(U) Distribution - Houston High Intensity Drug Trafficking Area Drug Market Analysis 2009 (UNCLASSIFIED)

Houston is a primary drug distribution center in the southwestern United States and is used by numerous DTOs to supply illicit drugs to markets in the HIDTA region as well as to major market areas throughout the United States. Traffickers in Houston supply cocaine, marijuana and, to a lesser extent, heroin, methamphetamine, MDMA, and diverted CPDs to distributors in major market areas such as Atlanta, Chicago, Dallas, Denver, Detroit, Kansas City, Los Angeles, New York City, Philadelphia, and St. Louis. Prior to shipping illicit drugs to other areas, traffickers in Houston often store the drugs at local stash sites. The traffickers' operations are extremely vulnerable at these stash sites; seizures of illicit drugs from locations in which large quantities are stored result in substantial losses for DTOs.

Houston is one of the most significant cocaine distribution centers in the United States. Although Houston has not experienced the wide fluctuations in cocaine availability that have occurred in many major drug markets throughout the United States since 2007, the availability of cocaine fluctuated in 2008. The amount of cocaine seized in Harris County decreased 72 percent from 2006 (1,326 kg) to 2008 (375 kg), according to NSS data. (See Table 3.) The price of powder cocaine varied at the wholesale level in Houston in the last 6 months of 2008 ($19,000-$24,000 per kg) compared with the last 6 months of 2007 ($12,000-$30,800 per kilogram). (See Table 4.) Anecdotal law enforcement reporting during the third quarter of 2008 also indicated that less cocaine was available than in the previous quarter and that the cocaine shipments transported to Houston were smaller. The decrease in the amount of cocaine available in Houston can be attributed to law enforcement efforts against prominent Mexican DTOs, violent conflicts between competing Mexican DTOs as well as between DTOs and Mexican military and law enforcement personnel and counterdrug efforts in source and transit zones.

Table 3. Illicit Drugs Seized in the Houston HIDTA Region by County, in Kilograms, 2006-2008*

County	Cocaine			Heroin			Marijuana/Hashish			Methamphetamine
County	2006	2007	2008	2006	2007	2008	2006	2007	2008	2006	2007	2008
Aransas	0	1	0	0	0	0	0	681	0	0	0	0
Brooks	884	691	552	16	0	16	59,451	65,089	56,517	33	5	0
Fort Bend	35	162	11	0	0	1	1,540	136	499	0	0	0
Galveston	28	101	41	0	0	0	3	1	0	0	0	0
Hardin	7	0	17	0	0	0	0	0	0	0	0	0
Harris	1,326	345	375	9	17	10	15,283	22,658	10,671	5	3	39
Jefferson	115	38	31	0	0	0	218	591	69	6	1	0
Jim Wells	0	7	0	0	0	0	281	1,298	3,299	0	0	0
Kenedy	868	705	358	0	8	0	26,954	15,384	16,165	34	98	0
Kleberg	368	57	150	0	0	0	5,186	11,667	4,173	0	7	0
Liberty	30	18	2	0	0	0	1	2,128	0	0	0	0
Nueces	53	473	33	0	3	0	2,600	3,262	619	0	43	3
Orange	4	33	68	0	0	0	93	831	102	0	0	0
Refugio	0	0	3	0	0	0	1,278	1,311	709	0	1	0
San Patricio	0	92	13	0	0	0	64	127	419	0	0	0
Victoria	0	1	0	0	0	0	0	85	163	0	0	0
Houston HIDTA Region	3,718	2,724	1,654	25	28	27	112,952	125,249	93,405	78	158	42

Source: National Seizure System.
* Data as of February 2, 2009. Amounts of less than 1 kilogram are shown as zero. NSS data are based on voluntary reporting and may not include all seizures occurring in the Houston HIDTA region.

Drug		January-June 2007	June-December 2007	January-June 2008	June-December 2008
Powder cocaine	Wholesale	13,500-17,500/kg	12,000-30,800/kg 12,000-14,000/lb	18,000-23,000/kg 7,200/lb	19,000-24,000/kg
	Midlevel	400-800/oz	375-1,800/oz	600-1,000/oz	400-1,000/oz
	Retail	NR	50-100/2/10 g	60-100/g	60-100/g
Crack cocaine	Wholesale	13,000-18,000/kg	13,000-18,000/kg	NR	NR
	Midlevel	325-600/oz	350-1,000/oz	350-500/oz	500-750/oz
	Retail	NR	NR	NR	NR
Heroin	Wholesale	35,000-62,000/kg MBT 17,000-27,000/kg MBP 55,000-80,000/kg SA	35,000-50,000/kg MBT	40,000-50,000/kg MBT 50,000-80,000/kg SA	30,000-50,000/kg MBT 50,000-80,000/kg SA
	Midlevel	1,000-2,500/oz MBT 1,000-1,600/oz MBP	1,000-2,500/oz MX	1,000-2,500/oz MBT	1,000-2,500/oz
	Retail	100/g MBT MBP	60-200/g MX	60-150/g MBT	60-150/g MBT
Marijuana	Wholesale	3,500-5,000/lb HY 3,300/lb BC 600/lb SN 300-500/lb CG	4,000-8,800/kg DO or LP HY 5,000-11,000/kg MX SN 280-500/lb MX	4,000-5,000/kg DO or LP HY 300-500/lb MX SN 250-500/lb MX	4,000-5,000/kg DO or LP HY 300-600/lb MX SN 180-500/lb MX
	Midlevel	NR	NR	NR	NR
	Retail	NR	NR	NR	NR
Methamphetamine	Wholesale	8,000-15,000/lb Ice 6,000-10,000/lb PM	17,600-33,000/kg Ice MX	18,000-33,000/kg Ice MX	11,000-19,000/lb Ice MX 18,000-20,000/kg PM MX 13,000-15,000/lb PM MX
	Midlevel	700-1,500/oz Ice 500-900/oz PM	NR	1,000-1,400/oz Ice MX	300-1,150/oz PM MX
	Retail	NR	100/g PM MX	NR	100/g PM MX
MDMA	Wholesale	NR	7-20/tablet	7-20/tablet	3-4/tablet
	Midlevel	NR	14-24/tablet	NR	NR
	Retail	10-30/du	NR	20/tablet	20-100/tablet

BC--BC Bud (Canada-produced marijuana)	CG--commercial grade	DO--domestic	du--dosage unit	G--gram	HY--hydroponic
Ice--ice methamphetamine	kg--kilogram	lb--pound	LP--locally produced	MBP--Mexican brown powder	MBT--Mexican black tar
MX--Mexico-produced	NR--None reported	oz--ounce	PM--powder methamphetamine	SA--South American	SN--sinsemilla

Source: National Drug Intelligence Center, National Illicit Drug Prices, as of fourth quarter 2008.

Houston is a principal transshipment area in the United States for Mexican marijuana; however, the total amount seized in the Houston area decreased in 2008. According to NSS data, marijuana/hashish seizures in Harris County decreased 30 percent from 2006 (15,283 kg) through 2008 (10,671 kg). (See Table 3.) This decrease can most likely be attributed to increased seizures of the drug by U.S. law enforcement in South Texas as well as seizures by Mexican authorities prior to the smuggling of the drug across the Southwest Border. NSS data indicate that the amount of marijuana seized in South Texas counties that border Mexico increased 26 percent from 2006 to 2008. Furthermore, some traffickers may be avoiding smuggling their marijuana loads across the U.S.-Mexico border in South Texas because of the high levels of violence in Tamaulipas and other areas in Mexico opposite the border in South Texas. (See Table 5.) Mexican marijuana that transits Houston is typically destined for Florida, Georgia, Louisiana, Mississippi, and South Carolina.

Table 5. Illicit Drugs Seized in South Texas Counties Bordering Mexico, in Kilograms, 2006-2008*

County	Cocaine			Heroin			Marijuana/Hashish			Methamphetamine
County	2006	2007	2008	2006	2007	2008	2006	2007	2008	2006	2007	2008
Cameron	930	1,320	553	14	20	47	13,277	17,303	19,697	96	4	59
Hidalgo	6,787	6,243	2,913	22	16	13	85,643	109,978	100,650	123	41	233
Kinney	0	44	24	0	0	0	3,431	1,304	1,057	1	0	0
Maverick	550	483	218	1	4	23	17,207	13,564	16,663	19	0	15
Starr	636	549	417	17	11	0	64,460	71,322	78,887	14	0	5
Val Verde	97	74	185	3	0	0	15,339	13,932	14,580	47	0	0
Webb	4,193	2,805	2,821	84	23	26	64,106	57,284	94,673	90	67	135
Willacy	55	27	64	0	0	0	2,134	1,366	1,358	1	4	0
Zapata	0	29	0	0	0	0	4,440	3,497	11,885	0	0	0
Total	13,248	11,574	7,195	141	74	109	270,037	289,550	339,450	391	116	447

Heroin transported to Houston is distributed locally as well as to other U.S. drug markets. The amount of heroin seized in Harris County in 2008 (10 kg) was similar to the amount seized in 2006 (9 kg), but less than the amount seized in 2007 (17 kg), according to NSS data. (See Table 3.) However, anecdotal law enforcement reporting in 2008 indicated that there had been no significant changes in heroin availability, prices, or purity in Houston. (See Table 4.) Several factors may account for decreased heroin seizures from 2007 to 2008: Increased law enforcement operations along the border in South Texas and seizures of the drug in Mexico prior to smuggling it across the Southwest Border may have resulted in fewer heroin seizures in the HIDTA region. NSS data indicate that the amount of heroin seized in South Texas counties bordering Mexico increased in each of the past 3 years, possibly accounting for some of the decrease in heroin seizures in the Houston HIDTA region from 2007 to 2008. (See Table 5.) Heroin is transshipped from Houston to markets in California, Louisiana, New York, and throughout Texas.

Methamphetamine seizure amounts in Harris County have increased over the past 3 years, indicating an increased flow of the drug from Mexico into the area. According to NSS data, methamphetamine seizure amounts in Harris County increased from 5 kilograms in 2006 to 39 kilograms in 2008. (See Table 3.) Because methamphetamine production has decreased in the HIDTA region, this increase most likely reflects increased smuggling of methamphetamine across the Southwest Border rather than increased local production. Furthermore, increased seizures of methamphetamine in South Texas counties have not resulted in a corresponding decrease in Harris County. (See Table 5.) Methamphetamine transported into the Houston area from California and Dallas may have contributed to an increase in methamphetamine seizures in Harris County that was not reflected in the total methamphetamine seizure amount for the HIDTA region. Methamphetamine is distributed from Houston to markets throughout the midwestern and eastern United States, including those in Florida, Georgia, Illinois, Louisiana, and Texas.

The diversion of CPDs in Houston has increased significantly; the city has become a key source area for these drugs. Distributors and abusers obtain diverted CPDs by purchasing them on the Internet, doctor-shopping, visiting corrupt pain clinics, obtaining prescriptions from unscrupulous physicians, stealing from pharmacies, forging prescriptions, and smuggling the drugs from Mexico. Moreover, an increasing number of pain clinics in the Houston area are serving as a source of diverted prescription narcotics, such as hydrocodone, for distributors and abusers. Such pain clinics are sometimes owned by unscrupulous physicians and corrupt pharmacists, making it relatively easy for distributors and abusers to obtain CPDs. Additionally, distributors frequently recruit homeless persons to make straw purchases of CPDs for them. (See text box.) Once distributors obtain the CPDs, they distribute them throughout Texas and in drug markets in other states, including Arkansas, Georgia, Louisiana, and Tennessee. For example, in February 2009, officers from the Jefferson County Narcotics Interdiction Unit stopped a vehicle with Louisiana plates traveling eastbound on I-10 near Beaumont, Texas. Officers seized more than 5,000 CPD tablets, including 1,600 grams of hydrocodone tablets, 104 Xanax (alprazolam) tablets, and 186 grams of Soma (carisoprodol) tablets.

Significant quantities of cocaine, heroin, marijuana, methamphetamine, and MDMA are distributed in the Houston area at the wholesale level. Mexican DTOs, criminal groups, and prison gangs dominate the wholesale distribution of cocaine, Mexican black tar heroin and brown powder heroin, marijuana, and methamphetamine. Colombian and Dominican DTOs and criminal groups also distribute wholesale quantities of cocaine, but to a lesser extent. Colombian and Dominican DTOs and criminal groups dominate the wholesale distribution of South American (SA) heroin. Asian DTOs and criminal groups distribute MDMA and marijuana.

Street and prison gangs, Mexican criminal groups, and local independent dealers distribute illicit drugs at the retail level. Street gangs, prison gangs, and local independent dealers are the primary retail-level distributors of powder and crack cocaine, Mexican black tar heroin and brown powder heroin, SA heroin, and marijuana; Mexican criminal groups also distribute marijuana at the retail level.

Drug-Related Crime

A significant amount of drug-related violent and property crime takes place in Houston. Drug abusers and dealers, particularly crack cocaine and methamphetamine users and dealers, engage in a host of violent and property crimes, including assaults, drive-by shootings, home invasions, robberies, burglaries, and firearms violations. Additionally, drug traffickers, particularly street gangs, routinely engage in violent criminal activity to protect and/or expand their drug distribution territory.

Houston is a significant source area for weapons smuggled south into Mexico. Houston was the top U.S. source city for guns recovered in Mexico from at least 2005 through 2007 (the latest year for which data are available). Mexican DTOs and their associated enforcement groups generally rely on firearms trafficking from the United States to Mexico to obtain weapons for their smuggling and enforcement operations. Drug traffickers, firearms smugglers, and independent criminals smuggle large quantities of firearms and ammunition from Houston to Mexico on behalf of Mexican DTOs, which then use these weapons to defend territory, eliminate rivals, enforce business dealings, control members, and challenge law enforcement. (See text box.) The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) estimates that thousands of weapons are smuggled into Mexico every year. Firearms are typically purchased at--or stolen from--gun stores, pawnshops, gun shows, and private residences prior to being smuggled into Mexico, where they are often sold for a markup of 300 to 400 percent. Moreover, large caches of firearms are often stored on both sides of the Southwest Border for use by Mexican DTOs and their enforcement groups. For example, in November 2008, the Mexican Army discovered a stash house in Reynosa, Tamaulipas, Mexico (opposite the Hidalgo POE in South Texas), and seized the largest quantity of weapons and ammunition ever recorded in Mexico; it is highly likely that many of these weapons came from sources in Texas, including Houston.