BAD COMPANY

How A Chain Is Broken

When a pair of local marijuana traffickers suspected a snitch in their
midst, they sent for her in Georgia and arranged to meet at a Tucson
hotel - the Smuggler's Inn.

It was the spring of 1998. The top agenda item was determining whether
Nancy Phillips had ratted out a Kentucky customer of the two
traffickers, Jose Luis Arevalo and Raul Bess.

"I convinced them that I was not talking to anyone," Phillips
testified last year, when she was finally called as a witness against
Arevalo.

But at the time of the meeting at the East Speedway hotel, she was
talking - to a Drug Enforcement Administration agent in Phoenix. And
Phillips, a part-time poetry editor who was born in Ajo, would talk
again - even as she continued doing business with Arevalo and even as
she developed an intimate relationship with him.

Meetings like this among people like these help forge Tucson's strong
link in the chain of marijuana distribution nationwide, a link that
produced an estimated $350 million in revenues last year.

Last year, officers outside Arizona made 71 seizures of marijuana that
was coming from Tucson. That's one new case every five days. Through
November this year, the pace has remained the same, according to the
Arizona High Intensity Drug Trafficking Area, an anti-drug
coordination office and intelligence center in Tucson.

Meetings like this also show how investigators turn traffickers
against each other to win drug-conspiracy cases, exploiting a system
rife with conflicts, competition and double-crosses that nevertheless
produces numerous convictions.

"I certainly think we're all playing a game, and we're all playing a
little role here," said Ivan Abrams, a local defense attorney who was
a federal prosecutor for eight years. "The agents' job is to catch
them. The prosecutors' job is to prepare them for the table. Our job
as defense lawyers is to minimize the carving upon them."

The agents have another job: Get as far up the chain as they
can.

"Normally what we do when we work someone - that is, to try to get
them to cooperate - is to work up the food chain, to try and go up the
chain of supply," said Bill Dickinson, chief of the Pima County
Attorney's Office narcotics section. "What we're trying to do is get
someone who is more significant than the person we're currently
dealing with."

In Phillips' case, that person was Arevalo.

"Mission Impossible"

A Douglas native who served two sentences in Arizona prisons for
selling marijuana, Arevalo, 44, left prison in 1994 and got back into
the business.

Within a few years, he was growing pot on a plantation in Mexico,
according to testimony by Phillips and two other co-conspirators. The
fields were in the Mexican state of Chihuahua, in mountains so remote
Arevalo had to ride on horseback to reach them, Phillips testified,
citing Arevalo's description.

Arevalo did not testify at his trial, but load driver Carl Lee did.
Lee said Arevalo bought the plantation in the late 1990s.

"Apparently he hired locals to manage the plantation," Lee said. "He
had a fellow that he took in from the United States, a specialist in
how to grow things, and he hired some local people and told me that he
had paid the Mexican government some money for protection."

Lee testified that Arevalo paid others to bring the marijuana across
the border and up to Tucson. Here, Lee would pick up loads of about
3,000 pounds each from stash houses Arevalo had in the city.

Arevalo owned a number of properties, some through front companies
such as J& D Land Acquisition Co. One stash house was on North
Tomahawk Trail, near the corner of East Tanque Verde Drive and North
Houghton Road. Another of his properties was at the top of Avenida de
la Colina, overlooking Raven Golf Club in the Catalina Foothills.

Arevalo shared his interest in real estate with co-conspirator Raul
Bess.

A fellow Douglas native, Bess had also served time for marijuana
trafficking. After his release from state prison in 1993, Bess formed
Flores Land Development, bought some Tucson properties and passed
himself off as a real estate manager.

But at the same time, he was working with Arevalo, distributing
marijuana across the country. His fellow traffickers called Bess
"King" behind his back because he acted like he was royalty, Nancy
Phillips said.

Bess, 46, and Phillips had known each other since 1985, Phillips
testified. "I met him because he was the brother-in-law of a man that
was engaged to my daughter," Phillips testified. "I knew they were all
drug dealers."

Within a few years, Phillips testified, she was doing business with
Bess, introducing him to marijuana customers she knew in Kansas, where
she was living at the time. Then, in 1995, Bess introduced Phillips to
Arevalo in a Tucson park.

They soon went into business with one another. Phillips, who has a
bachelor's degree in philosophy, went by the code name "Mission
Impossible."

Even at the Smuggler's Inn meeting, called to confirm Phillips'
loyalty, they did some business: Phillips offered to sell Arevalo and
Bess a direct connection to one of the customers she had been supplying.

Her link in the chain was buying loads of marijuana from Arevalo,
usually about 600 pounds at time, then selling them at a higher price
to her own wholesale customers in the Southeast. In a business that's
highly compartmentalized, so that losing one link doesn't unravel the
entire chain, Arevalo did not have contact with Phillips' customers.

But in the case of one of her best customers, her ex-husband in St.
Petersburg, Fla., Phillips offered to step aside and let Arevalo sell
direct. The price of the agreement: $250,000.

Trade Violence

Things got dangerous as Phillips started talking.

Threatened in March 1999 by federal agents who caught on to her,
Phillips agreed to cooperate. A few days later, Lee, the Arevalo
driver, met Phillips at a Howard Johnson's in Georgia to pick up a
marijuana payment from her.

Phillips tipped off the agents. Lee, known by the code name Butch, was
pulled over driving a motor home with about $1.2 million in cash
inside. Within a week Lee, too, decided to inform.

As more people in the chain agreed to help investigators, Bess started
getting nervous.

On May 24, 1999, he met in a taxi with attorney Mark Fishbein - who
later admitted laundering money for the organization - and showed him
a gun as they drove around north Tucson. Bess told Fishbein not to
talk to authorities, according to an affidavit from U.S. Customs
Service Agent Don W. Dunn.

It was too late, though; Bess was arrested two days
later.

The threat of gun violence is common in Tucson's wholesale marijuana
trade, investigators and traffickers said, but it's less prevalent
than the volume of trade would suggest.

Pima County sheriff's Sgt. Michael O'Connor said that last year the
department handled 29 homicide investigations, of which nine appeared
to be drug-world hits. That made 2000 "a pretty average year" for such
murders, he added.

Occasionally pot-related gunplay harms a bystander. In April 1999, a
group of young men burst into a home near West Grant Road and North
Silverbell Road, seeking a load of marijuana or drug money. One of
them shot and killed 12-year-old Elsa Vega.

"If you're talking about the international smuggling, people in this
area are not that affected by it. It's the distribution of drugs
locally where the average person is apt to be more affected by it,"
Pima County Sheriff Clarence Dupnik said.

Robert A. Wicks is not your average person.

Like Fishbein, Wicks learned what can happen when someone in the
anywhere can find out whether another agency is working a case at the
same time and place. If a conflict arises, the computer sends a
message of a conflict to the person making the query and to the agency
already involved.

"The best part is," said Vinsik, "you're not giving your information
to anybody except a secure computer."

Unraveling The Chain

Despite the conflicts, federal agencies obtained more than 45
convictions by early this year in their investigation of the Arevalo
organization and cases stemming from it.

One of them was Bess, who pleaded guilty to marijuana conspiracy and
money laundering charges but is still in prison awaiting sentencing.
His attorney, John Kaufmann, said Bess was involved in just one of
several supply lines Arevalo ran.

Lee, the driver known as Butch, pleaded guilty to conspiring to
distribute marijuana and money laundering and was sentenced to 18
months in prison.

Arevalo was tried in Tampa in February 2000. He hired famed Miami
attorney Frank Rubino, who represented Panamanian Gen. Manuel Noriega.
The government paraded a series of cooperating witnesses before the
jury - among them Phillips, Lee, and others - as well as Dunn and
other agents.

Rubino did not call any witnesses during the six-day trial. His
tactic, he said, "was to discredit the informant witnesses."

He did so, in part, with biting questions to Phillips about her
cooperation: "You were ready, willing and able to do whatever you had
to to save yourself, weren't you?"

Rubino also forced Phillips to acknowledge she had been selling
marijuana sporadically for about 20 years and had made more than
$100,000 in marijuana sales just in the four-month period before she
was caught March 25.

But jurors believed the government. Within a day of beginning their
deliberations, they convicted Arevalo of conspiring to distribute
marijuana and to launder drug money. Arevalo was sentenced to 30 years
in prison. He is appealing the convictions.

Phillips went free. She never faced any charges for her part in
distributing marijuana from Tucson.

The Star could not locate her despite repeated attempts.

"The moral of the story is you can commit any crime you want if you
inform on other people," Rubino said in an interview last week.

Federal authorities say the Arevalo case demonstrates that the
drug-enforcement system can work. Dunn and fellow agent James Krause
won a Customs Service award for their work on the case last year. Only
four people received such an honor nationwide.

LaTour Lafferty, who prosecuted the case, said he sees an encouraging
moral in the Arevalo case.

"A criminal enterprise is bigger than one person, but it only takes
one person doing the right thing to take out the entire organization,"
Lafferty said. Nancy Phillips, she added, "did the honorable thing.
Jose Arevalo didn't."

[Sidebar]

Jaime Figueroa-Soto

Tucson's most notorious marijuana trafficker of the last two decades
could be getting out of prison in just over four years.

Jaime Figueroa-Soto is scheduled to be released from the
maximum-security prison in Florence, Colo., on March 30, 2006,
according to federal Bureau of Prisons records.

For now, it appears, he should be able to leave prison cells behind
then, but the Arizona Attorney General's Office is arguing he should
be transferred to an Arizona prison on that date, not released from
custody altogether.

Figueroa-Soto was convicted in federal and state courts of running a
massive marijuana smuggling and distribution network during the 1980s
and of laundering the proceeds. Prosecutors estimated he was worth up
to $109 million at the time. Figueroa owned luxurious homes here, in
Scottsdale and in the Sonoran cities of Nogales and Hermosillo.

After two convictions in Pima County Superior Court and one in U.S.
District Court, Figueroa-Soto fought his state sentence and was
granted a new hearing at Pima County Superior Court in 1993. A new
sentencing order, issued by Judge Bernardo Velasco, said that all
Figueroa-Soto's prison sentences must end with the federal sentence.

On Nov. 30 this year, Assistant Attorney General Wanda Hofmann filed a
motion calling the re-sentencing illegal under Arizona law, which
requires that judges state a specific number of years for a sentence,
not set a release date dependent on another jurisdiction. Hofmann
asked that upon Figueroa-Soto's release from federal prison, he be
placed in state custody, where he would be eligible for parole on
April 16, 2009.

Defense attorney Bill Kirchner said he is planning to fight the
state's effort.

John Dugery

John Dugery distributed Jose Luis Arevalo's marijuana from Tucson to
Colorado, and in the process saw how the organization used stash houses.

At Arevalo's trial in Tampa last year, Dugery testified: "Once you
receive the marijuana, what you do is inspect for quality. And then
you check the weights because there is always discrepancies in how
much they say you got or how much you actually did get.

"So you take the marijuana, you weigh it, and you wrap it to keep it
fresh and as well as for transportation purposes," Dugery said. "Then
once it is finished being processed, it is either boxed or put in
duffel bags and transported to the point of sale."

Not just any bale could go to any customer, Dugery
testified.

"Some customers were very picky and they wanted the top, top quality.
Others, you knew you could get away with giving them lesser quality."

To make sure the right customer got the right load, the packers put
stickers on the box, Dugery said. Each customer also received a receipt.

"We color-coded the boxes so that it would be quick to transfer the
marijuana and each customer got the correct box," Dugery said.

Jerry Hornick

Jerry Hornick's innovative business lent itself naturally to use in the
cross-border marijuana trade.

Hornick ran Realistic Imaging, a company alongside Interstate 10 on the
Northwest Side, which molded plastic into lifelike displays of vegetables,
fruits and even a gigantic submarine sandwich.

Restaurants would buy the realistic-looking plastic molds for displays,
said attorney Robert St. Clair, who incorporated the company for later owners.

Hornick also used the displays as vessels for marijuana loads shipped to
Indiana, said Assistant U.S. Attorney Joshua Minkler.

"It initially started with this plastic birthday cake full of marijuana,"
Minkler said.

Hornick went on to send loads of marijuana in the 200-pound range to Randy
Byrd, a contact in Indianapolis. Hornick and Byrd were indicted in Indiana
in 1998, and in 2000 both were convicted and sentenced to prison. Hornick
got a three-year, one-month sentence.

But the company's use in the marijuana trade apparently didn't end with
Hornick's sentencing and his sale of majority ownership in 1998. In
February, a trucker from California tipped off U.S. Customs Service Agents
in Boston that the company was being used to ship marijuana loads again,
according to a sworn affidavit by agent John Lacinski.

On April 9, customs agents in Tucson searched the premises, at 5290 N. Casa
Grande Highway, seized 606 pounds of marijuana and arrested two people,
according to a search warrant return filed in U.S. District Court.

The company will never be used again. The building where it rented space
has since been demolished for a road-widening project.

"Mike"

Mike got into dealing drugs on Tucson streets, but his family made him a
nationwide marijuana trafficker.

He was a small-time Tucson coke dealer more than a decade ago when he
visited family in Mexico, and they showed him their marijuana fields, he
said. His relatives recruited Mike to help their marijuana loads survive
the trip to the East Coast.

"They didn't want me selling to no one on the streets," he said. The Star
is not naming Mike out of concern for his safety.

Avoiding seizure of the loads turned out to be easy, Mike said. Sometimes
they would pay thousands of dollars to a poor, young Mexican man to take 50
pounds of marijuana across the border and get caught. While officers were
seizing that load, the traffickers would send in 500 pounds.

"Our only problem was not swerving or speeding between Rio Rico and here,"
he said.

Soon he was pulling in hundreds of thousands of dollars, visiting hot spots
on both coasts, buying whatever he wanted.

He also started doing cocaine. Even during his time as a street dealer,
Mike hadn't been a user, but that changed when he started socializing with
his East Coast buyers. Soon he was an addict.

The freestyle life veered into violent crimes, including kidnapping
customers who owed debts, Mike said. Often, relatives would be forced to
put up their property as ransom.

"You end up with a ranch in Mexico, full of cars and boats," he said.

Eventually, he was convicted of one of these crimes and served years in
prison. But he could not kick his habit, although he is trying to now. The
hardest part may be avoiding the family members still involved in the trade.

"I love my family, but it's time for me to take charge of my life," he said.

The drug trade, Mike said "is great when you're young, 'cause you have
everything you want, but it catches up to you," he said. "You cannot win in
the drug trade. You're going to end up using it, you'll end up in prison,
or you'll get killed in a robbery." Roy

Tammerand

Tucson serves as a cultural meeting place in the marijuana underworld, the
same way the city has for decades.

Buyers with connections to the rest of North America, often Anglo, conduct
marijuana business here with suppliers who have connections to Mexico.

Take the case of Roy Tammerand.

A Canadian citizen, Tammerand said he began buying loads of marijuana in
Tucson in 1987, according to a federal presentence report. He got caught at
the trade and spent time in an Alberta prison.

But soon after his release in 1991, Tammerand returned to Tucson. He lived
here under the name Bill Hawkins, while returning to Canada for the
summers. He got back into the marijuana business, sending loads to Canada,
Illinois, Massachusetts and other places.

Tammerand's source from 1995 to 1999 was Ismael Martinez-Carrero, Tammerand
testified at Martinez-Carrero's trial.

Martinez-Carrero is a Mexican citizen whose family ran a tire shop called
Los Compadres at 901 S. Sixth Ave. At Martinez-Carrero's sentencing, his
attorney described Martinez-Carrero as a "broker" between the supplier and
Tammerand.

Tammerand testified at Martinez-Carrero's trial that he himself made
$250,000 per year in the marijuana trade. In 1999, when Drug Enforcement
Administration agents searched the house Tammerand rented, in the 5300
block of North Camino Real in the Catalina Foothills, they found $500,000
in cash.

After their convictions, the Canadian and Mexican were sent to American
prisons.

Tammerand, who struck a plea bargain and testified against his marijuana
source, was released from prison Nov. 30.

Martinez-Carrero is still serving his term - 12 years and 7 months.