Pubdate: Sun, 07 Apr 2002
Source: Chicago Sun-Times (IL)
Copyright: 2002 The Sun-Times Co.
Contact:  http://www.suntimes.com/
Details: http://www.mapinc.org/media/81
Author: Frank Main And Carlos Sadovi, Staff Reporters
Bookmark: http://www.mapinc.org/coke.htm (Cocaine)
Bookmark: http://www.mapinc.org/heroin.htm (Heroin)

DOPE SALES BUILD SECRET EMPIRES

You can't order a milkshake or a sundae at the "Ice Cream Shop." Only 
crack cocaine and heroin are on the menu, and gang members take your order.

On a 20-degree day, a young Gangster Disciple in a black parka stands 
guard in front of one of the low buildings of the Ida B. Wells 
housing development on the South Side.

While he watches, another teenager strolls up to a slow-cruising 
Toyota Corolla, a knit stocking cap pulled low over his eyes.

Holding a roll of cash in his gloveless hand, he calls out, "Rock! 
Blow!" The puffs of his breath vanish in the chilly air, and the 
Corolla rolls on.

Minutes later, another car pulls up. The kid in the stocking cap 
hands something to the driver. The driver hands something back. 
Probably a $10 bill.

This will go on all day.

Thousands of street-corner drug sales, the backbone of powerful gang 
empires in Chicago, rake in more than half a billion dollars a year 
in drug profits--nearly 1 percent of the city's economy, experts say.

A trickle of this river of cash pays for fancy cars and expensive 
suburban houses. The rest--the kind of money that would put 
legitimate enterprises into the Fortune 500--seems to disappear. But, 
in fact, it flows deep underground, seeping into cell phone stores, 
nightclubs, beauty shops, apartment buildings, record companies and 
even Hollywood.

For five months, the Chicago Sun-Times tracked the huge sums made by 
drug sales by interviewing cops, gang members and university experts, 
and spending days and nights on neighborhood streets and alleys to 
see drug dealers at work.

It Starts With A Dime Bag

The trail begins with $10 for a dime bag of dope sold by a teenage 
foot soldier who earns about twice the minimum wage. Multiply that 
one transaction by hundreds of sales sold by a crew of gang dealers, 
and the numbers quickly swell to an estimated $5,000 a day, $1.8 
million a year, just at that one stop--the Ice Cream Shop at 38th and 
Vincennes.

Day and night, "slingers" here openly sell crack cocaine in baggies 
stamped with ice cream cones--giving the corner its nickname. They 
also shell out their "Lucky 7" brand of heroin and pass out yellow 
business cards stamped with a logo of pharmacy bottles and the 
slogan, "Specializing in Medicine." Their location is boldly printed in blue.

The money is filtered up the gang chain. Dues are paid, SUVs are 
bought by lieutenants, and houses are purchased in the names of 
grandmothers. Some of the money ends up in tree-lined suburban 
neighborhoods, where the more powerful gang members lay their heads 
at the end of the day, a world away from the projects.

The money disappears into local riverboats and the noisy, gleaming 
casinos of Las Vegas and Atlantic City. There, it becomes traceless, 
hidden in casino chips used to pay drug suppliers or laundered as 
gambling wins.

And sometimes, it's just buried in backyard dirt.

"It's big business," said Willie Lloyd, whom police identify as the 
leader of the Vice Lords Nation, although the 51-year-old grandfather 
insists he is retired. "You have your accountants, you have your 
lawyers, everyone you need to be competitive out there in the streets 
and survive. You have your police for protection."

Hip-Hop Wash Cycle

Troy Watts was an aspiring music tycoon. He poured heroin profits 
into his Oak Park recording studio to buy a 2-inch reel-to-reel 
recorder, a 36-channel mixing board--everything necessary to attract 
a top-notch hip-hop group.

"Troy Watts lavished money on this studio," Assistant U.S. Attorney 
David Bindi said in federal court. "He bought state-of-the-art 
equipment--everything was the best."

Watts, 38, who attended Malcolm X College, never shied away from 
work. He held a job in a hardware store in the seventh grade and 
managed a grocery at age 17. What got him into trouble was trying to 
take a shortcut to success.

"Unfortunately, like many young men coming of age in the 1980s, he 
was seduced, apparently, by the allure of profit in this particular 
illicit business," his lawyer, Jeffrey Urdangen, said.

Watts recruited a cadre of smugglers to import about $16 million in 
heroin from Thailand from 1990 to 1994.

His best friend was a brutal Chicago gang member who acted as an 
"enforcer" to deal with problems, one of Watts' co-defendants told authorities.

In 1992, at the peak of the operation, Watts opened a recording 
studio, TCR&R, with three musically inclined pals. He pumped more 
than $100,000 into the business, court records show.

TCR&R signed a rap group, Crucial Conflict, that wound up abandoning 
Watts and joining other companies, including a major recording label. 
The group hit the big-time with a top 10 single, "Hay," and 
gold-selling album, "The Final Tic." But TCR&R never made any money, 
prosecutors said.

Watts' career in show business ended in 1998 when he pleaded guilty 
to drug conspiracy and money-laundering, landing himself a 24-year 
federal prison sentence in Lexington, Ky., far from music-industry 
types like Paulie Richmond, a Grammy Award-winning writer who penned 
the hit song "Shining Star." Richmond testified as a character 
witness at the trial of one of Watts' co-defendants.

Though he is in prison, Watts continues to try to cash in on the 
success of the band he claims he founded. He filed a $9 million 
lawsuit to get a cut of Crucial Conflict's profits.

'It Moves Through Me'

Another man with one foot in the music business and another in the 
drug world was Nathan "Nate" Hill.

Hill, 35, was arrested in 1998 after he fled to Africa to avoid 
prosecution for supplying the Gangster Disciples and Vice Lords gangs 
with more than 6,600 pounds of cocaine from 1987 to 1995.

"His famous phrase was, 'If anything moves through Chicago, it moves 
through me,'" said Assistant U.S. Attorney Colleen Coughlin, adding 
that Hill was a friend of reputed Gangster Disciples kingpin Larry Hoover.

Hill, who wasn't a gang member, was sentenced to life and fined $8.5 
million, and forfeited cash and property valued at $5 million. He was 
convicted of drug conspiracy, tax fraud, money laundering, operating 
an ongoing criminal enterprise and ordering the killings of three 
enemies, two of whom were, in fact, killed.

With his drug money, Hill moved into the recording business, founding 
New York-based Pocketown, named after his South Side neighborhood at 
78th and Stony Island. Pocketown scored a top 10 music video with 
"Froggy Style" by Nuttin' Nyce in 1995 and published "Wandering 
Eyes," which was on the soundtrack of Whoopi Goldberg's film "Sister Act 2."

He also plowed his cash into a bus company, American Tour and Travel, 
which offered a Heritage Tour of 20 Chicago sites of significance to 
black history. He even spent $700,000 in drug profits on a movie, 
"Reasons," which was based on his life.

A witness at Hill's trial described how he bragged about his toys: a 
$600,000, eight-passenger Lockheed jet; a $900,000, 73-foot yacht 
dubbed Magic Challenger, and five homes, including a four-bedroom 
A-frame on 11 acres complete with indoor pool on Boy Scout Road near Kankakee.

Hill was one of the top 15 most-wanted fugitives in America when he 
was nabbed in the west African country of Guinea, where he had become 
a coffee magnate, prosecutors said.

At Hill's 1998 sentencing, U.S. District Judge Charles P. Kocoras 
called Hill a smart, charming and organized businessman.

"It is just a tragic thing that you chose to commit all of those 
skills and your abilities to a life of crime," Kocoras said.

Phones, CDs And Haircuts

A third drug dealer who made a foray into the music world was 
Lawrence Nathan, now 68. The reputed Gangster Disciple was convicted 
in 1997 of narcotics racketeering and selling drug paraphernalia from 
his South Side record shop. He was sentenced to four years in prison.

Nathan's guilty plea cost him the store, Mary's Records at 361 E. 
69th, plus about $97,000 in cash and money orders, a Jeep and dozens 
of pieces of jewelry, all of which he was forced to hand over to the 
government.

Music stores, currency exchanges, car washes, beauty shops and 
apartment buildings are among the traditional fronts drug dealers use 
to launder money.

Unless police count every customer walking into a barbershop, they 
don't know how much business the store does. A drug dealer can 
overstate the barbershop's business to hide his drug profits.

Dope dealers with seemingly legitimate businesses will undercut 
competitors' prices on phones, CDs or haircuts to keep a steady 
stream of customers coming through the door.

"They're a scourge on the community," police Sgt. John Lucki said.

No Cub Scouts Or Boys Club

Chicago's major gangs are 40 to 50 years old. They're as much a part 
of some neighborhoods as churches and schools.

Sitting at a back table in Grandma Sally's Family Restaurant in 
affluent west suburban River Forest, Willie Lloyd sips a glass of 
orange juice while explaining how the Vice Lords provided a social 
outlet for kids growing up in his poor neighborhood in Lawndale.

Lloyd, who became the chief of the Vice Lord Nation in the 1970s, 
said he began his own faction, the Unknown Vice Lords, in the 
mid-1960s when he was about 15 years old.

"There was no Cub Scouts or Boys Club for us," said Lloyd, who has a 
thin scar running from his forehead to his neck, which he explains 
came from a box cutter in a fight when he was a teenager. "The YMCA 
was not really available to me. I just felt brotherhood and pride in the gang."

The Vice Lords were among the most violent street gangs in the 1960s, 
but they also became a nonprofit corporation and set up a 
neighborhood ice cream parlor called Teen Town, two Tastee-Freez 
franchises and the House of Lords, a hangout with pinball machines 
and a jukebox.

The enterprise even sent a letter on Vice Lords stationery to Mayor 
Richard J. Daley after the West Side riots of 1968. Conservative Vice 
Lords Inc. President Alfonso Alford offered to launch a 
beautification program with the city's help, writing, "In the past 
few days, we were on the street urging young people to end the 
burning and looting."

He never heard back from the mayor.

The budding social activism of the Vice Lords and other gangs was 
discarded in a brutal scramble for big money in the 1970s, Lloyd said.

Sitting next to Lloyd was a beefy man whom Lloyd introduced as a 
Gangster Disciples friend. The man remained stone-faced during the 
two-hour interview, breaking his silence once--to say grace over his spaghetti.

"With the drugs came the violence," Lloyd loudly exclaimed, sitting 
at Grandma Sally's, causing customers to stop eating and look over at 
him. "Greed became the motivating factor of these organizations. It 
became almost military in operation because we had to bring in 
weapons to guard the money, drugs and turf."

Lloyd--who claims he is now trying to stop the violence over money, 
drugs and turf--spent much of his life behind bars because of it.

He served 15 years in prison for his part in the killing of a state 
trooper in Iowa in 1970. He has been arrested more than 30 times, and 
survived two assassination attempts by other gang members. He was 
released from federal prison last year after serving an eight-year 
sentence on a federal gun conviction.

Though he was in prison for much of the 1980s and 1990s, his gang, 
the Vice Lords, dominated the city's drug sales--and murder 
statistics--along with the Gangster Disciples and the Latin Kings.

Gangs have become a major economic force in the city, said Steven 
Levitt, a University of Chicago economist. He estimated their annual 
profit from drugs at about $500 million, about two-thirds of 1 
percent of Chicago's gross domestic product, a measure of goods and 
services moving through the economy.

Tom Donahue, a federal drug enforcement coordinator here, called that 
figure "conservative" and said the total is closer to $1 billion.

Gangs also are more violent than their colleagues in crime--the 
mob--ever were. In the Al Capone era of the mob, according to the 
1929 Illinois Crime Survey, 215 gangsters were gunned down in four 
years in Chicago. Last year alone, 249 slayings were linked to gang 
activity, police said.

Ledgers, Dues And Guns

As gangs grew more corporate in the 1980s and 1990s, they stepped up 
their collection of dues and "street taxes," solidifying their 
control of neighborhood drug operations much like restaurant chains 
exert control over franchisees.

The Sun-Times has obtained the ledger of one street-corner "set" of 
the Latin Kings that shows how dues were allocated from 1996 to 1997.

The faction's leader told his foot soldiers their dues would pay for 
guns for the gang, the handwritten ledger says. The North Side group 
included 20 members who met 42 times over a year, each paying an 
average of $15 in dues at each meeting. Over the course of the year, 
they wound up giving about $12,600 to gang leaders for a gun shopping spree.

The Latin Kings operate dozens of such crews--each funneling dues to 
the top, said Andrew Papachristos, director of field research for the 
National Gang Crime Research Center. He estimated the gang collected 
hundreds of thousands of dollars in dues throughout the city in that 
one year alone.

In addition to dues, Latin King foot soldiers, whom Papachristos 
studied, were required to pay a "street tax" of more than half of 
their drug profits to higher-level gang members.

The teenage foot soldiers wound up making an average of $10 an hour. 
Their job description: hang out on street corners and watch for 
police; keep track of the money, drugs and weapons, which lay hidden 
in separate places, and peddle the narcotics to customers, many of 
whom drive in from the suburbs.

"It's mostly boring work," Papachristos said.

Foot soldiers, most of them under 18, "basically have a job at 
Target, but their risk is enormous," said Gregory Scott, an assistant 
professor of sociology at DePaul University.

Just ask Ranell Rogers, a 23-year-old member of the Mafia Insane Vice 
Lords. He wears a tattoo of a tombstone on his chest, a homage to his 
older brother Amin, killed in 1997. Like most gang members 
interviewed by the Sun-Times, Rogers knows of dozens of fellow gang 
members, friends, who have been killed.

"I graduated from a school not far from here, and there were maybe 47 
boys in two eighth-grade classes. There are maybe eight of us left 
alive," said Rogers, who lives on the West Side. "To get by, you have 
to kill your conscience."

WHO Needs Colors

The honchos of Chicago's biggest gangs--from Gangster Disciples 
chairman Hoover to Latin Kings chief Gustavo "Gino" Colon--have been 
taken down by federal prosecutions since the mid-1990s.

As a result, the discipline and corporate hierarchies of gangs such 
as the Gangster Disciples are breaking down.

"Don't nobody care what you are anymore, you fake like you're best 
buddies, but behind closed doors you're calling the cops on the other 
guys," said Rogers, a Mafia Insane Vice Lords member for about 10 years.

On the streets, many young gang members no longer know the laws for 
their gangs--the law, for example, that they are not to use addictive 
drugs. They also may not know anything about their gang leaders--who 
may have been imprisoned for as long as the younger members have been alive.

Prison, and not the streets, is considered the "gang university" 
where they are expected to learn the rules and history of their 
organizations if they are to survive.

Gone from the streets are the outward trappings of gang membership 
proudly displayed in the 1980s and 1990s.

Gang members have stopped wearing gang colors to "reduce rivalry and 
violence, decrease pressure from law enforcement and communities, and 
increase profits," according to the 2002 National Drug Threat 
Assessment, an analysis the federal government released.

And on the streets, these young foot soldiers--who dutifully paid 
their dues and street taxes in the 1980s and 1990s--are now 
increasingly snubbing the gang leadership.

"You have pockets of GDs all by themselves," said Chicago police Sgt. 
Marc Moore, as he drove past a Gangster Disciple guarding one of the 
high-rises in the Robert Taylor Homes--where a Chicago police rookie 
was gunned down in 1998 during an undercover drug stakeout.

"The allegiance is not as strong to the gang as it used to be. The 
allegiance now is to making money."

Greed has prompted strange and uncomfortable alliances--anything to 
get the dope sold and the money collected. Gangs now rent out 
corners--and entire public housing high-rises--to rival gangs to keep 
the money flowing. The Gangster Disciples, for instance, "rented" an 
apartment building they controlled in the Robert Taylor Homes to the 
Mickey Cobras for $10,000 a month, police say.

The lack of a strong hierarchy in many Chicago gangs is leading to 
shoot-outs as young members vie for power.

"There is a struggle from above to decide who is going to claim the 
lower levels," Columbia University Professor Sudhir Venkatesh said. 
"It's as though you had all of the McDonald's franchises now removing 
their signs and only putting up 'Burgers for Sale.' And all of the 
corporate leaders of Wendy's, McDonald's and Burger King are fighting 
to win over the allegiance of those franchises and put their name on 
the signs."

Police and state prosecutors see these power struggles as weakness. 
And they think the time is ripe to attack gangs with a new weapon.

Tax returns--not tommy guns--brought down Al Capone.

Going After The Money

Taking a lead from the feds, state prosecutors will comb through 
state tax returns and other financial records of suspected drug 
dealers in what they think could become a model for the rest of the nation.