Locals suspected in cocaine trade

Two Newport Beach men were part of a drug trade involving nearly 20 people that included trading large amounts of methamphetamines and Ecstasy for cocaine headed for Canada, federal prosecutors said Tuesday.

Within several indictments unsealed Tuesday, a grand jury determined that Nathanael Lineham, 39, and Alexandru Sabau of Newport Beach helped at least 18 people trade drugs worth millions of dollars with men in Canada.

Seven men, including Lineham, were arrested Tuesday and brought a two-year federal investigation dubbed “Operation Candystore” to a close. Prosecutors said Lineham used his job at Data Locking, also known as beStealth, to distribute encrypted Blackberries to drug traffickers so they could transmit encoded text messages to each other.

Authorities said the operation was overseen by Jason Wei, a Canadian national they arrested at LAX Sunday night before he could board a plane back to his country.

In an elaborate plan authorities said began at or about April 2006, Wei, Lineham and others formed a network of transporters, buyers and distributors of methamphetamines, Ecstasy and cocaine between Southern California and Canada. Money would come from as far away as Chicago, with meeting points set up in major cities near the Canadian border like Seattle, authorities said.

Sabau, who was arrested in late June for trying to exchange 100,000 pills of Ecstasy for 25 kilos of cocaine worth $2 million, was later linked to this larger operation and pleaded guilty to three charges last week.

The circumstances of his plea agreement with federal prosecutors is sealed, and his sentencing is scheduled for May.

According to the indictment, Lineham allegedly paid Sabau’s rent with drug money for months in the 9000 block of Residencia in the Newport Bluffs apartment complex.

Of the 18 men indicted Tuesday, only seven, counting Lineham, were arrested, officials said. Investigators are looking for the rest.

If convicted of the charges in the indictments, most defendants would face at least 10 years in federal prison.

JOSEPH SERNA may be reached at (714) 966-4619 or at joseph.serna@latimes.com.