DRUG SMUGGLER
"Drug smugglers, almost without exception, are white males. It's nice to know that the Anglo-Saxons still have a finger in something," remarks Philip, archly. Although Philip is an American, he speaks with an accent I can't quite place. It is foreign, but not exactly German or British. The sound reminds me of a prim, patrician New England Yankee speaking French, yet the words come out in English. He's been in the islands of the Caribbean too long. "The people who smuggle large quantities of cocaine, heroin, and marijuana are mostly college educated, and most of them quite successful and business-like before they got into smuggling," he says. Philip fits this profile. Brought up in an eccentric yet moderately wealthy family, Philip attended private schools for most of his higher education. Quite a few different private schools, in fact, since he had a tendency to get himself expelled.
The legitimate business Philip indulged in with some success for several years before he turned to drug smuggling was futures trading, which effectively straddles the fence between reliable financial services and gambling wildly with other people's money. Philip's profits from his high-stakes wheeling and dealing were invested in an offshore bank account in the Bahamas, which could not be directly traced to him. Even in his most legitimate phase, much of Philip's behavior fell into that gray area that cannot be described as strictly legal or illegal. However, his work was definitely profitable.
Finally, Philip is a white Anglo-Saxon. Not a bearded swashbuckler by any means, he has the smooth-faced good looks and the self-serving aggression of many young stockbrokers. Philip's description of his crimes is oddly spiked with the language of finance. Although he claims merely to have been a marijuana smuggler, primarily because it makes him seem less deadly, he makes no real distinctions between his product and other illegal drugs such as cocaine and heroin. Philip had carved out a niche market in a very competitive industry. What he sold and where those drugs ended up were only a matter of supply and demand, as far as he is concerned.
"I operated out of a loose consortium. We all pitched in some money together and bought in for the air and sea patrol schedules that were conducted by the United States Navy and the Coast Guard. A guy at the military base in Puerto Rico sold us the tour schedules. He was like clockwork. He flew a helicopter that went out on search patrols at night. He told us where his Blackhawk was based, where it refueled, its range, and the effective windows of opportunity.
"The Blackhawk flies fast, it flies low, but it doesn't fly for long. It's got to go back and be refueled and undergo routine maintenance every hour and a half. It's down for an hour every time it comes back in. So there is a window of opportunity there. He told us when and where those windows would open, which areas the Coast Guard boats were to patrol and what times, when the cutters were up in dry dock, and when the captains just weren't going out that night.
"He wasn't alone either. We verified his information from some other people who were also selling out their services. Their own organization was riddled with people who were selling information and who were actively smuggling on their own."
His luxurious island lifestyle among the trade winds jet set was far removed from the American neighborhoods where drugs have caused such devastation. Philip's only regret is that he got caught, and that when he was caught he was not able to make bond and skip the country.
"I am presently on parole from federal prison, and would like to go back and finish my law degree in the Cayman Islands. The education is good, the tuition is low, the degree is recognized in any British or former British territory, from South Africa to India to Bermuda, and there are plenty of opportunities for good scuba diving in the Caymans.
"Can you see me explaining this to my parole officer? 'Yes, Ms. Parole Officer, ma'am, I'd like to go to college again.'
"'Yeah, yeah.'
"'I'd like to go back and finish my training at the Cayman Islands Law School. I want to major in offshore finance and international tax treaties. Would you please give me permission? Why? I can't afford the tuition in this country now that all my money is gone. It's twenty thousand dollars a year to go to Columbia. Down there it's only five grand, and I can live under a palm tree. It almost never rains. The occasional hurricane comes through, but in the local vernacular: Hurricane blow down the grass shack, mon. But we can build it back up in forty-five minutes. Chop, chop some bamboo with the machete, mon!'
"I could just see her expression on that. I used to have fun saying, 'When you release me would you send me back down to Anguilla? I haven't lived in the United States for six years. It's a foreign country to me. I don't look like them. I don't speak like them anymore. I certainly don't think like them. And I sure as hell don't want to live in a place with an income tax.'"
***
While I was gone on one of my sailing trips, my business partner ran away with a lot of the company money, including a couple of clients' accounts. He was last seen with the daughter of the chairman of a sophisticated telephone systems manufacturer, driving off in a recently rented BMW, toward California. I don't know if the chairman ever found his daughter, or the people from the rental agency ever found the BMW. I know I certainly never found my money.
"This is a disaster," I thought. Fortunately, he was the majority owner in the corporation. The other 49 percent was owned by an offshore company that I'd set up. When the authorities started trying to hold somebody in the company accountable, they were more than happy to head off to the Bahamas and hold Highland Capital Associates Limited liable for every damn cent of it. It was just a letter box and a lawyer's office. My name really didn't appear anywhere, except as an employee. I never signed anything either if I could help it.
"Maybe it's time to go traveling," I thought. "Maybe it's time to go down and check out the opportunities in the Caribbean. I figure I can do well down there." So I sold my place in New York and moved.
I decided to dedicate myself to the task of making money the old fashioned way -- by smuggling. A lot of people in that part of the world do a lot of smuggling. As a matter of fact, there's not a whole lot you can do on an island. Most of the people make their livelihood by smuggling, especially in the area of St. Maartens, St. Barts. The place was well known as a staging point for shipping drugs to metropolitan France, because there is only one customs officer there. He'd been in his job for forty years. He was quite content to get up at ten in the morning, wander on down to the cafe, have a cup of coffee, then wander back up the hill to the gendarmerie and go to sleep until four o'clock in the afternoon. Then he'd wander down again, have a few drinks, and go back home. Needless to say, there was no crime, because there was no way anyone was going to allow a person to commit a crime that might alert the rest of the world to our presence. Speaking French quite well, I had a lot of friends down there. From sailing around, you learn to pick out people from a distance who are involved in the trade.
My first serious contacts were in the British Virgin Islands at the infamous Village Cay Marina which had "C" Dock, where all the smugglers hung out. I'd gone there to do some work on my boat, putting it back together after a hurricane. "C" Dock was known for the wild parties, at all times of the day and night. The local police started complaining. They'd be patrolling around the marina, which was right behind the local telephone building and the Barclay's Bank, and all these people -- male and female -- were in states of undress, lying unconscious on the pavement, or asleep among the empty bottles or entwined in the bushes, naked women running on the docks and on the decks of the boats every morning. It was understood that there would be a roaring party every afternoon from about five o'clock until three in the morning. There was always tons of rum punch. I mean literally more booze than you could ever hope to drink and successfully survive. The island was open and free, because the banking down there was booming. Banks were opening up left and right. People were smuggling cocaine and marijuana left and right. This was the height of the trade, when there was an insatiable demand for it. The price of a kilo of cocaine down in Colombia was about a grand, or you could get the three-liter wash stuff from Peru, which was absolutely fantastic, where they wash it down with three or four -- sometimes as much as seven liters -- of ether to get it very pure. That stuff was available for two or three grand. The cocaine, the booze, and the easy women who were flying in from France, Germany, England, or Australia. The all-night parties, nightclubs with swimming pools: It worked. It was fun. You'd drink all night, and someone would get drunk and challenge the crowd, so the next day we'd have a challenge race in our sailboats. Then the party just went around again.
The local police decided to start cleaning this up. It became too obvious when they saw wrappers for kilos lying around on the dock every morning, and people traipsing down the dock with suitcases of money to make deposits at the Bank of Nova Scotia -- which never asked any questions. Or Barclay's Bank, which wasn't much better, or the Sumitomo Trust, which was best of all, because they didn't even want a name to open you an account. One of the things people don't know is that there are two main places for money laundering. Because of the bank secrecy laws in Japan, they don't have to tell anybody anything, and there ain't much the United States can do to put pressure on them. The U.S. was in no position to tell anyone anything if they still wanted to sell their dead issues -- their T-bills and T-bonds, long and short-term debt. These banks were buying a significant part of the U.S. government debt securities issued at the federal auctions. At one time, as much as 30 percent was being purchased by a combination of European and Japanese banks, so U.S. authorities didn't put too much pressure on the big Dutch banks -- like ABN -- or the Japanese banks. They left them free to launder money as they pleased. The other largest place to launder money was down at 11 Wall Street at the New York Stock Exchange.
No matter what regulatory pressure the government applies, whenever they change the regulations, some financial organization steps in to fill the gap.
The year before last, all the chic banks were from Austria, because they'd do anything. They wanted their market share. The Bank of Vienna would open up voice-coded accounts. You didn't even have to go there. Normally, to open up an account in the Bahamas, you have to appear there at least once, so they can get your voice code, and then all the transactions are done by telephone. You call up, you speak to somebody. They take a few seconds of your voice, and match the voice prints. Then they'll do the transaction for you. No names, no numbers, nothing at all. The technology used by the off-shore people is considerably far in advance of that used by conservative American banks.
Hong Kong-Shanghai has a nice little card for their customers, holographically engraved for double security. It's a cash card, in so far as it has an E-prompt chip in it. The credits that are on the E-prompt chip are considered cash by the bank. The card itself has the same validity as cash, but without the bills. It's a way of carrying a million dollars in a portable electronic form with no signature, no verification codes. The money belongs to the person who is carrying it. You go in and buy this card. It's got a million dollars in cash on it. You insert it into the advanced ATM, which is finger-tip sensitive. It will match your fingerprints with the touch-sensitive strip on the card, and match your voice print when you speak into the identification machine. It's a real clever tool, that has a whole lot of applications in a cashless society. As a matter of fact, that's taking the cashless society one step further than the government wants to, because they are unable to document the cash transactions. The little chip is no bigger than the nail on your finger, so it can be hidden virtually anywhere. I don't think you'll see that particular application in this country for a while.
I digress. I got into smuggling from the party crowd up there. I was sailing around like everybody else was and showed myself to be bright and eager. I was introduced into the business by one very nice gentleman we called Full-Speed Reed. Full-Speed Reed was awarded his nickname because he always lived his life full speed. He was in his mid-fifties then, and he's still going full steam ahead now, although he can only drink beer because of his ulcers these days. He had a beautiful 65-foot wooden sailing yacht, two cargo freighters each about 110 feet long, and at any given moment he seemed to have three or four girlfriends. Reed was always in the bar. You walk in and Reed would be presiding over the crowd from about five o'clock until midnight, at which time we would all go out to dinner, buy Tequila and champagne, and generally have a gay old time. In short, he was a fun guy.
Reed came from the same town up the Chesapeake Bay from my mother's family. They lived on the same road. It's a small world. We started talking. "I used to live in New York," he said. "But about 1969, I said fuck it. I was in the construction trade in the city, so I moved down to South Florida, just in time to catch the big building boom." He was very successful in the construction business, not to mention the fact that he developed a market both in Florida and in New York for the nonseafood harvest that was coming in off the shrimp boats at the time. He built himself a very beautiful house, had the white Rolls Royce, the yacht, the whole schmear. When things got a little bit tough, he migrated down to Marathon Key.
"After a little while there, I said fuck this, and kept right on going, about two steps ahead of the law. I bought a freighter, filled it up with construction supplies -- bathtubs, Jacuzzis, lumber, and roofing material in the hold to build a new house -- strapped the Rolls on deck, hopped aboard, and moved further South." He put ashore at Tortola, tied up at "C" Dock, and started off-loading. He became quite a character there.
Reed took me down on a trip with him to Colombia. We went into Cartagena, which was absolutely drop-dead beautiful, and checked into a very nice hotel. We were wined and dined and treated. Now Reed gave me some advice at this time: "Everybody's going into cocaine and the crazies are going to start coming out of the woodwork pretty soon. They'll all be hot for cocaine, because it's portable and profitable. Everybody will stop smuggling marijuana. The price of pot will go up. If you can find a specialist market, you'll make a killing."
Next Reed introduced me to The Old Man in the Mountains, a very elegant Colombian gentleman. In general, you will find that in spite of their bad reputation, Colombians are very easy to deal with, very honorable. Gentlemen in the old sense, they always live up to their word, and expect you to do likewise, and are understanding when things go wrong in this particular line of work, just so long as you don't lie to them. We stayed for a week up in this gentleman's house as his guests. He believed in taking care of his guests properly, which meant proper drinks, dining, and young girls -- not street girls, some of the nicest girls around. We got to see the fields and the production process. He had quite a lot of things under cultivation in addition to marijuana. The size of his farm was probably eight or nine square miles of land under cultivation with a number of peasants working on it. Many of his peasants were like independent contractors who grew different crops for him. It was run as a large, paternalistic hacienda, where The Old Man was the feudal lord. His word was law in this very rural area. In exchange for that, he provided the schools, built the roads, made sure they had power and TV antennae. He dealt only in marijuana, not cocaine. Most of the people down there tend to be specialized. The older farmer types were into marijuana and had been in that business for say, twenty years. The younger kids went into cocaine for the fast buck.
Now that I had my contact, it was merely a matter of finding people to sell it to. So I gave a call to a friend of mine in the U.S. who was a New York City police officer, and said, "Do you know anybody who would buy my marijuana at a good price?"
"Sure," he said, "no problem. When can you bring it up?"
It was that simple. We practiced what we called, euphemistically speaking, free market arbitrage: Buy low, sell high. I bought marijuana in Colombia for seventy-five dollars a pound at first, then later at thirty-five dollars, and after I was better connected for about twenty-five dollars a pound. We'd bring it out, deliver it, and sell it for seven hundred or eight hundred dollars a pound, maybe even more. I brought a few hundred pounds to my police officer friend, who took care of it. It was very good quality Colombian of the type not seen around much anymore. We used to call it Technicolor, because of the way it looked, but it was just high-grade Colombian. Good, maybe even great sometimes, but a good mild smoke if you like smoking.
I never got into smoking very much. Proximity bred a whole lot of contempt. Live with the stuff, move it around, schlepp bales, stand on piles of it, and worry about it all the time, then you won't want anything to do with it, much less smoke it. The pollen gets everywhere.
After the first two hundred pounds turned over, I was sitting there quite happy with about $200,000 after expenses. "Three weeks' work," I thought. "This isn't a bad idea at all."
I began investigating other markets. I didn't want to deal more than necessary with the United States, given the fact that a lot of the people in the trade in the U.S. were not what you would call stand-up kinds of guys. I started looking a little bit further afield, and I ran into a very nice gentleman who had a fleet up in Scotland, which was engaged in commercial fishing in the North Sea. This Scotsman was also a little bit of a rogue at heart, and also part black Caribbean who had come down to visit some relatives: a Scottish, part-Caribbean pirate with a fishing fleet. We worked out an arrangement. I would deliver the stuff up to the North Sea by yacht, boat, commercial vessel or what have you. We'd do an offshore transfer, and ship it into South London where his connections in the local Jamaican community would take it off our hands.
One of the good things about this arrangement is that the British stopped customs patrols about 1960, so there's no customs at sea around England. And the other thing is that, quite simply put, once you're Eastbound in the Atlantic, the United States Coast Guard doesn't give a fuck about you as long as you stay headed out into the ocean. My home base was Anguilla. It's a little island with four thousand people and seventy banks. No crime. People don't lock their houses as a rule. People leave their keys in their cars, because it's hot and the clothes you wear don't have pockets. You don't want them to fall out in the sand and get lost, so everybody leaves their keys in the car.
The local government is very proud of the fact that all the laws and regulations for the entire island can be published in one book that is about fourteen type-written pages long -- except for the banking act, which is about eight thousand pages long. That's a very specific legislation, which conforms to international standards of secrecy and privacy under the internationally accepted offshore conventions.
One of the advantages of being in a small place like Anguilla where everyone knows everyone else is that any kind of federal agent sticks out like a sore thumb. If they call up the local government to come to visit and conduct a conference with their island counterpart, about five minutes after the agent hangs up with the government office, the secretary who took the call is on the line out, calling all the subscribers, letting them know that there's going to be a Fed in town next Thursday, arriving on the eight o'clock flight from St. Thomas.
I got into smuggling marijuana across the Atlantic Ocean to Europe. It was a very simple numbers game. You buy the marijuana for anywhere from twenty-five to forty dollars a pound depending on quality, you ship it over, and sell it wholesale for about eighteen hundred to two thousand dollars a pound. You don't have to ship much to make a lot of profit, and you don't have to do it very often.
I had more money than I knew what to do with, and I was only sending over about three loads a year. After expenses I could probably make something between $295,000 and $350,000 a load, after all the little odds and ends in expenses and paying people off. It wasn't too bad for about three weeks work, at least from my point of view. Plus I had it in offshore tax-free jurisdiction. The people I worked with in Europe paid cash on the barrel head. Within two or three days of receiving shipment, we'd meet in Luxembourg or Austria, and I'd get my money.
I'd take my money in the easiest negotiable forms of security that all Europeans use when they want to move stuff around -- Ecodenominated Euro-bonds. I'd take it back home and put it in the bank in Anguilla. There were slight service charges, but nothing like a fee. Or I'd go up and deposit them in a Finnish bank. Finland is about the greatest place to do business, since they have no central clearinghouse bank authority. Every bank does it for themselves. There's no organization up there, so there's no records kept. It's painfully easy even to this present day.
I bought another sailboat, and I got together with some other people to open up a yacht charter service to keep myself occupied and to have a legitimate business down there. We chartered Nautor Swan design boats to wealthy clients from England, Germany, and North America who had that same kind of boat at home. They didn't necessarily want to take their vessel all the way across the ocean for the Caribbean season, but would like to charter one similar to it because of their familiarity with the design, and its appurtenances. It worked really well. It was a good idea. We offered full service -- which meant picking them up at the airport with flowers and a pretty girl, driving them around to their boat, having everything aboard that they wanted, for instance the kind of wine they preferred. I didn't lose money for one day while I was running the damn thing.
I started meeting a lot of people. A forty-four-foot Swan cost you just around a million dollars. So the people I met were people with money. Most of them are in a high tax bracket, and most of them wanted to find ways to move their money around offshore. Business opportunity!
What the customs authorities caught me with was bearer securities amounting to about $325,000 in hand, secreted in a specially constructed attache case. At that time, I was functioning as a courier for an offshore corporation based in Anguilla. The securities were in a sealed pouch, and I was bound for the Bank of Luxembourg.
For a number of reasons, I decided to take a commercial air flight as opposed to chartering a plane from St. Maartens over to Europe, which is normally the easiest way to go. I'd get together with a friend, and we'd charter one of the jets from the runway -- round trip to Paris is about $22,000 for you to go over, and the plane to fly back. The advantage of this is that you put into a private airport. There is no customs or very minimal ones. You can come in unobserved by the French Air Police, which is really handy. Or you can land in Brussels, and they don't give a fuck anyway. Or you can land at Schiphol at Amsterdam, where you can just hop into an ABN limo and go to the bank. The Dutch are really cooperative. They're very materialistically oriented and understand that money doesn't really have a smell.
I thought that I'd been really discreet and very clever. I thought that my name had never been come across by anybody. I never used my real name, had never signed much of anything, and avoided leaving and entering through customs as a general rule whenever I went any place, which is remarkably easy to do into this country or any other country. What I'd failed to realize was that the downfall of most people is behaving in an altruistic fashion. They get in trouble by doing a favor for a friend. That will lead to your or anyone else's downfall.
At arm's length, I brokered a deal for a young Danish guy who was taking a load back home to Denmark on a cargo freighter. It was a fairly small amount, about a thousand pounds. It was done on a recommendation of a friend of mine who said the guy was a good kid, but my friend didn't have any marijuana available, and did I know somebody who had some stuff to get this kid set up in like two days? I said sure.
From the inquiries that I made about the kid, he was a stand-up guy. He was intelligent, was doing well, and always paid on time. So I made two phone calls, and the kid went down to Antigua at Ricky's famous concrete dock, put his thousand pounds on the boat, and the boat headed back to Europe by way of the U.S. Virgin Islands.
Unfortunately for the kid, he hadn't had much experience dealing with people in the Caribbean. They were taking on cargo in the Virgin Islands. The locals have a tendency to rip open cargo to see what's inside, so they can grab a little bit here and there. Two of the local guys ripped open one of the bags with the marijuana in it, stuffed their jackets full of marijuana, and walked out the front gate of the customs compound. Even in the Virgin Islands, they probably would have gotten away with it, if it hadn't been lunchtime when there was somebody at the gate house. They grabbed these two schmucks who then turned around and pointed to the boat at the end of the dock. Customs went down, and the kid was sitting there, frantically sewing up the bags. U.S. Customs grabbed him.
Unfortunately for me, the kid had a tendency to write things down, which is something that you don't do. He'd written down my name along with a few others. He knew my real name, even though I used an alias with him. He must have gotten it from Ricky, who knew my whole name. Plus the kid had written down my phone number, of all damn things.
That wasn't so bad. The kid was in the slammer there. He did something everyone should do when they are arrested for a federal crime. He posted bail, and he left.
I didn't even hear about it. Nobody heard about it. He was only in for a weekend. Somebody flew in from Denmark, posted the $100,000, and he was gone. It was great. Now, they've got nobody who knows anything.
About two months later, I came flying through on this courier mission on a commercial flight going to Puerto Rico and on to Europe. I got off the plane. "Hey, we've got some time to kill before the flight leaves. Let's go into town and get some lunch." I went through customs coming into the country, drove into town, had lunch. When I got back to the airport, I had to check in for the flight, and there were a couple of agents waiting for me.
I was arrested on five counts of conspiracy to import and distribute, carrying on a continuing criminal enterprise, and for violating money laundering statutes. The conviction rate in federal trials varies from one part of the country to another, but all states have conviction rates in the high 90th percentile. If you go to federal court you have something like a 2.1 percent chance of being proved innocent. This smacks surprisingly of a kangaroo court system where you are going to be convicted no matter what you do.
You shouldn't get yourself an attorney to fight for you, someone who will take you to court and cost you an arm and a leg. They will just charge you as much as they possibly can without telling you that you are going to be convicted anyway. Most people don't figure that out until the judge hands down the sentence. You are going to be convicted. You will get time, and you will do 98 percent of that time in the federal system. The smart thing to do is to put up your $100,000 bail and leave the country, then never come back. There's no two ways about that, as I was soon to find out.
Finally, I pulled into Club Fed, which is very nice accommodations. I highly recommend it for losing weight and for learning to play tennis. We had some of the best tennis players I've ever seen in my entire life down there. This place was known within the prison industry as the Tennis Camp, because fully three-quarters of the people there were committed tennis fanatics. There was no black market trafficking in booze, or in marijuana, or in girls. There was black market trafficking in tennis strings, racquets, specialized tennis shoes, gloves, and grip tape. That's what was smuggled into our camp. Only occasionally would one of the older gentlemen get himself a nip of bourbon smuggled in. Most of the younger camp members would just turn their heads the other direction and ignore it totally, as did the guards. How are you going to tell somebody the same age as your father, "I'm going to put you in the hole for getting your nip every month."