Jose Arguello, Conspiracy to Distribute a Controlled Substance, South Dakota 2023

Rapid City, SD – In a shocking turn of events, two men have been sentenced for their involvement in a large South Dakota drug conspiracy. Jose Arguello, 37, of Rapid City, and Fernando Valenzuela, 41, of Phoenix, Arizona, were handed down sentences of 25 years and 11 years and three months in federal prison, respectively.

The two men were convicted of Conspiracy to Distribute a Controlled Substance and were sentenced on August 11, 2023, by U.S. District Judges Jeffrey L. Viken and Karen E. Schreier. Arguello was ordered to pay a $100 special assessment to the Federal Crime Victims Fund, while Valenzuela was also ordered to pay the same amount.

The conspiracy, which began around July 2020, involved the trafficking of methamphetamine from Arizona and Mexico into South Dakota. Arguello, who served as the lead organizer, coordinated with several other individuals to send money packages through the U.S. Postal Service, UPS, and other mail carriers to obtain large volumes of methamphetamine.

When the bulk quantities of methamphetamine arrived in the Rapid City area, Arguello would divide and package it, dispersing 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 of 2023.

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

With the sentencing of Arguello and Valenzuela, 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 of 2023. The case serves as a reminder of the devastating impact of drug trafficking on communities and the importance of law enforcement’s efforts to combat it.

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