money then moving between front-facing businesses and making the transactions seem less suspicious.


For example, Olesky points to the cartel's operations with Chinese organized crime groups, laundering money through the Los Angeles' garment district. 

These middle "money brokers," according to Olesky, usually make around 3%-5% of the profit for moving money through fronted businesses and getting the funds back into the hands of the cartel without direct handoffs. 

Over $63 billion was sent to Mexico from abroad by immigrant workers in the United States in 2023, according to Banxico, Mexico's central bank. 

"While there is no solid estimate on the percentage of these funds attributable to illegal activity," Olesky said, "with the Mexican drug cartels overseeing a multi-billion-dollar drug trade, it is not insignificant."

Greed as downfall 

However sophisticated the cartels' operations are, authorities said they can rely on one consistent thing to help them — greed.

“Greed is what got them in this industry," Olesky said. "It will be their downfall.” 

Through the work of undercover agents and DEA operations, the RMFD seized 425.60 kilograms of fentanyl, or approximately 2.61 million pills, in Colorado in 2023, according to a press release.

Across the four states of Colorado, Utah, Montana and Wyoming, the division seized 565,200 fentanyl pills in 2021; 1.9 million in 2022; and, 3.4 million in 2023.

The undercover operation on Thursday, which seized over 50,000 pills, is an important but still developing part of the battle, the agency said. 

"We’re not going to arrest our way out of it, but there are people benefiting off of the lives of others,” Olesky said.

The operation began with a tip from an source that someone in the area had "hundreds-of-thousands of pills," Fryer said. 

An undercover agent then contacted the dealer and purchased a small amount of drugs. During the smaller transaction, the dealer noted they had significantly more.

The transactions between the dealer and agent went on a few times, helping build rapport between the two sides. 

"You have to make it seem like you're really there for the product. The way you do it is to approach it in a respectful manner," an unidentified undercover agent with the RMFD said.

"These guys are motivated by money. You build the rapport and confidence and once they see the money coming through, it's a straight shot to moving forward," they added.

During the bust on Thursday, Fryer said a large amount of drugs was ordered. The task force already had an arrest and search warrant, which led to a search of the residence for any information about the operation and supplier.

Broadly speaking, a suspect may become an informant for the agency, depending on the crimes and willingness to speak, Fryer added, helping fuel operations targeting the bigger fish.

These operations can take weeks to years, serving as a stepping stone in the larger battle against local dealers and Mexican cartels.

"From what I see, it doesn't look great," the undercover agent said of the fentanyl trade in the Denver metro. "In my experience, there's a lot of overdoses, like four to six a day. That's not really out there in the public. The way it affects the families and friends is pretty bad."

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