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 had limited 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, according to an affidavit from U.S. Customs Service Agent Don W. Dunn. Bess told Fishbein not to talk to authorities, Dunn wrote.

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 marijuana chain has it out for you: Last spring Wicks was kidnapped, beaten and held for $50,000 ransom in Tucson.

The reason, Wicks later told police, was unspecified problems that arose with a driver Wicks provided to marijuana traffickers to take a load to New York.

Wicks was working at a bar called MacDaddy's, 500 N. Fourth Ave., on April 7 when an acquaintance named Raimundo Lizarraga came in, according to Tucson police reports and court records. Wicks left with Lizarraga, saying he was going to pick up some vodka.

That evening, Wicks called his girlfriend to say he was being held by men who put a hood over his head and beat him, he told police.

A police officer pretending to be a friend of Wicks' girlfriend took over the prolonged telephone negotiations, police reports say. The next afternoon, the officer arranged to leave a car behind the Fry's supermarket at East Grant Road and North Alvernon Way. The keys would be on the left front tire and the cash in the trunk, the officer said.

When three of the kidnappers arrived, they opened the trunk, and an explosive device planted inside went off. SWAT officers rushed the three and arrested them. Then another SWAT team stormed the duplex on East Nebraska Street where Wicks was being held. They found him inside with his hands bound. Nine men were eventually convicted of the crime and sentenced to prison.

Wicks, now 35, was a victim in those moments but his own criminal record dates to 1993, when he admitted in U.S. District Court in Tucson that he had led a continuing criminal enterprise - marijuana trafficking - between 1989 and 1992.

Wicks now faces trafficking charges in connection with the events leading to the kidnapping, as well as felony charges of extortion and illegally conducting two businesses - MacDaddy's and another bar, called 5150, at 5150 E. Speedway.

He has also told Bureau of Alcohol, Tobacco and Firearms agents he knew "everything" about the May 1, 1999, fire that destroyed the former Solarium restaurant on East Tanque Verde Road, according to an ATF report. Arson was the cause of the fire, which is still under investigation.

All that led Assistant Arizona Attorney General Sylvia Goodwin to label Wicks a "career criminal."

His attorney, Natalie Prince, denied that, saying there is no evidence to support the extortion or illegal-business charges.

"He's a bartender," Prince said. "He's not actually as colorful as people would like to think he is."

Interagency conflicts

The conflicts that erupt among traffickers crop up between the investigators pursuing them, too.

A cross-country investigation, driven by an aggressive U.S. Customs Service agent from Tampa, Fla., got dealer Phillips to talk and finally snared Arevalo.

It also revealed a friction among investigators so common that special offices in Tucson and across the country have developed systems to prevent it.

The agent, Don Dunn, first met Phillips when some of her marijuana money was seized in Texas on its way to Tucson. A Texas officer called Phillips and, pretending to be a money courier himself, arranged a pickup.

The meeting was set for March 25, 1999, at a tire dealership in Tampa. When Phillips drove up carrying $50,000 in cash, agents confronted her, she testified.

"I shut my door and tried to pull away," Phillips said.

The agents drew their guns, and she stopped.

"Then they came up, and Don Dunn said to me, ‘I might not arrest you today, but I am going to arrest you.' And I knew that was true. And so I said now I want to cooperate," Phillips testified.

Dunn quickly carried the investigation westward, persuading a driver and other conspirators to turn against the organization.

Operation Mission Impossible was born.

The new informants introduced undercover customs agents to Arevalo in April 1999, pretending the agents were load drivers. The agents were entrusted with a load - 766 pounds of marijuana, packed into a motor home. On May 5, investigators searched Arevalo's home in the 5000 block of North Amapola Drive, just east of the Tucson Mountains, and Arevalo was finally arrested.

But Dunn's aggressiveness brought objections from local customs agents and eventually drew criticism from a federal judge.

Two Tucson attorneys connected to the Arevalo organization, Fishbein and Marshall Tandy, had already been arrested when - on July 26, 1999 - Dunn led a search of the far Northwest Side office of a third local attorney - Natman Schaye.

Dunn was seeking information on Schaye's relationship to Arevalo's partner, Bess, a client of Schaye's.

Prosecutors planned to seek an indictment against Schaye, Assistant U.S. Attorney Anne Mosher said at the time. But U.S. District Judge Alfredo Marquez rejected the evidence from the search, calling the action illegal.

Schaye was not indicted.

Friction among police hindered another investigation, too, allowing a Tucson trafficker to remain free for six years.

Sgt. Michael Hambrook of the New Hampshire State Police testified last January that in 1992, he came to Tucson while investigating Alberto Lujan - the supplier of one of New Hampshire's biggest marijuana dealers.

Here, Hambrook teamed up with customs agents investigating some of the same dealers. Customs agent David Penrod, also testifying in January, said Lujan was using a Tucson produce company in 1992 to send loads of marijuana to Michigan and New Hampshire.

Prosecutors in Tucson and New Hampshire obtained indictments against Lujan.

At the same time, DEA agents in Michigan were cultivating Lujan as a possible source of information - in return for possible immunity - against Mexican trafficker Manuel Carter Davis, Hambrook testified. But the investigators in New Hampshire and Tucson wanted Lujan to turn himself in before any immunity agreement was worked out.

The conflict erupted during a February 1993 meeting in Tucson, Hambrook testified.

A Michigan-based DEA agent at that meeting said "he'd been a DEA agent for a few years and this man Lujan could be a career-maker as an informant," Hambrook testified.

The DEA agent involved denied making that comment, said agency spokeswoman Susan Feld.

"I was horrified," Hambrook said, because while Lujan was free, a man below him on the marijuana chain was serving a 25-year prison sentence.

The DEA in Michigan never met Lujan in person. Instead, the agency negotiated the immunity agreement via fax machine, with Lujan's lawyer as an intermediary, Hambrook testified.

Feld said the DEA talked with Lujan by phone. The agency never used Lujan as an informant, she added.

It took until June 1998 for Lujan to be arrested. After pleading guilty to marijuana conspiracy in New Hampshire last February, he was sentenced May 31 to a term of 24 years and four months. The man he was to inform on, Carter Davis, was convicted in Tucson three years earlier and extradited last Sept. 27 to face charges in Mexico.

"Sometimes they don't like to share with each other," said Raymond L. Vinsik, director of a Tucson anti-drug coordinating and intelligence center called the Arizona High Intensity Drug Trafficking Area, or HIDTA. "We're forcing them to work together and share information together."

At the HIDTA center near Tucson International Airport, 240 employees from law-enforcement agencies at all levels work in joint task forces. Thirty such centers operate nationwide.

The local center's leverage in encouraging cooperation comes in the form of a $12.4 million budget that it doles out to task forces and investigations. That money also goes to maintain a computer intelligence system that steers officers away from conflicts with one another.

"With Tucson being a transshipment area, you have a lot of agencies coming in from Texas or California or Illinois," said Pennie Gillette, an Arizona Department of Public Safety lieutenant who heads HIDTA's intelligence center. "Without some system to be able to computerize this information, you get blue on blue - officers on officers."

By entering the time and place of an intended operation, officers from 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, including Phillips and Lee 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 sold 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.

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

"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."

CORRECTION RAN DECEMBER 11, 2001 A2

A story on A1 Sunday about Tucson's role in the marijuana trade misidentified The Burrito Bandit Mobile Food Service Corp., owned by Tucson marijuana trafficker Jose Luis Arevalo. Arevalo's business was not affiliated with the former Burrito Bandit restaurant, which was located at 8320 E. Broadway and was owned by Michael Lytle.