ASPEN - Federal prosecutors filed court papers Monday to dismiss cocaine-trafficking charges against an Aspen woman arrested in May as part of drug investigation that netted 10 indictments.
Peggy Schlauger, 51, was one of six Aspen-area residents federal agents detained as part of a sting they say dismantled a cocaine-trafficking network that ran between Aspen and Los Angeles. The arrests came after a federal grand jury out of Denver indicted her and nine other people - three of whom were arrested in the Los Angeles area; while a fourth California suspect remains a fugitive - in April.
Schlauger was indicted on one count of conspiracy to distribute and possess with intent to distribute 5 kilograms or more of cocaine. She faced at least 10 years in prison if convicted, and pleaded not guilty to the charge May 25, one week after the arrests. She had been free on $20,000 bond.
But Monday's two-page motion, which Assistant U.S. Attorney Michele Korver filed, seeks "the court to enter an order dismissing all counts of the indictment as to Defendant Peggy Schlauger."
Schlauger's court-appointed attorney, Daniel Smith of Denver, was not immediately available for comment Monday. A spokesman for the U.S. Attorney's Office in Denver also could not be reached at deadline.
The dismissal of the case against Schlauger is not official; it requires the approval of presiding Judge Marcia S. Krieger, who had not signed the proposed order as of 5 p.m. Monday.
Should the case against Schlauger be dismissed, it would mark the first disposition in the case. Schlauger's alleged role in the network is unclear, as the bulk of the facts and details of the case so far have been limited to grand jury testimony, which is closed to the public.
However, her name surfaced during a June 14 detainment hearing in Denver for defendants Christopher Sheehan of Snowmass Village and alleged ringleader Wayne Alan Reid, both of whom are 65.
At the hearing, Paul Pedersen, a Glenwood Springs police officer and special task-force member with both the DEA and Two Rivers Drug Enforcement Team, testified that Schlauger obtained files from Reid's home.
Schlauger received the files from a confidential informant who had close ties to Reid, according to the testimony. Following an April 8 traffic stop of Reid (which came before the DEA sting) in Mesa County by state troopers, who subsequently found a brick of cocaine weighing more than 1 kilogram in the trunk of his car, Reid instructed the confidential informant to give Schlauger the files from his house.
Meanwhile, Schlauger, along with the other defendants, was scheduled to stand trial in February for the charges.
While it appears that another defendant, Joseph Burke, 64, of Aspen Village, will not stand trial, he is due back in court Oct. 31 for a change-of-plea hearing. Burke originally pleaded not guilty in May to two felony charges: conspiracy to distribute and possess with intent to distribute 5 kilograms or more of cocaine, and aiding and abetting in the distribution and possession with intent to distribute cocaine.
Other locals charged are Joan Anastasi, 67, and Jack Fellner, 61.
DEA officials have alleged that Aspen was the end stop for a cocaine ring that operated out of Los Angeles and had connections to Mexican drug cartels. They claim that more than 200 kilograms were transported from Los Angeles to Aspen over the past 15 years.