BLOOD TRADE: THE STORY OF CRAIG PETTIES

How the drug business works and Memphis' role as a major player

When the officers came to the house, they noticed a distinct
smell.

"I smoked a little marijuana to help ease my mind from the fact of my
girlfriend cheating on me," Craig Petties said, according to an arrest
report.

But this was more than one man dulling his sorrows with weed. In a
bedroom closet of the home in southwest Memphis, officers found three
duffel bags stuffed with marijuana. Six hundred pounds in all.

That 2001 discovery, big as it was, only hinted at things to come for
Petties.

In the years that followed, authorities say, he moved to Mexico and,
working with a branch of one of that country's most notorious cartels,
operated a trafficking empire that funneled hundreds of kilos of
cocaine and more than a ton of marijuana into Tennessee and other states.

The enterprise has been described as one of the largest and most
ruthless such businesses ever uncovered in the region.

The story of Petties' alleged rise from petty drug peddler to
international trafficker illustrates how the drug business works and
Memphis' role as a distribution hub. It also shows how an enterprise
built on American demand for marijuana and cocaine can spread violence
and mayhem from Mexico all the way to middle-class Memphis suburbs.

While in Mexico -- a nation wracked by drug-related violence --
Petties allegedly was ordering the killings of rivals, suspected
informants and others in the Memphis area.

The victims include a 28-year-old man who was shot and killed in his
garage near Shelby Drive and Hacks Cross while his young children were
in the home. Later, assassins executed two men in a car in Hickory
Hill, and fatally wounded a man in an afternoon shooting in a restaurant.

In all, the 50-count federal indictment accuses Petties of conspiracy
in six murders, as well as an assortment of racketeering charges.

The resulting federal case is a sprawling web involving dozens of
defendants and witnesses.

Petties, who could face the death penalty if convicted, has pleaded
not guilty to the charges. He declined a request for a prison
interview, and defense attorney Ross Sampson also wouldn't comment.

A trial date has not been set.

But even as he sits in prison, Petties remains the subject of fear,
hatred and even mythic lore on the streets where he grew up.

One narcotics officer tells of T-shirts in South Memphis emblazoned
with Petties' picture. Messages on social networking sites range from
calls for his death ("PUT HIM IN THE GROUND") to admiration ("Trying
to get that Craig Petties money").

His story is a testament to how the city's deep social problems suck
young people into the trade.

Troubles began early

Craig Petties was born in 1976 and came of age in the 1980s just as a
new, highly addictive form of smokable cocaine called crack swept
through inner cities throughout America. It touched the Riverview
neighborhood where Petties grew up in a small, brick, shotgun-style
house that his mother had bought for $17,000.

His section of West Dison Avenue was "a well-known drug trafficking
area," wrote a police officer who arrested Petties in 1996.

Petties got into serious trouble early in life.

His first arrest came at 15, when he was charged with possession of a
sawed-off shotgun. According to juvenile court records, he had set off
the gun in his house when he and a friend were looking at it --
Petties called the police and said that he planned to use the gun to
scare robbers who had taken his coat.

In the summer of 1993, when he was 16, he was twice arrested and
accused of selling crack.

That December, days before his 17th birthday, he was arrested for
attempted murder.

He had been with a group of young men who walked up to Eric Cole and
started shooting, according to records. Cole was hit in the back,
survived, and identified someone other than Petties as the one who
shot him.

Still, authorities moved to try Petties as an adult. Records from the
case offer a glimpse at his home life.

He was raised by his mother, Ever Jean Petties, and lived with one
sister. The whereabouts of his father were unknown.

His mother reported in 1993 that she received $1,279 per month through
her position as a foster parent and from her job at the board of
education. That put the family income slightly above poverty level.

After Petties turned 18, his arrest record continued to grow. In 1998,
for instance, he pleaded guilty to burglarizing railroad boxcars.

In March, Ever Jean Petties declined to be interviewed. "I'm not doing
nothing on my son and I'm not talking about anything."

One significant person in this story doesn't show up in the juvenile
court records.

According to U.S. Marshals spokesman Dave Oney, Petties is a
half-brother of Paul Beauregard, better known as rapper DJ Paul of
Three 6 Mafia, a group that has sold millions of recordings.

It is known for songs on topics that include drug-trafficking and
murder, the very activities Petties is accused of.

A publicist at Columbia Records said Beauregard wouldn't
comment.

A rebel and a dropout

Petties belonged to a vast crowd of fatherless children growing up in
low-income families in Memphis.

About 57 percent of children in Shelby County are born to unmarried
parents, and absent fathers are common, a factor that can lead
children into crime.

A psychologist, Robert M. Parr, had evaluated Petties a few months
before the shooting. The teenager was 5 feet, 5 inches tall and
weighed 130 pounds, Parr wrote, and was polite throughout testing.

"There is evidence of problems with impulse control, rebelliousness
and negativism, as well as resentment of authority," Parr wrote.

He assessed Petties' verbal IQ at 77, a score low enough to be in the
"borderline" range.

The adult court later sent Petties' shooting case back to juvenile
court. Records do not show what the punishment was.

He attended Carver High School and probably didn't graduate, though
the school system wouldn't release records.

Dropping out is common. In 2009, Carver's "cohort dropout rate" -- the
number of students who leave somewhere between ninth and 12th grade --
was about one in three.

Those who drop out have few options in the legitimate work force. And
there are tempting alternatives.

A history of trafficking

For decades, selling drugs has been an alternative way to earn money
in Memphis.

In 1931, federal authorities used undercover agents and telephone
wiretaps to smash what the press called "the Gowling ring," named for
a 60-year-old trafficker named Jimmy Gowling. Police said the group
used Memphis as a base to ship morphine, opium and other narcotics to
other states by airplane, car and boat.

This and countless other examples show that Memphis' transportation
links and central location have long made it a good place to
distribute illegal drugs.

And Memphis has long been a center for drug consumption, not just
distribution.

In 1900, cocaine was legal, and some Memphis drugstores stayed open
all night to sell small boxes of the powder to addicts for as little
as five cents.

The history of drugs in Memphis has long been associated with minority
groups, from Chinese opium dealers in the 19th century to
African-American and Mexican traffickers today. But whites have long
been involved both as traffickers and as consumers.

As The Commercial Appeal wrote in 1900 about cocaine: "The use is not
confined alone to the negro, but white people are also using it in
large quantities."

A major supplier

By 2000, Petties was already involved in large-scale trafficking, Abe
Collins, a special agent for the Drug Enforcement Administration,
wrote in a 2002 affidavit.

In one case, Petties bought 10 kilograms of cocaine and 200 pounds of
marijuana through middlemen who worked with Mexican couriers, he wrote.

Collins believed Petties had become the primary supplier of cocaine
and marijuana in the Memphis area and that his partners included
several close friends from his old neighborhood.

Collins also wrote that Petties was a leader of the Gangster Disciples
street gang and that the murder of a past member of Petties'
organization, Antonio Allen, remained unsolved.

The organization used various front businesses. Drugs were dealt out
of an auto repair business on Elvis Presley Boulevard, Collins wrote.
And in October 2000, Petties turned in a business license application
to launch a company called C's Trucking.

Smuggling routes

Trucks play a key role in the drug business in Memphis. Most of the
cocaine, marijuana and methamphetamine that arrives in Memphis is
smuggled from Mexico and delivered on Interstate 40 or Interstate 55
by 18-wheelers or cars with secret compartments, said Keith Brown,
resident agent in charge for the Drug Enforcement Administration.

Brown said Memphis is a major market for drug consumption.

"It's hard to measure," he said. "But there are thousands and
thousands of pounds of marijuana coming into this city every year.
There are thousands of kilos of cocaine. There are probably hundreds
of kilograms of heroin."

There are specialists who handle transportation, others who build
secret compartments in vehicles and houses, and others who launder
money, he said.

Memphis is a distribution hub for regional drug markets like
Jonesboro, Ark., but isn't a major multistate hub like Atlanta, Brown
said.

And he said Mexican cartels act as suppliers to local groups but
usually don't exert local control.

Others have reached somewhat different conclusions. U.S. Atty. Larry
Laurenzi says Memphis is becoming a hub both for local distribution
and for transshipment to cities like Chicago.

He also said traffickers are bringing drugs into the Memphis area
directly from Mexico, rather than the old pattern of using middlemen
in states like Texas.

"I don't think any community wants to have that type of business,"
Laurenzi said.

As of this writing, Laurenzi's office was seeking to have the
government declare Memphis and nearby territories a High Intensity
Drug Trafficking Area, a designation that would bring in additional
money.

Neither Brown nor Laurenzi would talk about the Petties case in
detail. The Memphis police, who were involved in the investigation,
also declined comment.

A lucrative business

Records suggest Petties was making large amounts of money at a very
young age.

In June 1999, the 22-year-old Petties signed mortgage papers for a
$185,000 house in Hickory Hill. He quickly paid off the debt, becoming
one of many in his circle who bought houses in the suburbs.

Drug-trafficker Ruben Laurel later would tell authorities that he and
others had counted more than a million dollars on the pool table on
the second floor of the house, according to an affidavit from Collins.

A federal indictment accuses Petties of using drug money to buy
numerous luxury cars and trucks, including a Mercedes-Benz worth
nearly $112,000. An earlier version of the indictment says he once
bought a Bentley worth $339,000, and that he also purchased property
in Las Vegas.

Petties isn't the only one alleged to have become rich from drug
sales.

Forbes magazine estimates the net worth of Sinaloa cartel leader
Joaquin "El Chapo" Guzman Loera at $1 billion, making him one of the
world's wealthiest individuals.

Petties allegedly worked with a branch of the Sinaloa
cartel.

Colombians, not Mexicans, used to be on top of the Latin American
drug-trafficking scene.

But law enforcement cracked down on a smuggling route favored in the
1980s -- shipping cocaine from South America to the Caribbean and
south Florida.

Drug organizations now find it easier to smuggle cocaine from South
America to Mexico, where it can be shipped over the 2,000-mile land
border into the U.S. Other drugs, like marijuana and methamphetamine,
can be produced in Mexico itself and shipped over the border.

About 6,600 people died in drug-related violence in Mexico last year,
and some has spilled over the border.

So far, Memphis has seen relatively little violence linked directly to
cartels, though local drug activity leads to plenty of killings,
Laurenzi said.

Mexican cartels fear U.S. law enforcement because it is usually more
competent and less corrupt than Mexican institutions, said Alex Posey,
an analyst with the global intelligence company .

That's why America hasn't seen mass cartel killings. "As long as
you're not involved in the drug trade, it's in their best interest to
leave you alone," he said. "Because the more scrutiny they draw upon
themselves, the worse for business it is."

Source of trouble

A small conflict got Petties in big trouble.

On April 4, 2001, police were called to a house in southwest Memphis
by Petties' girlfriend, Latosha Booker.

Petties and Booker said they had been in an fight, but that everything
was fine, according to an arrest report.

But there was a strong smell, and a marijuana cigarette was in plain
sight on a coffee table, according to an affidavit by Collins. Other
men emerged from elsewhere in the house, and the homeowner, Tino
Harris, signed a consent to search form. Officers quickly found the
600 pounds of marijuana.

Petties and several others were arrested. An arrest sheet listed his
occupation as "C-Trucking," presumably commercial trucking. His
girlfriend was charged with simple assault, but it was never pursued.

A judge set bond at $250,000. Petties made it and was released. The
state, for reasons that aren't clear, later dropped charges against
Petties and some of the others. It wasn't the end of the matter.

In June 2002, officers searched a Bartlett property belonging to
Harris and turned up 38 kilograms of cocaine.

In November 2002, the federal government filed an indictment against
Petties under seal.

The federal system gives long sentences. But even before the
indictment was filed, Petties had disappeared.