News Release
FOR IMMEDIATE RELEASE
March 23, 2006

Charges Against Cocaine/Marijuana Distribution Ring, Arrests, Search Warrant Executions and Drug Seizures in Multi-District, Coordinated Enforcement Actions

March 22-Memphis, TN - Lawrence J. Laurenzi , Acting United States Attorney for the Western District of Tennessee, and Andrew Dimond, Resident Agent in Charge of the DEA’s Memphis Resident Office, announced the following:

  1. a federal indictment in Memphis against nine defendants charged with conspiring to distribute cocaine and marijuana,
  2. the execution of eight search warrants and additional searches in the Memphis and Jackson areas,
  3. seizures of cocaine, marijuana and automobiles, and
  4. indictments charging 32 defendants, arrests and search warrant executions in the Eastern District of Tennessee arising from two federal prosecutions in Chattanooga, Tennessee, which are related to the Memphis prosecution.

The Memphis indictment was returned on March 21, 2006. The arrests, searches and seizures occurred in the areas of Memphis, Jackson and Chattanooga on March 21 and 22, 2006.

THE MEMPHIS INDICTMENT

The Memphis indictment charges the following defendants with conspiring to distribute cocaine and marijuana:

  1. Defendant Sergio ASCENCIO (aka Giovanni Caraballo, or Chico, or "G") resided in the Memphis, Tennessee area or Mexico during the conspiracy alleged in count one of the indictment. According to the indictment, Sergio ASCENCIO was a principal organizer and manager of the cocaine and marijuana trafficking organization, which conspired to distribute hundreds of thousands of dollars worth of cocaine and marijuana in the Western District of Tennessee, and elsewhere. The indictment alleges that, in furtherance of this conspiracy, Sergio ASCENCIO made numerous telephone calls to defendants named in this indictment, among others. The indictment alleges that, while in Mexico, Sergio ASCENCIO conspired with Andres ARBELAEZ, among others, to distribute cocaine and marijuana on his behalf in the Western District of Tennessee, and elsewhere.
  2. Defendant Andres ARBELAEZ resided in the Memphis, Tennessee area during the course of the conspiracy alleged in count one of the indictment. The indictment alleges that, in furtherance of this conspiracy, Andres ARBELAEZ made numerous telephone calls to defendants named in this indictment, among others. According to the indictment, Andres ARBELAEZ also conspired to distribute cocaine and marijuana on behalf of Sergio ASCENCIO while Sergio ASCENCIO was in Mexico.
  3. Defendant Steve LAVENDER resided in the Memphis, Tennessee area during the term of the conspiracy alleged in count one of the indictment. According to the indictment, Steve LAVENDER conspired with Andres ARBELAEZ, among others, to distribute cocaine and marijuana in the Western District of Tennessee. The indictment alleges that, in furtherance of this conspiracy, Steve LAVENDER made and received numerous telephone calls from Andres ARBELAEZ, among others.
  4. Defendant Larry ANDERSON (aka, the "Ugly One") resided in the Memphis, Tennessee area during the conspiracy alleged in count one of the indictment. According to the indictment, Larry ANDERSON conspired with Andres ARBELAEZ, among others, to distribute cocaine in the Western District of Tennessee. The indictment alleges that, in furtherance of this conspiracy, Larry ANDERSON made and received numerous telephone calls from Andres ARBELAEZ, among others.
  5. Defendant Otis SMITH (aka Ozzie or "OC") resided in the Memphis, Tennessee area during the conspiracy alleged in the indictment. According to the indictment, Otis SMITH conspired with Andres ARBELAEZ and Sergio ASCENCIO, among others, to distribute cocaine and marijuana in the Western District of Tennessee. The indictment alleges that, in furtherance of this conspiracy, Otis SMITH made and received numerous telephone calls from Sergio ASCENCIO and Andres ARBELAEZ, among others.
  6. Defendant Armando DIAZ is alleged to have conspired with Andres ARBELAEZ and Sergio ASCENCIO, among others, to distribute cocaine in the Western District of Tennessee. According to the indictment, Armando DIAZ made and received numerous telephone calls from Andres ARBELAEZ, among others. On or about October 31, 2005, Armando DIAZ was arrested in Texas with approximately four (4) kilograms of cocaine, which was destined for Sergio ASCENCIO in Memphis, Tennessee.
  7. Defendant Derrick MARTIN (aka the "Big One") resided in the Jackson, Tennessee area during the conspiracy alleged in the indictment. According to the indictment, Derrick MARTIN conspired with Andres ARBELAEZ, among others, to distribute cocaine in the Western District of Tennessee. The indictment alleges that, in furtherance of this conspiracy, Derrick MARTIN made and received numerous telephone calls from Andres ARBELAEZ, among others.
  8. Defendant Dustin REDMOND (aka David Fleming) resided in the Memphis, Tennessee area during the conspiracy alleged in the indictment. According to the indictment, Dustin REDMOND conspired with Andres ARBELAEZ, among others, to distribute cocaine and marijuana in the Western District of Tennessee. The indictment alleges that, in furtherance of this conspiracy, Dustin REDMOND made and received numerous telephone calls from Andres ARBELAEZ, among others.
  9. Defendant Luis MANCILLA resided in the Memphis, Tennessee area during the conspiracy alleged in count one of the indictment. According to the indictment, Luis MANCILLA conspired with Andres ARBELAEZ, among others, to distribute cocaine in the Western District of Tennessee. The indictment alleges that, in furtherance of this conspiracy, Luis MANCILLA made and received numerous telephone calls from Andres ARBELAEZ, among others.

The indictment also contains the following allegations describing the charged conspiracy:

  1. According to the indictment, Sergio ASCENCIO and other coconspirators negotiated with other cocaine traffickers in Mexico, Texas and Tennessee for the purchase of large quantities cocaine.
  2. The indictment also alleged that Sergio ASCENCIO and other coconspirators organized and managed the delivery of various quantities of cocaine and marijuana from Mexico and Texas into the Western District of Tennessee.
  3. The indictment also alleged that cocaine and marijuana was stored, prior to distribution to buyers, in premises known as "stash houses."
  4. The indictment also alleged that Sergio ASCENCIO, Andres ARBELAEZ, and other coconspirators distributed various quantities of cocaine and marijuana throughout the Western District of Tennessee. Sergio ASCENCIO and Andres ARBELAEZ, and other coconspirators sold and distributed cocaine and marijuana on consignment to others (referred to by the coconspirators as "fronting").
  5. The indictment also alleged that Sergio ASCENCIO and Andres ARBELAEZ, and other coconspirators, recruited individuals to distribute cocaine to buyers in the Western District of Tennessee.
  6. The indictment also alleged that Sergio ASCENCIO and Andres ARBELAEZ, and other coconspirators, recruited other individuals to count, transport and store currency derived from the sale of controlled substances.
  7. The indictment also alleged that the defendants and coconspirators used telephones, including cell phones, to facilitate their illegal narcotics business; that is by making telephone calls to communicate with each other, with suppliers, and with customers.

THE ARRESTS, SEARCHES AND SEIZURES IN WESTERN TENNESSEE

Eight federal search warrants were executed on March 21 and 22, 2006, and residences were searched in Memphis, Cordova, Lakeland, Germantown, Bartlett and Mason. Three other residences were searched, by consent, in Memphis and Jackson. A total of approximately eight kilograms of cocaine, approximately 175 pounds of marijuana, 15 firearms, at least approximately $100,000 in cash and 16 vehicles were seized. The firearms included four assault rifles and nine handguns. Approximately six kilograms of cocaine were found in a vehicle near a residence in Jackson. Approximately $90,000 to $100,000 in cash was found in a residence in Memphis. In two residences, in Memphis and Germantown, the investigators found wrappings and other materials indicating the residences were used to store substantial quantities of drugs. As of the issuance of this press release, the investigators have arrested four of the defendants charged in the Memphis drug indictment and another defendant was previously arrested. Efforts to apprehend the remaining defendants are in progress. Besides the defendants charged in the Memphis drug indictment, the investigators also detained an additional ten individuals for immigration violations.

THE POSSIBLE PENALTIES IN THE MEMPHIS INDICTMENT

A violation of Title 21, United States Code, § 846, which makes it a crime to conspire to violate the Controlled Substances Act, is punishable, in a case involving this quantity of narcotics, by a minimum prison term of ten years and a maximum term of life, a $4,000,000 maximum fine, plus five years supervised release, or after one prior drug felony conviction not less than 20 years, a $8,000,000 maximum fine, plus ten years supervised release, or after two or more prior drug felony convictions a mandatory life prison sentence.

THE PROSECUTION IN THE EASTERN DISTRICT OF TENNESSEE

The United States Attorney's Office for the Eastern District of Tennessee has initiated two related drug conspiracy prosecutions, charging defendants in the Chattanooga area. Details about that prosecution and the resulting arrests and seizures are available from that office. Thirty-two defendants were charged with drug trafficking offenses in two indictments. One of these defendants was arrested in Memphis on March 21, 2006.

CONCLUSION

The case initiated through the Memphis indictment is being prosecuted by Assistant United States Attorney Scott Leary, with the Office of the United States Attorney for the Western District of Tennessee. The Memphis case was investigated by the DEA Task Force in Memphis, which is comprised of DEA Special Agents and agents and officers with U.S. Immigration and Customs Enforcement , the U.S. Marshal’s Service, the Germantown Police Department, the Shelby County District Attorney General’s Office, the Memphis Police Department, the Shelby County Sheriff’s Office, the Millington Police Department, and the Tennessee Bureau of Investigation.

Additional assistance in the Western District of Tennessee operation was provided by the Narcotics Division and SWAT team of the Shelby County Sheriff's Office, the Madison County Sheriff's office, the U.S. Marshal’s Service, U.S. Immigration and Customs Enforcement and the West Tennessee Drug Task Force .