War Without Borders

HOW U.S. BECAME STAGE FOR MEXICAN DRUG FEUD

CHULA VISTA, Calif. -- Eduardo Tostado was a prosperous man whose
businesses and pleasures straddled the coastal border. He owned a big
house and a used-car lot in the San Diego suburbs, and a seafood
restaurant in Tijuana.

He was also part of the border underworld, the authorities say -- a
high-ranking member of the Mexican drug cartel driving much of the
United States' illegal marijuana trade and the cascade of violence in
a 40-year drug war. Some evenings, Mr. Tostado drank tequila at the
Baby Rock club in Tijuana or sipped Scotch at the Airport Lounge in
San Diego. He socialized mainly with men he knew well and women he
knew not at all.

His wife, Ivette Rubio, was aware of this, and they were having
problems in their marriage. So when Mr. Tostado called her in June
2007 to say he had been kidnapped and needed her to sell their house
to pay a ransom, she did not believe him.

"You got drunk," she said, "and you went out, and you didn't come to
sleep in the house."

Click, the phone went dead.

Mr. Tostado was in the hands of Jorge Rojas-Lopez, a former member of
the cartel, the Arellano Felix organization, who had turned on it.
Based in the San Diego suburbs, Mr. Rojas-Lopez was running a renegade
squad of kidnappers and hit men, fighting for a piece of the marijuana
market.

Across the border, the Mexican government, with $1.5 billion from the
United States, is battling its drug cartels, and the cartels are
battling one other. The Arellano organization has borne the brunt of
these drug wars, and has fragmented into smaller crews spinning across
the border like shrapnel.

"We believe there has been a splintering of the A.F.O. and that it has
lost the power that they once wielded," said Keith Slotter, the agent
in charge of the F.B.I.'s office in San Diego.

The illegal drug market has never been so unsettled, drug enforcement
experts say, with small elite killing squads like the one Mr.
Rojas-Lopez was running -- Mr. Slotter identified three in San Diego
alone -- operating on both sides of the border. For three years, Mr.
Rojas-Lopez's rogue squad, a mix of United States citizens and
Mexicans, used houses in tract developments as roving bases, hunting
cartel members and imprisoning their prey along bland residential
streets. They secured ransoms worth millions. Payment, however, did
not guarantee that the victims survived.

At stake were billions of dollars in profits from tons of smuggled
marijuana, and other drugs, and the precious control of Mexican border
cities like Ciudad Juarez; Nogales; and Tijuana. Those cities are
thoroughfares to the world's most lucrative drug market: the United
States.

The authorities in Kansas City, Mo., and Miami are also investigating
the Mr. Rojas-Lopez's squad for drug trafficking and killings in their
cities.

Mr. Rojas-Lopez and eight other members of the squad, called Los
Palillos, are now on trial in San Diego, charged with kidnapping 13
men and killing 9 from 2004 to 2007. Seven other co-defendants are
fugitives. Since the investigation began, three more fugitive squad
members have been killed.

This account of Los Palillos in Tijuana and San Diego, based on more
than 6,000 pages of court documents, testimony from 175 witnesses and
co-defendants, and interviews with law enforcement officials, offers a
window into how Mexico's drug wars are playing out on American soil.

Mr. Rojas-Lopez's ambitions were fueled by more than just desire for a
piece of the marijuana trade. He also wanted revenge for the death of
his brother, Victor, a cartel enforcer, who was killed by the
Arellanos organization in 2003 for insubordination. Mr. Rojas-Lopez's
squad eluded the Arellanos cartel and law enforcement officials in San
Diego for three years. Investigators heard whispers of a mutinous
enforcement squad operating in the area but were unable to put the
pieces together.

Relatives of the kidnapping victims either avoided the police or
withheld crucial information about their loved ones. Instead, they
quietly sold assets on both sides of the border, raising hundreds of
thousands of dollars in a matter of days.

Some victims were released unharmed. Others were smothered with
masking tape, shot in the stomach or pulverized with a police
battering ram and dumped on a suburban street. Or they were boiled
down in acid and never seen again, a technique known in Mexico as
"pozole," or Mexican stew.

Mr. Tostado, the kidnapped businessman with the big house here, and
his wife were among the pawns in this underworld, with Mr. Rojas-Lopez
demanding $2 million from Ms. Rubio for her husband's life. The next
call she received that day was not from her husband.

She did not recognize the voice that said, "Hey, you want me to send
your husband in pieces or what?"

Call to Police Pays Off

At the time of his abduction, Mr. Tostado, a legal resident of both
the United States and Mexico, was helping the Arellanos cartel "pass
tons of marijuana" across the United States border, according to the
federal agents and Jose Olivera-Beritan, one of the nine suspected
members of Los Palillos who is on trial in San Diego Superior Court
for murder and kidnapping. "He knew in advance which trucks will be
searched," Mr. Olivera-Beritan said of Mr. Tostado in a jailhouse
interview. "He told us he was giving cops money under the table."

Mr. Tostado has offered contradictory statements to agents regarding
his cartel affiliation.

His wife, Ms. Rubio, took a risk that night in June 2007 by calling
the police. Investigators say that it made the difference between Mr.
Tostado's survival and the stories of less-fortunate kidnapping victims.

The event that led to the renegade squad occurred in 2003, when Victor
Rojas-Lopez crossed the cartel.

One evening at Zool, a nightclub in Tijuana, members of his
enforcement squad got in a fight with members of another Arellano
squad over a woman. A member of Victor Rojas-Lopez's team pushed a gun
into the face of a man who happened to be the brother-in-law of the
cartel leader, according to grand jury testimony.

The bosses ordered Victor Rojas-Lopez to kill the underling. He
refused and was shot to death.

His younger brother, Jorge, then took over the squad, called it Los
Palillos -- "the toothpicks," after Victor, who was skinny but tough
- -- and fled to San Diego.

Mark Amador, a San Diego County deputy district attorney who is the
lead prosecutor against Los Palillos, said that much of the evidence
about what happened next came from an insider, Guillermo Moreno, an
American citizen and the member of Los Palillos who had pulled the gun
at Zool.

"He is the witness that pulls all the pieces together," Mr. Amador
said. Mr. Moreno, who was arrested after Mr. Tostado's kidnapping,
ultimately led investigators to rental houses around San Diego used by
Los Palillos. In a deal with prosecutors, he agreed to a minimum
25-year prison sentence, rather than life. At some houses, forensic
investigators found DNA from victims.

When members of Los Palillos first arrived in San Diego, they lived
quietly off earlier spoils. Then they went back to the work they knew
best: killing and drug trafficking.

The first corpses were found on Aug. 15, 2004, decomposing in a Dodge
minivan.

The police said the bodies belonged to three drug smugglers who had
crossed the border to do a deal with the squad members.

The squad used safe houses with attached garages so they could move
drugs or bodies in and out without being seen, Mr. Moreno, the
witness, said. In many neighborhoods, the real estate bubble created a
constant churn of new faces, so it was easy to go undetected.

The three smugglers expected to drop off several hundred thousand
dollars' worth of marijuana, sleep over and leave for Mexico in the
morning. Instead, Mr. Moreno said, the squad waited for the men to
fall asleep, then shot one of them in the stomach.

"Someone said, 'Quit crying, you,' " Mr. Moreno told the grand jury.
The man bled to death.

The other two smugglers were suffocated. Mr. Rojas-Lopez is accused of
stealing their marijuana and ordering Mr. Moreno to dump the bodies.

The Arellanos cartel, meanwhile, ordered a former Baja California
police officer named Ricardo Escobar Luna, 31, who was working for the
cartel, to hunt down Los Palillos in San Diego.

But members of the squad learned that Mr. Escobar was after them and
abducted him from his home in Bonita, Calif., according to testimony
from Mr. Moreno. The kidnappers disguised themselves as police
officers and drove up in a BMW with flashing lights.

Mr. Escobar's wife called the police but never mentioned that her
husband worked for the Arellanos cartel, said Steve Duncan, an
investigator for the California Department of Justice.

Testifying before the grand jury, Mr. Moreno described how he had
overheard a discussion among squad members before the kidnapping:
"Well, he's here to kill us; we might as well kill him."

On Aug. 20, 2005, Mr. Rojas-Lopez took a police battering ram into the
bedroom where Mr. Escobar, the former police officer, was tied up,
according to testimony by Mr. Moreno.

Meanwhile, Mr. Moreno went outside to water the lawn and keep an eye
on the neighbors, he said. When he went back inside, he saw blood on
the walls.

Victor Escobar, the former officer's brother, told investigators that
he had paid the squad $600,000 for his freedom, but he never had much
hope. "Yeah, I knew they'd kill my brother," he said. "But what else
could I do?"

By September 2005, the police were beginning to understand that the
killings around San Diego were related, but they still did not know
how. The case began to unfold when two squad members with automatic
rifles and pistols bungled the kidnapping of an Arellanos cartel
trafficker in a cul-de-sac in Chula Vista, in broad daylight.

A police cruiser chased the gunmen to a strip mall parking lot and was
barraged by bullets.

The gunmen were caught later that day and eventually convicted for
attempted kidnapping and the attempted murder of a police officer.

Within a few years, Los Palillos had become a minicartel with a drug
trafficking network that snaked through the Mexican cities of Ensenada
and Tijuana, San Diego and on to Missouri and Florida, according to
federal agents.

Two Cuban nationals ran Los Palillos operations in Kansas City, Mo.,
Mr. Moreno, the witness, told federal officials.

In September 2006, a woman in the small farming community of Jameson,
about 50 miles north of Kansas City, heard gun shots and then found
two bodies near a barn. Deputies discovered a 47,000-square-foot
marijuana garden behind rows of corn stalks. Members of Los Palillos
were arrested on suspicion of killing local rivals, the authorities
said.

By 2007, the authorities said, the renegade squad had made millions of
dollars. Mr. Rojas-Lopez wore Rolex watches. Photographs on MySpace
showed his squad members hoisting drinks at trendy San Diego bars.

In May 2007, two more drug smugglers, both 33, were kidnapped, and
they were never seen again. Mr. Moreno told federal agents that their
bodies had been dissolved in a vat of acid.

Beer, Soccer and Arrests

Before he was kidnapped, Mr. Tostado was worried. A man had left an
extortion note at the front door of his home, recorded by his security
camera. Armed with a picture of the man, Mr. Tostado drove down to
Tijuana to find some answers.

Mr. Tostado, an avid off-road racer, who admitted in court that he had
socialized with members of the Mexican underworld and had accepted a
$200,000 race car from the Arellano family, learned that the man in
the photo was a member of Los Palillos.

A few weeks later, an acquaintance introduced Mr. Tostado to a Tijuana
woman named Nancy. On June 8, Nancy invited Mr. Tostado to her home in
Chula Vista. Mr. Tostado walked in carrying bottles of Cognac and
whiskey. Hands grabbed him from behind in the darkened room. Someone
fired a Taser, immobilizing him.

Mr. Tostado was held for eight days while Los Palillos negotiated by
phone with his wife. He said that he drank beers with his abductors,
who watched soccer on television and smoked marijuana.

Occasionally, Mr. Rojas-Lopez would vent angrily about the Arellanos
cartel.

"They have killed my family and my brother," he told him. "I had to do
something, and I have the nerve to do it over here."

By June 16, Mr. Rojas-Lopez had agreed to accept $193,000 in cash.
Wiretapped calls recorded the kidnappers directing the dropping off of
the ransom money.

On June 16, 2007, federal agents arrested the squad leaders, Mr.
Rojas-Lopez and Juan Estrada-Gonzalez, the second-in-charge, after
they dropped the money off at a motel. Another team of agents stormed
the house where Mr. Tostado was being held and freed him.

Later that day, as Mr. Tostado recounted his experience to federal
agents, he pledged to leave the underworld behind.

"I think I need to start over again," he said. "I'm reborn right
now."

Mr. Tostado is keeping a low profile these days. He sold his house in
Chula Vista and no longer races the off-road circuits in Mexico.

He sold his restaurant in Tijuana, too, after someone left three
barrels in front of it in 2008. They were full of bones and acid.