**U.S. Department of Justice**Drug Enforcement AdministrationNational Narcotics Intelligence Consumers Committee 1995The Supply of Illicit Drugs to the United StatesAugust 1996
**Executive Summary**In 1995, major changes occurred in the illicit drug trade, many of which were broughtabout by aggressive drug law enforcement. In Latin America, the Cali Drug mafiaexperienced setbacks with the arrests of key leaders. The Shan United Army in the Far Eastexperienced increased pressure that eventually led, in early 1996, to the surrender ofKhun Sa to Burmese central authorities. In Southwest Asia, key arrests of majortraffickers were followed by their extradition to face charges in the United States. 

Yet, challenges remained. Just to our south, drug gangs in Mexico transported cocaineto the United States and produced not only heroin and marijuana, but increasinglymethamphetamine for the U.S. market. These groups expanded their foothold in the UnitedStates, replacing outlaw motorcycle gangs as the principal suppliers of the drug. Courierscontrolled by West African criminals continued to flood through U.S. airports withhigh-quality Southeast Asian heroin, and South American heroin suppliers increased theirU.S. market share, particularly in the Northeast. 

In major urban areas, and in many smaller cities and towns as well, drug distributionwas accompanied by increasing numbers of homicides and drug-related violence. Thefollowing summarizes, by drug and in the area of drug money laundering, the major eventsand trends of 1995. 

In 1995, drug mafias based in Colombia directly managed virtually all aspects of thecocaine trade, from acquisition of cocaine base, to cocaine production in South Americaand transportation to wholesale distribution in the United States. These organizations, aswell as other smaller groups, were serviced by a complex infrastructure that transportedcocaine by land, sea, and air conveyances principally to the United States and Europe.Part of this infrastructure included Mexico- and Caribbean-based transportation groupsused to ship cocaine to the Southwest and Southeast United States, respectively. 

In June 1995, three Cali mafia drug lords, Gilberto Rodriguez-Orejuela, JoseSantacruz-Londono, and Miguel Rodriguez-Orejuela, were arrested by the Colombianauthorities and, in March 1996, Santacruz-Londono was killed during a confrontation withthe Colombian National Police after he had escaped from prison. Polydrug trafficking gangsin Mexico that served as transporters for the Colombian groups played a more significantrole in the cocaine trade. The fact that gangs in Mexico lacked an established traffickinginfrastructure in cocaine source countries, however, remained a substantial impediment in1995 to their international expansion. Nevertheless, the Mexican gangs emerged second onlyto the Colombians in terms of power, sophistication, and scope of internationaloperations. 

The Cali drug lords continued to operate their drug empires from behind prison walls byshifting day-to-day control of their organizations to trusted lieutenants or relativesstill at large. A new generation of relatively young North Coast, North Valle del Cauca,and Cali traffickers conducted more independent action. 

Potential cocaine production in 1995 is estimated at 780 metric tons compared to arevised 1994 estimate of 760 metric tons, while the amount of cocaine seized worldwideamounted to approximately 230 metric tons compared to 303 in 1994. Operation Breakthrough,a DEA-managed comprehensive coca cultivation and cocaine base processing research project,estimated an actual cocaine production amount of 715 metric tons in 1995. U.S. federal lawenforcement agencies seized 120 metric tons of cocaine in 1994, according to the FederalDrug Seizure System (FDSS). FDSS figures for 1995 indicate that U.S. federal authoritiesseized 98 metric tons of cocaine. 

Traffickers continued to use intermodal means of transport, and often concealed largershipments in commercial maritime containerized or bulk cargo. They also used fishingvessels to convey multimetric-ton shipments from Colombia to Mexico. Traffickers also usedspecially designed vessels to smuggle cocaine from Colombia to northern Caribbean islandsor Puerto Rico. General aviation aircraft and large- capacity cargo airplanes, to includejets, were used to convey cocaine to Mexico from South America. 

Many trafficking gangs operating from Mexico routinely were paid from 40 to 50 percentof the cocaine shipment in product by Colombian suppliers. In so doing, theseorganizations gained a foothold in the lucrative cocaine wholesale business in the UnitedStates. Mexico-based trafficking organizations also stepped up alliances with cocainesuppliers in Peru and Bolivia. Two record-setting cocaine seizures in Peru demonstratedthat gangs operating from Mexico were dealing directly with traffickers in Peru andBolivia, independent of any links to Colombia-based drug organizations. 

The drug mafias in Colombia continued to dominate wholesale cocaine distribution in theUnited States through what is recognized as a sophisticated organizational structure.Cocaine wholesale-level distribution and drug money laundering networks were comprised ofmultiple cells functioning in a number of major metropolitan areas. These cells maintainedmeticulous records and used available technology, including personal computers, pagers,and facsimile machines, in their daily operations. U.S. operations were coordinated on adaily basis by key managers in Colombia. Primary U.S. bulk cocaine distribution centersincluded southern California, southern Texas, New York City, and southern Florida. Fromthese centers, cocaine was shipped throughout the United States for delivery to lowerlevel distribution groups in secondary source cities. 

Distribution groups were comprised chiefly of the African- American street gangs andthe ethnic Dominican, Cuban, Haitian, Jamaican, Mexican, and Puerto Rican criminal groupsthat controlled cocaine and crack sales at the retail level. Gangs, including the Crips,Bloods, and Dominican gangs as well as Jamaican "posses," were primarilyresponsible for widespread cocaine and crack cocaine- related violence. The migration ofgang and posse members to smaller U.S. cities and rural areas resulted in increases indrug-related homicides, armed robberies, and assaults in those areas. 

The price and availability of cocaine in the United States remained relatively stable.In 1995, cocaine prices ranged from $10,500 to $36,000 per kilogram nationally. Averagepurity for cocaine at the gram, ounce, and kilogram levels remained high. Average purityat the gram (retail) level for 1995 was 61 percent. The average purity per kilogram(wholesale) was 83 percent for the same time period. 

Crack continued to be used in epidemic or near-epidemic proportions in most majorcities. The number of hard-core crack users in the United States remained relatively highand stable. 

Heroin was supplied to the United States from four source areas: Southeast Asia(principally Burma), Southwest Asia/Middle East (Afghanistan, Lebanon, Pakistan, andTurkey), Mexico, and South America (Colombia). In 1995, worldwide opium production was4,157 metric tons, an increase over the 1994 worldwide opium production total of 3,409metric tons. Opium production in Southeast Asia, estimated at 2,157 metric tons in 1994,increased to 2,561 metric tons in 1995. 

In the Golden Triangle, the Shan United Army, headed by drug lord Khun Sa, found itselfunder increasing pressure as the Burmese Army attacked its positions while Thaiauthorities limited the flow of goods and services to the Shan State. Khun Sa reportedlyshifted operations to make greater use of Laos, and possibly Cambodia and Vietnam, to shipheroin westward. From Southeast Asia, the heroin was transported to international marketsby independent brokers and shippers. These brokers provided suppliers with connections toethnic Chinese criminals in the United States who acted as wholesale distributors. TheseUnited States-based groups supplied local criminals who distributed heroin at the retaillevel. Nigerian and West African groups, meanwhile, smuggled Southeast Asian heroininternationally and distributed it in the United States through their own contacts withUnited States-based criminal groups. 

Importation and distribution of Southwest Asian heroin was much less centralized thanthat for Southeast Asian heroin. In the United States, a number of ethnic groups fromSouthwest Asia and the Middle East were active in the importation and distribution ofheroin. These included ethnic Afghans, Greeks, Iranians, Israelis, Lebanese, Pakistanis,and Turks. Much of this heroin was smuggled to ethnic drug distribution groups in theUnited States. 

Virtually all of the heroin produced in Mexico was destined exclusively fordistribution in the United States. Drug gangs in Mexico remained inveterate polydrugsmugglers. They produced and/or transported large quantities of heroin, cocaine,marijuana, and methamphetamine into the United States on a daily basis. Black tar andbrown heroin were produced by traffickers in Mexico and sold in the western United Statesby ethnic Mexican-American criminal networks. Organizations controlled from Mexico madedistribution at the wholesale level; local U.S. gangs often managed street sales. 

South American heroin was distributed primarily by independent traffickers fromColombia. These criminals established themselves in the U.S. heroin market by distributinghigh-quality heroin frequently above 90 percent pure and by undercutting the price oftheir competition. Most reporting indicates that heroin traffickers from South America,particularly Colombia, expanded their efforts to supply multikilogram quantities. 

In 1995, seizures of heroin in excess of 100 kilograms continued to occur in SoutheastAsia and Europe, although no such large seizures were made in the United States. Worldwideseizures of morphine base/heroin amounted to about 32 metric tons in 1995, with 1.3 metrictons seized in the United States by federal law enforcement authorities. 

The U.S. market continued to be dominated by high-purity Southeast Asian heroinprevalent in the northeastern United States and along the East Coast. In the UnitedStates, heroin was readily available in many cities, as evidenced by the high level ofretail purity. Indicators reflected significant use in many East Coast cities, due toincreased availability of high-purity Southeast Asian as well as South American heroin. 

Data obtained from the DEA's Domestic Monitor Program (DMP), a retail-level heroinpurchase program, indicated that the availability of South American heroin steadilyincreased in northeast U.S. cities. Although South America still ranked behind SoutheastAsia as a source region for heroin destined for the United States, it appears that drugtraffickers from Colombia expanded their foothold in the U.S. heroin market. 

Nationally, in 1995, Southeast Asian heroin ranged in price from $70,000 to $260,000per kilogram. Southwest Asian heroin also ranged from $70,000 to $260,000. Wholesale-level prices for Mexican heroin were the lowest of any type, ranging from $50,000 to$250,000. South American heroin sold for $80,000 to $185,000. The wide range in kilogramprices reflected variables such as buyer-seller relationships, quantities purchased,purchase frequencies, purities, and transportation costs. 

During 1995, the nationwide average purity for retail heroin from all sources was 39.7percent, much higher than the average of 7 percent reported a decade ago, and considerablyhigher than the 26.6 percent recorded in 1991. The significant rise in average puritycorresponded directly to the increase in availability of high-purity Southeast Asian andSouth American heroin. 

In 1995, the retail purity of South American heroin was the highest for any source,averaging 56.4 percent, followed by Southeast Asian heroin with an average of 44.6percent. Southwest Asian heroin averaged 35.3 percent at the retail level and Mexicanheroin averaged 29.7 percent, almost double the 1991 average for Mexican heroin. 

Heroin purity at the street level was generally highest in the northeastern UnitedStates, where a large percentage of the nation's user population lives. New York City isone of the major importation and distribution centers for Southeast Asian and SouthAmerican heroin. The average purity at the street level in New York City for these heroinsources during 1995 was 58 percent and 76 percent, respectively. Of all of the DMP cities,Philadelphia, with an average of 70.9 percent, recorded the highest average purity ofretail heroin for all sources during the same time period. 

Marijuana was the most widely abused and readily available illicit drug in the UnitedStates. A resurgence of marijuana trafficking and abuse took place in urban centers acrossthe nation. Sources of supply in Mexico provided more than 50 percent of the foreignmarijuana available in the United States. At the same time, drug law enforcement reporteda continued increase in shipments from Colombia, Venezuela, and Jamaica. 

Domestically, marijuana distribution was controlled by a variety of groups andindividuals, ranging from large, sophisticated organizations that controlled cultivationand interstate trafficking to small independent traffickers operating on the local level.State and local drug law enforcement officials reported that small groups of 5 to 10individuals controlled distribution at the retail level. Domestic street gangs and ethnicgroups (usually immigrants from source countries) made for a wide range of retail sellers.

Cannabis was cultivated illicitly in the United States in remote locations andfrequently on public lands. Major domestic outdoor cannabis cultivation areas were foundin Tennessee, Kentucky, Hawaii, California, and New York. Significant quantities ofmarijuana also were produced domestically in indoor grow operations. The number of indooroperations seized in 1995 was 3,348, compared to the record high of 3,849 seized in 1992.The controlled environment of indoor operations enabled growers to use sophisticatedagronomic techniques to enhance potency and production. 

Prices for marijuana, which vary in accordance with potency, availability, source oforigin, and/or proximity to the point of entry into the United States, have increaseddramatically during the past decade at the high end of the price range. Commercial grademarijuana that sold for between $400 and $600 per pound in 1984, sold for between $300 and$4,000 per pound in 1995. Sinsemilla in 1984 sold for between $1,200 and $2,500 per pound,compared to prices of between $800 and $8,000 per pound in 1995. One of the primaryfactors influencing price was potency, which has increased substantially for bothcommercial grade and sinsemilla, with THC content averaging 3.33 and 6.66 percent,respectively, in 1995. 

A recent trend in marijuana use, the smoking of hollowed out cigars referred to as"blunts," was confined to younger users and may have been responsible for anincrease in cannabis-related emergency room visits. 

The term dangerous drugs refers to the broad category of illicitly manufacturedcontrolled substances, other than cocaine, heroin, and marijuana, and licit controlledsubstances diverted to the illicit market. Dangerous drugs include depressants,stimulants, hallucinogens, and controlled substance analogs. Clandestine laboratories areresponsible for the overwhelming majority of illicitly manufactured dangerous drugsavailable in the United States. 

Domestic methamphetamine production, trafficking, and abuse were concentrated primarilyin the western and southwestern regions of the United States; however, methamphetamine wasalso available in the Midwest and some portions of the South and Southeast.Methamphetamine laboratories operating within Mexico and California are the primarysources of supply for all areas in the United States. 

Although independent trafficking groups continue to produce methamphetamine, Mexicanpolydrug trafficking families dominated wholesale methamphetamine distribution in theUnited States in 1995. Trafficking organizations based in Mexico operated large-scalelaboratories and saturated the western U.S. market with high-purity methamphetamine. Thesegroups became a source for methamphetamine in Hawaii, challenging traditional Asiansuppliers. In building and securing market share, these groups frequently employeddraconian measures, leading to increased street-level violence. 

Areas of the Pacific Northwest, the Midwest, and areas as far east as Atlantaexperienced a dramatic increase in the availability of methamphetamine that was suppliedby trafficking gangs from Mexico. In addition to domestic production, methamphetamineincreasingly was produced in Mexico and smuggled into the United States. Domestically,federal seizures of methamphetamine laboratories exceeded 300. State and localauthorities, particularly in the West, also seized a significant number of methamphetaminelaboratories. Restrictions on the availability of essential chemicals used in domesticmethamphetamine production continued to limit production in the United States and led toattempts to produce the drug from over-the- counter medications containing ephedrine andpseudoephedrine. 

According to the latest information available from the Drug Abuse Warning Network(DAWN), the estimated number of nationwide emergency room drug abuse episodes involvingmethamphetamine has increased dramatically since 1992, following significant decreasesthat had begun in 1990. According to DAWN statistics, the areas hardest hit bymethamphetamine abuse included San Diego, Phoenix, San Francisco, Los Angeles, Dallas,Denver, and Seattle. Los Angeles and Phoenix in particular have experienced dramaticincreases in the number of methamphetamine-related episodes since 1991. 

Traditionally, methamphetamine use was associated with white males between the ages of19 and 40. DAWN reporting shows that this population continued to dominate the data.However, reporting from epidemiologists and treatment personnel revealed shifts in useprofiles. There were reports of increased methamphetamine use among college students andyoung professionals at all-night dance parties called "raves." 

LSD was available in retail quantities in virtually every state, and availabilityincreased in a number of states. LSD production facilities are thought to be located onthe West Coast, in the northern California and Pacific Northwest areas. A proliferation ofmail-order sales created a marketplace where the sellers are virtually unknown to thebuyers. The vast majority of users were white, middle-class high school and collegestudents attracted by the low prices and who perceived the drug as harmless. 

PCP production was centered in the greater Los Angeles metropolitan area. LosAngeles-based street gangs, primarily the Crips, continued to distribute PCP to a numberof U.S. cities through their cocaine trafficking operations. They posed a particularproblem because of their propensity for violence. Six PCP laboratories were seized in1995, compared to nine in 1994. 

MDMA is related to methamphetamine and is known by several street names such asecstasy, XTC, clarity, essence, and doctor. MDMA was shipped by independent traffickers bypost or express mail services from source areas in Texas and the West Coast todistributors across the country. Three MDMA laboratories were seized during 1994 in theUnited States, while two were seized in 1995. MDMA is popular among college students, andoften is found at the all-night raves. MDMA, often sold in tablet form, was found indosage units of 55 to 150 milligrams. Retail prices ranged from $6 to $25. 

In 1995, there was an influx of flunitrazepam (Rohypnol) tablets into the Gulf Coastand other areas of the United States. Rohypnol is a benzodiazepine manufactured inColombia, Mexico, and Switzerland by Hoffmann-LaRoche, but not legally manufactured ormarketed in the United States. Rohypnol is reported to be 7 to 10 times more potent thanValium and produces amnesia as a serious side effect. The street price for Rohypnol wasgenerally $5 per dosage unit, although prices of $6 to $8 also were reported. Wholesaleprices ranged from $1.25 to $3 per tablet. 

Controlled substance analogs presented a unique problem to drug law enforcement. Mostanalogs were produced domestically by independent laboratory operators in relatively smallquantities. During 1992, the DEA first encountered methcathinone, a methamphetamine-likeanalog that originated from clandestine laboratories in northern Michigan. In response,the DEA arranged for it to be placed in Schedule I of the Controlled Substances Act inOctober 1993. Twenty methcathinone laboratories were seized during 1994, with another 19seized in 1995. Methcathinone production and distribution, originally limited toMichigan's Upper Peninsula region, spread throughout much of the Midwest. 

Abusers of dangerous drugs also used legitimately manufactured controlled substancesdiverted to the illicit market. Illegal or fraudulent prescribing and dispensing, as wellas theft from legitimate channels, were employed to divert these drugs. Major sources ofdomestic diversion shifted from the wholesale to the retail level. Domestically, organizedgroups of "doctor shoppers" operated interstate, often ranging across four orfive states in search of sources. Diversion commonly involved depressants such asbenzodiazopines, particularly alprazolam and diazepam. 

In 1994 and 1995, U.S.-based drug traffickers shipped their profits out of the countryin smaller amounts than in previous years. Worldwide, money laundering methods varied bycountry and region of the world due to a number of factors, including the relativesophistication of banking and financial centers, and the existence of underground bankingsystems that operated largely along ethnic ties. Money laundering methods continued toevolve in response to variations in law enforcement pressure. 

Ethnic Pakistanis established businesses in the United States that serviced SouthwestAsia's *Hundi* underground banking systems. Invoice manipulation was used to movedrug proceeds into and out of the United States. Russians newly arrived in the UnitedStates closed real estate deals with cash carried in shopping bags and used casinos tolaunder illicit proceeds generated from a variety of criminal activities. Other moneylaundering methods that drew attention included the use of the following: swaps(international currency transactions); payable- through-accounts held by foreign banks inU.S. banks; "smart cards" for structuring deposits and transferring moneyinternationally; and cyberbanking for instant multinational layering of deposits.