RING SOLD TON OF COCAINE, FEDS SAY

Middle School Teacher And Her Son Arrested

A federal prosecutor alleged Thursday that a family-operated drug ring
that included a Milwaukee Public Schools teacher distributed almost a
ton of cocaine in Milwaukee and elsewhere over the past few years and
grossed an estimated $18 million.

"The numbers are staggering," Assistant U.S. Attorney Lennie Weber
said in federal court, referring to the 900 kilograms alleged to have
been distributed.

Lonnie Peterson, 30, who operates a pager business, and his mother,
Patsy Peterson, 55, a teacher at Sarah Scott Middle School, appeared
Thursday before U.S. Magistrate Judge William E. Callahan Jr.

Lonnie Peterson allegedly headed the cocaine ring; Patsy Peterson
allegedly collected and delivered drug proceeds and kept records of
the transactions.

Both defendants pleaded not guilty. Callahan ordered Lonnie Peterson
held in jail without bail pending a hearing Tuesday. Patsy Peterson,
whom Callahan said had deeper roots in the community, was ordered held
in jail in lieu of $25,000 cash or property bond.

The alleged drug ring, said to have been run by family members and
associates of Lonnie Peterson, is believed to have rung up about $2
million in profits from March 1995 through at least December 1997,
said Weber, who appeared in court with Assistant U.S. Attorney Carol
Kraft.

"The strength of the case, I think, is very high," Weber
said.

The mother and son were represented in court Thursday by the
father-daughter lawyer team of James Shellow, who represented Lonnie
Peterson, and Robin Shellow, who represented Patsy Peterson.

Lonnie Peterson was indicted on nine counts of conspiracy, cocaine
distribution, using a communication facility in the commission of a
felony, and money laundering.

Patsy Peterson was indicted on six counts of conspiracy, using a
communication facility in the commission of a felony, and money laundering.

U.S. Attorney Thomas P. Schneider said the case, as far as the amount
of powder cocaine involved, "is the largest one I've seen in federal
court."

While cautioning that only allegations are involved at this point, he
said federal authorities have been concentrating on rooting out and
arresting major players in the regional drug trade. People frequently
complain that the "big guys" don't get arrested, he said.

"In fact," he said, "the big guys are getting busted and receiving
significant sentences. The dealers on the street know that."

Robin Shellow protested during the hearing that Patsy Peterson was
arrested at work, even though she has known for some time that she was
under investigation and would have appeared voluntarily.

"I am beyond angry that she was arrested at Sarah Scott Middle School
where every day those children look up to Patsy Peterson and she is
still presumed innocent," she said.

MPS officials could not be reached for comment Thursday
night.

The indictment seeks the forfeiture of $2 million from all defendants,
some of whom have not yet been publicly identified. In addition, it
seeks forfeitures from Lonnie Peterson of property in Stone Mountain,
Ga. -- where he spends part of his time -- along with leather
furniture, clothing and electronic equipment seized from his home
there. It also seeks 31 cases of men's Buffalino luxury shoes.

Weber said there are allegations that Lonnie Peterson "used juveniles
to traffic cocaine for him." When he was arrested, Lonnie Peterson was
with a 13-year-old who was carrying almost $2,000, she said.

James Shellow, however, said the child was carrying money for Lonnie
Peterson's pager business.

The indictment alleges that Patsy Peterson used at least some of the
drug money for car payments and home remodeling.

Only parts of the indictment handed down in the case were unsealed
Thursday. The unsealed portion alleges that members of the ring,
family members and associates of Lonnie Peterson, imported cocaine
from various locations, which were not specified. The conspiracy
included the use of phones, cellular phones and pagers to coordinate
drug sales and to arrange for the collection and distribution of the
proceeds.

"Some of the defendants established procedures in the course of the
conspiracy . . . that relied on minimal discussions of drugs and money
when using a telephone and by the use of coded language to represent
drug and money transactions," says the unsealed portion of the
indictment.