QUERETARO, Mexico — When the little girl saw the children move into the house nearby, she was excited.
"My daughter said, 'Oh, Mommy, I'm going to have neighbors to play with!'" her mother recalled.
But they never saw the children come out again.
The mother had seen the man of the house just once, as he moved in. She noticed he was black, a rarity in this part of Mexico. And she saw that men were constantly moving in and out of the house and the windows were always closed.
In an interview nearly two years later, she spoke through protective bars in her garage and asked that her name not be published.
Why was she nervous?
Heavily armed men had invaded her street and arrested the neighbor, filling the area with lights and the sound of trucks and helicopters. She had heard the footsteps of snipers on the ceiling as she and her family cowered inside.
And shortly after the raid, she had learned who the neighbors were: the family of a 31-year-old man who had emerged from the streets of South Memphis to become an internationally wanted fugitive.
By the time Craig Petties was arrested in Queretaro on Jan. 10, 2008, authorities say, he was operating a vast drug-trafficking business in conjunction with a branch of one of Mexico's most notorious cartels. They say it was an operation that spread violence and chaos on both sides of the border.
Petties still awaits trial, and he and his lawyer have declined comment.
But the story of his arrest and deportation back to Memphis shows how deeply drug money has affected even the most promising corners of Mexico, a country with a historically weak government and a culture of official corruption.
It also shows that drug purchases on the streets of Memphis, bribes in Mexico City and murders for hire on both sides of the border are part of the same economic system.
Petties disappeared from Memphis in 2002, officials say, and in August 2004 he was added to the U.S. Marshals 15 Most Wanted list. It's unclear when he arrived in Mexico, and most of his life in that country is a blur. So are the lives of at least three other members of the organization who also fled the South to live in Mexico for a time.
A U.S. official says that because of corruption, Petties received warnings about efforts to catch him and moved from place to place within Mexico. According to this official, Petties had been noticed by Mexican authorities more than once and had been let go because of cartel influence.
Different type of 'hood
In Queretaro, Petties lived in a new subdivision called Milenio III. To get there, you drive up a steep hill away from the traffic and the fire-breathers spitting flaming gasoline for tips. You pass a fancy coffee shop and bounce over rows of speed bumps.
Although there are huge Arabic-style archways and mansions here with turrets like the Taj Majal, Petties lived, for a short time at least, in a modest white stucco house on a cobblestone street. It was unoccupied and available for rent when reporters visited in December.
It overlooks a steep valley, with cacti, hummingbirds and red stone cliffs. You can look down and see cars and trucks, and trains like the ones Petties had burglarized in Memphis years earlier.
Little is known about his time here. Representatives at the U.S. Embassy in Mexico City wouldn't talk about their hunt for Petties, and Mexican authorities released limited information.
But a few things are clear.
Petties was living under the protection of the Beltran Leyva cartel, with whom he had done business in the U.S., the former attorney general of Mexico, Eduardo Medina Mora, has said.
The group was led by the Beltran Leyva brothers, a group of five or six men who would later break off from the larger Sinaloa Cartel, based on Mexico's Pacific coast.
Medina Mora said that Petties became a broker for the cartel, "using his contacts in the United States to secure and speed up the traffic of drugs to the north."
Petties' flight to Mexico may have even helped him expand the trafficking business beyond Memphis and into Georgia, Mississippi, North Carolina and Texas, DEA agent Abe Collins wrote in a 2008 affidavit.
By at least 2007, federal officials in Memphis knew Petties was living in Mexico and believed he was receiving cash payments funneled back by couriers.
Collins cited the case of two men caught in south Texas in December 2004 with about $129,000.
Officials also believed Petties was running his drug business long-distance using cell phones.
Several alleged Memphis traffickers met with Petties in Acapulco in March 2004, according to Orlando Pride, a convicted member of the organization quoted in a 2007 affidavit by Collins.
Pride said Petties provided the group with a code sheet for phone calls that "consisted of lines with numbers and coordinating letters."
The organization exercised "great phone discipline," meaning members frequently changed numbers to prevent wiretaps, Collins wrote.
One alleged lieutenant would destroy telephones immediately after each of his conversations with Petties, who disguised his voice on the phone, Collins quoted defendant Orlando Mays as saying in another affidavit.
This discipline helps explain how Petties was able to evade authorities for years. It also reflects paranoia. The Craig Petties described in official documents was convinced that others would betray him.
And he was right. By 2007, several of his top lieutenants were in prison, and his organization was riddled with informants willing to give up secrets and record conversations in exchange for lighter sentences, affidavits show.
And the group had been infiltrated by least one undercover officer — Therman Richardson of the Memphis Police, who later won a high-level award for the risky work.
The federal government says Petties and others in the organization ordered killings of people they considered threats. His organization is accused in six slayings, including that of informant Mario Stewart, fatally shot in his garage in an upscale southeast Shelby County neighborhood in March 2005.
In June 2007, he allegedly ordered the killings of four other Memphis rivals, and even suggested that he send his "cleanup boys" from Mexico to do it, a plan that was eventually rejected, according to a Collins affidavit.
The person hired to do the killing, Orlando Mays, decided he needed help.
So he talked it over with a friend. But that friend — unnamed in records — was a federal informant who recorded the conversations, Collins wrote.
Mays was arrested and awaits trial.
It was a spy game much like the Cold War. And it even extended to the U.S. Embassy in Mexico City.
The newspaper El Universal reported in October 2008 that an embassy employee may have passed information about the search for Petties to the Beltran Leyva cartel.
The incident highlights a disturbing fact about modern Mexico. Drug money means everyone is suspect and some paranoia is justified.
As Petties lived on the run, his half-brother Paul Beauregard was achieving fame as rapper DJ Paul of the group Three 6 Mafia.
By 2004, the group had signed a contract with Columbia Records and was even producing its own movies.
Two years later, DJ Paul and co-writers would receive an Academy Award for one of their musical contributions to the film "Hustle & Flow," a song called "It's Hard Out Here for a Pimp."
To date, the group has sold 6.4 million albums, according to Nielsen SoundScan. Song titles include "Let's Plan a Robbery" and "They Bout to Find Yo Body."
Some songs, like "Trap Boom," make clear references to transporting and distributing large amounts of drugs: "I went to Key West and picked it up, back in Memphis broke it up."
Their music is known even in Queretaro. "It's cool," says Victor Guerra, a lanky 25-year-old who breakdances for tips at traffic lights.
Hunters are hunted
For Mexican law enforcement, the threat of death is real, so much so that police sometimes wear ski masks in public and the federal prosecutor's office bans employees from keeping photos of loved ones in their offices to prevent them from becoming targets.
So how was Petties arrested?
Interviews and records suggest that Petties and his associates were newcomers in Queretaro, and that the operation that removed them was run entirely by Mexicans. U.S. officials weren't on the scene until Petties was already in custody.
According to one source with knowledge of the case, it all started in 2007, when a man approached Queretaro officials with a bold proposal.
He said he represented Arturo Beltran Leyva, whose cartel wanted the right to operate in the area. In exchange, the cartel would give the authorities whatever monthly payment they wanted.
Agreeing to such a demand would be highly unusual in the United States. In Mexico, where drug money fuels a long tradition of corruption, it isn't.
This time, the answer was no. Investigators began to follow the man. Weeks later, the investigation led them to a house where someone important was hiding. It turned out to be Petties.
Some speculate that there may have been other forces at work. To understand this, you have to understand Queretaro...