Hunting El Chapo

by Andrew Hogan

  “Look, I’m skeptical, too,” Diego said, “but what other options do we have? We need to play her out to see if she can deliver.”

  “What we need to know,” I said, “is who all of this money really belongs to.”

  “Agreed.”

  OUT ON THE HOTEL BALCONY, I gazed over the thin glass wall down at the city below. Mercedes was staying at one of the few luxury hotels in town that had been completely finished. So much of the Panama City skyline remained half-constructed: cranes and scaffolding and exposed girders. Brand-new buildings had been abandoned half-complete, while many of the finished ones were empty.

  Panama City was the money-laundering capital of the Western Hemisphere. Banks had sprouted up on every corner like cactus along the sidewalks of Phoenix. Citibank, Chase, RBC, Bank of Montreal . . . but also lesser-known Latin American ones: Balboa Bank & Trust, Banco General, Mercantil Bank, and Centro Comercial de Los Andes . . . There was plenty of legitimate banking business, but some, like HSBC, faced criminal prosecution for “willfully failing to maintain an effective anti-money laundering program” in connection with hundreds of millions of dollars of dirty drug money belonging to Mexican cartel bosses.*

  Over the months of phone-wooing, Mercedes had suggested meeting Diego face-to-face in Mexico City, but the DEA brass considered it too dangerous, and our Mexican police counterparts would never allow it. “El Canal” was perfect: Panama was known as a neutral zone for drug traffickers from all around the world to meet without threats of territorial disputes or violence. It was also geographically convenient if you wanted to meet Colombian or Mexican contacts. Many in the narco world felt at ease in this glitzy isthmus.

  Eventually we wandered back to our hotel rooms. I had at least an hour of writing ahead, typing up the sixes, without which this entire Panama City operation would have no evidentiary value.*

  As I slogged away on the reports, Diego sat on the edge of the bed, filling me in on the details from his recent phone conversations with Mercedes. But as the UC, Diego had to get his mind right—mingling with the locals, feeling the vibe of the city—so once he’d finished briefing me, he went down to the third-floor casino for another round of drinks. I sipped a fresh Balboa and continued banging away on the sixes. Fifteen minutes later, the hotel door opened.

  “It’s looking really good down there,” Diego said.

  “Meaning?”

  “Lot of hotties.” Diego smiled. “A few of them were checking me out—for real. One of them was eye-fucking me hard, brother.”

  “C’mon, dude, I gotta finish up this fuckin’ six,” I said, laughing, then Diego slid another Balboa across the desk. I took a deep breath and slapped my MacBook closed, and the two of us headed down to the third floor. Diego wasn’t exaggerating. As those elevator doors opened, the casino bar was swarming with some of the most beautiful women I’d ever seen—some in slit miniskirts, tube tops, stiletto heels, and tight jeans showcasing the work of some of the top Colombian plastic surgeons.

  It took a few minutes of Spanish small talk before I realized these women were all high-dollar Colombian prostitutes on “work visas” from Medellín, Cali, and Bogotá. Diego shrugged, and we decided to hang out with the girls anyway, dancing as a live band played, even though I had no idea what I was doing—the merengue steps were easy enough to fake, but with the sophisticated swirling salsa moves, I had to let my colombiana lead. Then we all hopped in a cab and headed out to one of the city’s hottest nightclubs. A few more drinks, a little more dancing. Then another club . . .

  Diego and I made it back to our rooms just in time to get three hours of sleep before the big meet. But Diego’s mind was right now: he was ready to negotiate with some of the Sinaloa Cartel’s most powerful money brokers. This became the typical pattern for our first night in any foreign country: we’d tear it up until nearly dawn, taking in the nightlife like the locals and getting a firsthand understanding of the streets, which would prove invaluable when we entered UC meetings.

  When I was on the verge of sleep, I caught a flash of an infamous face on my hotel room TV. In Spanish I heard that, for the first time, Forbes had listed Joaquín “El Chapo” Guzmán as a billionaire, one of the richest and most powerful “businessmen” in the world.

  WE HAD SELECTED a popular high-end steakhouse called La Rosita—located just inside the front door of a luxury shopping mall—for the next day’s undercover meet with Mercedes Chávez Villalobos.

  The plan was this: Diego and Mercedes would sit at an outdoor table so I could keep my eyes on my partner throughout the meeting from inside the cab of a Toyota Hilux pickup, the G-ride that belonged to one of the DEA agents permanently stationed in Panama.

  Neither Diego nor I could carry: Panamanian law wouldn’t allow us to bring our handguns into the country. But Diego was armed with one high-tech gadget: a secret key-fob camera that looked like an ordinary car key remote but was capable of discreetly recording hours of audio and video.

  Diego was dressed in a well-tailored three-button dark gray suit, a white shirt, and a solid maroon tie pulled so tight it made the bottom of his neck puff out against his collar.

  “Kill it, baby,” I said, leaning over, hugging him. Diego nodded, mouth drawn tight as if he were already running scenarios in his head.

  I set up the G-ride in the busy parking lot as close as I could to watch Diego enter the restaurant, discreetly parked, but with a perfect line of sight to the terrace tables.

  But after two minutes, there was still no sign of Diego.

  Three minutes passed. Then five. Then seven. I still couldn’t see him on the terrace. I thumb-typed a text in our prearranged code, in case they checked his phone: innocuous Mexican slang for “What’s happening, dude?”

  “K onda, güey?”

  No reply from Diego.

  “K onda?”

  My leg began twitching nervously.

  I kept hitting resend on the BlackBerry.

  Nothing.

  I felt sweat drenching the front of my shirt.

  This was the worst scenario for an undercover meet: we had no backup agents inside the restaurant with eyes on the UC, and no armed Panamanian counterparts watching our backs.

  I couldn’t sit for another second. I bolted from the Toyota and headed straight for the entrance of La Rosita.

  What if Mercedes had switched up locations at the last minute?

  What if her people had snatched Diego to pat him down, make sure he wasn’t a cop?

  In the restaurant, the hostess smiled and, in heavily accented English, said, “You have a reservation, sir?”

  I was so focused, scanning for Diego’s gray suit at the restaurant tables, that I barely heard myself answer.

  “No, I’m meeting a friend,” I said. “He’s already seated.”

  I scanned every table hard but didn’t see him anywhere.

  Fuck! Had they grabbed him already?

  I started to feel everyone’s eyes locking on me as I frantically walked through the tables.

  I hope to hell we’re not compromised.

  Where is he, for fuck’s sake?

  I had nowhere to go. I spun in a circle in the center of the restaurant, the walls becoming a blur. I quickly grabbed a busboy by the shoulder.

  “El baño?” I asked, and no sooner had the kid gestured to the left than I saw that I was standing right next to Diego—in fact, I was literally looking down on the crown of my partner’s head.

  Diego was in an intense but muted conversation with Mercedes. And not only Mercedes, but two older Mexican-looking males. They were heavy hitters, I could tell. One appeared to be wearing a pistol, bulging behind the flap of his tan blazer.

  Three targets? The meet was only supposed to be with Mercedes. I knew that Diego would be trying to hold his own, with no backup for his story, but even at a quick glance, I sensed that the sit-down had turned tense. Mercedes and the two henchmen had hard gazes; they weren’t buying Diego’s story.

  Before anyon
e noticed me looking, I darted for the bathroom. A single trickle of sweat ran from my chest down to my navel. I could hear myself breathing loudly. Right before I reached the bathroom, I noticed a steak knife on a table ready to be cleared.

  Could I grab it without being seen? There was no other option. I needed a weapon and had to take the chance.

  As quickly as I could, I snatched up the knife, placed it flush against my wrist, and slipped it into my pocket.

  In the bathroom, I turned on the sink and splashed cold water on my face, attempting to calm my nerves, hoping one of the bad guys wouldn’t stroll in suddenly to take a piss.

  What the hell can I do if they plan on kidnapping Diego? What if this meet is all a setup to take him as human collateral?

  The door suddenly swung open—I straightened up, my face still dripping with cold water, but it was just a regular restaurant patron. I knew one thing: it was crucial to get photographs of Mercedes and the two heavies so I could identify them if they took Diego by gunpoint. It would also be critical for future indictments, and I couldn’t rely on the key fob Diego was carrying.

  I had the steak knife ready in one pocket; in the other, I had a small Canon digital camera, which I flipped on, to video mode.

  Keep the camera steady in your hand. Don’t make eye contact. They won’t see it’s on—just stroll by naturally . . .

  I walked slowly past Diego, unable to aim the Canon’s lens, just hoping I’d capture the faces of everyone at the table as I walked toward the door. I knew I couldn’t hang out in the restaurant alone, so I found a discreet place outside where I could watch Diego through the windows of the front door. I sat there, my hands trembling as I waited for Diego to exit.

  AFTER ANOTHER HOUR, Diego got up from the table, shook everyone’s hands, and gave the half-hug—Mexican style—to all three, then walked out of the restaurant.

  I followed him on foot as he walked on into the mall, staying thirty yards behind, making sure we weren’t being followed by any of Mercedes’s people.

  Finally, I looked back over my shoulder three times and met up with him in a back parking lot. We were clean. We jumped in the cab of the Hilux and sped off.

  Diego was silent for a long time, staring out the window and trying to make sense of what had just happened. His expression was trancelike.

  “You all right, brother?” I reached over and grabbed him by the shoulder, attempting to shake him back to reality.

  “What?”

  “Bro, you cool?”

  “That was so fuckin’ intense,” Diego said at last. “A straight-up interrogation. She kept hitting me with question after question. ‘Who’s your company? Who do you work with?’”

  “How’d you play it?”

  “Just started making up shit, story after story—how we’re moving millions in tractor-trailers, our fleet of private aircraft. Ships. Told them we transport coke—by the tons.”

  “And?”

  Diego grinned.

  “She bought it, man!” he shouted. “She fuckin’ bought it! I had all three of them eating out of the palm of my hand.”

  “Outstanding! Did she say whose money it is?”

  “Yeah, it’s his,” Diego said.

  “His?”

  “She said it’s his,” Diego repeated.

  Diego went quiet, smiling.

  “His?” I asked again.

  “Chapo.”

  “Chapo.”

  “Yes. She said, ‘It’s all Chapo’s money.’”

  Team America

  PHOENIX, ARIZONA

  July 1, 2010

  I FELT LIKE a millionaire. And I was one—for a few hours, at least. I’d been entrusted with $1.2 million in laundered drug proceeds, freshly withdrawn from our undercover account at a local bank in Phoenix. Along with three other Task Force officers, I painstakingly counted and recounted that million in cash and stuffed the bundles into two white FedEx boxes.

  The money seemed fake. It was a sensation I’d become accustomed to in the past year: anytime I handled US currency used in our undercover operations, I felt like I was thumbing through Monopoly money. A good cop is able to dissociate from the awe of the green. Those fat stacks of cash on our big conference table were just another tool of the undercover trade.

  Counting the bills, I thought back to four months earlier, when Diego and I had made our first pickup. After nearly a year of nothing but big talk—her “hundred-million-dollar contracts all over globe”—Mercedes finally came through: she had a much smaller cash drop of $109,000, delivered, fittingly, in a laundry detergent bucket to Diego and my undercover teammate in a Home Depot parking lot just south of Los Angeles. That very afternoon—and following the instructions laid out precisely by Mercedes—Diego and I had run the stack to the bank, then wired the money to an account at Deutsche Bank in New York. From there, the money was transferred to an account at a corresponding bank in Mexico. Back at the office, Diego sent a photo of the wire confirmation to Mercedes over his BlackBerry and put his feet up on his desk.

  “We’re big-time now, dude,” I said with a sarcastic laugh. It was a modest start, considering some of the huge figures Mercedes had been throwing around, but soon Diego and I were inundated with money-pickup requests. Mercedes set up back-to-back drops in New York City, black duffel bags stuffed with dirty money: $199,254 one day, $543,972 the next, and then $560,048. Always with the same wiring instructions—to a Deutsche Bank in New York.

  A lot of the money couriers hardly looked the part. One time we flew to New York and followed a couple in their seventies who had parked their RV, with California plates, on a side street off Times Square, then marched two suitcases full of cash to our undercover in the shadows of the billboards.

  Then it was up to Vancouver, Canada, for a pickup up of more than $800,000. The Canadian dollars had to be quickly converted to US currency before we could send the wire to Mercedes. In less than a month, we’d laundered more than $2.2 million of Chapo’s money for Mercedes.

  The money-laundering aspect of the investigation was authorized under an official Attorney General Exempt Operation (AGEO). An AGEO allowed federal agents to follow the money and further exploit their investigations, ultimately leading to the dismantlement of an entire drug-trafficking organization, as opposed to arresting a couple of low-level money couriers. It took me months of writing justifications to become authorized to create fictitious shell companies and open undercover bank accounts.

  We’d flipped so many members of Bugsy’s crew, getting them to cooperate, that our assistant United States attorney, before every proffer, would say to the defendants, “Now that you’ve seen the evidence we have against you, how would you like to come on over and join Team America?”

  We’d dubbed our new case “Operation Team America.” By June 2010, it was obvious that Mercedes had her hands full, and in the midst of all the cross-country cash pickups, she introduced Diego to Ricardo Robles, a thirty-four-year-old Mexican with a youthful face and thick black hair. Ricardo was a powerhouse money broker who’d grown up in the lucrative world of Mexican casas de cambio—money exchanges—even owning a few himself.

  Diego and I quickly learned that all of the pickup contracts had come from Ricardo. Mercedes was just another protective layer, another buffer, shielding the true bosses while still taking her cut.

  Over the weeks, Diego and Ricardo formed a tight bond. Finally, Ricardo asked for a face-to-face meet at Diego’s Phoenix office. There was just one minor issue: we didn’t have one.

  Ricardo was flying in that afternoon. We arranged to have him picked up curbside at Phoenix Sky Harbor International Airport in a silver Mercedes CL 63 AMG. Our undercover teammate, driving the Mercedes, looked the part of a young narco. Following in a black Cadillac Escalade with twenty-two-inch black custom wheels, we used more undercover agents from the Task Force, posing as Diego’s own personal security group.

  As Ricardo drove in from the airport, we were still making the final arrangements
in a luxurious high-rise office suite we’d rented. It was a gorgeous 1,200-square-foot space overlooking downtown Phoenix.

  “Shit, we’ve got a major problem,” I said to Diego as we were walking around the suite admiring the view.

  “The place doesn’t look lived in,” Diego agreed. “Looks like we moved in five minutes ago.”

  I ran to the elevator, rode down to the street, jumped into my G-ride, and drove to my house. There, I grabbed some framed art off my living room walls, a few houseplants, sculptures, and trinkets I had collected from my travels. Meanwhile, Diego at the last moment set a framed photo of his kids on top of the desk. With my stuff plus his, the illusion was complete: Diego, wearing a silver Armani suit, sat back in his tall leather swivel chair, looking every bit the sleazy corporate executive.

  Our teammates radioed to me that Ricardo had arrived and was coming up in the elevator. Diego quickly tightened his tie while I gave him a heavy pat on the back and rushed out the door.

  We were charging at least seven percent on every money pickup, a standard commission. We would then take the commission and set it aside as Trafficker Directed Funds (TDF), to be used to rent the office space, buy the latest MacBooks and sophisticated recording devices—hidden inside expensive-looking wristwatches—along with the iridescent Armani suit for Diego.

  The trust had already been established through laundering a couple million in drug money, and now it was time for Ricardo and Diego to talk about the other end of the equation: a two-ton cocaine transportation contract, moving product from Ecuador to Los Angeles.

  “He wants to introduce me to Chapo’s people,” Diego told me as we debriefed the meeting over cups of coffee.

  It had become obvious that, just like Doña Guadalupe and Mercedes, Ricardo was yet another buffer—another broker in the middle. And we knew there would likely be several more layers to sift through before we got to the top.

  But before the introductions to Chapo’s people could be made, there was a final test. Ricardo had several money pickups in Vancouver, Canada. But this time he wanted that cash—the $1.2 million—delivered directly to Mexico in bulk.