Oakland man who came to the US in his early 20s has struck it rich through fentanyl sales, feds allege

SAN FRANCISCO — An Oakland man has been indicted on fentanyl distribution charges in a case where prosecutors say he’s been caught repeatedly with large stacks of cash, distribution quantities of drugs and expensive vehicles allegedly used to transport fentanyl.

Milton Varela-Arteaga, 27, came to the United States from Honduras in 2018, when he was just 21 years old, according to federal prosecutors. But in recent months, federal drug agents say he’s been found with $70,000 in suspected drug money, more than $10,000 in cash on two other occasions and obtained more than four pounds of fentanyl just six weeks after authorities allegedly raided his Oakland home and took large amounts of methamphetamine and fentanyl.

Now, Varela-Arteaga — along with his cousin, Jose Medina-Murillo, 39, also of Oakland — have been indicted on federal charges of possession and distribution of fentanyl. For now, they’re both in custody while the case is pending, and face up to 40 years if convicted.

In a court filing arguing for Varela-Arteaga to be kept on pretrial detention, federal prosecutors outlined multiple instances where he was allegedly arrested with several pounds of methamphetamine, fentanyl, or both. Authorities claim that during one Homeland Security Investigations search of his home, he admitted to working the “night shift” as a drug dealer in San Francisco’s Tenderloin neighborhood, meaning he showed up at 6 p.m. and left at 3 or 4 in the morning, court records show.

Prosecutors have also attempted to tie him to a bank account containing $244,000, alleging that his girlfriend — who owns the account — received that much money from February 2022 to November 2023. This, despite her telling authorities she mostly worked as a house cleaner during that time, and before that had a job at Panera Bread, according to court records. Of that, roughly $100,000 was deposited in a single month, from October to November of last year, prosecutors say.

The investigation came to a head last Nov. 29, when HSI agents allegedly raided Valera-Arteaga’s Bancroft Avenue apartment in East Oakland and seized more than $13,000 and 500 grams of fentanyl from a black Mercedes Benz sedan. When they interviewed his girlfriend that same day, she reportedly mentioned having recently bought a second Mercedes Benz in cash for herself.

These seizures came months after two similar searches in May and June — of Valera-Arteaga’s home and Mercedes, respectively — where authorities say they found a total of more than $80,000 in cash, more than six pounds of fentanyl and more than four pounds of methamphetamine.

Both Valera-Arteaga and his cousin have entered not guilty pleas and remain jailed without bail. In a Jan. 16 court order, U.S. Magistrate Judge Peter Kang wrote he was unpersuaded by the prosecution’s arguments that Valera-Arteaga’s release would threaten public safety, but still ruled to keep him in jail based on his “risk of flight.”

“(Valera-Arteaga) has incentive to flee and motive to reunite with his children and significant other in Honduras, and the fact that he has demonstrated an ability to travel across borders indicates that there exists a higher risk of such flight,” Kang wrote.