Trial bares gang’s reach |

Trial bares gang’s reach

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By JULIA REYNOLDS, Herald Salinas Bureau
October 24, 2010

In recent years, Salinas became the hub for the Nuestra Familia’s narcotic sales in Northern California, as the gang bought “front” businesses and invested in a Mexican drug cartel, according to testimony in federal court Friday.

From 2004 to 2007, Castroville resident Mario Diaz and other Central Coast gang members used Salinas as the Nuestra Familia’s distribution base for methamphetamine, marijuana and cocaine, sending hundreds of pounds of the drugs a month to San Francisco, Sacramento, Stockton and other areas.

“We’re the backbone of all those other cities,” said Diaz, who worked under the gang’s Salinas regiment until his arrest in 2007.

In a Sacramento federal court this week, Diaz told jurors that at the same time, the gang was setting up front businesses in California as it began to invest in a Mexican drug cartel.

In a “trial” investment, Salinas gang associates traveled to Juarez, Mexico, where they paid more than $120,000 to Mexican federal police, who delivered the cash to the representative of a major drug cartel, Diaz testified.

Diaz is the star witness in an ongoing trial resulting from Operation Valley Star, a far-reaching FBI investigation that in 2007 led to arrests of three dozen gang leaders, members and associates, most of them from the Salinas and the Central Coast.

Demand for drugs became so great, Diaz said, that just before the Valley Star arrests, the gang began to sell methamphetamine and cocaine in Hawaii, Utah and the Midwest — and had plans to move into Chicago, Atlanta and Miami.

Only San Jose kept its own drug suppliers under gang leader Charlie Campa, Diaz said, although the Salinas regiment occasionally supplied that city as well.

Central Coast gang investigators agree that the scope of the Salinas-based drug empire was vast.

“Salinas was the hub,” said Santa Cruz County sheriff’s Sgt. Roy Morales, who was part of a task force called Northern Exposure that investigated Watsonville and Castroville Nuestra Familia members before the FBI took over the cases in 2006.

Morales said the gang’s Watsonville regiment commander, Oscar “Baby Joker” Cabrera, collected drug payments from cities as far north as Santa Rosa.

Flees to Mexico

Cabrera fled to Mexico in 2006, shortly after he became a suspect in the murder of a Santa Cruz County man.

In Mexico, according to Diaz, Cabrera briefly lived with one of the gang’s Salinas crew bosses, Robert “Bubba” Hanrahan, who at the time was wanted on Monterey County drug charges.

The gang in Salinas wired money to the Mexican states of Sonora, Michoacan and Durango, chiefly to pay the men’s cell phone bills, which sometimes were more than $500 a month, Diaz testified.

Cabrera was the “more fruitful” of the two exiles, Diaz said, because he “was establishing a line of drugs down there.”

Diaz said that in late 2005, he and his girlfriend traveled to the state of Durango with Salinas resident Ernest Paul Killinger and his wife. There they met with a man named Enrique Galindo at a rural hacienda.

Killinger rode one of Galindo’s horses, Diaz said, while he and Galindo arranged an infusion of cash from the Nuestra Familia that Diaz hoped would lead to a regular monthly supply of 200 pounds of methamphetamine from Mexico.

During the trip, Diaz said he was in regular contact with Larry “Paqui” Amaro, the leader for Salinas who oversaw all of California for the gang.

“He was over everybody out there on the streets,” Diaz said.

Amaro and Killinger are among four defendants facing possible life sentences in the current trial.

In his testimony, Diaz said that Amaro’s niece, Rebeca Guzman, and an unnamed cousin of Diaz’ drove to El Paso, Texas, and crossed into Juarez, where they delivered between $120,000 and $130,000 in cash to Mexican federal police officers. Galindo received all the money, he said.

Months passed and no drugs arrived in Salinas. Diaz said he went back to Durango to recover the gang’s investment, but Galindo told him he’d have to collect in Juarez, a city infamous for cartel-related murders. Diaz said he balked.

“I would have never come back,” he said. “(Galindo) had federal agents on his side.”

In the end, Galindo gave the gang a combination of cash and a SUV that was delivered to Cabrera in Michoacan, Diaz said.

Meanwhile, Salinas was kept supplied with regular methamphetamine shipments from Southern California and from a drug dealer known as “Rudy” in Rosarito, Baja California, he said.

Government prosecutors say they don’t know what became of Galindo, or whether FBI agents in Mexico ever followed up on Diaz’s information about him.

Cabrera remains at large.

Hanrahan is serving a 13-year state prison sentence after he was arrested at the San Ysidro border crossing near San Diego in November 2006.

Gang officers say the relationships forged between the Nuestra Familia and Mexican suppliers during those years remain strong, and the extent of the gang’s drug empire was demonstrated by narcotics seizures and arrests across Northern California this year in Operations Knockout, Tapout and Street Sweeper.

Businesses opened

While its drug business grew, the gang strove for an image of legitimacy by acquiring front businesses used to launder drug money and for meeting places.

Morales, the gang investigator, said the gang opened tattoo parlors, including one Hollister business called Nor Cal Tattoo that was operated by Cabrera before he fled.

Diaz ran Geez Clothing, a Los Banos retail store.

Killinger bought and operated a cell phone store in Oakland, investing around $40,000 borrowed from Nuestra Familia generals, Diaz said. The shop was intended, he said, as “a stepping stone into the legitimate business world.”

State records show that Phillip Sparks, believed to be the gang’s most recent Salinas regiment commander, still owns the West Market street adult store Forbidden XTC, and is listed as a partner in an umbrella-stand import company. Sparks was indicted on federal drug charges in August as part of Operation Street Sweeper.

Through 2007, the Salinas regiment usually had around $200,000 in its “bank,” Diaz said. They were discretionary funds “to play with.”

Before their arrests, the gang’s leaders hoped to buy a former motorcycle shop on North Main Street for $1 million to set up an auto repair shop.

Defense attorneys for Amaro, Killinger and two other defendants are expected to cross-examine Diaz later this week as the 4-year-old conspiracy case continues.

Diaz, originally the operation’s top target, has entered a plea agreement that remains under seal.

His testimony, so far, has steered clear of any allegations of gang violence, including his involvement in an alleged plot to murder a Bay Area attorney that was disclosed in a filing last week by prosecutors.

As he sat calmly through the first three days of what may become two weeks of testimony, Diaz did not hide the fact that he was an integral part of the gang’s rapid expansion into the state’s illegal drug business.

“We’re doing it for everybody,” Diaz told another gang member before his arrest. “For the people, not just for Salinas … we want to build empires everywhere.”

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