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When Félix Gallardo was arrested, Guzmán reportedly lived in Guadalajara, Jalisco for some time. One of his other centers of operation, however, was in the border city of Agua Prieta, Sonora, where he coordinated drug trafficking activities more closely. Guzmán had dozens of properties in various parts of the country. People he trusted purchased the properties for him and registered them under false names. Most of them were located in residential neighborhoods and served as stash houses for drugs, weapons, and cash. Guzmán also owned several ranches across Mexico, but most of them were located in the states of Sinaloa, Durango, Chihuahua, and Sonora, where locals working for the drug lord grew opium and marijuana. The first time Guzmán was detected by U.S. authorities for his involvement in organized crime was in 1987, when several protected witnesses testified in a U.S. court that Guzmán was in fact heading the Sinaloa Cartel. An indictment issued in the state of Arizona alleged that Guzmán had coordinated the shipment of 2,000 kg (4,400 lb) of marijuana and about 4,700 kg (10,400 lb) of cocaine from 19 October 1987 to 18 May 1990, and had received roughly US$1.5 million in drug proceeds that were shipped back to his home state. Another indictment alleged that Guzmán earned US$100,000 for trafficking 70,000 lb (roughly 31,750 kg) of cocaine and an unspecified amount of marijuana in a period of three years. In the border areas between Tecate and San Luis Río Colorado, Guzmán ordered his men to traffic most of the drugs overland, but also through a few aircraft. By using the so-called piecemeal strategy, in which traffickers kept drug quantities relatively low, risks were reduced. Guzmán also pioneered the use of sophisticated underground tunnels to move drugs across the border and into the United States. Aside from pioneering the tunnels, Palma and Guzmán packed cocaine into chili pepper cans under the brand "La Comadre" before they were shipped to the U.S. by train. In return, the drug lords were paid through large suitcases filled with millions of dollars in cash. These suitcases were flown from the U.S. to Mexico City, where corrupt customs agents at the airport made sure the deliveries were not inspected. Large sums of that money were reportedly used as bribes for members of the Attorney General's Office.

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