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Accused heroin kingpin worked welfare system

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Copyright © 2014 Albuquerque Journal

Accused South Valley heroin kingpin David Reynolds likes the good life.

According to federal court records, he has a taste for new cars and trucks, golf outings and gambling trips to Vegas where he bought $115,000 in casino chips.

Meanwhile, name a program for the poor – food stamps, aid to dependent children – and Reynolds’ live-in girlfriend was applying for it.

A 2007 mug shot of David Reynolds after a drug-related arrest.

A 2007 mug shot of David Reynolds after a drug-related arrest.

As far as the New Mexico Human Services Department knew, the 31-year-old Reynolds was a broke, out-of-work father of two children living at his mother’s house in the 6800 block of Ivy SW with the mother of his children, Consuelo Munoz.

In 2012, Munoz filed her application for assistance with HSD for the fourth year in a row, declaring that neither she nor Reynolds had jobs or earned any income and that they had no assets or resources, according to federal court records.

But, for three years, the U.S. Drug Enforcement Administration and local narcotics agents were developing a different picture of Reynolds and the multi-county heroin distribution network they claim he established and ran since at least early 2010.

That picture included fast cars, big trucks, front businesses, gambling trips to Las Vegas, Nev., golf dates and lots of cash.

But that didn’t keep his girlfriend from getting on the state dole.

In her application for assistance from HSD in 2009, she reported household income of zero with $500 of miscellaneous assets, claiming that she, Reynolds and the children were living with Reynolds’ mother.

Court documents show that, in subsequent years, she declared an income of $10,939 and $2,454. During that time, she stated that Reynolds’ income was zero and that they continued to live at Reynolds’ mother’s home on Ivy Place SW.

The DEA alleges Reynolds spent at least $50,000 remodelling this South Valley home while his girlfriend claimed he made no income. (Dean Hanson/Albuquerque Journal)

The DEA alleges Reynolds spent at least $50,000 remodelling this South Valley home while his girlfriend claimed he made no income. (Dean Hanson/Albuquerque Journal)

The court documents do not say how much in state assistance Munoz and Reynolds received over the years.

But court records show that Reynolds and Munoz seldom lived with his mother at the Ivy Place address.

Instead, agents had Reynolds under surveillance in 2010 and found the couple living at five other residences over the course of the three-year investigation.

By early 2013, Reynolds and Munoz had settled down at a home in the 5700 block of La Anita SW where Reynolds began an extensive remodelling of what agents described as a run-down home.

They estimated that Reynolds spent $50,000 on the exterior alone – replacing old garage doors, putting new stucco on the house, replacing an old chain-link fence with one of cinder block, and installing wrought iron fencing and doors, as well as motorized iron gates in front of two driveways.

The interior was also being remodeled, but agents didn’t want to approach the contractors for fear of “blowing” their surveillance.

At that time, Munoz said on an HSD application, neither she nor Reynolds had jobs or earned any income and had no assets or resources, according to court records.

The home being remodeled on La Anita, according to county property records, was also listed in the name of Reynolds’ mother.

Gambling and cars

The rear of an auto body shop on Old Coors where federal agents claim drugs and money were delivered by members of Reynolds' organization. (Dean Hanson/Albuquerque Journal)

The rear of an auto body shop on Old Coors where federal agents claim drugs and money were delivered by members of Reynolds’ organization. (Dean Hanson/Albuquerque Journal)

Last December, Reynolds and 14 others were indicted by a federal grand jury on charges of conspiracy to distribute heroin in Bernalillo and Santa Fe counties. Reynolds and the others were arrested in December, and he is being held without bond. He faces a potential prison sentence of 10 years to life if convicted.

He has pleaded not guilty.

His attorney, Douglas Couleur, had no comment for this story.

The investigation into Reynolds’ operation was called operation “Sand Wedge,” because Reynolds liked to play golf.

According to federal seizure warrants, he also liked to gamble in Las Vegas, Nev., where agents traced at least four gambling junkets in which Reynolds bought more than $115,000 worth of casino chips.

Agents also tried to keep track of the cars he was buying but never put in his own name.

In August 2010, he purchased a new Camaro and registered it in his mother’s name, but agents saw only Reynolds or Munoz driving the car, which they estimated at being worth $25,000 to $30,000. In 2011, Reynolds bought a Ford King Ranch F-350 pick-up truck for approximately $45,000. But he registered it in the name of a man in California.

In 2013, he bought a new Honda Accord and registered it in the name of one of his drug runners who lived in Santa Fe.

Court records recount a telephone conversation between Reynolds and an associate in which Reynolds complained about putting $100,000 into rebuilding a 1957 car that isn’t otherwise described.

Other surveillance reports have Reynolds keeping other cars – a Jeep Cherokee and a Lexus – in a storage garage rented in Munoz’ name where Reynolds allegedly also stored drugs.

Agents could find only one legitimate job that Reynolds held from 2009 through 2013; it was at Eclipse Aviation, where he earned $5,700 in three months.

While his girlfriend applied for state programs for the poor, Reynolds took junkets to Las Vegas where he gambled at least $115,000. (McClatchy-Tribune File)

While his girlfriend applied for state programs for the poor, Reynolds took junkets to Las Vegas where he gambled at least $115,000. (McClatchy-Tribune File)

Spotted surveillance

Court records show that federal and local narcotics agents had a difficult time cracking what they called the Reynolds Drug Trafficking Organization.

Several search warrants recount times when members of the organization spotted law enforcement surveillance in and around the Los Padillas neighborhood where Reynolds operated.

Although the neighborhood has long been home to the Los Padillas gang, none of the people working with Reynolds overtly displayed gang ties.

Reynolds and several of his associates appear to have learned from their prior drug arrests – none of which amounted to any significant jail time.

For instance, they changed cellular phones often, in some cases as often as every 30 days, or more frequently if they suspected police surveillance.

Their telephone conversations appear in court records to be short and mainly to arrange face-to-face meetings.

Gene Solis, 20, accused of being one of Reynolds’ main drug runners, was apparently adept at spotting police surveillance, according to reports.

Solis has pleaded not guilty and was released pending trial to a halfway house.

On several occasions, Solis canceled drug or money deliveries to Reynolds because he spotted federal agents following him or watching Reynolds’ home, the reports say.

Heroin and other drugs that Ramirez and his associates allegedly sold were stored away from their homes in storage lockers or the homes of minor members of the organization.

Court records show that they were able to quickly change drug suppliers.

Last June, Jose Martinez-Encinias, 41, was arrested with two kilograms of heroin, one kilogram of cocaine and 17 firearms. He had been identified as the main source of drugs for Reynolds’ group at that time, according to court records.

Within a few weeks, Ramirez and his associates were allegedly receiving drugs from local contractor Humberto Hernandez, 37, although there were complaints that the heroin was not as strong as the organization’s clients had been using. Hernandez is one of the 14 arrested with Reynolds. Both Hernandez and Martinez-Encinias have pleaded not guilty.

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