The drug dealers next door: How NYC heroin mills are blending in

NEW YORK - In a major drug bust that drew little attention just a week before Philip Seymour Hoffman's death, authorities found a sophisticated heroin packaging and distribution operation in an apartment in the Bronx.

There, workers with coffee grinders, scoops and scales toiled around the clock to break down bricks of the drug into thousands of tiny, hit-size baggies, bearing such stamped brands as "Government Shutdown" and, in a nod to the Super Bowl, "NFL."

• California widens access to drug that can reverse heroin overdose
• Actor Hoffman's fatal heroin overdose puts focus on dealers
  

The seizure of $8 million worth of heroin was the result of the latest raid on heroin mills located behind the doors of New York homes, which authorities say are a sign of a well-oiled distribution network that caters to more mainstream, middle- and upper-class customers like the Oscar-winning Hoffman.

Tests are continuing to try to pinpoint how Hoffman died, but his body was found with a syringe in his arm and dozens of packets of heroin nearby. Where he got his drugs remains uncertain, but the arrests of drug suspects identified during the investigation suggest he might have visited a lower Manhattan apartment building where a supplier lived.

There's no evidence that the Bronx operation provided any heroin Hoffman might have bought. But New York has long been known as the nation's capital of smack, regularly accounting for about 20 percent of the heroin the federal Drug Enforcement Administration seizes every year.

Those seizures have grown by 67 percent in the state over the last five years, a trend Brennan attributes in part to high-volume heroin mills invisible to most New Yorkers but capable of churning out hundreds of thousands of packets within days after a big shipment arrives.

The pipeline starts in Mexico, where cartels traffic Colombian-produced heroin by the kilogram. The wholesalers smuggle the drugs into the United States concealed in trucks, through tunnels dug under the southwest border and, in one recent case, by molding and coloring the heroin to look like coffee beans and shipping it via UPS to a private postal box in Queens.

The retailers favor residential settings in safe neighborhoods as a means of cover. Raids by Brennan's office and the DEA in recent years have found them in a newly renovated apartment in midtown Manhattan that rented for $3,800 a month and in a two-story, red-brick home in the New York City suburb of Fort Lee, N.J.

A mill found in an 18th-floor apartment in upper Manhattan had a sign that read, "Clean Up After Yourselves - The Management." At another discovered across the street from Manhattan College in a Bronx, immigrant workers wore school sweatshirts to try to blend in.

Workers can make up to $5,000 a week. They're also given meals and toiletries to help make it through 12-hour shifts.

The mill operators and workers go out of their way not to disturb neighbors, who might report them to police, or to draw the attention of other criminals who wt to rob them. They leave the apartments empty when not working, and sometimes change locations long before their leases are up as a cost of doing business, said James J. Hunt, the acting head of the DEA's New York office.

"Drug dealers are very wary," Hunt said. "They wouldn't want word to get out on the street about a mill. They want anonymity."

The economics are addictive: The heroin flooding the region carries an average wholesale price of about $60,000 per kilo. The retailers can cut a kilo to a 50 percent purity level using powdered vitamin B or other nontoxic substances. That provides enough drugs to fill 25,000 single-dose glassine envelopes that would be sold for $5 each to street-level dealers, who in turn charge customers $10 to $15. After subtracting the cost of the kilo, wages and other expenses, the mill operator would turn a $70,000 profit per kilo.

In the Bronx takedown on Jan. 30, investigators conducting surveillance at a building there stopped a man making an apparent delivery of drugs before seeing another man try to flee out the fire escape of a fifth-floor apartment. Inside, they found 33 pounds of heroin, 18 coffee grinders used to cut the heroin with baking soda, folding tables and chairs where it was packaged and stamps with various brand names.

Once exposed, mills like the Bronx one can be a touchy subject for property owners and their tenants.

There was no response to a phone message left with the landlord of the building. Linda Johnson, who lived in a one-bedroom apartment there until a few months ago, said she never noticed anything suspicious.

"I saw people coming and going in the elevator and nobody bothered me," said Johnson, 61. "If it was happening, you'd know it, right?"

Separate operations distribute the drugs to users in the city and beyond. New York City brands have turned up in Boston, Philadelphia, Washington, D.C., and smaller cities in Connecticut, Hunt said.

The distributors offer customer service intended to remove the fear and stigma from bygone eras. In one case, a dealer riding a three-wheeled motorcycle and a helmet emblazoned with the heroin brand name "Sin City" would direct customers to an exact block in a middle-class Brooklyn neighborhood - code-named "the office" - then pull up alongside their cars and exchange glassines for cash.

Dealers and users in New York and elsewhere often connect on social media sites with a degree of anonymity, authorities say. Phone numbers are exchanged and meeting spots are arranged through texting. Sometimes there's home delivery.

Elizabeth Thompson, a recovering addict who got hooked on heroin and relied on home delivery while going to law school in Philadelphia, described the delivery men who came to her door at an apartment building there as prompt and courteous.

"I never felt unsafe with them," said the 30-year-old Thompson, now policy coordinator with the New Jersey Drug Policy Alliance. "They wanted the business. And I was a good customer for a long time."

Downstream, "it's hand to hand - the dealer's hands to the buyer's hands," Brennan said. "That has to go on no matter what. There's no anonymity at that point."