Mexican cartels stockpile drugs and money amid COVID-19 pandemic

LOUISVILLE, Ky. – The COVID-19 pandemic is making meth more expensive in much of the USA.

Travel restrictions at U.S.-Mexican border crossings and abroad have made it harder for cartels to move drugs and drug profits without detection, according to agents with the U.S. Drug Enforcement Administration.

"There’s been stockpiling of drugs and money on both sides of the southwest border, and money-laundering activity has decreased,” said J. Todd Scott, special agent in charge of the DEA's Louisville Field Division.

“People, in general, aren’t moving; stuff isn’t moving," he said. "Cartels function best when they can kind of move undercover, move with the legitimate commerce.”

Travel restrictions to and from China slowed the importation of precursor chemicals, which cartels use to make meth and fentanyl. Cartels, in turn, slowed the amount of meth sent to America. 

To lessen the financial blow, cartels inflated the price of drugs, especially meth, according to drug agents across the country.

“About half of our field divisions are reporting price increases at the retail level of meth and increases for fentanyl" across the country, said Scott, who directs agents and intelligence analysts in Tennessee, Kentucky and West Virginia. “There’s less of it out there, they’re gonna charge more." 

'Every arm of cartels are having to adjust'

In Los Angeles, a major hub for Mexican cartels, meth prices have doubled. At the end of last year, a trafficker could buy a pound at wholesale from a cartel associate for $900. Then prices began to rise, climbing to $1,800 to $2,000 per pound, said Bill Bodner, special agent in charge of the DEA's Los Angeles Field Division. 

The street-level price of fentanyl and crystal methamphetamine, called "ice," has increased in Virginia, West Virginia, Kentucky and Tennessee, said Vic Brown, executive director of Appalachia High Intensity Drug Trafficking Area task forces. State lockdowns and the recommended reduction of travel slowed drug trafficking along interstate corridors, he said.

“With methamphetamine, we’re seeing prices have gone up across the state of New Mexico,” said Will Glaspy, head of High Intensity Drug Trafficking Area task forces in the New Mexico region. 

In the DEA New England Field Division – which includes Massachusetts, Connecticut, Vermont, Maine, Rhode Island and New Hampshire – investigators noticed slight price increases for fentanyl and cocaine at the end of May, but no increase for meth in their region, said division spokesman Timothy Desmond. The virus hasn't hampered drug sales, he said.

The coronavirus has affected Mexican cartels' global business.

The cartels have struggled to get drugs in and money out of Australia, said Kevin Merkel, the DEA's Australia attaché. This is the most sought-after illicit drug market, where users are willing to pay a much higher price for top-quality Mexican meth than American buyers.

"As businesses are having to adjust, every arm of cartels are having to adjust," Merkel said.

Meth prices started to climb in Australia in May and have doubled in some areas, the drug agent said. A kilo of meth used to cost $90,000 to $130,000 but now garners up to $200,000, he said. Cocaine, harder to get during the pandemic, followed a similar spike. Dealers pay more and pass the additional cost to users. 

See also:Why the coronavirus pandemic is fueling drug overdoses in Kentucky

In East and Southeast Asia, the supply of meth and other synthetic opioids has swelled, causing prices to fall, according to a report in May from the United Nations Office on Drug and Crime.

"While the world has shifted its attention to the COVID-19 pandemic, all indications are that production and trafficking of synthetic drugs and chemicals continue at record levels in the region," Jeremy Douglas, UNODC representative for Southeast Asia and the Pacific, said.

As people who are addicted scramble to pay more for their fix, agents predict an increase in car, garage and home burglaries, as well as thefts.

"I would be very surprised if over the next three to four months, we didn’t see property crimes go up," said Bodner, head of LA drug agents. "When prices go up, addicts have to pay, and they have to get the money from somewhere."

The money paid for drugs is stockpiling in the USA and Australia, as cartels are leery of getting caught during a time of reduced travel. 

During a 10-week period beginning in March, drug agents in the Los Angeles area seized $10 million in drug money, Bodner said. That's more than double drug profit seizures during the same time period last year. He explained that traffickers who used to limit money stored in stash houses to $100,000 to $200,000 keep $1 million or more.

After law enforcement stumbled onto several large stockpiles of drug proceeds, cartels made quick changes.

“They’re having to resort to the old-fashioned way of putting money back in the trunk of a car and driving it south," Bodner said.

Recently:Mexican cartel member with ties to billionaire fugitive extradited to USA

Virus also affects drug agents 

As cartel members and associates have made adjustments during the pandemic, so have investigators.

“Routine hand-to-hand drug deals or buys you might have done a few weeks ago are a little tougher to pull off now," Scott, the DEA agent in Louisville, said. "But the bigger investigations, the wire intercepts, the long-term complex conspiracy cases are still going on.

“We’ve got enough gear to go out and do the arrests we need to do.”

Scott moved from Texas to Kentucky in May during the pandemic to lead the DEA's Louisville Field Division. He had to use videoconferencing to meet his new agents, who he said continue to "vigorously" pursue cases.

"It hasn’t been easy, and we’ve had to get a bit creative in how we safely approach our operations, but we haven’t let the pandemic stop our efforts to support DEA’s mission and keep our communities safe," he said.

Merkel oversees one of the divisions most affected by the virus. Several of his agents and their families were evacuated from China, Indonesia and parts of Manila. Those agents, temporarily relocated to Washington, have remained in contact with their counterparts in their host countries to coordinate investigations, search warrants and arrests.

"They’re on the other side of the world still getting their job done,” Merkel said. "It's impressive."

Investigation:Mexican drug lord’s empire devastating families with its grip on US

Across the USA, federal agents wear face masks, gloves and eye protection to search suspects' homes and make arrests.

In New York, police and DEA agents teamed to shut down a drug ring in the Bronx in May that had more than a million dollars in heroin and fentanyl. 

"Amid the COVID-19 pandemic, we arrested six drug traffickers who aptly branded their product ‘coronavirus,’ " DEA Special Agent in Charge Ray Donovan said in a tweet.

Some police departments are concerned about safety and want to hold off on interviews and searches and instead focus on surveillance.

“Some of those departments don’t want their guys going out,” said Glaspy, who oversees task forces at the border that team federal agents with local and state police.

Previously:Daughter of cartel boss allegedly misled judge to seek bond because of COVID-19

In Mexico, cartels capitalize on pandemic

In Mexico, cartels are finding ways to capitalize on the virus. That includes fighting over drug sales and coveted routes as police and the military focus on civil unrest as a result of the coronavirus, which has killed more than 13,000 people in Mexico.

"That obviously distracts law enforcement from controlling many highways and many drug distribution points, and that could promote the trafficking or domestic sale of drugs,” said Eduardo Guerrero Gutiérrez, a public safety consultant and political analyst based in Mexico City.

The cartel turf wars have contributed to a spike in homicides, which topped 11,535 by the end of April, according to the country's security ministry. At that pace, the country is likely to suffer one of its deadliest years since record keeping began in 1997.

During the pandemic, cartels  deliver food and essential household items to impoverished residents in Mexico to garner support and mark their turf.

Cartel members boast about their supposed good deeds on social media, posting videos and photos of boxes of supplies branded with their cartel name, such as CJNG, for the Cártel Jalisco Nueva Generción or its leader "El Mencho." 

The cartels steal the food from markets in an attempt to bolster their image and profit off the pandemic, Merkel said. "It’s disgusting."

The food handouts are a common propaganda campaign for cartels, said Javier Oliva, political and social sciences professor and researcher at the National Autonomous University of Mexico.

"The truth is that they just hand out 30 or 40 boxes," not enough to lessen the poverty, Oliva said. "They only want to show the message, 'Here we are,' " especially to rival cartels.

In contrast, the cartel frequently uses social media to spread fear by posting photos and videos of kidnappings, torture and killings of rivals, which was detailed in November in a  Courier Journal special report on the cartel and El Mencho.

Who is El Mencho? He's the most powerful drug kingpin you've never heard of

Will virus have lasting effect on drug war?

Drug agents expect cartels to resume money laundering and drug smuggling once flights and traffic at the border increase. They don't know whether cartels have found new ways to get drugs from Mexico into the USA.

“It’s far too soon to know exactly how COVID-19 is affecting the cartels," Scott said during an interview in Louisville. "We just don’t have enough data."

In Los Angeles, Bodner said, “The drug business is a pretty efficient market. They're always looking for new opportunities."

Merkel said agents will investigate how cartels adjusted during the pandemic to find new ways to attack them.

“We’ve seen what can happen when cartels are disrupted on a global scale," he said. "We’re going to attempt to exploit that as much as we can.”

Reach reporter Beth Warren: bwarren@courier-journal.com or on Twitter @BethWarrenCJ. 

Seeking help

People struggling with drug addiction can find help through the Substance Abuse and Mental Health Services Administration's national hotline 1-800-662-HELP (4357).

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