12 members of international drug trafficking organization operating out of Minnesota auto repair shop indicted on drug, money laundering charges

ST. PAUL, Minn. — Twelve members of the Penaloza drug trafficking organization have been indicted for conspiring to distribute methamphetamine and marijuana in Minnesota, announced U.S. Attorney Andrew M. Luger Wednesday.

This indictment resulted from a three-year joint investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), the Minneapolis Police Department and St. Paul Police Department, operating under the auspices of Organized Crime Drug Enforcement Task Force (OCDETF) designation.

Search and arrest warrants were executed Sept. 24 in Minnesota, California and Illinois. Four defendants made initial appearances in U.S. District Court in St. Paul before Magistrate Judge Jeffrey J. Keyes. Two defendants appeared in U.S. District Court in Fresno, California and one appeared in Chicago.

“Drug traffickers will not find a safe haven in Minnesota,” said Luger. “Criminals in Minnesota continue to be stymied by the coordinated effort of federal and local law enforcement. It is a credit to their hard work and dedication that another international drug trafficking organization is under indictment.”

J. Michael Netherland, special agent in charge of HSI St. Paul said: “As a result of this investigation, we've successfully dismantled a dangerous drug trafficking organization responsible for flooding the Twin Cities with methamphetamine. Leveraging our worldwide assets, HSI will continue to partner with other federal, state and local agencies, not only to stem the flow of illegal narcotics into the country, but also to intercept and seize the illicit proceeds being funneled out of the United States."

Dan Moren, assistant special agent in charge of DEA Minneapolis-St. Paul, said: “Federal, state, and local law enforcement partners have dealt a swift and expansive blow to organized crime today. Multijurisdictional criminal organizations, such as the Penaloza Drug Trafficking Organization, pray that DEA, HSI, and the Minneapolis and St. Paul Police Departments aren’t communicating with each other and connecting the dots…we are.”

Saint Paul Police Chief Tom Smith said: “It is thanks to partnerships like those being utilized in this operation that our communities are safer. Those we serve know that we are all stronger and safer because our law enforcement agencies are working together. It’s time that the people involved in these criminal activities get that message, too. Their crimes will not be tolerated.”

According to the indictment and documents filed in court, the Penaloza drug trafficking organization has been distributing methamphetamine, cocaine, and marijuana in Minnesota and other states since at least August 2011. Eduardo Penaloza-Romero leads the Minnesota branch of the organization, based out of an automotive repair business called Auto Laser in Spring Lake Park, Minnesota. Auto Laser is an alleged front business for the Penaloza organization used to store and transfer methamphetamine, and as a meeting place to collect drug money.

According to documents filed in court, Eleuterio Izazaga-Pascacio, one of the Penaloza ringleaders, has supplied Penaloza-Romero with methamphetamine, and on at least one occasion discussed in coded language the sale of two pounds of narcotics for $10,000 each. Penaloza-Romero was supposed to sell the methamphetamine for $12,500 per pound and send the profit to Izazaga’s brother.

Penaloza-Romero and other members of the conspiracy repeatedly discussed trafficking methamphetamine through the Auto Laser shop in Spring Lake Park, Minnesota. On Aug. 5, law enforcement officers stopped a vehicle traveling to the Auto Laser shop from California. Ten pounds of methamphetamine was recovered from the vehicle.

According to the indictment, other members of the Penaloza organization participated in the conspiracy by transporting or selling methamphetamine, or laundering the proceeds of the drug trafficking organization. Between August 2011 and Sept. 23, 2014, law enforcement seized from the Penaloza drug trafficking organization about $600,000 in U.S. currency, 47 pounds of methamphetamine, 10 pounds of marijuana, and a handgun. Law enforcement has conducted nine purchases of controlled substances from associates of the Penaloza organization.

The 12 defendants and their corresponding charges are as follows:

Eleuterio Izazaga-Pascacio, 48, of Fresno, California

• Conspiracy to distribute methamphetamine and marijuana, one count
• Possession with intent to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, one count
• Distribution of marijuana, one count
• Money laundering, three counts

Imer Penaloza-Pineda, 36, of Zihuatanejo, Mexico

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, 4 counts
• Money laundering, two counts
• Distribution of marijuana, one count

Eduardo Penaloza-Romero, 24, of Spring Lake Park, Minnesota

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, three counts
• Distribution of marijuana, one count

Gerrardo Sanchez, 28, of Chicago

• Conspiracy to distribute methamphetamine and marijuana, one count
• Money laundering, two counts

Felix Velazquez-Garay, 41, of St. Paul, Minnesota

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, three counts

Arnaldo Enrique Almendarez, 40, of St. Paul, Minnesota

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, one count

Aundray Lindsey, 36, of St. Paul, Minnesota

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, one count

Cesar Daniel Molina-Carranza, 31, of St. Paul, Minnesota

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, one count

Magedaleno Perez-Arenas, 36, of St. Paul, Minnesota

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, one count

Ramon Espinosa-Cardenas, of Fresno, California

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, one count

Alfredo Basurto-Herrera, 26, of Fresno, California

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, one count

Jesus Sotelo-Valdovinos, 40, of Fresno, California

• Conspiracy to distribute methamphetamine and marijuana, one count
• Distribution of methamphetamine, one count

This case is being prosecuted by Assistant U.S. Attorney Allen Slaughter.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.