Victor Gill had no job and no business license, but for some reason he found it necessary to buy eight money-counting machines in the space of a month in early 1986. To U.S. Customs agent Fred Ghio and IRS agent Karl Knudsen, Gill might as well have been wearing a neon sign that said, “Arrest Me!”
The two agents were on the prowl for money launderers. A good way to find them, they reasoned, was to check with companies that made cash-counting machines. One such firm was the Glory Business Machine Co. in Bell, California, a rundown suburb of Los Angeles that in better days had been Hollywood gangster Mickey Cohen’s stomping grounds. After seeing how often Gill was visiting Glory, they decided he could stand some scrutiny.
Ghio and Knudsen dropped by the Bell Police Department to see if anyone there knew their quarry. As luck would have it, the city of Bell’s only narcotics detective, Jerry Guzzetta, was on duty, and he knew Gill well. He’d arrested him on cocaine charges a few years earlier and was more than happy to help the two federal agents bust him again. “You can’t investigate money laundering without getting into dope. There’s just no way,” Guzzetta said.
Jerry Guzzetta went after dopers with a vengeance, and his one-man investigations had produced some impressive results. In November 1985 he’d been the subject of a glowing piece in the Los Angeles Times for his work in taking down a large Colombian trafficking ring. Some of his fellow officers regarded him as a loose cannon and a publicity hound, always trying to make a name for himself. But his friends said Guzzetta’s zeal was largely misunderstood.
“He hated dope dealers. He hated them with a vehement passion, because a dope dealer had killed his brother, and that’s one of the things that spurred him to go after these people so aggressively,” Officer Tom McReynolds said.
“In a sense, a drug dealer killed my entire family,” Guzzetta said. “After the guy shot my brother in the head, my father died of a heart attack. And then my mother died a couple years later. And he got off with two years for involuntary manslaughter.”
Knudsen and Ghio liked Guzzetta’s enthusiasm, and they invited him to join their surveillance of Gill. The trio soon discovered that Gill was buying the money machines for Colombian traffickers who didn’t want their names turning up on purchase orders. He was arrested and eventually pleaded guilty to conspiracy charges.
It was the start of a mutually beneficial relationship for Guzzetta and the two federal agents, who specialized in money-laundering cases. For a small-town police department like Guzzetta’s, busting a money launderer was an answered prayer, because the police got to keep a percentage of the spoils.
After California voters passed Proposition 103, which slashed local property taxes, many local police departments became hooked on drug money, using asset forfeiture laws to replace their lost tax revenues. Cash seized from traffickers and money launderers began being used to pay officers’ salaries, for overtime, new patrol cars, uniforms, guns, and even helicopters.
The cash-strapped Bell PD was delighted to loan Guzzetta out to work with the federal agents. They would find the suspects, Guzzetta would help with surveillance and the search warrants, and afterward the city of Bell and the federal government would divvy up the booty—a win-win situation all the way around.
The trio “did some very good work together at first,” Ghio said. “[We] took a lot of dope off the streets and seized a lot of cash.” He said Guzzetta “became somewhat a local hero. He got a lot of recognition from his fellow officers, the publie, and the Bell City Council, mainly due to the funds they got through asset sharing, which was generated from the seized cash.”
Later that summer IRS agent Knudsen received notifications from two L.A. banks about a pair of customers who were making large cash deposits on a regular basis, officially known as “suspicious transactions.” Banks routinely report them to the IRS. “They did a bank account check and found out [the customers] had no visible means of support but had over $1 million in the bank,” Guzzetta said. The federal agents approached Guzzetta and asked him if he wouldn’t mind helping out “because one of the banks was in the city of Bell and I had a good rapport with [the bank officers].”
Guzzetta began tailing the two depositors, which was easy because they stood out in a crowd. They were the Trees—Jacinto and Edgar Torres, Danilo Blandón’s gigantic associates. The Torres brothers were running all over L.A., picking up packages, dropping off packages, making strange nighttime trips into South Central Los Angeles.
Jacinto, Guzzetta discovered, was on probation for cocaine possession. That, combined with the bank accounts, the surveillance, and the lack of employment, provided all the ammunition he needed to get a search warrant for the addresses the Torres brothers had been visiting. On August 11, 1986, Guzzetta and his federal friends raided them—and they hit the jackpot.
“We found $400,000 in the closet of one of the houses,” Guzzetta said. “That was their spare change.” But the Torreses were too smart to mix their money with their cocaine. Like their friend Blandón, they kept the two far apart, hidden in nondescript rental houses around the city. The raid produced not an ounce of dope.
Guzzetta said the brothers disclaimed ownership of the $400,000 and handed it over to the feds, which satisfied Ghio and Knudsen. “They’d seized some money, cleared some paper, and made their bosses happy. They weren’t interested in prosecuting them federally because all they really had them on was a currency violation. Even if they were convicted they’d have pulled three years and been out in a year and a half,” Guzzetta said.
But Guzzetta wasn’t willing to just turn the brothers loose. If he couldn’t put them away, he’d put them to work—for the police.
As imposing as they were, the Torreses had an Achilles heel that Guzzetta and the federal agents skillfully exploited: their live-in girlfriends, who were close relatives of Medellín cartel boss Pablo Escobar. (In a 1996 interview, Norwin Meneses confirmed the relationship between the women and Escobar.)
Guzzetta said the Torreses were informed that no charges would be filed against them, but their girlfriends would be prosecuted on conspiracy and tax evasion charges, imprisoned, and then deported as undesirable aliens who would never be allowed to set foot in the United States again.
To the rest of the world, it would seem like the brothers had sacrificed their women to save themselves, offending traditional Latin machismo. Even worse, it would appear as if they’d ratted out two of the cocaine lord’s relatives. “You give up Pablo Escobar’s family, and you’re dead,” Guzzetta chuckled. “So we turned them.”
To keep the brothers on a short leash, it was arranged with the Los Angeles County District Attorney’s Office for the Torreses to plead guilty to drug charges under false names. They were given suspended sentences, put on probation, and turned over to Guzzetta, who was assigned as their sole law enforcement contact to minimize their chances of exposure.
“They were scared to death,” Guzzetta said. “They believed very strongly, and I agreed with them, that if anyone found out they were informants—including their girlfriends—they’d be killed in a minute.”
During a debriefing on August 22, 1986, the Torreses told Guzzetta that they were convinced their girlfriends had already hired a couple of assassins. They told the detective they would check in with him every twenty-four hours to let him know they were still alive. “The informants advise that if...they are found dead in some other location, that it was their girlfriends who had contracted their killing,” Guzzetta’s report stated. “The informants relate that if, in fact, they are found dead, that the method which would probably be used upon them is a lethal injection of drugs, which will show up as a drug overdose.”
Guzzetta and the federal agents began debriefing the brothers, and slowly, like an ocean liner emerging from a fog bank, the size of the operation they were part of began to take shape.
It was mind-boggling.
They revealed a drug ring that was dumping hundreds of kilos of cocaine every week into the black neighborhoods of Los Angeles, generating truckloads of cash. “The CI [confidential informant] has admitted laundering approximately $100 million since Jan. 1986,” Customs agent Ghio wrote a few days after the debriefings began. “They currently have approximately 1,000 kilos of cocaine currently stored in the Los Angeles area as well as between $250,000,000 and $500,000,000 secreted in various locations locally that they have been unable to get out of the U.S.”
Guzzetta said he initially doubted the brothers’ story. Crooks trying to wiggle out of a jam often made extragavant claims, but this took the cake. No one he had questioned claimed to have a half a billion dollars stashed somewhere. “These guys were right off the street. They had absolutely no credibility as far as I was concerned,” Guzzetta recalled.
To prove what they were saying, the Torres brothers invited Guzzetta and his friends to follow them while they made their rounds, dropping off dope and picking up cash from their customers in South Central Los Angeles. “The reliability of the CI has been substantiated,” Ghio reported to his bosses a few days later. “Under the control of Det. Guzzetta, Bell, PD., the CI has picked up and delivered 40 kilos of cocaine and collected and delivered $720,000.” Within two weeks, Guzzetta wrote, he had “observed the movement of monies totaling $750,000, $230,000, $130,000, $150,000 respectively, which have been moved by informants and picked up from the Black market area.”
Guzzetta began compiling his debriefing notes into a series of reports he titled “Project Sahara,” because he figured the Torreses could help dry up the cocaine supply in South Central. Portions of his Project Sahara reports were located by police investigators ten years later, in 1996. “Basically, there is one major market which informant 36210 and 36211 are dealing with, which for the sake of argument in this report will be designated the Black market, because it is solely controlled by two male Negroes by the name of Rick and Ollie,” Guzzetta wrote in his first report.
Guzzetta listened gape-mouthed as the brothers rattled off names, dates, delivery sites, and routes of transportation. The two black dealers in South Central, they reported, “are generating a conservative figure of approximately $10 million dollars a month.”
The Torreses told him that the blacks were getting their cocaine from three Colombians and “a fourth peripheral source.” Two of the Colombians, they knew only by nickname; the “peripheral source” they knew quite well: Danilo Blandón.
“Informants relate that Danilo Blandón is extremely dangerous because of his access to information,” Guzzetta wrote, “and further, is extremely dangerous because of his potential to override the informants’ market, thus cutting off the informants from the supply source of cocaine and currency, thus cutting off the informants’ source of information.”
Guzzetta said the brothers told him that Blandón had “a lot of inside information as to law enforcement activity, as to people that are working him,” and they warned him to “be extremely careful about releasing any information to other law enforcement agencies...because they were afraid that Blandón had somebody inside the police department or whatever that was feeding him information.”
Ricky Ross confirmed that Blandón had an uncanny ability to accurately predict upcoming police raids but said he was never able to explain Blandón’s clairvoyance.
The Torres brothers told Guzzetta that “Blandón is working with an ex-Laguna Beach police officer by the name of Ronnie, who lives in an expensive house in Mission Viejo and drives a new Mercedes automobile.... Ronnie transported 100 kilos of cocaine to the Black market and has transported millions of dollars to Miami for Danilo Blandón.” Once Blandón’s cash arrived in Florida, the brothers reported, a relative of Blandón’s, Orlando Murillo, would launder it. They described Murillo as “a bank chairman under Somoza prior to his is being thrown out of power.”
Roberto Orlando Murillo, the uncle of Blandón’s wife, was an influential Nicaraguan economist who’d been appointed by President Somoza in 1978 to the Central Bank of Nicaragua, which is similar in function to the U.S. Federal Reserve Bank. The debonair investment banker was also the official representative of two Swiss banks located in Panama and Managua, and had managed a number of the Somoza family’s businesses before the revolution.
It was when the Trees started talking about Murillo and the Contras—and the airfields in New Orleans and Brownsville, Texas, where Contra cocaine was allegedly being flown in under armed guard—that Guzzetta knew he was way out of his league.
Even if only half of what the Torreses were saying was true, the detective realized, he was up against an organization that could roll over a small-town cop like he was a bug. “I took it to the chief of police. I told the chief, ‘It’s bigger than I can handle. These guys are talking about millions of dollars in cocaine, they’re talking about a Nicaraguan [leader] named Calero being involved in this, Colombian families that strike fear into the hearts of mortal men. I can’t handle this by myself.’”
His chief, Frank Fording, asked him if he would mind teaming up with one of the L.A. County Sheriff’s Major Violators squads, the “Majors,” as the elite units were known.
Guzzetta didn’t mind at all. In fact, he was thrilled by the prospect. “The Majors were hot shit,” Guzzetta said. “They had all the resources, they had the funding, they had the manpower, they had the surveillance equipment, the night vision stuff, the helicopters, the overtime. They had everything.”
They were semilegendary in L.A. law enforcement circles as the best the 8,000-man sheriff’s department had to offer. Any cop with the slightest amount of ambition lusted for an assignment to the Majors. They got the biggest cases, seized the largest amounts of cash and cocaine, got the fattest overtime checks, and worked virtually unsupervised.
As L.A. defense attorney Jay Lichtman put it: “This was really the cream of the crop, the elite, the top officers of the Sheriff’s Department.” They were considered some of the best drug detectives in the nation.
They also won notoriety for their boozy off-duty carousing. A drunken crew member had once pulled out a pistol at a restaurant to hurry along a lazy waiter. On another occasion Deputy Daniel Garner, regarded as the best drug detective in the department, relieved himself on the pants leg of an aspiring narcotics officer Garner deemed unworthy of joining the Majors.
The squads—Majors I, II, and III—worked out of trailers at the Whittier and Lennox stations, each team of seven or eight defectives commanded by a sergeant. Guzzetta was put together with Majors II, headed by Sergeant Edward Huffman, whose brother was a friend of Guzzetta’s. “Huffman was great,” Guzzetta said. “A real straight arrow.”
Guzzetta gathered up his “Project Sahara” reports and delivered them to the Majors, where they landed on the desk of Detective Thomas Gordon, a tall, soft-spoken officer who had spent sixteen years with the Los Angeles County Sheriff’s Department.
By 1986, Tom Gordon had become a hard man to impress. Since 1982 he and his cohorts on the Majors had been tangling with the biggest criminals L.A. had to offer: the Mexican mafia, the gangbangers, Medellín cartel cells, international money launderers. But “Project Sahara” had a bit of everything, and it had an element the Majors had never before faced—a CIA-linked guerrilla army that was allegedly dealing in dope. There was no telling where this investigation could take them. Former lieutenant Mike Fossey, the unit supervisor and intelligence officer for the Majors II squad, called it one of the biggest cases he’d ever handled.
One of its main attractions was that it would provide the law enforcement community with a wealth of information on the inner workings of the L.A. crack market. Though the crack epidemic had been raging in South Central for three years by then, drug agents still had very little understanding of its dynamics.
They knew the street gangs that dominated the trade rarely left their own neighborhoods, which meant that somehow, someone was bringing in massive amounts of cocaine and delivering it to them. But no one—from the DEA on down—had been able to figure out where it was coming from, who was importing it, or who was reselling it to the gangs.
Many narcotics detectives assumed that the normal rules of the drug trade—where one or two major drug rings control a “turf”—didn’t apply to crack, because the marketplace appeared so disorganized and fragmented. There were crack dealers everywhere, on every corner. The problem seemed uncontrollable.
“We haven’t encountered any major network. We’re conducting these little skirmishes. It’s very frustrating,” one narcotics detective complained to the Los Angeles Times in early August 1986. Robert Stutman, the head of the DEA office in New York in the mid-1980s, wrote that “the marketing of crack was thought to be a cottage industry, a low-level blip in the drug trade like the selling of single marijuana cigarettes.”
But that was only because the cops had never gotten much beyond the streets. In June 1986, DEA intelligence revealed that “what looked like independent street corner pushers were actually the bottom rung of carefully managed organizations,” Stutman wrote in his 1992 memoirs. “It came as a revelation.”
Analyzing the information provided by the Torres brothers, the Majors reached the same frightening conclusion. The L.A. crack market, they realized, was far more disciplined and well organized than anyone had ever dreamed.
And worse, through these two mystery dealers named Rick and Ollie, it appeared that the gangs had established a direct pipeline to the Colombian cartels, which meant they had access to as much cocaine as they could sell. Since the circle was so small, it was little wonder that its bosses had escaped detection for so many years.
It had been one long cop-free party, but it was coming to an end. The Majors now had the names and addresses of everyone at the top of the distribution chain, from the Colombian importers to the Nicaraguan middlemen to the black wholesalers who controlled the South Central marketplace. If everything went right, Gordon and his men could take down the biggest crack operation ever uncovered—one whose tentacles reached all the way to South America—and cut off the L.A. ghettos’ main source of supply.
“This was going to be my last hurrah,” said Gordon, who was scheduled to be rotated out of the Majors in a few months. “Like anyone, I’ve got an ego, and I wanted to go out with a bang.”