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Department of Justice

U.S. Attorney's Office
District of South Dakota
Alison J. Ramsdell, United States Attorney
For Immediate Release
Friday, August 18, 2023

Two Men Sentenced in Large Drug Conspiracy

RAPID CITY, S.D. — U.S. Attorney Alison J. Ramsdell announced today that U.S. District Judge Jeffrey L. Viken and U.S. District Judge Karen E. Schreier sentenced two men, convicted of conspiracy to distribute a controlled substance. Both sentencings took place on August 11.

Jose Arguello, 37, of Rapid City, South Dakota, was sentenced to 25 years in federal prison, followed by 5 years of supervised release and ordered to pay a $100 special assessment to the Federal Crime Victims Fund. Arguello was sentenced by Judge Viken.

Fernando Valenzuela, 41, of Phoenix was sentenced to 11 years and three months in federal prison, followed by 5 years of supervised release and ordered to pay a $100 special assessment to the Federal Crime Victims Fund. Valenzuela was sentenced by Judge Schreier.

Arguello and Valenzuela were indicted, along with several others, for conspiracy to distribute a controlled substance in spring 2021, and each pleaded guilty in May 2023.

Beginning around July 2020, methamphetamine was trafficked into South Dakota from Arizona and Mexico through coordination by Jose Arguello, Fernando Valenzuela and several other persons. Arguello served as lead organizer of the conspiracy and recruited and coordinated others to send money packages through the U.S. Postal Service, UPS, and other mail carriers. At times, money was also wired to various locations. All of the money sent was to obtain large volumes of methamphetamine. When the bulk quantities of methamphetamine arrived in the Rapid City area, Arguello divided and packaged it and dispersed it to multiple sub-distributors for further distribution in the Black Hills. Some members of the conspiracy, including Kevin Dunn, expanded the group’s methamphetamine trafficking activities to North Dakota. Dunn was previously sentenced to 20 years in prison in January by Judge Viken.

In addition to the large volume of methamphetamine that was distributed through the course of this conspiracy, multiple firearms were also possessed in furtherance of the conspiracy.

In total, four members of the conspiracy have been sentenced, three have pleaded guilty and are awaiting sentencing, one still has a pending warrant and one is set for a trial at the end of August 2023.

This case was investigated by the Unified Narcotics Enforcement Team (UNET), the Drug Enforcement Agency, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. UNET is comprised of law enforcement from the Pennington County Sheriff’s Office, Rapid City Police Department, South Dakota Division of Criminal Investigation, South Dakota Highway Patrol and the South Dakota National Guard. Assistant U.S. Attorney Gina S. Nelson prosecuted the case.

Arguello and Valenzuela were immediately remanded to the custody of the U.S. Marshals.


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