A Dozen Members Of Penaloza Organization Indicted For Conspiracy To Distribute Methamphetamine, Money Laundering, And Related Charges

United States Attorney Andrew M. Luger today announced the indictment of 12 members of the Penaloza drug trafficking organization for conspiring to distribute methamphetamine and marijuana in Minnesota. The indictment is the result of a three-year investigation, which was a collaborative effort between Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), Minneapolis Police Department, and St. Paul Police Department, operating under the auspices of Organized Crime Drug Enforcement Task Force (OCDETF) designation. Agents today executed search and arrest warrants in Minnesota, California, and Illinois. Four defendants made initial appearances in US District Court in St. Paul before Magistrate Judge Jeffrey J. Keyes. Two defendants appeared in US District Court in Fresno, Calif., and one appeared in Chicago, Illinois.

“Drug traffickers will not find a safe haven in Minnesota,” said US Attorney Luger. “Criminals in Minnesota continue to be stymied by the coordinated effort of federal and local law enforcement. It is a credit to their hard work and dedication that another international drug trafficking organization is under indictment today.”

J. Michael Netherland, Special Agent in Charge of HSI St. Paul said: "As a result of this investigation, we've successfully dismantled a dangerous drug trafficking organization responsible for flooding the Twin Cities with methamphetamine. Leveraging our worldwide assets, HSI will continue to partner with other federal, state and local agencies, not only to stem the flow of illegal narcotics into the United States, but also to intercept and seize the illicit proceeds being funneled out of the United States."

Dan Moren, Assistant Special Agent in Charge of the DEA, Minneapolis-St. Paul District Office said: “Federal, state, and local law enforcement partners have dealt a swift and expansive blow to Organized Crime today. Multi-jurisdictional criminal organizations, such as the Penaloza Drug Trafficking Organization, pray that DEA, HSI, and the Minneapolis and St Paul Police Departments aren’t communicating with each other and connecting the dots…we are.”

Saint Paul Police Chief Tom Smith said: “It is thanks to partnerships like those being utilized in this operation that our communities are safer. Those we serve know that we are all stronger and safer because our law enforcement agencies are working together. It’s time that the people involved in these criminal activities get that message, too. Their crimes will not be tolerated.”

According to the indictment and documents filed in court, the Penaloza drug trafficking organization has been distributing methamphetamine, cocaine, and marijuana in Minnesota and other states since at least August 2011. EDUARDO PENALOZA-ROMERO leads the Minnesota branch of the drug trafficking organization, based out of an automotive repair business called Auto Laser in Spring Lake Park, Minnesota. Auto Laser is an alleged front- business for the Penaloza organization, and is used to store and transfer methamphetamine, and as a meeting place to collect drug money.

According to documents filed in court, ELEUTERIO IZAZAGA-PASCACIO, one of the Penaloza ringleaders, has supplied PENALOZA-ROMERO with methamphetamine, and on at least one occasion discussed in coded language the sale of two pounds of narcotics for $10,000 each. PENALOZA-ROMERO was supposed to sell the methamphetamine for $12,500 per pound and send the profit to IZAZAGA’s brother. PENALOZA-ROMERO and other members of the conspiracy repeatedly discussed trafficking of methamphetamine through the Auto Laser shop in Spring Lake Park, Minnesota. On August 5, 2014, law enforcement officers stopped a vehicle traveling to the Auto Laser shop from California. Ten pounds of methamphetamine was recovered from the vehicle.

According to the indictment, other members of the Penaloza organization participated in the conspiracy by transporting or selling methamphetamine, or laundering the proceeds of the drug trafficking organization. Between August 2011 and September 23, 2014, law enforcement seized from the Penaloza drug trafficking organization approximately $600,000 in cash, 47 pounds of methamphetamine, 10 pounds of marijuana, and a handgun. Law enforcement has conducted nine purchases of controlled substances from associates of the Penaloza organization.

This case is the result of an investigation conducted jointly by HSI, DEA, Minneapolis Police Department, and St. Paul Police Department, under the auspices of the OCDETF.

This case is being prosecuted by Assistant U.S. Attorney Allen Slaughter.

Defendant Information:

ELEUTERIO IZAZAGA-PASCACIO, 48
Fresno, Calif.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Possession with Intent to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count
• Distribution of Marijuana, 1 count
• Money Laundering, 3 counts

IMER PENALOZA-PINEDA, 36
Zihuatanejo, Mexico

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 4 counts
• Money Laundering, 2 counts
• Distribution of Marijuana, 1 count

EDUARDO PENALOZA-ROMERO, 24
Spring Lake Park, Minn.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 3 counts
• Distribution of Marijuana, 1 count

GERRARDO SANCHEZ, 28
Chicago, Ill.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Money Laundering, 2 counts

FELIX VELAZQUEZ-GARAY, 41
St. Paul, Minn.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 3 counts

ARNALDO ENRIQUE ALMENDAREZ, 40
St. Paul, Minn.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count

AUNDRAY LINDSEY, 36
St. Paul, Minn.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count

CESAR DANIEL MOLINA-CARRANZA, 31
St. Paul, Minn.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count

MAGEDALENO PEREZ-ARENAS, 36
St. Paul, Minn.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count

RAMON ESPINOSA-CARDENAS
Fresno, Calif.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count

ALFREDO BASURTO-HERRERA, 26
Fresno, Calif.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count

JESUS SOTELO-VALDOVINOS, 40
Fresno, Calif.

Charges:
• Conspiracy to Distribute Methamphetamine and Marijuana, 1 count
• Distribution of Methamphetamine, 1 count

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The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.