IMMIGRANTS BECOME HOSTAGES AS GANGS PREY ON MEXICANS

EL MIRAGE, Ariz. -- A whispered 911 call from a cellphone early one
January morning brought police to a home on West Columbine Drive in
this Phoenix suburb. Inside, they found more than 30 half-naked and
shivering men -- prisoners, police say, of a gang that had smuggled
them in from Mexico.

Beaten and threatened with a 9-mm Beretta pistol, a local detective's
report said, the men were being shaken down for as much as $5,000
apiece, a ransom above the $1,000 that each had agreed to pay before
being spirited across the border.

Such cases are increasingly common in Phoenix, which is gaining
notoriety as the kidnapping capital of America. Authorities blame
forces ranging from Mexico's rising drug violence to a gang takeover
of the immigrant-smuggling business. Scenes From a "Drop House"

Another factor: the volatile housing market in the city, which has
left it strewn with thousands of rental houses on sometimes sparsely
populated suburban blocks, handy places for smugglers to store either
drugs or people. The police call these "drop houses." They say
federal, state and local authorities discovered 194 such houses in
2007, then 169 last year and dozens more so far in 2009.

While most of Phoenix's abduction cases relate to the drug trade, as
dealers snatch rivals to demand ransom or settle debts, increasing
numbers involve undocumented migrants. "Of 368 kidnap cases last year,
78 were drop-house cases involving illegal aliens," says Sgt. Tommy
Thompson of the Phoenix Police Department. Officials say that in 68
alleged drop houses identified in the first five months of 2009,
authorities found 1,069 illegal immigrants.

What's happening here marks a shift in the people-smuggling business.
A couple of decades ago, workers commonly traveled back and forth
across the U.S.-Mexico border, going to the same American farm or
construction job each year. To make the passages they often would use
the same smuggler, called a "coyote," each time.

Now, organized gangs own the people-smuggling trade. According to U.S.
and Mexican police, this is partly an unintended consequence of a
border crackdown. Making crossings more difficult drove up their cost,
attracting brutal Mexican crime rings that forced the small operators
out of business. The Phoenix area also was affected because tougher
enforcement at the border focused on traditional routes in Texas and
California -- funneling more traffic through Arizona along desert
corridors controlled by Mexico's Sinaloa drug cartel.

Even the recent falloff in immigration resulting from U.S. job losses
helps to fuel kidnapping, some authorities believe. They say that as
border crossings decline, gangs earn less money directly from
smuggling fees than from holding some of their clients for ransom,
before delivering them to their destination farther inside the U.S.
[rough neighborhoods]

"The alien becomes a commodity," says Matthew Allen, senior agent in
charge of the Phoenix office of U.S. Immigration and Customs
Enforcement. "One way you raise the value of that commodity is by
threatening: terrorizing someone in a drop house."

Last month, police raided two houses in the suburb of Avondale, at
both of which they say they rescued undocumented immigrants. On May
12, they found 14 immigrants held at a "fortress-like" house on West
Madison Street. Heavy deadbolt locks had been installed on doors,
windows were sealed, and a closed-circuit video system enabled guards
in one part of the house to monitor other rooms.

Police photos of the scene reveal a thick black stain running the
length of one bedroom wall where hostages allegedly were kept, a
residue left by sweaty bodies jammed in tightly. "The darker it is,
the longer they were there," said Lt. Robert Smart of the Arizona
Department of Public Safety.

Local authorities learned of the house when someone called police in
New Jersey and said a relative who had recently crossed into Arizona
from Mexico was being held hostage. Lt. Smart said New Jersey
authorities traced the alleged extortion demand to a ring operating
from Tucson, about 135 miles away from Avondale, which police believe
was handling negotiations for those holding the immigrants.

Four nights later, at a second house three miles away in the same
suburb, police say they rescued 34 immigrants, including two pregnant
women, who law-enforcement officials estimate had been held anywhere
from three days to two months.

Earlier, one house was raided twice in two months. The home on West
Lumbee Street had two characteristics attractive to smugglers: a site
close to an Interstate highway and a large attached garage that made
it easy to move people in or out undetected. Journal Community

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On Dec. 4, police stopped a van on Interstate 10, the highway linking
Phoenix and Los Angeles, and found it jammed with 19 men. An
investigation led to the West Lumbee Street house, where two people
were taken into custody. Yet before the end of January, police were
back at the same house, this time, they say, rescuing two immigrants
held captive by a different gang.

The area's housing market has facilitated such activities. When the
real-estate bubble was inflating, some investors bought houses and
offered them for rent while waiting for a chance to flip them. By the
time the mortgage market faltered in mid-2007, according to the
Maricopa County assessor's office, the supply of houses for rent in
the Phoenix area had swelled to 73,700, up nearly 75% from 2000.

The bust has enlarged rental-house numbers by 12,000 more, as strapped
owners of hard-to-sell homes try to rent them out. The abundance
favors smugglers two ways: by making owners less picky about tenants
and by spawning "dead zones" containing many unoccupied houses, where
there are few residents to notice suspicious activity.

A recent survey by the state attorney general's staff of 170 former
drop houses found that more than half had been mortgaged with
no-money-down, interest-only financing, and 42% have gone into
foreclosure.

At the West Lumbee Street house raided twice in two months, the
owners, Pablo and Ana Maria Sandoval, had moved to a larger home and
were eager to find a tenant to help them pay the mortgage. They rented
the house out for $1,200 a month.

"We had heard about these smugglers, but something like this had never
happened to anyone we knew," says Mr. Sandoval, who repairs vending
machines for a living. He says he has taken the house off the rental
market and it's now occupied by a son who lost his own home to
foreclosure.

The Sandovals didn't face any charges. The owners of such homes are
almost never charged, says Arizona Attorney General Terry Goddard,
because it's hard to prove owners knew their houses were being used by
renters in criminal activity. To date, after more than 500 alleged
drop houses have been busted, no absentee owner has been charged with
a smuggling-related offense. Most illegal aliens found inside are
deported, except for a few needed as prosecution witnesses.

In all, a thousand houses in the Phoenix area are being used as drop
houses at any given time, many never discovered, police say. They
found out about the house in El Mirage when a dispatcher answered a
911 call at 7:50 a.m. on Jan. 31 and heard the word "help" -- along
with what sounded like the chirp of a smoke alarm.

The call lasted long enough for El Mirage police to determine the
street it came from: West Columbine Drive, a suburban street where
early this year almost a third of the 34 homes were unoccupied and six
were in foreclosure. Officers conducted a search of the street and,
after detecting a smoke-alarm chirp coming from No. 12301, surrounded
the house and went in.

According to a local detective's report, the upstairs windows were
sealed from the inside with plywood. The police found 37 people
inside, most of them illegal aliens.

A single small upstairs bedroom contained 22 men. "The subjects I
found were all in their underwear and laying in a line next to each
other along the walls and inside the closet," one officer wrote, in a
report reviewed by The Wall Street Journal. They had been jammed in so
tightly and so long that the wallboard showed indentations from bare
backs pressed against it. Pink walls, decorated with stickers of
Disney characters, were stained with sweat smudges.

Down a short hallway was a tiny laundry room labeled "Office." There,
according to captives' accounts to investigators reviewed by the
Journal, immigrants were beaten and ordered to produce phone numbers
of relatives in the U.S., who were then called and told to wire ransom
money.

The documents say one captive, a 39-year-old Honduran named Jorge
Argueta-Pineda, told investigators that after being beaten repeatedly,
he arranged to have relatives wire $3,200 to a Western Union office in
Mexico. While most of those found inside were deported, Mr. Argueta
has been allowed to stay in the U.S. to testify against his alleged
captors. He couldn't be reached for comment.

In the case, seven Mexican nationals in custody pleaded not guilty to
federal charges including hostage-taking and possession of a firearm
during a crime of violence. Among them were several who, according to
the local police, were in the house when it was raided, and stripped
off their clothes to try to pass as captives.

The owners of the house are Aniceto Alcantar, who works at a plastics
factory, and his wife, Laura, a schoolteacher. After moving to another
house, the Alcantars had offered the one on West Columbine for rent in
December. Weeks went by without a nibble, but finally they received a
call from a young couple.

Mr. Alcantar, 37, says it didn't bother him that the two --
Mexican-born, like himself -- had no references. "They said they had
just moved to Phoenix from California. Supposedly they sold cars for a
living, out of their home," he says. What gave him confidence they
weren't criminals, Mr. Alcantar adds, was that they said they were too
poor to afford the security deposit and asked to pay it in
installments.

The $750 deposit might have helped with the cleanup. After the January
raid, Mr. Alcantar says he found thousands of dollars in damage to the
house, from ruined carpets to damaged plumbing. He says he had to
paint his children's former bedrooms several times to cover the stench
of bodies that been pressed together for too long.

"I guess I got lucky: The police found out quickly," Mr. Alcantar
says. "If they had been in here much longer, they would have destroyed
my house."