Inside Dope

Inside Dope
Posted by CN Staff on March 08, 2007 at 15:26:07 PT
By Monte Burke
Source: Forbes Magazine 
USA -- A man we'll call Frank is a 35-year-old equities trader for a Wall Street investment bank. He lives with his fiancée in a 1,700-square-foot, three-bedroom apartment in a chic Manhattan neighborhood and, like many well-to-do New Yorkers, relies on a vast array of delivery services to satisfy his whims. He orders out for dinner nearly every night. His dry-cleaned suits are brought to his doorstep. His groceries arrive in cardboard boxes.
Tonight, as he does once a month, Frank will call on a service that's not found in the Yellow Pages. He dials a number listed on a colorful business card that a friend gave him. He reaches an answering service, punches in his own number, then hangs up. Within minutes his phone rings and he is asked by the voice on the other end for his code word. He provides it and hangs up again.Two hours later a backpack-toting, clean-cut young man wearing jeans and a T shirt shows up at the door, looking every bit like a college kid on his way to the library. But his backpack isn't crammed with books; it's filled with dozens of clear, 4-inch-long plastic boxes, each containing up to 2 grams of high-grade marijuana ranging in price from $50 to $400. "It's convenient, the weed is good and it feels very safe," Frank says of the service. "I would never go down to the park to buy it."Such transactions take place thousands of times a day in the city; the services date from the early 1980s. Back then most dope was still purchased in open-air markets--Central Park, for example--until the mid-1990s, when former Mayor Rudolph Giuliani rid the streets of drug dealers, which started gentrifying many crime-ridden New York neighborhoods.But instead of disappearing, the trade went underground and radically changed. No longer does most of the pot come in, French Connection style, by the ton on boats or tractor trailers. The trade starts with small amounts of weed mostly grown regionally and moves through multilevel distributors. Like the Internet, this kind of distribution channel has many nodes of activity and no fixed hub. A broken link hardly slows the operation at all.Dealers use pagers, cell phones and PDAs to create from this topology a sophisticated, and very lucrative, network. The key is having several layers of agents between the grower and the buyer--and making it inherently difficult for law enforcement to connect the dots. The operation can even continue when its leaders are in jail.Were it not for a squealer, the Drug Enforcement Administration might never have broken up a drug delivery service that called itself the Cartoon Network (after the cable TV channel). A yearlong investigation led to the arrest of John Nebel, 35, founder and ringleader of the operation, and 11 others, charged with conspiring to traffic in 2,200-plus pounds of marijuana between Jan. 1, 1999 and Dec. 1, 2005. A high school dropout from Long Island, Nebel (who, along with those confederates, has pleaded guilty to conspiracy) led a mobile and tech-savvy network via a call center that frequently changed locations and delivered dope through a system of couriers overseen by street managers. "We had to dismantle the entire operation to kill it," says a baby-faced, blue-eyed, 42-year-old DEA special agent. Helping him take down the dope ring was a black-haired, 46-year-old task force officer for the Suffolk County sheriff's office. We'll call these two cops Tom and Jerry. They are still trying to do their jobs anonymously.No telling how many of these services exist. They come in all sizes, from corporate-like entities with client lists in the tens of thousands to lone entrepreneurs who deal with a handful of customers. They market their wares with business cards or, better yet, by word of mouth; because it leaves too many electronic fingerprints, the Internet is out. At its height, the Cartoon Network had 30 employees, including executives (Nebel and three lieutenants) and six middle managers responsible for overseeing dozens of laborers (packagers, dispatchers and couriers), all working together to get pot from the grower to the customer. Only Nebel and his inner circle knew everyone in the organization; that made it difficult for authorities to break one link and follow it up the chain. (In fact, the network continued to operate smoothly during the year that Nebel spent in jail for a separate drug charge in 2001.)Most of the marijuana was grown in dozens of private homes across the metropolitan area (including Connecticut and New Jersey), primarily in basements. A typical grower would cultivate 300 to 400 plants, which were harvested up to four times a year, yielding 30 to 40 pounds at each cut, worth $150,000 to $200,000 wholesale (Nebel's cost) and $540,000 to $720,000 on the street. The pot was mostly high grade and grown hydroponically with mineral nutrients, not soil.A wholesale distributor bought the pot for $4,000 a pound and delivered it to the executive group (which paid $5,000), just a few pounds at a time. "They kept the increments small so they could move it quickly and never have too much on hand," says Tom. Then, packaged by the pound, the dope was delivered to a home base--a call center in a hotel room in Manhattan, Brooklyn or Long Island or one of Nebel's seven houses (all owned under different names) in the metro area. The call center changed weekly, even daily, to prevent detection. Up to six employees worked in the call center, which was overseen by an executive. The two or three packagers broke down the pot into 1.5- and 2-gram parcels, which were placed in plastic canisters and labeled according to type. Some of the more popular were Strawberry Cough, NYC Diesel and AK-47, names that referred to the seed, strain and potency. The higher-priced brands ($100-plus per 2 grams), like limited-quantity designer handbags, moved the fastest.Generally, three employees worked as dispatchers in the call center. One manned the central computer, which had a customer database, custom-made for Nebel for $50,000. When a call came into a Cartoon Network pager at the center, it was instantly downloaded into the database, which brought up vital information about the caller: where he lived, his buying history and the last courier who delivered dope. "This was one of their safety valves to weed out police calls," says Jerry. The network received up to 600 calls a day. If the number cleared, a dispatcher called it back and asked for a code--sometimes a word (like "cartoon") or the code name of a courier. The dispatcher sent a street manager (with no pot) to check out new clients. (If a customer ever mentioned dollar amounts over the phone, the dispatcher was trained to drop the call immediately and flag the caller's number in the database. "This was another precaution," says Jerry.) With the correct code given, another dispatcher paged a street courier and gave him the delivery address.Each of four street managers kept tabs on up to six couriers after handing over the vials from the call center. To make deliveries, couriers traveled by foot, bike, subway or bus, getting instructions from the call center. "They liked to hire college kids, you know, just regular-looking guys," says Tom. Such services rarely hire African-Americans as couriers because they were thought more likely to be hassled by the police. Couriers were careful to carry just enough pot to stay under the state guidelines for a felony charge in case they were pinched (possession of anything up to 8 ounces is still a misdemeanor). Also, their knowledge of the other employees involved in the network generally stopped at their street managers. At the end of the 12-hour shift (11 a.m. to 11 p.m., 365 days a year), couriers brought the money and any leftover dope back to the street managers, who paid them, typically $200 a day. Street managers took the money to an executive who, in turn, paid the rest of the staff. Street managers, packagers and dispatchers made $300 a day. Nebel's three managers took home $300, plus lots of perks. Even with daily expenses of $9,000, the Network often cleared $17,000, for an annual net of $6 million--tax free, of course.That all went up in smoke after an anonymous letter, presumably from a disgruntled former employee, was sent to a police department in Long Island. It outlined how the Cartoon Network functioned, the address of a call center and one of the service's pager numbers. Tom and Jerry cloned the pager number, tapped the organization's phones and did street surveillance. After a year they had enough for search and arrest warrants and in December 2005 seized $837,000 worth of dope, $685,000 in cash, Nebel's seven residences, 16 cars, a boat and thousands of vials packaged for the holiday season. In total the feds are seeking a $22.5 million forfeiture. The DEA also seized the database of 50,000 client names and phone numbers but has thus far not pursued them. Nebel awaits sentencing later this year--and faces ten years to life. Enough time to work on the book he's been planning to write.Note: New York City's marijuana delivery networks are like the Internet: sophisticated, robust and lucrative.By the Numbers:High Times25 million The number of Americans who have smoked pot in the last year.$36 billion The estimated retail value of last year's marijuana crop.9.6% The average annual growth in weed production over the last 25 years.Sources: U.S. Department of Health & Human Services; Jon B. Gettman, Ph.D.Smoke Screen Graphic: Forbes Magazine (US)Author: Monte BurkePublished: March 26, 2007Copyright: 2007 Forbes Inc.Contact: readers forbes.comWebsite: -- Cannabis Archives 
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Comment #11 posted by cannabliss on March 09, 2007 at 13:25:40 PT
What Kind Of Idiot
...would pay $200 or more for a bottle of wine? Lots of people. Maybe it's really good weed. Plus, people pay for convenience. It's cheaper to wash one's on clothes and cook one's own meals, but not everyone wants to.Everything is overpriced in Manhattan anyway, right?It just shows the folly of prohibition. Interdicting supply just drives up price which creates incentives for increased production. Demand-side reduction would be the way to go, but lies involving fried eggs is not the way to go about it. Besides, demand for a helpful substance will logically be hard to reduce.
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Comment #10 posted by Max Flowers on March 09, 2007 at 11:31:29 PT
...dozens of clear, 4-inch-long plastic boxes, each containing up to 2 grams of high-grade marijuana ranging in price from $50 to $400.Is this saying that some strains are $200 a GRAM? What kind of idiot would pay $200 a gram or $100 a gram for that matter? Am I reading that right?
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Comment #9 posted by potpal on March 09, 2007 at 05:06:12 PT
o-ver t-here Insanity is contagious.
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Comment #8 posted by Toker00 on March 09, 2007 at 03:58:58 PT
Impeachment Drums...
Good luck with this:
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Comment #7 posted by Toker00 on March 09, 2007 at 03:35:50 PT
Now here is another "Mover". Cynthia McKinney. She is what we need to be supporting and building momentum for change. Listen carefully, America, to these few words of wisdom and direction from the end of one of her speeches. This lady GETS it!"Finally, I have complete belief in the young people of our country and their ability to lead the kind of change that I'm talking about.After all, it was the young people from just a few generations ago who faced attack dogs, water hoses, police beatings, and lynch mobs. They sat in at lunch counters across the country and stood up for our country.And they won. And I know we all can do it again.Now, should you ever waiver in your faith, just acknowledge this:The world's most marginalized and dispossessed are already ahead of us in taking their countries back! Of course, starting in 1959 with Cuba, but then Venezuela, Cote d'Ivoire, Brazil, Argentina, Spain, India, Bolivia, Chile, Ecuador, Haiti, and Nicaragua all have stood up to imperial domination--and won!In the meantime, we have to demand more from our representatives. How can you be against war if you finance war? And how can you be against George Bush if you won't impeach him?The American people are being fed madness as sanity. But, this is not Oz, Wonderland, the Twilight Zone, and it's not 1984!With every fiber in our being we must resist. Resist like Mario Savio told us to resist: with our entire bodies against the gears and the wheels and the levers of the machine.We must resist because we claim no partnership in war crimes, genocide, torture, or crimes against humanity. We claim no complicity in crimes against the American people.We will build a broad-based, RAINBOW MOVEMENT for justice and peace. And we will win.I want to thank Dedon, Adrienne Cole (my former Chief of Staff), Anastasia King (Producer of American Blackout), Tracy Larkins (my scheduler, host, and everything assistant), and all the people associated with this program, and all of you for supporting it.Thank you."RAINBOW MOVEMENT. Red, Yellow, Black, Brown, White. The colors of the EARTH rainbow. These colors are Earth Colors. Earthbows. These "Earthbows" will spread across the Earth as the Rainbows spread across the sky. It can HAPPEN! Empire is over if you want it.Toke.
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Comment #6 posted by The GCW on March 08, 2007 at 19:44:40 PT
For 10 years after repealing the original prohibition (of alcohol), murder rates decreased. Prohibition causes crime rates to increase. Now, there is a national news story that is an eye opener and an insight for activists...-0-Big-City Murders Jump More Than 10 Pct. it's not murders, alone; all kinds of crime are way up.)...there is reason to believe repealing the sequel will yield the same results. 
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Comment #5 posted by John Tyler on March 08, 2007 at 19:39:27 PT
Business is business
They should have had a degaussing device to destroy the hard drive the database was on. One zap and a powerful electronic pulse is sent into the hard drive rendering it useless and the data destroyed. Oh well, but it shows that a lot of people want this product and a lot of people will try to get it to them. It is interesting that Forbes, a big time business magazine, would run this article. But, this is business after all, currently illegal business, but business nonetheless. 
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Comment #4 posted by FoM on March 08, 2007 at 18:48:26 PT
New Mexico: House Rejects Medical Marijuana
 March 8, 2007SANTA FE -- The House has rejected a bill to legalize the medical use of marijuana.The bill failed today on a 33-to-36 vote.The measure previously had passed the Senate and Governor Richardson had expressed support for it.The proposal would have allowed the use of marijuana for pain or other symptoms of debilitating illnesses such as cancer, glaucoma, epilepsy, multiple sclerosis, HIV-AIDS and certain spinal cord injuriesSupporters say marijuana could help patients who don't respond to other treatment, such as an individual who suffers from nausea because of treatments for the cancer.Opponents dispute the medical value of marijuana and warn that legalizing marijuana would send the wrong message to children about the use of drugs.Copyright 2007 The Associated Press
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Comment #3 posted by mayan on March 08, 2007 at 18:24:43 PT
Cannabis Is King
Cannabis is the king. Prohibition crowned it! Thanks to prohibition there is more,better pot around than ever. The survival of the species is guaranteed with countless,potent strains being bred and seed-stock which would make any farmer proud. Prohibition has created a monster!THE WAY OUT IS THE WAY IN...Pilot's Lawsuit Alleges Airliners Rigged With Explosives: Fitting Aircraft With Illegal Parts? Chip that was illegally installed in 2000 could have been utilized to execute 9/11 attacks: Coalition Calls for Whistleblower Hearings: McKinney demands 9/11 Truth in California speech for Pacifica fundraiser: & 911: A Rebuttal (must see video): And A Controlled Demolition Of The World Trade Center (video): of 9/11 Twin Towers Collapse?
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Comment #2 posted by Sam Adams on March 08, 2007 at 17:05:34 PT
Strange, I'm surprised a business magazine didn't mention the bottom line. 10 years in jail, probably about $400,000.  Two high-level cops, investigating for a year, the whole shebang, I dunno, 1 or 2 million?  just a guesstimate.So one and half million to put this guy in jail, with his only real crime being to piss off one of his staff.Isn't it interesting that the government ends up with both our tax money to pay their salaries, and then they also get the cannabis profits in the end as well.No wonder they like prohibition so much! You can see why they're always looking for new stuff to "prohibit"
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Comment #1 posted by laduncon on March 08, 2007 at 16:15:29 PT
Gotta love databases (if ur a cop, that is)
Why here officer, just follow the bread crumbs and you'll find the evil cookie monsters :(
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