**U.S. Department of Justice**Drug Enforcement AdministrationNational Narcotics Intelligence Consumers Committee 1994The Supply of Illicit Drugs to the United StatesAugust 1995
**Executive Summary**In 1994, cocaine hydrochloride (commonly referred to as cocaine) was readily available invirtually all major U.S. cities. Trafficking was managed primarily by Colombian drugmafias that exerted control over the Andean source nations potential cocaine production of820 to 855 metric tons. In 1994, 303 metric tons of cocaine were seized worldwide. U.S.Federal law enforcement agencies seized 115 metric tons of cocaine during the year,according to the Federal-wide Drug Seizure System (FDSS). Colombian drug mafias-looseconsortiums of independent groups-directly managed all aspects of the cocaine trade, fromcoca cultivation to Andean Ridge cocaine production and transportation to wholesaledistribution in the United States. These organizations, as well as other smaller groups,were serviced by a complex infrastructure that transported cocaine by land, sea, and airconveyances principally to the United States and Europe.At the U.S. wholesale level, the Colombian drug mafias operated cocaine distribution anddrug money laundering networks comprised of multiple cells functioning in a number ofmajor metropolitan areas. They maintained meticulous records and used the latesttechnology--computers, pagers, and facsimile machines-in their daily operations. Theiractions were coordinated on a daily basis by key managers in Colombia.Colombian cells remained in contact with North American criminal organizations andmaintained relationships with third-country traffickers as well. During the last severalyears, Colombians have used Mexican and Caribbean-based transportation groups to shipcocaine to the Southwest and Southeast United States, respectively. Primary U.S. bulkdistribution centers included southern California, southern Texas, New York City, andsouthern Florida. From these centers, the cocaine was shipped throughout the United Statesfor delivery to lower level distribution groups in secondary source cities. Chief amongthose groups were African-American street gangs and ethnic Dominican, Cuban, Haitian,Jamaican, Mexican, and Puerto Rican criminal groups that controlled retail cocaine andcrack sales.In 1994, cocaine prices ranged from $10,500 to $40,000 per kilogram nationally. Kilogramprices in virtually all major metropolitan areas remained at the lower end of the pricerange. Average purity for cocaine at the gram, ounce, and kilogram levels has remainedhigh for the past several years. Average purity at the gram (retail) level for 1994 was 63percent. The average purity per kilogram (wholesale) was 83 percent for the same timeperiod.Prices for kilogram quantities of cocaine in Europe fell as Colombian traffickersinundated European markets. Nigerian trafficking groups moved cocaine from Brazil to theAfrican continent and on to Europe. Eastern European nations such as Poland emerged as newtransit zones.Large cocaine seizures, often metric-ton sized, occurred in the source and transit regionsin 1994. Traffickers continued to use intermodal means of transport and often concealedlarger shipments in commercial maritime containerized or bulk cargo. Traffickers also arebelieved to have experimented with the use of semi-submersible and fully-submersiblevessels to smuggle cocaine from Colombia to northern Caribbean islands or Puerto Rico.General aviation aircraft and large capacity cargo airplanes, to include jets, were usedto convey cocaine to Mexico from South America.Since June 1995, three Cali drug mafia kingpins-Gilberto Rodriguez-Orejuela, JoseSantacruz-Londono, and Miguel Rodriguez-Orejuela-have been arrested by the Colombianauthorities. The Colombian Government is to be commended for these arrests. The long-termvalue of these actions, however, only can be evaluated in accordance with the successfulprosecution of the criminal eases against these Cali kingpins. The Rodriguez-Orejuelabrothers and Santacruz-Londono must be incarcerated for a lengthy period of time underconditions that do not allow them to continue their drug operations.Heroin available in the United States was produced in four source areas: Southeast Asia(principally Burma), Southwest Asia/Middle East (Turkey, Pakistan, Lebanon), Mexico, andSouth America (Colombia). In 1994, worldwide opium production fell to 3,409 metric tonsdue primarily to drought in Southeast Asia. However, opium poppy cultivation in Southwestand Central Asia expanded.The U.S. market was dominated by high-purity Southeast Asian heroin, which remainedprevalent in the Northeast and along the East Coast. Ethnic warlord armies in SoutheastAsia produced abundant supplies, which were transported by independent brokers andshippers. Links between suppliers and brokers connected overseas Chinese criminalpopulations to ethnic Chinese wholesale distributors in the United States. UnitedStates-based ethnic Chinese groups consorted with local criminal organizations throughconnections initially established in U.S. prisons. Nigerian and West African groupssmuggled Southeast Asian heroin internationally and distributed it in the United Statesthrough contacts with United States-based criminal groups.Middle Eastern traffickers smuggled Southwest Asian heroin to ethnic enclaves in theUnited States. Lebanese, Israelis, Pakistanis, Turks, and Afghan groups all were involvedin supplying the drug to United States-based groups for retail distribution.Virtually all of the heroin produced in Mexico was destined exclusively for distributionin the United States. Black tar heroin was produced by Mexican traffickers and sold in thewestern United States by Mexican-American criminal networks.South American heroin, produced in Colombia, was readily available in the Northeast andalong the East Coast, and was trafficked primarily by independent Colombian traffickers.In fact, data obtained from DEA's Domestic Monitor Program (DMP), a retail level heroinpurchase program, indicated that the availability of South American heroin was steadilyincreasing in Northeast U.S. cities. Although South America ranked far behind SoutheastAsia as a source region for heroin destined for the United States, it appeared thatColombian drug traffickers expanded their foothold in the U.S. heroin market.Heroin was readily available in many U.S. cities as evidenced by the high level of retailpurity. Indicators reflected significant use in many East Coast cities, due to increasedavailability of high-purity Southeast Asian as well as South American heroin. Growingdomestic demand was reflected in high worldwide opium poppy cultivation, opium/heroinproduction, and trafficking.Nationally, in 1994, Southeast Asian heroin ranged in price from $100,000 to $260,000 perkilogram. Southwest Asian heroin ranged from $75,000 to $200,000. Wholesale-level pricesfor Mexican heroin were the lowest of any type, ranging from $50,000 to $250,000. SouthAmerican heroin sold for $85,000 to $180,000. The wide range in kilogram prices reflectedvariables such as buyer/seller relationships, quantities purchased, purchase frequencies,purities, and transportation costs.On the street, heroin purity was directly related to availability. Retail heroin puritywas tracked by the DMP. For 1994, the nationwide average purity for retail heroin from allsources was 40.0 percent, much higher than the average of 7 percent reported a decade ago,and considerably higher than the 26.6 percent recorded in 1991. The significant rise inaverage purity corresponded directly to the increase in availability of high-puritySoutheast Asian and South American heroin.In 1994, the retail purity of South American heroin was the highest for any source,averaging 59 percent, followed by Southeast Asian heroin with an average of 39.7 percent.Southwest Asian heroin averaged 35.9 percent at the retail level and Mexican heroinaveraged 27.0 percent, almost double its 1991 average.Heroin purity at the street level was generally highest in the northeastern United States,where a large percentage of the nation's user population lives. New York City was one ofthe major importation and distribution centers for Southeast Asian and South Americanheroin. The average purity at the street level in New York City for Southeast Asian andSouth American heroin in 1994 was 60.9 percent and 71.0 percent, respectively. Of all ofthe DMP cities, Philadelphia, with an average of 64.3 percent, recorded the highestaverage purity of retail heroin during the same time period.Seizures of heroin in excess of 100 kilograms continued to occur in Southeast Asia, but nosuch large seizures occurred in the United States during 1994. Worldwide seizures ofheroin amounted to about 23.8 metric tons. In the United States, 1.3 metric tons wereseized. In the Golden Triangle, the Shan United Army, headed by drug lord Khun Sa, founditself under increasing pressure as the Burmese Army attacked its positions and Thaiauthorities limited the flow of goods and services to the Shan State. Khun Sa was dealt aserious blow in November when Thai police arrested several key Shan brokers. Khun Sashifted operations to make greater use of Laos and possibly Cambodia and Vietnam to shipheroin westward. Nigerian courier organizations continued to smuggle large quantities ofheroin to the United States, making use of transit locations in Asia, Africa, and Europe.Russian organized crime expanded its worldwide activities and involvement in the herointrade.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 United States, spurred by the smoking of marijuana-filled cigars known as blunts.Marijuana from Mexican sources (whether grown in-country or transshipped from othersources) supplied more than 50 percent of the marijuana available in the United States.However, drug law enforcement reported a continued increase in shipments from Colombia,Venezuela, and, possibly, Jamaica. Domestic cultivation supplied approximately 25 percentof the U.S. market.Cannabis was cultivated illicitly in the United States in remote locations, occasionallyon public lands. Major domestic outdoor cannabis cultivation took place in Alabama,Hawaii, Kentucky, Tennessee, and California. Significant quantities of marijuana also wereproduced domestically in indoor growing operations, where sophisticated agronomictechniques were used to enhance potency and production. Effective eradication of outdoorcrops, fear of detection, drought, plant disease, and theft also contributed to increasingillicit indoor cultivation.Domestic cultivators have increased (THC) content-the primary psychoactivecomponent-through selective breeding and cloning. Moving operations indoors permittedgrowers to use advanced cultivation techniques and produce crops year round. Most indooroperations grow potent sinsemilla, the unpollinated female plant. The number of indooroperations seized in 1994 was 3,209, compared to the record high of 3,849 seized in 1992.Mexican polydrug trafficking organizations have smuggled marijuana into the United Statesfor over 20 years and were responsible for between 50 and 60 percent of the marijuanaavailable in the United States during 1994, with all of it smuggled across the Southwestborder. In addition to the Mexican organizations, marijuana traffickers from Colombia, theCaribbean, and the Far East smuggled the drug to the United States. These traffickers usedcargo vessels, pleasure boats, and fishing boats to transport marijuana shipments viatraditional maritime routes.Mexican polydrug organizations employed a wide variety of transportation and concealmentmethods for smuggling marijuana. Shipments of 50 kilograms or less were smuggled bypedestrians, who crossed at border checkpoints, and backpackers, alone or in "muletrains ", who crossed at more remote locations. Mexican traffickers also concealedmarijuana in an array of vehicles, including commercial vehicles, private automobiles,pickup trucks, vans, mobile homes, and horse trailers that were driven through ports ofentry. Shipments larger than 50 kilograms, ranging up to multithousand kilogram amounts,usually were smuggled in tractor-trailer trucks. Once the marijuana was successfullysmuggled across the border, traffickers consolidated the shipments at central sites incities such as Tucson, Arizona; El Paso, Houston, and McAllen, Texas; Los Angeles,California; and, Las Cruces, New Mexico. From these distribution hubs, marijuana wasshipped to cities in the Midwest, North, and along the Gulf Coast and eastern seaboard.Domestically, distribution was controlled by a variety of groups and individuals, rangingfrom large, sophisticated organizations that controlled cultivation and interstatetrafficking to small independent traffickers operating on the local level. State and localdrug law enforcement officials reported that small groups (5 to 10 individuals) controlleddistribution at the retail level. Domestic street gangs, as well as ethnic groups (usuallyimmigrants from source countries), made for a wide range of retail dealers.Prices for marijuana, which vary in accordance with quality, 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 $400 to $600 per pound in 1984, sold for $285 to $4,000 per poundin 1994.IX Sinsemilla in 1984 sold for $1,200 to $2,500 per pound, compared to $900 to $9,500 perpound in 1994. One of the primary factors influencing price was potency, which hasincreased substantially for both commercial grade and sinsemilla, with THC contentaveraging 4.30 and 7.41 percent, respectively, in 1994.The term "dangerous drugs"; refers to the broad category of illicitlymanufactured controlled substances, other than cocaine, heroin, and marijuana. Dangerousdrugs include depressants, stimulants, hallucinogens, and controlled substance analogs.Domestic clandestine laboratories were responsible for the overwhelming majority ofillicitly manufactured dangerous drugs available in the United States. Methamphetamine, a stimulant produced and distributed primarily in the western UnitedStates, was the most prevalent clandestinely manufactured controlled substance in theUnited States. Other significant dangerous drugs of abuse included the hallucinogensd-lysergic acid diethylamide (LSD), phencyclidine (PCP),3,4-methylenedioxy-methamphetamine (MDMA), the stimulant methcathinone, and the depressantflunitrazepam. In addition, throughout the United States, criminals engaged in a widevariety of techniques to acquire and sell legitimately produced controlled substances andpharmaceuticals .During 1994, 306 clandestine dangerous drug laboratories were seized, marking the firstyear that the number of seizures had increased since 1989. Laboratories came in all sizesand were found in a variety of locations, from sophisticated underground hideaways tomotel rooms, kitchens, bathrooms, and garages. The most productive laboratories werelocated in secluded rural areas, a safe distance from the metropolitan distribution chainsthey served. Operators ran the gamut from high school dropouts to chemists with doctoraldegrees.In 1994, 263 methamphetamine laboratories were seized, primarily in the western andsouthwestern United States where most of the nation's methamphetamine production wascentered and availability was highest. Methamphetamine production and distributionnetworks also were established in some of the rural regions in the East, such as southernPennsylvania.Numerous individuals, groups, and organizations, from independent entrepreneurs and outlawmotorcycle gangs to Hispanic polydrug trafficking organizations, manufactured anddistributed methamphetamine. Outlaw motorcycle gangs influenced production in certainareas, such as California, Colorado, and Texas. In California, Mexican traffickersdominated the large-scale production and distribution of methamphetamine in the San Diego,Riverside, San Bernardino, and Fresno areas. Limited evidence suggested that Mexicantraffickers attempted to expand their operations to other areas of the western UnitedStates."Ice", is a large-crystal form of d-methamphetamine hydrochloride, identical inboth chemical and pharmacological properties to the powder (small crystal) form ofmethamphetamine. Although ice trafficking has remained prevalent in Hawaii since 1988, ithas not emerged as a major drug problem in the continental United States. Much of the icemethamphetamine available in Hawaii was manufactured in clandestine laboratories in thePhilippines, Taiwan, and China. In 1994, most of the ice available domestically wassmuggled by ethnic Korean traffickers.LSD was available in retail quantities in virtually every State, and availabilityincreased in a number of States. LSD production facilities in all likelihood were locatedon the West Coast, in the San Francisco, northern California area, and the PacificNorthwest. Since 1977, only six LSD laboratories have been seized by DEA. The last seizureby DEA of an active LSD manufacturing laboratory in the United States occurred in 1981 inBellevue, Washington.Distribution of LSD is unique within the drug culture. A proliferation of mail order saleshas created a marketplace where the sellers are virtually unknown to the buyers, providingthe highest-level traffickers with considerable insulation from drug law enforcementoperations. The vast majority of users were white, middle-class high school and collegestudents who are attracted by the low prices and who perceived the drug as harmless.PCP production appeared to be centered in the greater Los Angeles metropolitan area. LosAngeles-based street gangs, primarily the Crips, continued to distribute PCP to a numberof cities in the United States through their cocaine trafficking operations. They posed aparticular problem because of their propensity for violence. PCP abuse peaked in the earlyto mid-1980's, and was supplanted by the use of crack cocaine. However, there are recentindications that PCP abuse has increased somewhat in a limited number of cities. PCPlaboratory seizures since the mid-1980's have ranged from 3 to 21 per year, totalsconsiderably less than the high of 79 reported in 1978. Nine PCP laboratories were seizedin 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. Three MDMA laboratories were seized during 1994 in the United States.MDMA was popular among college students, and also was used at all-night dance parties,principally by middle-class youths. Dosage units of MDMA, often sold in tablets, variedfrom 55 to 150 milligrams. Retail prices ranged from $6 to $25.Recently, there has been 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 one of the greatest adverse effects of Rohypnol is amnesia. The street pricefor Rohypnol was generally $5 per dosage unit, although prices of $6 to $8 also werereported. Wholesale prices ranged from $1.25 to $3 per tablet. Street names for Rohypnolincluded "Rophies", "Ropies", "Ruffes", "Roofies",and "Roches".Controlled substance analogs present a unique problem to drug law enforcement. Mostanalogs were produced domestically by independent laboratory operators in relatively smallquantities. New analogs may emerge at any time. For instance, during 1992, DEAinvestigated a methamphetamine-like analog called methcathinone, which originated fromclandestine laboratories in northern Michigan. In response, DEA arranged for methcathinoneto be placed in Schedule I of the Controlled Substances Act in October 1993. Twentymethcathinone laboratories were seized during 1994, compared with 22 confiscated in 1993.Methcathinone production and distribution, originally limited to Michigan's UpperPeninsula region, spread throughout much of the Midwest in 1994.Legitimately manufactured controlled substances frequently were diverted to the illicitmarket. Illegal or fraudulent prescribing and dispensing, and theft from legitimatechannels were used to divert these drugs. Major sources of domestic diversion shifted fromthe wholesale to the retail level. Domestically, organized groups of "doctorshoppers"; operated interstate, often ranging across four or five States in search ofsources. Diversions commonly involved depressants such as benzodiazepines, particularlyalprazolam and diazepam.Money laundering methods vary by country and regions of the world due to a number offactors, including: the perhaps most importantly, variations in enforcement pressure. Thecontinuing evolution in money laundering legislation and economic developments worldwidehave spawned a new generation of money laundering methods.In 1994, United States-based drug traffickers shipped their profits out of the country insmaller amounts. This was reflected in DEA's undercover proprietary money launderingoperations.Money launderers' exploitation of casinos continued to grow as the proliferation ofcasinos in the United States was not matched by a growth in resources to monitor them.River boat casinos became popular and Native Americans opened casinos in almost everyState. Nevada's casinos still are exempt from Federal currency transaction reporting.Various ethnic groups in the United States new to money laundering have introduced theirown methods or have revised older methods. Ethnic Pakistanis have established businessesin the United States that service Southwest Asia's hundi underground banking systems.Invoice manipulation was used to move drug proceeds into and out of the United States.Russians newly arrived in the United States closed real estate deals with cash carried inshopping bags; they also used the casinos to launder illicit proceeds that were generatedfrom a variety of criminal activities. Other money laundering methods that have drawnattention recently include: the use of swaps (international currency transactions);payable-through-accounts held by foreign banks in U.S. banks; "smart cards"; forstructuring deposits and transferring money internationally; and cyberbanking for instantmultinational layering of drug deposits.