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The Mexican Connection

April 24, 2006
April 24, 2006

Table of Contents
April 24, 2006

SI Bonus Section: Golf Plus
SI Players: Life On and Off the Field
NBA PLAYOFF PREVIEW
NHL Playoff Preview
COLLEGE FOOTBALL
SPECIAL REPORT: STEROID TRAFFICKING
Departments

The Mexican Connection

Operation Gear Grinder shut down a flourishing drug business in a BALCO-scale investigation of major steroid trafficking

From his parkedcar, Jack, the special agent from the U.S. Drug Enforcement Agency, had a clearview of the entrance to the Empress Hotel in La Jolla, Calif. It was Dec. 14,an overcast day, and Jack's men were all in place. They were hoping to arrest akey figure in Mexico's steroid industry, a pharmaceuticals executive andtrained veterinarian named Alberto Saltiel-Cohen, who, according to a tip, wasstaying at the Empress. ¶ Jack waited and watched, looking for a man who fitSaltiel-Cohen's description: 5'8", slim, early to mid-50s, Latino, with agoatee. Jack himself is trim, his black hair peppered with gray. He is thefather of two boys, the younger of whom, an 11-year-old, loves baseball. Likemany fathers, Jack (who asked that only his first name be used, to avoidcompromising his ongoing investigative work) had watched the 2005 congressionalhearings on steroid use in pro sports and heard the stories of young athletesabusing the drugs. But unlike other parents, he didn't feel helpless againstthe seeming epidemic. For 21 months he had been the lead agent in OperationGear Grinder, the largest steroid-trafficking investigation in history. Now hewas poised to nab the man whose three companies had allegedly produced morethan 70% of the $56 million worth of illegal anabolic steroids seized annuallyin the United States.

This is an article from the April 24, 2006 issue Original Layout

When a manmatching Saltiel-Cohen's description emerged from the hotel and stopped at thecurb, standing there in dark jeans and a leather jacket like any touristwaiting for a cab, Jack felt his heart leap. He glanced once more at a photo ofSaltiel-Cohen and gave the order to his men. "Go ahead. Arrest him," hesaid into his radio.

Less than an hourlater Jack called the person who he believed would take the greatest pleasurein the news of the bust: Don Hooton. In July 2003, Hooton's 17-year-old son,Taylor, a baseball player at Plano (Texas) West Senior High, committed suicideafter four months of using a steroid manufactured by one of Saltiel-Cohen'scompanies. The teen's much-publicized death had come to represent the dangersof illegal performance enhancers to young athletes.

"Can you cometo San Diego?" Jack asked Don. "Something big is coming down."

DEA agents likeJack say that trying to stop the trafficking of illegal drugs is like trying tocatch water from a gushing faucet. No one knows for sure how large theillegal-steroid trade is, but illicit sales to U.S. customers are estimated bysome industry insiders to exceed a billion dollars a year. The drugs areeverywhere: In a 2004 University of Michigan survey, 42.6% of 12th-graders saidsteroids were "fairly easy" or "very easy" to get. That surveyand one done by the Centers for Disease Control and Prevention in '03 put thenumber of high school seniors who had tried steroids at 3.4% and 4.9%,respectively.

Law enforcementhas scarcely attempted to stanch the flow. Other street drugs have been ahigher priority. Weak sentencing guidelines have also undercut steroidprosecutions. Other obstacles--from a lack of jurisdiction over foreignmanufacturers to the impossibility of screening the tens of millions ofpackages coming into the U.S. each day--have made fighting the problemdifficult. Along the porous Mexican--U.S. border, across which human"mules" carry inexpensive steroids bound for dealers in the U.S.,policing is limited by a lack of manpower and even dogpower; steroids don'temit the telltale odors many other banned drugs do, so canine patrols areineffective.

The Internet hasfueled the growth of the steroid business, enabling anyone, including kids, toorder the drugs from home. The web also gives dealers a new tool for recruitingcustomers. According to Doug Coleman, a DEA supervisory special agent withexpertise in steroid cases, some dealers "troll the Internet likepedophiles. They stake out bodybuilding chat rooms and discussion boards usedby kids looking to get stronger."

Facing theproliferation of these illegal drugs, the U.S. government has finally begun toaddress the problem, not merely through public-service ads, or the high-profileBALCO case (SI, March 13)--which targeted the selling of steroids to eliteathletes--but also with a new willingness to go into the trenches to fightlarge-scale, grassroots trafficking. Last month the U.S. Sentencing Commissiondramatically toughened the penalties for steroid offenses, putting them on anequal footing with other Schedule III drugs, such as LSD and Vicodin. "Afew years ago when you talked to senior law-enforcement people [about combatingdrug use], they wouldn't talk about steroids," says Scott Burns, a deputydirector of the White House Office of National Drug Control Policy and a U.S.representative to the World Anti-Doping Agency, "but now they have made thetrafficking of steroids a priority."

Still, whenOperation Gear Grinder was launched two years ago, its goal--to grind to a haltthe gears of top companies in the Mexican steroid industry--seemed impossiblyambitious. Could the U.S. government alter the business practices of drugcompanies based in Mexico, where selling anabolic steroids over the counter islegal, and shut off the supply of those drugs heading north? And even if itsucceeded in doing so, would that be enough to make even a tiny dent inAmerica's steroid market?

The answer, itturned out, would be yes on both counts.

The mostsuccessful crackdown ever on performance-enhancing drugs did not begin as ahunt for steroids. It started with a probe called Operation TKO, the goal ofwhich was to cut off the supply of ketamine, a dangerous hallucinogen popularwith ravers. In 2003, as a result of TKO, U.S. and Mexican authorities shutdown a Mexico City--based company, Laboratorios Ttokkyo, which produced80%-to-90% of the ketamine found in the U.S.

Jack worked onthe operation and noted that Ttokkyo had also manufactured veterinary steroids,which are most commonly used to hasten the growth of beef cattle. What caughthis attention was that many of the steroids were sold in pet stores andfarmacias (pharmacies) in Mexican border towns and tourist destinations likeCanc√∫n and Ensenada--and were bought almost exclusively for human use, largelyby Americans. (Mexico's veterinary-steroid industry stepped up production foruse by humans to meet the demand created after the Anabolic Steroid Control Actof 1990 toughened penalties for illicit steroid sales within the U.S.) Aware ofthe growing steroid problem, Jack wondered what other companies might be makingor distributing supposed veterinary steroids that were really aimed atbodybuilders and young athletes.

Jack's partner,Bob, the department's prescription-drug expert, sent investigators to visit alleight of the DEA's domestic labs, where steroids captured in the U.S. are sentto be analyzed and, ultimately, destroyed. Bob and his team painstakinglypulled every steroid vial and file, and they created a database for the originof each drug. "What surprised us was that every lab, whether it wasChicago, New York, or Miami, had steroids from Mexico," Jack says. Furtheranalysis showed that 82% of the steroids seized in the U.S. were made south ofthe border. "It was shocking," says Jack. "We thought we'd see morefrom Asia or Europe."

The target wastoo tempting to pass up. "In the drug game, if you make a one percentdifference, that's phenomenal," says assistant U.S. attorney Laura Duffy,who attended the March 2004 meeting of agents, prosecutors and others at whichOperation Gear Grinder was laid out. "What got us motivated is that wethought there was a chance we could make an 82 percent difference."

Not that heneeded it, but Jack found more motivation in the summer of '05 while watchingTV with his sons. Flipping through the channels one Sunday night, he stopped on60 Minutes, a show he normally never watched. Don Hooton was on camera tellingcorrespondent Jim Stewart about Taylor's suicide and lamenting that steroidswere so easily available to kids. "I have not seen an interest in takingresponsibility for this problem and taking active steps to stop it," Hootonsaid.

"I wanted toreach through the TV," Jack says, "to grab him and say, 'Don't worry.We're going to do something.'"

The charges theU.S. Attorney's office hoped to pin on the eight targeted companies and onowners like Saltiel-Cohen were plain enough: conspiracy to import anabolicsteroids into the U.S., conspiracy to distribute anabolic steroids andconspiracy to launder money obtained by illicit acts. To prove these felonies,however, Jack and his team first had to establish that the owners, managers anddistributors knew that the steroids were destined for the U.S.

It was obvious tothe DEA that the companies' websites were geared toward U.S. users. Many of thesites were available only in English, complete with American flags on theirhome pages. "The websites are how they made a lot of their money," Jacksays, "but we also felt that was their Achilles' heel."

The DEA set up awebsite of its own, bio-power-meds.com, purportedly backed by a distributorflush with cash and ready to serve as a conduit to customers in the states.Informants also posed as distributors looking to buy large quantities ofsteroids. Sites such as anabolicsclub.com and mexicansteroidsales.com allegedlysold steroids to the feds from Saltiel-Cohen's three companies, Animal Power,Denkall and Quality Vet, and shipped them to P.O. boxes set up by the DEA. Inall, agents seized or tracked some 360,000 doses of anabolic steroids. IRSinvestigators tracked the payments.

DEA agents andinformants communicated with sellers using BlackBerrys, and the e-mails wererouted to an FBI Regional Computer Forensics Laboratory to be indexed asevidence. The DEA also targeted e-mail accounts it suspected were being used bydistributors and set up wiretaps. Transcribers marveled at how well-spoken thealleged traffickers were. "They are used to drug suspects who use a lot ofslang," Jack says, "but these men were proper, they were businessmen,they were highly intelligent."

Days afterwatching Don Hooton tell 60 Minutes the story of his son's death, Jack calledHooton at his home in Plano. He introduced himself and told him he had watchedthe segment with his two boys, saying, "It was like you were talkingthrough the TV screen to me. And I wanted you to know that I'm listening."Later Jack told him, "The DEA in San Diego is working on a case. You're notgoing to see results anytime soon. But believe me, we are as committed as youare. And I just want you to know, I will work my ass off for thiscause."

Jack continued tocheck on Hooton every other month, and over the next year and a half, afriendship developed. Jack listened as Don talked about the Taylor HootonFoundation, which he had formed in an effort to educate kids and parents aboutsteroid use. He heard Don's frustration over the investigation into Taylor'sdeath. The probe had stalled, even though police had identified a localteenager they believe had supplied Taylor with steroids. Don was also upsetwith officials at Plano West Senior High; he felt they weren't acknowledgingthe steroid problem at the school (box, page 74).

Jack never gavein to the temptation to cheer Hooton up with updates on Gear Grinder, andHooton found a way to satisfy his curiosity without pressing. "I know it'sinappropriate, Jack, to ask you guys what you are doing or how you are doing,but tell me one thing. Are you smiling?" Don asked during one call.

"Yeah, I'msmiling," Jack said.

"Good,"said Hooton. "That's all I need to know."

Jack eventuallytacked a photo on his cubicle wall of the vial of steroids found in Taylor'sroom. Taylor had wrapped the vial carefully and hidden it behind a speaker. Hehad used the drug without his parents' knowledge, and, when he tried to quit,became so engulfed by depression that he hanged himself in his room, leaving anote that read, "I love you guys. I'm sorry about everything."

In early 2005 theDEA received the vial, which contained Deca QV 300, or nandralone, one ofQuality Vets' most popular products. That drug, the DEA says, was one ofSaltiel-Cohen's biggest money-makers.

To prove that themanufacturers and distributors of the steroids were aware that humans wereusing them in the U.S., the DEA first turned to the Olympic lab at UCLA, to thescientists who first identified THG, the designer steroid at the center of theBALCO scandal. Doctors there determined that the Mexican drugs were exactlywhat athletes would take, and were in the dosages that those users wouldwant.

Further debunkingthe notion that these were produced as veterinary drugs, the DEA found thatsome 80% of the steroids were being shipped to the Baja California region,which Bob found has only 1% of Mexico's cattle. With the help of Dr. ScottStanley, an associate professor at the UC Davis School of Veterinary Medicine(at which Saltiel-Cohen, ironically, had done graduate studies), investigatorsmarshaled even more evidence. Some of the seized products contained more thanone steroid, a practice known as "stacking," which is common amonghuman users but has no veterinary purpose. And often the instructions wereblatantly wrong. "There were products where the instructions suggested twotimes and up to 25 times the recommended doses for animals," Stanleysays.

Stanley also toldthe DEA that the volume and variety of products was excessive. "In the U.S.the use of steroids on animals is not a popular treatment anymore," Stanleysays. Only five types of anabolic steroids are used on animals in the U.S.; theMexican companies were manufacturing 17 types.

On Dec. 14, whenDon Hooton received the call asking him to come to San Diego, he knew only, perthe usual code, that Jack was smiling. It wasn't until Jack picked him up atthe airport the next day that he was filled in on the fruits of GearGrinder.

"Jack tellsme, 'Hooton, we are going to shut them down.' Then he tells me aboutSaltiel-Cohen, and I am going nutso inside," says Hooton. "Jack had ona baby blue suit, dressed like a million bucks, and he's got this piece on hisbelt, a big black gun in a holster, and I'm going, 'Damn, this is for real.They've just arrested the biggest guy of them all.'"

Jack took Hootonto the press conference to announce the indictment of Saltiel-Cohen and 22others--owners, managers and distributors--on a variety of charges, includingconspiracy to import steroids and money laundering. After the announcement,Hooton and Jack were sitting at a table as reporters lingered and askedfollow-up questions, when Jack looked at his watch. It was 1:45. "How wouldyou like to watch him be arraigned?" he asked Hooton.

Minutes later thetwo were in the courtroom as Saltiel-Cohen was ushered in. Hooton was struck byhow distinguished Saltiel-Cohen looked, even in a prison jumpsuit. "Helooked just like a business guy," Hooton says. "He looked like an Enronperp."

Saltiel-Cohenwould soon be dubbed Narco Vet by the Mexican press. After watching him pleadnot guilty, Hooton and Jack returned to the DEA office, where agent after agentcongratulated Jack on the biggest bust of his career.

In the days afterthe arrests bodybuilders and weightlifters posted messages on U.S.--basedwebsites like elitefitness.com, expressing concern that supply lines would becut off for the popular steroids produced by companies like Saltiel-Cohen'sQuality Vet. "This is the worst news I've heard in a long time," wroteryan04. "R.I.P.-QV ... you've been a friend to us all."

Their concernsproved justified. In the ensuing months, all eight companies either halted orsignificantly cut back on the production of steroids, and seizures of Mexicansteroids smuggled into the U.S. dropped significantly. The Mexican government,which had cooperated with the DEA investigation, says it is investigatingmoney-laundering violations by the companies on its side of the border.Meanwhile, working off a list of more than 2,000 people in the U.S. who haddone business, directly or indirectly, with the eight companies, DEA agentsknocked on roughly 500 doors across the country, making a handful of arrestsand issuing warnings to stay out of the steroid trade.

While 18 of thoseindicted in Gear Grinder remain at large (four others are in custody and havepleaded not guilty), Saltiel-Cohen sits in a federal detention center in SanDiego, awaiting a motion hearing in mid-June. "My client has beencooperating with the government and is negotiating a plea agreement," sayshis lawyer, Merle Schneidewind.

In Tijuana,meanwhile, business is hurting at many farmacias, especially those specializingin veterinary drugs. At Farmàcia Veterinaría Revolución, which stands only afew yards from El Arco Reloj Monumental, Tijuana's version of the St. LouisGateway Arch, a 100-milligram vial of Winstrol manufactured by Quality Vetcosts $185, up from $120 before the indictments. Ralph, a twentysomethingemployee who mans the counter, explains the hike: "We don't have much leftand don't know if we can get more. If someone else starts making it, we willstay open. If not, who knows."

At a nearbyfarmàcia, Granero El Toro, owner Nino Velàzquez says that 30% of his businesscame from selling anabolic steroids from the eight companies. "Right herein [central Tijuana], four veterinarian pharmacies have already closed because95 percent of their business was anabolic sales," he says. "They've runout of stuff to sell. The ones that are still open are running out fast. I knoweight vet pharmacies that have closed in Mexico so far--five in Tijuana, one inNuevo Laredo and two in Ciudad Juàrez."

Who knows howlong the impact will last? New labs are rumored to be springing up already inMexico. Anabolic steroids are also available through the Internet from dozensof other countries, including Australia, India, Russia, Thailand and Turkey.Every known steroid is for sale--as are ones not yet known. A Chinese companycontacted by an SI reporter last year offered not only to sell him THG, butalso to concoct a variation of it that would be undetectable to drugtesters.

One critic ofOperation Gear Grinder, William Llewellyn, author of the exhaustive steroidguidebook Anabolics 2006, says, "Nobody wants kids taking steroids, but allthis is going to do is drive the market further underground. You'll see morecounterfeit [steroids] and more tainted products, which can cause infections orworse." Indeed, there have already been reports of counterfeits showing upin Mexico. "One new product came out last week," says Velàzquez, thefarmàcia owner, "but it looks like a bad imitation. It looks like it wascooked up in someone's house."

The U.S. end ofthe steroid pipeline also is difficult to police. Personal trainers and gymjunkies continue to push the drugs at fitness clubs. Some of them expand theirterritory and become "remailers," who are paid to receive packages fromforeign websites or smugglers and redirect them to clients within the U.S.Those efforts are designed to confuse law enforcement and protect buyers frombeing directly linked to the original source of the drugs.

Kids often end upas part of the distribution chain. Once a youngster is using steroids he can beeasily converted into a foot soldier for his supplier. "The kid is frontedsome steroids he can't afford," says DEA agent Doug Coleman. "Whathappens when you can't pay? You are now a distributor because you need to payoff the debt. Next thing you know these kids are selling to theirbuddies."

Though thechallenges remain daunting, Operation Gear Grinder proved that victories are atleast possible in the fight against steroids. To celebrate, Jack and Hooton satin a Mexican restaurant near San Diego after the indictments were announced,sharing a pitcher of frozen margaritas.

"Don, I don'tknow why I watched 60 Minutes that night," Jack said, suggesting it wasfate. The two men talked for hours, about Gear Grinder and their families. WhenHooton tried to thank him for his work in the fight against steroids, Jackwaved him off. "I was just doing my part, while you do your part," hesaid.

The U.S. Pipeline

During Operation Gear Grinder, the DEA identified morethan 2,000 people in the U.S. who had done business with the eight targetedMexican steroid companies. Florida had the most steroid recipients (235),followed by New York (211), Texas (188), California (186) and New Jersey(168).

[This article contains a map with descriptive text. Please see hard copy orpdf.]

CUSTOMERS

PER STATE

0-15

16-40

41-80

81-120

121+

Steroids manufactured in or around Mexico City maketheir way to U.S. users via border-town pharmacies and Internet mailorders.

Mexico City

Nuevo Laredo

Ciudad Juàrez

Tijuana

"Every DEA lab, whether it was Chicago, New Yorkor Miami, had [seized] steroids that came from Mexico," says an agent."IT WAS SHOCKING."
PHOTOPhotograph by Robert BeckOVER THE COUNTER Border-town farmacias like this one in Tijuana purport to sell steroids for animals, a legal practice in Mexico, but in truth they do a steady business with human users from the U.S.PHOTOJAILED Saltiel-Cohen's firms allegedly fed the U.S. market. PHOTODARREN CARROLLPAIN RELIEFThe DEA probe thrilled Hooton, whose late son, Tyler (inset), was a steroid victim. PHOTOCOURTESY OF THE HOOTON FAMILY [See caption above.]MAPILLUSTRATION BY DON FOLEYPHOTOCOURTESY OF BRAD CUNNINGHAMBEFORE ... With visions of winning a Mr. Olympia title, Cunningham added 60 pounds of muscle with a regimen of steroids. PHOTODARREN CARROLL... AND AFTER He now works out with his same old ferocity, trying to undo the effects of the heart attack and stroke he suffered.PHOTODARREN CARROLLGRASSROOTS TEACHING At Plano East, football players in the Atlas & Athena program meet in groups to discuss steroids.