Ring of ‘Hardened Drug Dealers’ Sold Mass Amounts of Cocaine, Other Drugs from North Carolina Frat Houses, Feds Say

The high-volume drug deals at some fraternity houses at the University of North Carolina at Chapel Hill were so brazen that Orange County Sheriff Charles Blackwood said an investigation into the network “kind of came to us.”

“It unfolded unlike any other case I’ve seen in my 40 years of law enforcement,” Blackwood said at a news conference on Thursday.

The investigation culminated with charges against 21 people allegedly involved in a drug trafficking ring that spread to two other North Carolina universities and moved hundreds of kilograms of street drugs, including cocaine and narcotics like Xanax, over the span of several years, resulting in sales exceeding $1.5 million, federal prosecutors said on Thursday.

“This is not the situation where you have single users, where you have a 19-year-old sipping a beer or you have someone who is taking a puff of a joint on the back porch of a frat house,” said U.S. Attorney Matthew G.T. Martin of the Middle District of North Carolina at the news conference. “These are 21 hardened drug dealers.”

Among those charged are current and former students from UNC-Chapel Hill, Duke University and Appalachian State University. All three universities pledged to work with prosecutors on the case.

“We take these allegations very seriously,” Duke spokesman Michael Schoenfeld said in a statement. “The use and distribution of narcotics is against the law, it is against our code of conduct, and it endangers the health and safety of our students and community. Duke will respond accordingly through our disciplinary process.”

The case began in November 2018, when Blackwood’s office began looking into illegal drug sales on campus at UNC-Chapel Hill. Investigators soon found that deals were happening inside or near the houses for Phi Gamma Delta, Kappa Sigma and Beta Theta Pi from 2017 to the spring of this year, authorities allege.

UNC-Chapel Hill suspended university recognition of all three fraternities on Friday. The International Fraternity of Phi Gamma Delta also temporarily suspended the UNC-Chapel Hill chapter, according to executive director Rob Caudill.

“These allegations are very serious, suggest conduct which violate our policies and values, and we have zero tolerance for the alleged actions,” Caudill said in a statement.

Kappa Sigma Executive Director Mitchell B. Wilson said in a statement that the fraternity’s leadership is concerned about the allegations and plan to investigate if members violated the organization’s code of conduct.

“Kappa Sigma is a values based fraternity, and we expect our members to be law-abiding citizens,” Wilson said. “Those who violated our standards will be held accountable.”

Beta Theta Pi did not immediately respond to a request for comment.

The deals at the fraternity houses included a vast menu of drugs, including cocaine, “Molly” also known as MDMA, mushrooms, Xanax, steroids, human growth hormones and other narcotics, according to prosecutors. Hundreds of pounds of marijuana, which remains illegal for recreational and medical use in North Carolina, were also sold, federal officials said.

Investigators soon moved their probe into Duke and Appalachian State, according to court documents, and discovered that the ring used encrypted apps and offered payments electronically through Venmo and PayPal.

One informant told investigators that many drug sales happened “behind closed doors” to members of the fraternities, according to court documents, and some would post prices for drugs in the chapter’s GroupMe thread. Many transactions allegedly took place around the fraternity’s big events, where high volumes of drugs were in demand. One defendant told investigators that one year, the 22-member Phi Gamma Delta pledge class pooled money to buy an ounce of cocaine for a spring-break trip.

Investigators say they learned that suppliers in California were mailing cocaine to North Carolina, and shipping marijuana by car. The suppliers were often paid through packages stuffed with cash sent through the mail or with money orders through Western Union, prosecutors said.

The group indicted on Thursday included defendants ranging in age from 21 to 35. At least 11 are current or former students of the three schools, prosecutors said.

The fraternity groups’ alleged primary supplier was Francisco Javier Ochoa Jr., 27, of Turlock, Calif. Ochoa was indicted in November 2019 for conspiracy to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana, according to court documents. According to a defendant who cooperated with investigators, Ochoa supplied them each week with approximately 200 pounds of marijuana and two kilograms of cocaine from March 2017 until March 2019.

When local law enforcement seized Ochoa’s stash, investigators found “148.75 pounds of marijuana, 442 grams of cocaine, 189 Xanax pills, steroids, human growth hormone, other narcotics, and approximately $27,775.00 in U.S. currency,” according to a news release.

Ochoa’s lawyers would not comment on their client’s case. He pleaded guilty in February and was sentenced on Nov. 24 to 73 months in prison with five years of supervised release and ordered to pay $250,000, prosecutors said.

The 20 other defendants, who were indicted between July and December, face charges including conspiracy to distribute the drugs and distribution of a controlled substance within 1,000 feet of a public or private college or university. The investigation is ongoing and more people could be charged, prosecutors said.

UNC-Chapel Hill Chancellor Kevin M. Guskiewicz said in a statement that the university was “extremely disappointed” to learn about the allegations involving former students and on-campus fraternities.

Check out the story covered in The Washington Post and The New York Times.

“Our community can be certain that the University will enforce the student conduct code to the fullest extent possible,” Guskiewicz said.

Robert J. Murphy, a special agent from the Drug Enforcement Administration, said the case would stop a burgeoning drug culture in the fraternities.

“These fraternity members’ drug trafficking crimes contributed to a toxic and dangerous environment on these college campuses,” Murphy said in a statement. “The arrest of these drug traffickers makes these college campuses and their respective communities safer.”

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