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Prices of illegal drugs on LI soar as supply chain shrinks due to the pandemic, feds say

Investigators seized 70 kilograms of cocaine during a

Investigators seized 70 kilograms of cocaine during a raid in Hunts Point in August 2019. Credit: New York Drug Enforcement Task Force

The price of illegal drugs on Long Island and in New York City has increased markedly because of a decreasing supply chain due to the coronavirus pandemic, federal officials say.

Investigators point to a number of factors, including dealers who are reluctant to meet with clients for fears of contracting the potentially deadly virus; the high risk of transporting drugs and the chemicals needed to make the drugs across international borders and across the country as airlines have halted flights and borders have been shut down; and drug addicts not able to travel out of Long Island and New York City due to the lockdown ordered by Gov. Andrew M. Cuomo in March.

“In our line of work, drug prices are the telltale sign of a change in supply and demand,” said Ray Donovan, the head of the New York office of the DEA, which also covers Long Island. “It’s not surprising that illegal business would have problems, as legitimate businesses do, because of the coronavirus."

The price of marijuana has gone up an average of 55% from a low of $800 a pound to as much as $1,600 a pound this March compared to March of last year, officials said.

The price of cocaine went from a low of $28,000 a kilogram, which is equivalent to 2.2 pounds, to up to $34,000; heroin from an average of $50,000 a kilogram to as much as $56,000; and methamphetamine from $12 a gram to $15 a gram in recent months, officials say.

The federal Drug Enforcement Administration, from which the figures come, has long had a policy of making street buys to follow the price of drugs. The hike in illegal drug prices is also a result of effectiveness of enforcement against the illegal marketplace in narcotics, officials say. 

DEA statistics also show that seizures of drugs and drugs arrests on Long Island and in New York are way down, even though there are more agents in the street. With fewer arrests and seizures, agents do not have to be off the street to fill out reports and paperwork and appear in court, Donovan said in an interview last week.

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In April, DEA agents seized 18 kilos of heroin, compared to 168 kilos in April 2019, officials said. In the case of the synthetic drug fentanyl, agents confiscated one kilogram last month, compared to 42 last year, and agents seized only five kilograms of cocaine last month, compared with 954 kilograms in April 2019.

Donovan said drug arrests appear to be down more than 50%, though those statistics for last month are still being compiled.

Donovan says the virus has resulted in even dealers, in some ongoing investigations, becoming reluctant to meet with undercover agents acting as buyers because of fear of getting the virus.

Professionals who deal with treating drug addiction say they are observing the same trends.

Jeffrey Reynolds, the head of the Family and Children’s Association on Long and Island and a member of Cuomo’s Heroin and Opioid Task Force, said addicts are reporting a bag of heroin on the street has gone from $10 to $20.

In addition, Reynolds said, addicts who might have gone into the city when there was a shortage of drugs on Long Island are not going because the Long Island Rail Road trains are so empty they fear they would stand out, Reynolds says.

Steve Chassman, the head of the Long Island Council on Alcoholism and Drug Dependence, said he even got a call from an addict complaining that his regular dealer was not returning his phone calls, refusing to meet with him because of fear of catching the virus.

Officials say the increasing prices of illegal drugs is caused by problems brought on by the effects of the coronavirus in the United States, Mexico and China, and the interconnected way the drug trade works between the countries.

Mexican cartels, for example, depend on China for supplies of drugs and precursor manufacturing chemicals, and also the cartels depend on China — and a complex money-laundering scheme — to get the hordes of cash the U.S. drug trade generates back to Mexico.

One example, Donovan says, of a chemical supply that traditionally came from China is ammonia, which is needed by the drug cartels in heroin production. China has supplied ammonia very cheaply, but the virus has effected production by Chinese companies and transportation overseas. There is some ammonia production in Central and South America, but it is relatively very expensive, driving up production cost of the narcotic, Donovan says.

Without chemicals, Mexican cartels have had to produce fewer drugs, and the coronavirus has made it more difficult to ship narcotics into the U.S. market.

Donovan says transportation has become a cartel problem because of tighter border enforcement, as well as the lack of other traffic on interstates from border crossovers in Arizona and California along interstates to New York.

Just as Reynold’s Long Island addicts are afraid to take the railroad into New York, Donovan says the cartels are afraid that their transportation vehicles — mostly driven by Hispanic drivers — are much more likely to get stopped by state police on empty highways. There are similar situations at airports — fewer travelers make it more likely that couriers and shipments will be stopped and searched, Donovan says.

The coronavirus has also struck at the way Mexican cartels get money out of the United States back home to refuel the cycle of drug production and distribution in the United States.

The traditional way money laundering has worked is that dealers in New York go to appliance dealers with connections in China and give them cash to purchase appliances, and then have the goods shipped to China, Donovan said.

In China, the appliances are sold and the income is then sent on to Mexico. But restrictions on the retail appliance business caused by the virus in both New York and in China has impacted this method of money laundering, Donovan said.

This flow of tens of millions of dollars is much less scrutinized than if it transferred directly from the U.S. to Mexico, Donovan says.

“Drug prices may not be of the highest concern at this time, but one of our jobs is to relay recent trends in drug trafficking to the public.” Donovan said, pointing out that the "consequences of drug use remain the same — addiction, overdose and death.”

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