How San Francisco’s open-air drug dealers work

Dervin Amado Arteaga Ervir, a 15-year-old boy from the Honduran village of El Escano de Tepale, had just parted ways with his father when he joined other young Honduran migrants selling drugs at Seventh and Mission streets in San Francisco. It was a little after 6 p.m. on July 18, 2021, when a driver in a white Chevrolet Malibu rolled up and called out to him.

As Dervin approached the vehicle, the driver pulled out a gun and demanded the cash in the teenager’s backpack. The boy handed over the money, but either didn’t hear or didn’t comply with the man’s demands to relinquish the whole bag, Dervin’s father, Marcio Amado Arteaga Escoto, said in a later interview.

Marcio heard the gunshots from less than a block away. He and his son had just bought dinner, but Dervin, explaining he wasn’t hungry, told his dad he was going to hang out with his friends for a while.

As Marcio ran back toward the crowd, he saw it was Dervin who had been shot. He scooped up his son, who was bleeding from the neck, and screamed, a witness said.

“He was with life still,” Marcio said. “He wanted to talk to me but he could not because he was suffocating. I had him in my arms. He died in my arms.”

Dervin was pronounced dead at San Francisco General Hospital at 8:47 p.m.

Marcio said that his son’s friends had urged him to sell drugs, and that he had succumbed to the peer pressure about a month earlier.

“They’d say, ‘Are you going to go back to Honduras poor?’” Marcio said. “The other friends keep calling him, keep calling him, ‘Come, come, because the money is easier.’ And so, he fell.”

Since the pandemic, drug dealers who have migrated from Honduras, mostly from the Siria Valley about 80 miles north of the capital, Tegucigalpa, and near Dervin’s hometown, have taken control of the open-air markets in the Tenderloin and South of Market neighborhoods. They amount to hundreds of cogs in a global enterprise that’s supplied by Mexican cartels and enriched by an epidemic of addiction in America.

In an effort to better understand the supply side of a drug epidemic that has claimed more than 2,200 lives in San Francisco since the start of 2020, The Chronicle over the last 18 months examined the inner workings of the markets.

The investigation included interviews with more than 100 people, including 25 Honduran migrants who acknowledged selling drugs in the Bay Area or who have been convicted of doing so. The Chronicle reviewed thousands of pages of records, including death reports, police statistics, lawsuits, five years of detainer requests by U.S. Immigration and Customs Enforcement, and documents from nearly 3,400 local and federal drug cases.

Bloody turf wars and gang initiation rituals aren’t defining features of San Francisco’s modern drug operation, partly because the Honduran dealers “all know each other,” a city police officer said. The intent is to make money fast, and any mayhem is costly — it attracts police attention and can close a block for hours.

Still, the specter of violence is constant. Almost all the Honduran dealers The Chronicle interviewed said that despite their dominance over the area, they or their families in Honduras could be killed for running afoul of the bosses. On the streets, desperate customers can be volatile, and robbers know they’re carrying cash. The Hondurans are known to defend their territory with knives and machetes.

Most Hondurans who migrate to the Bay Area or elsewhere in the country to escape poverty, crime and a lack of educational and financial opportunities work in legal jobs. But more than 200 Honduran migrants have been charged with drug dealing since 2022, the investigation by The Chronicle concluded.

Marcio is one of them. Last October, a little over a year after holding his dying son, Marcio was arrested on suspicion of selling drugs. He was arrested again in March.

“It’s true. I am not going to lie,” he said. “I was doing it because, as I told the police sincerely, I did not have work. … If I had work I would not be doing these things. … I had no way to pay rent. I went to the streets to sell drugs.”

The Honduran dealers’ takeover of drug sales on Tenderloin and South of Market streets was made possible by the Sinaloa and Jalisco New Generation cartels from Mexico. As the producers and distributors of most of the drugs sold in the Bay Area, the cartels rely on the Hondurans as their primary sales arm, the investigation found.

As a general rule, the group that makes the drugs controls the market, said Wade Shannon, a recently retired special agent in charge at the U.S. Drug Enforcement Administration in San Francisco. “If (the cartels) decide to ever cut (the Hondurans) off, that’s the end of the game,” Shannon said.  “But I think they provide a value to the cartels there; they’re moving a lot of their product.”

After decades of maintaining a minor presence in the Tenderloin, dealers from Honduras took control quickly and quietly, coinciding with the rise in use of the mega-powerful opioid fentanyl.

“It really just started as a small group of Hondurans who were here probably for other reasons, economic reasons, got into drug trafficking,” Shannon said. “They recommended other friends come up, and then they started consolidating. And then, you know, San Francisco itself had its own sort of old networks of African American distributors and others, and there was violence between those groups before the Hondurans came in and finally overwhelmed and consolidated their control.”

A veteran attorney in the city Public Defender’s Office said she began noticing the large number of migrants from Honduras on her drug caseload around 2021. She spoke on the condition of anonymity because she has several open cases.

“I think it was probably happening before, but that’s when it became something that was impossible to ignore,” she said.

The Chronicle is limiting the personal information it publishes about dealers unless given explicit permission to use their names, because they said speaking to the media could endanger them or their families.

One San Francisco native and former drug dealer who worked for a local gang said migrants from Honduras took over the “Million Dollar Mile” — the Tenderloin — because of better organization, discipline and supply chain.

For the Honduran dealers, he said, “It don’t matter who’s driving the car. This is how we run our program. This is the percentages that everybody gives up. This is how we deal with violence. This is our disciplinary action, this is our code around this, that’s what’s in place. Nobody’s bigger than the program.”

The Honduran dealers’ power also rests in their numbers, according to police and locals.

“Most of them, like sizewise, they’re not really imposing,” said the former dealer. Because of this, the man said, some have wrongly assumed that Honduran dealers would be easy to bully, but when robbed or otherwise threatened they defend themselves as a group.

Sam Quinones, a journalist and author who has reported extensively on the U.S. opioid epidemic and has argued against the decriminalization of drug possession and use, said the Honduran dealers in San Francisco were comparable to a wave of black tar heroin traffickers from Mexico who opened markets across the country more than a decade ago.

The Xalisco Boys, as Quinones called the group, all hailed from a small town of that name in Mexico. They established footholds in cities without existing drug networks and with lighter criminal penalties, such as Portland, Ore.

“I believe that in these small, close-knit worlds, word spreads quickly that there are no consequences,” he said. “It’s a selling point.”

Network of affiliates

Once they arrive in the Bay Area, many of the young Honduran dealers crowd into bare-bones homes in Oakland, sharing rooms with new acquaintances and sometimes their families, according to court records and dealers who spoke to The Chronicle.

“We know that these folks live in Oakland, they live in various apartments,” Mayor London Breed said in a March interview. She said the dealers ride BART from Fruitvale Station in Oakland to Civic Center Station in San Francisco and “conduct business like they’re going to a job.”

The Chronicle’s investigation found no evidence of drug kingpins among the Honduran migrants in San Francisco. The dealers work as a network of affiliates, which keeps the police from being able to cripple the operation with one key arrest.

The cartels hire runners to ferry their product from Mexico to Southern California; from there it’s transported up the West Coast with local operatives close to the cartels working out the details. These operatives often own a few properties in the East Bay, which can serve as stash houses and rental units for street dealers, according to court records and police interviews.

These operatives are the highest-ranking members of the Bay Area network and are the middlemen in this global operation. The operatives  are known to their underlings as “the machine,” according to two sources.

Drugs will typically flow through the machine to either a lower-level distributor or directly to a dealer.

Shipments are often sent by car to distributors who live primarily in Oakland and are from Honduras. They are frequently trusted family members who log orders from the street dealers and arrange drop-offs.

The dealers from Honduras interviewed by The Chronicle said they would not identify or did not know the leaders of their distribution network or the cartels.

Orders are often filled over the phone and in code, in case of a wiretap. Recently, Bay Area dealers and distributors have begun ordering drugs by colors that supposedly denote potency, though police said the use of colors is just a branding tactic.

On dozens of occasions over the course of reporting this story, Chronicle journalists were able to observe how the dealers work the streets in the Tenderloin and South of Market.

They operate in shifts, with younger dealers sticking together, in groups of about 10, both for socializing and protection, the dealers interviewed confirmed. The groups aren’t tethered to certain corners, sometimes migrating a few blocks away when police are nearby.

Still, they are highly visible. Many look like they should be in high school, their clean Nikes standing out amid the human misery that drives the business.

More experienced dealers prey on the chavos, or young dealers, who are new to the country, don’t speak English and are living without their families, one dealer said. The chavos are recruited as foot soldiers and forced to pay a portion of their earnings to a person higher up in the chain.

People “think that all the young dudes that are in the street like this life,” the dealer said. “All of them want out.”

Although many of the dealers themselves are not armed, San Francisco police said there’s someone with a gun on every block for protection. Dealers are known for carrying cash and are often the targets of robberies. Or sometimes, one dealer said, users will press for free samples and attack if they’re rejected.

In Dervin’s case, police have not said why Bernard Hayes, the man arrested in the case, shot the teenager. Hayes was arrested after a car chase in which police say he struck a pedestrian.

When a potential customer passes them on the street, the young dealers descend. The words “fetty, crack, powder” can be heard through the scrum, along with “mami, mami, mami” if the passerby is female. Some will trail would-be buyers a little longer down the block, their offers buzzing in the air.

There is usually minimal effort to hide a sale. The dealer escorts the buyer around a corner or behind a car. Some carry scales to weigh the bigger sales. Customers may live steps away in a tent on the street or drive in from other parts of the Bay Area.

Young boys riding electric scooters zip through the markets acting as lookouts. When they think they have spotted law enforcement officers, they let out a series of whistles to alert the dealers.

Every night at around 8, the same female vendors drive up to the corners, pop the hatchback on their cars and offer the dealers plates of meat, beans, vegetables and rice for $15 so they can eat without leaving their posts.

A common tactic is to hire a person who uses drugs, often a homeless person, to hold the bulk of the day’s drug inventory in a backpack. The holder is usually paid $10 an hour, plus some drugs, in exchange for mitigating the dealer’s risk, because the seriousness of charges from an arrest can depend on the amount of drugs a person is caught holding.

One man who has lived on the streets of San Francisco for 17 years and frequently works as a holder said the arrangement carries almost no risk from police.

“They’re only looking for the Hondos,” he said, using a term the dealers use to describe themselves.

On a recent weekday afternoon in the Tenderloin, a Honduran dealer in black Nike running gear and another in a fedora planted themselves on a sidewalk next to a white SUV. Nearby, a young woman and her boyfriend sat against an apartment building, the man smoking a cigarette and the woman a crack pipe.

Every few minutes, the dealer would be approached by a passerby and nod to the boyfriend. The boyfriend would hop to his feet, strap on a black backpack and walk backward toward the dealer.

The dealer would then unzip the backpack and fish out a plastic container carrying hundreds of clear baggies. He’d remove a bag or two, press palms with the passerby and add another layer to an inch-thick wad of bills.

“Babies! Babies! Babies!” the blond woman yelled as a child prepared to pass on the sidewalk. This was an alert to the dealers: Clear the path, tuck away the drugs, if just for a moment — a small courtesy to the residents of the Tenderloin. But on this day no one seemed to listen. The woman shook her head before taking another hit.

Other deceptions are also used. Winston Guerrero, a 26-year-old native of Honduras and former dealer, said he and others would carry a small stash in a fake energy drink can. In some versions, the can would unscrew in the middle but pop open at the top, allowing them to pour out liquid if a police officer demanded it.

The dealers’ clothes serve to obfuscate as well, Guerrero said. It’s hard to identify an individual when he and all of his co-workers are wearing black balaclavas, hoodies and surgical masks.

Several of the current or former dealers described operating by a personal moral code. Three men said they would sell crack, cocaine and heroin but not fentanyl, due to its lethality.

Guerrero said he would refuse to sell to pregnant women and would scold his friends if they did. He would also carry Narcan, a medication that can reverse opioid overdoses. On some occasions, he said, he would use it to save people overdosing on drugs — but only if they were his customers.

Although they often stand together in groups, the street dealers were described as independent contractors by police sources. They seek to establish their own clientele, and their earnings depend on how much they sell in a day.

Top dealers can net about $300 to $700 on an average day by selling fentanyl, meth, cocaine and heroin, according to one dealer. Fentanyl is also often mixed into other drugs to increase their potency, according to the DEA. But some high-earning dealers said various factors have been driving down their income of late.

“Before,” a veteran dealer said, estimating his daily earnings a few years ago, “maybe $1,000.”

The veteran dealer said the streets are oversaturated with migrant Honduran teens and young men like him. Plus, fentanyl prices have dropped. Only $10 can buy you a “point,” or one-tenth of a gram. A “pinch” goes for $5 and will get typical users high for four to six hours.

Most Honduran street dealers in the Bay Area use a money-wiring service such as MoneyGram to send their earnings to relatives in their homeland. While some dealers said they never made enough money to cover their family’s basic necessities, others have been able to establish nest eggs. One dealer said his family didn’t need his financial assistance, and he has already built a home in Honduras for about $40,000.

Dervin’s father, Marcio, said his experience has been quite different.

“I have not made money from drugs,” he said. “We all don’t have the same luck. I did not have the luck. Others take the money, and they invest it and they make more money. I have not been able to make money that way.”

Some of the current dealers who spoke to The Chronicle said they have legal jobs while dealing. Selling drugs just pays better, they said. One said he moves furniture, another said he was an Amazon delivery driver in the morning and sold drugs in the evening.

Others said they would prefer doing only legal work, but getting a job can be prohibitively complex and time-consuming. They don’t have immigration papers, don’t know how to find an immigration attorney and don’t speak English. And getting approved for a work permit is all the more difficult with a criminal record, which many have due to drug charges. Meanwhile, they are expected to support families back in Honduras.

“I like to work in roofing, construction, the kitchen, whatever,” one 21-year-old man said in a recent interview. “I’ll work on whatever as long as it’s my job.”

The man, who migrated to the U.S. alone at 14, said his status as an unaccompanied minor helped get his citizenship paperwork started, but he didn’t know how to continue the process when he relocated to Oakland at 19 to find work and live with his cousins. He said he began selling drugs to support his mom and grandmother in Honduras.

Some of the dealers spoke dispassionately about their work: It was the easiest way to make good money. When one veteran dealer was asked why there are so few Hondurans from regions other than the Siria Valley who sell narcotics in San Francisco, he laughed.

“They don’t know about it,” he said.

Relationships between dealers and distributors vary, police said. Some dealers are beholden to a single distributor, while others have been heard on wiretaps cursing out their distributors when they’re out of supply before taking their business elsewhere. Sometimes street dealers will buy their supply outright, other times on loan.

Transcripts of wiretaps in one recent case laid out the disparity in earnings between two high-ranking operatives and their associates, all of them Honduran.

In one of the calls, the group’s alleged leader, Javier Castro Banegas-Medina, talked about how he kept $40,000 to $60,000 stashed in case he was arrested. That would be enough to get a good lawyer, get released on bail and “take off” for Honduras, he said. In other calls, he discussed his house with a beautiful staircase, and how he had just sent one of his cars there.

Another higher-ranking associate, Keny Romero Lopez, was heard discussing how he owned several properties and animals in Honduras and could sell them if he needed to make bail.

Meanwhile, two other men who had recently started running deliveries and cutting fentanyl for Banegas-Medina were heard on wiretaps complaining about having no money. One of the men said he was paid $300 to $500 a week and that most of that went back to Banegas-Medina for rent.

All four men were arrested in May 2021 after a raid of Banegas-Medina’s residences yielded 19 kilograms of fentanyl, much of it wrapped in plastic bricks and stashed in fence posts, prosecutors said.

Banegas-Medina pleaded guilty to possession with intent to distribute 40 grams or more of fentanyl and, in December, was sentenced to 10 years in prison. Romero Lopez is still awaiting trial, and the two delivery drivers, Elmer Rosales-Montes and Jose Ivan Cruz-Caceres, were sentenced to 26 months and five years, respectively, for their roles.

Living in constant fear

Many of the dealers spoke of being constantly afraid. Some recounted rumors about dealers who were killed for angering the cartels or a distributor. They spoke of hearing about dealers who were murdered and their bodies dismembered or hidden, never to be found.

The Chronicle could not substantiate the specific incidents.

Other dealers expressed fear that, if they were perceived as snitches or lost or used their drug supply or money, they or their family members would be killed.

When asked whether the killers would be people from Honduras or the Mexican cartels, or even other dealers or coyotes, the answer, invariably, was a version of: “They’re all the same.”

One dealer in his mid-30s said failing to pay off a debt would result in death. Dealers are not killed in San Francisco, he said, but bodies have been known to show up in Mexico and the Central Valley.

Accounts of alleged retaliation killings can be found in court records and interviews with attorneys: In one case, a dealer reported seeing human traffickers beat a man to death after he tried to quit dealing. In another, a man said his parents in Honduras were killed after cartels discovered he had been working as a confidential informant for the DEA in San Francisco.

Despite numerous requests for help corroborating these claims, lawyers for the two men would not supply The Chronicle with supporting evidence, citing ethical and safety concerns.

From 2018 to 2022, nine people facing drug sales charges in San Francisco died before their cases were resolved, according to records provided by the San Francisco District Attorney’s Office. Of the three who were Honduran, autopsy reports concluded that each died of an accidental overdose.

One dealer said that if a dealer dies in San Francisco, it’s usually because he was murdered by a user. If a dealer dies in Oakland, it’s because of an overdose.

But a former leader of a local Honduran trafficking organization said those overdoses are also murders within the trade. “It’s not hard to kill someone by putting something in their drugs,” he said.

The Chronicle asked him: How many of the overdoses listed as accidental were actually murders?

“Most of them,” he said.

The street dealers’ fears don’t necessarily include law enforcement.

San Francisco Police Chief Bill Scott said his team’s operations have evolved over the past several years to better confront the spread of fentanyl.

“Fentanyl has changed the game in San Francisco and in California,” Scott said in response to questions emailed to him. “This deadly poison has caused fatal overdoses to increase almost every year since it hit the streets of our city. We have changed how we are evaluating and responding to this drug crisis. The SFPD has increased our plainclothes operations and buy-busts to ensure we hold the dealers who profit from this misery accountable.”

Asked recently whether he was afraid of San Francisco police, a dealer let out a loud laugh. Yes and no, he said.

“They know what’s going on, but I don’t know. If they want to clean it, they can clean it,” the dealer said. “Sometimes they do the job, but it’s like, just for the news, like, ‘Oh, we did the job good.’ If they wanted to clean it good, they could do that.”

The dealer said he likes some of San Francisco’s police officers. Sometimes, he said, one will tap him on the shoulder and say, “You’ve been out here for four hours. You’ve made enough money.”

Evan Sernoffsky, a spokesperson for the San Francisco Police Department, said he would question the claim of a known drug dealer. “We’re arresting drug dealers and holding them accountable,” he said.

One current Honduran dealer in his mid-20s said he has been arrested four times since 2022, a figure The Chronicle confirmed.

Most judges will release accused drug dealers on their own recognizance, which means they do not have to post bond and are required to check in weekly with a case manager. The dealer who was arrested four times was diligent about these calls; on a recent Wednesday, about an hour after dropping off some meth at a house in Oakland’s Rockridge neighborhood, he pulled over on a quiet street to leave a voicemail for his case manager.

“I’m going to be honest, I came here to sell drugs,” he told The Chronicle. The man, who is originally from a small town north of Tegucigalpa, said he’d been living in another Western state for a few years before joining some friends selling drugs in San Francisco.

In interviews with 25 current or former dealers, The Chronicle found three who said they were coerced into the trade. One said he was forced into selling drugs and now can’t get out. He was 14 when he first entered the U.S., he said, and came without a legal guardian. He spent most of his teens in the South and Midwest, where he stayed at shelters designed for unaccompanied minors.

At 19, before aging out of the shelter program, he moved to Oakland to live with his cousins and look for a job. He wanted to support his mother and grandmother in Honduras.

“And then my own cousins got me into the game,” he said.

He said his cousins gave him drugs to sell and portrayed it as a favor to him. He could take the drugs on loan and, after selling them for a profit, pay his cousins back, they told him.

“I had nothing — I was desperate and had no work to do,” he said. “They took advantage of it. … They hugged me and everything, like they love you.”

The man said he accepted the offer, but then thought better of it and threw the drugs away. But he began getting calls from strangers demanding he pay off his debt in cash or labor. He has been forced to sell drugs by his cousins and others ever since, he said.

He said he once left his cousins and lived on the street for four weeks. But his mother in Honduras had no other means of financial support, he said, and kept asking him for money. When he could not find a legal job that paid enough money for remittances, he went back to work with his cousins.

Another dealer said the migrants’ desperation makes them easy targets for exploitation by coyotes.

“They offer to take you to the United States and help you find a job,” the man said in an interview from jail. “They tell you that once you work you can pay them back for the help they gave you. But once you are in their hands they start trying to figure out who your family is, who your parents are. Later, the threats start. They put you out there selling drugs.”

The coyotes, he said, “put you under threat because you owe them money and you have to pay them. There are people who pay them, but they don’t succeed in getting out because once you are benefiting them, they don’t want to set you free. They always want you to be working.”

How many migrants from Honduras may be dealing under duress is not known. In recent months, San Francisco public defenders have argued in three cases that their clients are not criminally responsible because they are human trafficking victims.

The federal government defines trafficking for visa purposes as someone recruiting, harboring, transporting, providing or obtaining a person for labor or services through the use of force, fraud or coercion for the purpose of involuntary servitude, peonage, debt bondage or slavery.

Prosecutors have disputed the public defenders’ assertions, pointing out that the defendants had money for cars and phones, and were free to move around and hang out with friends.

All three cases resulted in a hung jury. None of the cases will be retried.

Former San Francisco District Attorney Chesa Boudin said publicly in 2021 that a “significant percentage” of people selling drugs in San Francisco were from Honduras, and that “many of them had been trafficked from Honduras.” Some, Boudin said, had been trafficked to San Francisco “under pain of death.”

The public defender who represents 20 to 30 clients in drug sale cases, most migrants from Honduras, said she believes there is merit to the trafficking claim because of behavior she’s witnessed. The attorney said people she believes to be her clients’ traffickers attend court hearings in person or watch the proceedings through Zoom.

The attorney said she couldn’t estimate what percentage of her clients have been trafficked, partly because many of the cases resolve without having that discussion.

“I can tell you that I suspect that many, many of my clients have at least some level of coercion present in their lives,” she said. “And that there have been a few clients where I honestly don’t think that that’s present in their life.”

When asked about the trafficking allegations, most Honduran dealers who spoke with The Chronicle said no one was forced to sell drugs against their will, or that they hadn’t heard of that happening.

One veteran dealer laughed at the question and said the trafficking claims were just a defense strategy.

“I see the news every day, I see Twitter every day,” he said, noting that he had read about the recent cases that resulted in hung juries.

“I told myself, ‘That’s what I’m going to tell my lawyer too,’ ” he said. “It went through my mind like, ‘I’m going to tell my lawyer they’re going to kill my family.’ ”

Facing legal risks is just one of the tradeoffs that comes with escaping the poverty and crime of the Siria Valley to sell drugs in San Francisco. The dealers interviewed by The Chronicle, even those who had made enough money to support their families in Honduras and build nice homes there, expressed unease about the choices they had made. Many hoped to one day return to the villages they risked their lives to flee, and retire with their families in comfort.

For the parents of Dervin, who sold their land in Honduras to afford the family’s migration to Oakland, the drug trade has resulted in only loss.

They’re raising their 11-year-old daughter in a small East Oakland home shared by a rotating cast of family members. Their home, across from a bodega, has almost no furniture or decor in its living space, save for a few tributes to Dervin on the walls. One, a handwritten note penned in marker, is from Dervin’s little sister telling him she misses him on what would have been his 16th birthday.

“For me (life in the U.S.) has not been better,” his father, Marcio, said in a recent interview from his kitchen. “Life here has been the worst for me. At least I had work in Honduras. I could give my children their daily bread. And here I can’t give anything.”