Right Under Their Noses

How did the sheriff's posse commander and his minions miss what is alleged to have been the largest marijuana-smuggling operation ever run by gringos? They were, after all, sharing a warehouse.

U.S. marshals detained Quiroz--apparently without Rice or Gregory knowing--as she tried to board the aircraft. The marshals questioned Quiroz and obtained receipts and information from her giving the name and location of a Lewisville, Texas, hotel where she had been staying.

Federal agents went to the hotel, a Homewood Suites Inn, and learned that Rice, who was using Gregory's name, had been asked to check out of the hotel several days earlier because of suspicious activities, including making numerous phone calls from the lobby.

Rice, however, apparently liked the room, and gave the hotel a business telephone number and told the clerks to contact him there if a room became available.

The hotel clerk gave the federal agents the phone number, which they traced to a large warehouse in Dallas.

Deputy U.S. Marshal Randyl Kruid noticed another hotel across the highway. Kruid went to the Marriott Residence Inn and showed the staff a photo of Rice.

Kruid hit the jackpot.
The hotel staff said Rice, again using Gregory's name, was registered at the hotel and had been paying for his room in cash. Kruid and U.S. Treasury Special Agent Steve Pennington staked out Room 105 and waited.

They didn't have to wait long. Federal records indicate that about 11:30 a.m., Rice, with Gregory driving, pulled into the hotel parking lot and went to their room. Federal agents gave Rice and Gregory about two minutes before they approached the room.

According to an affidavit by Irving police officer David Carmical, Rice and Gregory were not obsessed with security.

"As they [federal agents] approached the room, they noticed the door was standing open and they noticed a maid's cart outside. They walked to where they could see inside the room and they saw two persons sitting at a small table talking on a phone.

"They [Rice and Gregory] were involved in a very animated conversation on the phone. Both parties were involved in the conversation.

"They [federal agents] also saw a brief case open on the floor, just below the table. . . . and they could see bundles of money. They could determine there were at least stacks of hundreds and fifty dollar bills."

There's no mention of where the maid was, but Carmical testified the federal agents believed the telephone conversation was of "a business nature."

Gregory and Rice apparently didn't notice the two men standing outside their room ogling what turned out to be $34,500 in cash and eavesdropping on their conversation. Agents then moved in and arrested Gregory and Rice, who were both unarmed, without incident.

A pat-down search of Gregory revealed 1.5 ounces of marijuana in a coat pocket.

The investigation shifted to the Dallas warehouse where Rice had told the Homewood Suites clerk to contact him. Investigators took a drug-sniffing dog to the warehouse, and, according to a federal prosecutor, the dog went bonkers.

Investigators found 9,031 pounds of marijuana in the warehouse, which was leased in Gregory's name. In addition, investigators found two oceangoing cargo containers that contained an air compressor and a vacuum sealer allegedly used to shrink-wrap bales of pot.

After his arrest, Gregory gave investigators permission to search a Dallas house he was leasing.

"At that location, they recovered several different types of drug notes, drug ledgers, which indicated narcotics transactions and also approximately $446,000 in cash, U.S. currency," Carmical testified.

Rather than fight drug charges that could have resulted in life in prison, Gregory quickly capitulated and on March 3 pleaded guilty to one count of intent to distribute marijuana. He was sentenced to six years in federal prison in June after agreeing to provide the government "substantial" information in its case against Rice and others. Gregory, who is serving his sentence at a federal detention camp in California, declined to be interviewed for this story.

Rice is jailed in Waco pending his March trial.
One of the concessions Gregory provided included permission to search a Phoenix warehouse Gregory leased from--and shared with--Marvin Weide, commander of Arpaio's executive posse.

James Gregory told federal agents Rice gave him $60,000 to set up a drug distribution warehouse in Phoenix. Gregory said he began leasing a portion of Marvin Weide's warehouse at 1625 North 40th Street in June 1995, for $4,100 a month.

Gregory, 51, apparently was unconcerned that Weide was a member of the sheriff's posse and that marked sheriff's cruisers frequently were parked around the warehouse.

In fact, Thrasher says Gregory welcomed the prominent police presence. Apparently, he was more concerned about rival drug dealers stealing his stash than Arpaio's Executive Posse discovering one of the biggest marijuana smuggling operations on Earth.

"How would you feel if you had a humongous drug operation going on and doing tons of marijuana and you had all these police cars sitting out in front of your place? Wouldn't you feel a certain amount of comfort?" Thrasher asks before answering his own question.

"I would. I would feel wonderful. Nobody is going to think anything is going on with all those sheriff's cars parked right there."

Gregory told investigators that Helmut Pauwells, a Mexican national who illegally entered the United States, worked with him and handled day-to-day activities at Weide's warehouse, according to an affidavit by a Texas Department of Public Safety narcotics officer Robert B. Nesteroff filed in U.S. District Court in Phoenix.

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