Jun.20, 2010, 1:07 AM

This sprawling port is on the front line of Colombia's drug war.

One of Colombia's deadliest cities, with a murder rate 24 times that of New York, gun battles echo through the slums as gangs fight over control of the vital route for cocaine exportation.

But even the residents of this battle-weary town were shocked by the scale of the drugs ring that began to unravel in their port late last year.

Dock workers, noticing a suspicious load of fertilizer from Manzanillo, in Mexico, slashed open the sacks to investigate. Inside, they discovered $27 million, shrink-wrapped and buried inside the fertilizer.

The money is thought to have belonged to Colombia's "super cartel" -- an international money-laundering and drug-trafficking organization, more sophisticated and more powerful than anything the police had ever taken on before.

Nine months later, agents involved in Operation Pacific Rim believe they have broken what they say was one of the world's biggest drug cartels and captured two of its three main kingpins.

The cartel is among four giant drugs gangs in Colombia reported to have shipped 912 tonnes of cocaine to the U.S. during the past seven years, with a combined street value of $24 billion.

"This case is not big-- it's huge," said an officer with U.S. Immigrations and Customs Enforcement.

Following a massive operation mounted jointly by the U.S., Colombian, Argentine and Mexican police, two of the three alleged kingpins of the cartel have been arrested.

The pair are alleged to have headed an organization thought to be responsible for nearly half the Colombian cocaine seen on America's streets.

The first of the two to be arrested was Luis Caicedo Velandia, known as Don Lucho and thought to be the mastermind behind the cartel.

Colombia-born Caicedo is alleged to have moved to Argentina several years ago to run his operation in secret, moving tons of cocaine into the U.S. and laundering billions of dollars in profits. He was seized in April as he was walking past a shopping mall in Buenos Aires.

Caicedo kept a low profile. Oscar Naranjo, director of Colombia's national police force, said Caicedo, 43, "did everything differently [to other kingpins ] -- low profile, secrecy, orchestrating trafficking in obscurity."

Caicedo had once been a policeman himself, working for the country's technical investigations force. By 2005, he was overseeing the shipment of drug profits for the cartel, according to Argentine newspaper reports.

"He moved around the continent, between Colombia, Peru, Argentina and the United States," Naranjo said.

We are talking about the most important operation of the past 15 years with respect to drug trafficking in

Colombia. -- Gen. Luis Gilberto Ramirez Calle, head of Colombia's Criminal Investigation Administration

Police believe he cultivated deep contacts with the Mexican mafia, and forged a close link with "El Chapo" Guzman, the fugitive leader of the country's notorious Sinaloa cartel.

Caicedo is being held in a high-security Buenos Aires prison where he was secretly questioned for two months before the U.S. formally sought his extradition two weeks ago.

His lawyer denies that Caicedo is involved in drugs and says he is a Guatemalan businessman.

Earlier this month came a second breakthrough when Claudio Javier Silva Otalora, alias El Patron, was arrested during a police raid on a factory in the Colombian jungle.

"We are talking about the most important operation of the past 15 years with respect to drug trafficking in Colombia," said Gen. Luis Gilberto Ramirez Calle, head of the country's Criminal Investigation Administration.

The cartel, known as the El Dorado, is one of four large cartels formed in Colombia five years ago from the remnants of the Cali and Medellin cartels, which fell victim to a combination of feuding between the two gangs and a police and army crackdown.

Most of its product is shipped to the U.S.

The cartel's power spread across the globe, with cocaine being shipped to every continent except Antarctica.

The drug cartels buy coca from Colombia's peasant farmers for about $780 per kilogram.

After being refined into cocaine, the same quantity can then be sold for about $22,700 in Europe.

Running drug-producing laboratories deep in the Colombian jungle, the cartel would then pack the drugs and ship them around the world -- even using a fleet of semi-submersible submarines to ship cocaine to Mexico. The vessels, built in secret jungle factories at a cost of $1 million each, are only used once before being discarded.

"It's a very large network which obviously has huge tentacles," said Ana Margarita Duran, the director of Colombia's National Anti-narcotics and Maritime Interdiction Unit.

"It has managed to launder billions of dollars."

The cartel hid its activities behind front organizations set up to give a facade of legitimacy, Duran said.

The cartel is thought to have made profits of $5 billion and employed a network of informers, hit-men, intelligence gatherers and traffickers.

"It's mind-boggling, the type of profit these guys were producing," a U.S. customs agent told CBS News.

"They invest in businesses, big investments, apartment complexes, office buildings.

"But there is so much left over they have to do something with all this cash. And sometimes all that's left is to hoard it and hide it."

The gang is said by investigators to have been in some ways a victim of its own success.

With so much cash pouring into its organization, it could not manage to launder it all and instead had to smuggle it into Colombia, where it was detected at the port.

It is a significant boost to the U.S. government's high-profile war on drugs following President Barack Obama's announcement of a new push against central and South American drug cartels.

Obama declared last year that the U.S. would confront the drug cartels that were "sowing chaos in our communities."

Colombia is the world's largest producer of cocaine, generating 390,000 kg in2008, accordingtotheInternational Narcotics Control Board.

The country accounts for 62 per cent of the world's cocaine production, a trade the United Nations estimates to be worth $70 billion worldwide.

Cocaine has overtaken coffee as Colombia's top export.