FLORENCE — Three Florence residents are among 32 people arrested Tuesday on federal indictments involving a Chinese marijuana and cigarette trafficking organization.

The organization conspired to manufacture and distribute more than $45 million in marijuana, according to a release from the U.S. Attorney’s Office, Southern District of New York.

The group also distributed nearly 44 million cigarettes, resulting in more than $7 million in lost tax revenue, the release states.

The Florence residents are Denise Ragland, also known as Denise Roy, 51; Norris Patterson, 27; and Oakley Simpson, 40, according to the U.S. Attorney’s Office.

Each is charged with one count of marijuana conspiracy. The offense is punishable by 10 years to life in prison.

Federal, state and local authorities Tuesday raided Ragland’s home at 1648 E. Lee Ave. and business, Denise’s Designs Gifts & More, at 2929 Cloverdale Road, as part of a massive investigation authorities dubbed “Operation Stone Dragon.”

They arrived about 8 a.m. Ragland was taken into custody and escorted from the house just before 10 a.m. Authorities remained at the residence until almost noon.

In all, 37 indictments were opened Tuesday and arrests were made on all but five suspects nationwide, according to the U.S. Attorney’s Office. Authorities continue the search for four, while one was expected to surrender to authorities in Arkansas.

Aside from the Florence trio, nearly all suspects are from New York or California. The remaining are from Tennessee, New Jersey or Rhode Island.

U.S. Immigration and Customs Enforcement and Homeland Security Investigations were involved in the operation. Those agencies, along with the Lauderdale County Drug Task Force, conducted the raids in Florence.

Manhattan U.S. Attorney Preet Bharara stated in a release the arrests “deal a blow” to the organization.

“Thanks to the coordinated efforts of federal, state and local law enforcement around the country, this alleged supply chain has effectively been broken,” Bharara said.

James T. Hayes Jr., Immigration and Homeland special agent-in-charge, said the suspects had a “highly organized network.”

“These allegedly corrupt people were savvy in their alleged scheme to move hundreds of thousands of dollars and drugs throughout the United States,” Hayes said. “While some may mistakenly perceive smuggling and trafficking in narcotics as a path to a quick profit, these arrests demonstrate the serious consequences that await those who engage in the smuggling and sale of illegal drugs.”

The indictment states the defendants have been part of a nationwide organization that produced and distributed marijuana and distributed contraband cigarettes from California to various locations in the United States. The locations include the New York City area.

The case has been assigned to U.S. District Judge Miriam Goldman Cedarbaum, of New York.

Two brothers, Paul Coong Lay, 47, of Monterey Park, Calif., and Chan Coong Lay, 43, of Fresno, Calif., are accused of maintaining a network of locations throughout California and elsewhere for growing marijuana, according to the U.S. Attorney’s Office. Authorities said they raided a location in Porterville, Calif., in October after observing the brothers visiting the site. More than 200 pounds of processed marijuana and approximately 185 live marijuana plants were seized.

The indictment charges Paul Lay with three counts of money laundering, two of contraband cigarette conspiracy and one of marijuana conspiracy. Chan Lay faces three counts of money laundering and one of marijuana conspiracy.

The indictment states marijuana grown by the brothers, in addition to contraband cigarettes, were shipped by tractor-trailer throughout the nation. Law enforcement officials followed the trucks to drop-off points in Colorado, Tennessee and New York.

In Tennessee, authorities observed Ragland and others unloading trucks at a warehouse. Earlier this month, authorities observed Chan Lay, Simpson and others unloading a truck, according to the document.

Authorities arrested Simpson with some 80 pounds of marijuana, the indictment states.

The document alleges money from the sale of the substances was laundered through various means. In one case, authorities seized $110,000 cash in September from Paul Lay that was concealed in cardboard shipping boxes otherwise filled with lollipops.

In conjunction with Tuesday’s arrests, 17 bank accounts were seized, including those belonging to the trucking company that authorities say was used for transporting the illegal substances.

The raid at Ragland’s home drew a great deal of attention from neighbors. Dozens of people gathered at times to watch agents go in and out of the home. Police dogs were used to try to pick up traces of evidence. Shortly before noon, agents came out with armloads of items and left the scene.

Authorities seized at least five vehicles from the house, which is at the corner of Lee Avenue and Randolph Street. Two trees in the yard have “no trespassing” signs posted.

Some neighbors said they never knew of any problems involving Ragland.

“It was a crazy scene out there with all kinds of law enforcement going in and out,” Zachary Johnson said. “A lot of people living in this area are concerned about this, and it caused a pretty big crowd to form. We don’t see a lot of traffic in and out of her house at all. I can’t imagine drugs being run out of there. She’s a nice lady and has always treated (neighbors) kindly.”

Neighbors in a home behind Ragland’s are University of North Alabama students who said the only time they see Ragland is when she is gardening in her yard.

Ragland’s daughter, Melanie Ray, watched the scene at the house unfold from across the street. Ray said her mother is innocent, and claims a man who was caught with marijuana lied to authorities about her mother in an effort to have his charges reduced or dropped.

“They’re trying to say drugs are paying for everything we’ve got, but there’s no way,” Ray said. “We work seven days a week at our business.”

Bernie Delinski can be reached at 256-740-5739 or bernie.delinski@TimesDaily.com.

Lisa Singleton-Rickman contributed to this report.

Video: Homeland Security Raids Florence Residence