JUL 17 -- (SAN DIEGO) In December, 2004, a 24-month investigation dubbed “Operation Veracruz” heralded the dismantling of a large-scale drug trafficking network distributing cocaine in San Diego’s coastal communities. The upper levels of this criminal organization were comprised almost exclusively of residents of Nautla, a small town of approximately 2900 residents located in Veracruz, Mexico. At that time over 100 Nautla residents had been arrested over the course of the previous decade and at least two had been killed in drug-related violence in San Diego.

On July 10, 2007, NTF agents executed a search warrant at 4104 48th Street, Apartment #2, arresting three subjects and seizing the cocaine and cash. The following day the group’s local manager was arrested in National City. A fifth subject had been arrested a week earlier on drug trafficking charges related to this same apartment. Packaged for sale and surrounded by the trappings of drug distribution such as scales, small plastic baggies and bulk cash, the three Nautla residents appeared to have ignored the message sent in December 2004:

“Apparently there is a prevailing feeling in Nautla, Mexico that cocaine trafficking in San Diego is the road to riches. Out of a population estimated at 2900 residents more than 100 individuals have been arrested in San Diego for drug violations, some on multiple occasions. We will continue to block that road and prosecute both dealer and customer alike,” said DEA Acting Special Agent in Charge Alan Poleszak, “When Mr. Palacio returns, we will be waiting….”

The Nautla-based networks have followed a standardized business plan, utilizing salaried delivery drivers in San Diego who report daily to a local “manager”. In the instant case, the manager reported to organization head Rene PALACIO-CORREA in Nautla. Delivery drivers averaged a $400-500 dollar weekly salary while the manager earned roughly $1,000 weekly. Information gleaned during this recent investigation suggests that up to $5,000 a week was being funneled back to cell head Rene PALACIOS-CORREA, aka “La Rana”, in Nautla from this San Diego-based crew. There are a number of these networks operating in San Diego, apparently known to each other but not in business together. PALACIOS-CORREA is being sought at this time. The PALACIOS group was distributing multiple kilograms of cocaine monthly in San Diego.