Business lessons from an alleged drug dealer in Atlantic City

Mykal Derry, the U.S. Attorney said, ran an efficient business operation, dealing heroin, cocaine and prescription drugs -- as much as a million dollars worth -- in Atlantic City.

As a crime story, it's impressive -- 25 arrested Tuesday, 34 charged -- with the main points laid out at a Camden press conference hosted by New Jersey's  U.S. Attorney, Paul Fishman. But as a business writer, I was also impressed by the complexity of the organization. It rivaled much of what  I've seen in two decades of reporting on companies and their business practices. You can read an account of the criminal side of the story written by my colleague Joseph Gambardello.

Derry, 32, set up a complex organization that included distributors, suppliers and couriers.

"This is a pretty sophisticated operation," Fishman said. 

Like many executives, Derry had his challenges. One of them, according to the 227-page complaint, was his younger brother, Malik, 22, also charged. How many family business seminars have there been on what happens when a family member isn't performing up to expectations? 

Wiretaps picked up Mykal Derry discussing Malik's "lack of effort and success at drug trafficking along with his apparent penchant for violence," the complaint noted. Malik needs to focus, Mykal complained. He has to choose between drug trafficking or violence for the Dirty Block organization.

Mykal Derry also felt a responsibility, apparently, to mentor his younger associates in the ways of business.

If Malik was a slacker on the sales side of the business, Quasim Duncan, 19, of Mays Landing, was not, according to the complaint. So, Derry encouraged "Duncan to save and pool his proceeds from the sale of heroin with Derry to acquire larger quantities of heroin at a lower price." 

In fact, he gave similar advice to "youngin's," as they were called, mentoring the junior members of the organization who were working their way up the corporate ladder.

"Intercepted communications reveal that Derry is cautious about his direct involvement in violent incidents, as he directs younger members of the conspiracy, referred to as “youngin’s,” and other members and associates of the gang to commit acts of violence on his behalf. Derry has also advised younger members and associates on drug trafficking, encouraging them to save and pool their proceeds from the sale of heroin and provide them to Derry in order to purchase higher quantities of heroin at a lower price," the complaint said.

Derry and his partners also worried about quality control.

Here's the set-up: According to the complaint, one of Derry's alleged partners, Tyrone Ellis, was asking Franklin Simms, allegedly a distributor, to supply a "tester" to sample the quality of the heroin to be sold. I'm including a couple of paragraphs with the rough language replaced by dashes.

“You could um, get a tester to the crib man?”

Ellis was asking Simms to have a heroin user available to test a sample of the heroin and provide an evaluation. Simms said, “There’s one here.”

After Simms identified the “tester,” Ellis said, “That broken down-a-- n----, that n---- is f----d up, that n---- nose broke. . . I’m saying if you can get somebody else.”

Ellis did not trust the individual to provide an accurate evaluation as to the quality of a sample of heroin."

To run his business, Derry obviously had to use a lot of managerial chops -- most of them familiar to anyone with any kind of business background. But there's one huge difference. Derry controlled his gang with violence, the complaint said, even setting up a complicated logistics system to make guns available when needed and then to hide them away when they weren't in use. He and his brother are charged with murdering a competitor.