Episode 5: A yacht called "I Dream" washes up in Tonga with some drugs and a grisly cargo.
He Got Greedy
Paul Le Roux always knew that the end would come, or so those inside his organization told me. Some believed that the sheer vastness of his criminal appetite implied that he was all but daring law enforcement to take him down. Others remembered that Le Roux talked for years about how the U.S. Drug Enforcement Administration was on his trail. They’d always assumed he was boasting, exaggerating his importance.
There were also times when it seemed like Le Roux was considering getting out. In an online chat, sent to me by one of his former employees, he discussed disappearing into a new identity as early as 2008. “I need a dead body certified as me,” Le Roux said. “The body should have a certificate saying ‘died from multiple gun shot wounds.’” He also wanted a birth certificate under a new name, one that would work not just once, but for a lifetime.
Le Roux either never got the birth certificate or never used it. Instead, when he started to feel that his time was short, he put into action another, even more elaborate plan. By early 2012, authorities in the U.S. began closing in on Le Roux’s operations. That spring, he exchanged his haven in the Philippines, with his established routines, paid-for police protection, and network of employees, for a new home base in Rio de Janeiro.
Le Roux seemed to see Brazil as a trapdoor to a fresh start: Soon after he arrived, he set about generating new business. The first involved a boat, transporting $120 million in cocaine from Peru to a buyer on the other side of the Pacific.
As he finalized the arrangements for the shipment, another lucrative offer presented itself. A trusted associate of Le Roux’scontacted him to say that he’d met a representative of a Colombian cartel that wanted to build a large-scale methamphetamine operation in Liberia. On May 11, Le Roux’s associate flew to Rio for a meeting. The Colombians wanted precursor chemicals, a facility, and a chemist for making meth, in exchange for which they would supply Le Roux with cocaine.
The Colombians requested a sample of the product Le Roux could help them create. A week later, he gave the associate his bank account number, and the Colombians wired payment for a 24-gram sample of meth. Le Roux sent the sample to Liberia and supplied a tracking number. The Colombians tested the meth and found that it was clean, nearly 100 percent pure. They were ready to make the trade: 100 kilos of meth for 100 kilos of cocaine.
All that was required to complete the deal was for Le Roux to travel to Liberia and meet with the cartel representative. He caught a commercial flight to Monrovia, the Liberian capital, and touched down on September 25, 2012. As was often the case with Le Roux and his businesses, the swap was a bold plan, almost too over the top in its complexity. Only this time, Le Roux wasn’t the one pulling the strings.
For many months, I tried to convince someone in U.S. law enforcement to talk to me on the record about Le Roux. Several divisions of the Department of Justice, the DEA, and the U.S. Attorney’s Office in Washington and New York all repeatedly refused to speak with me. My phone calls and emails were met with variations on “no comment.” Kent Bailey, the acting head of the DEA in Minnesota, who I’d heard had been involved in the case, declined to connect me to any agents involved and referred my inquiries to Lawrence Payne, the DEA’s spokesman in Washington. Payne’s response was polite but firm: “There isn’t any information that we can confirm, deny, or discuss right now,” he said. Much of the evidence pertaining to Le Roux was still being held in sealed court filings, and as long as the cases remained open, no one in federal law enforcement would officially say a word about him.
But then, over the past few weeks, I spoke to two law enforcement officials with extensive and direct knowledge of the Le Roux case. One of them, whom I’ll call Jody, I met in a New York City bar one March afternoon after we were put in contact by a mutual acquaintance. Another, whom I’ll call Sol, called me after reading the first four parts of this story. Both had been briefed on the specifics of the Le Roux investigation, and they provided an inside look at the DEA’s five-year pursuit. They agreed to speak to me on the condition that they not be named, given the pending prosecutions and the fact that they were not authorized to speak publicly.
Their independent accounts confirmed one another’s and echoed what I had already learned from hundreds of pages of court documents both in the U.S. and overseas, as well as from my interviews with defendants, their families, and defense lawyers with access to parts of the government’s investigation. In total, these sources revealed how the U.S. brought down Paul Calder Le Roux. Through their accounts, I also discovered how close he came to escaping its grasp. “I’ve had a lot of drug cases,” Sol told me. “But Le Roux? He was by far the smartest drug dealer I’ve ever dealt with.”
A decade before the national opiate epidemic made headlines, the DEA had seen online pharmacies funneling prescription medication onto American streets. The agency responded with Operation Baywatch, Operation CyberRx, Operation Lightning Strike, Operation TexRx, and Operation Control/Alt/Delete, a series of attempts to shut down a thriving industry of rogue pharmacies, also known as pill mills.
In the summer of 2007, an investigator in the DEA’s Minneapolis–St. Paul office named Kim Brill was making undercover online purchases of phentermine, a prescription appetite suppresant with amphetamine-like effects. One of the shipments arrived from Altgeld Garden Drugs, a pharmacy on the South Side of Chicago. Brill and a partner obtained a warrant to search the store, and in the back they discovered FedEx boxes full of medications.
The DEA got a warrant for FedEx’s records and found that a single company was paying to ship those packages all around the country. It was called RX Limited. According to one indictment, “approximately one hundred pharmacies throughout the United States had also shipped under RXL’s FedEx account. RXL’s most frequently sold prescription drugs were Fioricet, Soma (carisoprodol), and Ultram (tramadol), and their generic and brand-name equivalents.”
Over the coming months and years, Brill and her colleaguesembarked on the painstaking work of building a case against RX Limited. The evidence they compiled would ultimately amount to millions of pages of documents, according to one defense attorney involved in the case. Brill was a “diversion investigator”: Unlike agents tracking street narcotics like cocaine and methamphetamine, her focus was on legal drugs being diverted into illegal markets. According to both Sol and Jody, she was also exceptionally diligent, with a natural aptitude for making connections other investigators failed to spot. On RX Limited, she often worked alongside a DEA special agent named Travis Ocken, a clean-cut Nebraskan who had come to the agency by way of the Lincoln police force. Both of them were supervised, a source told me, by Bailey. (For simplicity’s sake, I will refer to the collection of Minnesota investigators who worked on the case as “the agents.”) Working with DEA offices as far-flung as Detroit, New York City, Newark, New Jersey, and Hong Kong, the Minnesota agents set out to unravel RX Limited’s operation.
To understand that network required a slew of strategies, Jody told me, a combination of tracing “the FedEx account and who opened that, and various email accounts, various affiliate programs—finding out who the affiliates were, who is paying those people—finding out where the servers were.”
The shipping account was a foot in the door: Among the 100 pharmacists using the account was Charles Schultz, the 74-year-old who owned two family-run drugstores in Oshkosh and Monroe, Wisconsin. Agents eventually determined that he shipped over 700,000 prescriptions on behalf of an RX Limited subsidiary. Another was Babubhai Patel, a pharmacist and businessman in his late forties who controlled 26 pharmacies in the Detroit area. According to a federal indictment, in addition to shipping drugs for RX Limited, the government alleges that Patel helped RX Limited set up credit card processing operations in the U.S.—another trail for the agents to follow.
In October 2007, Brill began making controlled buys on RX Limited websites, using accounts created by the DEA. When each package of pills arrived, it included a label indicating which doctor had prescribed them. That led the agents to physicians like Elias Karkalas, who operated a 15-year-old family practice in King of Prussia, Pennsylvania, and whose indictment now reads like this:
On or about December 2, 2008, ELIAS KARKALAS authorized a sham prescription for the dispensing and distribution of Fioricet or its generic equivalent to an RX Limited customer, an undercover investigator in Minnesota, with whom he did not have a bona fide doctor-patient relationship and who stated on the submitted customer questionnaire that the Fioricet was being ordered to treat knee pain.
“It took a while to put all the pieces together,” Jody told me, not least because RX Limited wasn’t a single site but a conglomeration of hundreds, with similar-sounding names like Cheaprxmeds.net and Allpharmmeds.com. Some of those sites were affiliates, marketing sites recruited by RX limited to funnel customers to the company in exchange for a per-order fee.
The names of these sites could change in an instant. RX Limited’s marketing strategy was essentially to send spam email to any address it could find. When service providers blocked those sites for bulk-email infractions, RX Limited and its affiliates would open up new ones, which in turn would be blocked. It was an endless game of cat and mouse. In the early days of RX Limited, employees purchased individual web domains at public sellers like GoDaddy. Later, RX Limited spawned its own domain-selling company, ABSystems—the equivalent of opening a printing press for web addresses. But instead of selling those addresses to others, ABSystems generated them by the thousands, virtually for free, exclusively for RX Limited.
John Reid, a researcher at Spamhaus, an independent organization that tracks spammers and fraudulent websites, described such efforts as a kind of “snowshoeing.” By creating thousands of sites, Reid told me, ABSystems spread the load the way a snowshoe distributes your weight. “If you register 10,000 a week, the moment one goes bad, you just switch to another one,” Reid said. Spamhaus keeps a list of the worst spammers so that email providers can easily block them. After years of collecting data on RX Limited and its affiliates, Spamhaus noted that, at times, more than a quarter of the domains on the block list were generated by ABSystems. By 2012, a private organization that tracks online pharmacies called LegitScript estimated that ABSystems accounted for more than half of the rogue online pharmacies in the world.
As I listened to Jody and Sol explain how the DEA agents had peeled away the layers of RX Limited, it felt eerily similar to the process I would undertake a decade later in my reporting. Companies and websites were registered under a myriad of monikers, real and fake. My files are filled with dozens upon dozens of names and address, in Florida, Panama, the UK, the Netherlands, Romania, Russia, and the Philippines, a database of criminals, rubes, and fictional aliases like Ario Galvydis and Gherghy Jiku.
As Brill began cataloging these names, one kept popping up again and again in important places: Paul Calder Le Roux. “Before Le Roux started putting accounts in other people’s names, he had his name involved a little bit,” Jody told me. A few of those I had encountered myself: Le Roux’s name attached to a Florida company cited in a 2008 FCC complaint, for instance, about a marketing call made to someone in the National Do Not Call Registry. Others were buried deeper, on FedEx records, credit card processing accounts, emails, and banking records that only a search warrant could unearth.
The agents didn’t even have a photograph of Le Roux. But the scope of the operation they now attributed to him was so vast that the Department of Justice placed Le Roux on the U.S. Attorney’s Consolidated Priority Organization Target (CPOT) list, an internal index of the DOJ’s top targets. CPOT designees, like Sinaloa cartel head Joaquín “El Chápo” Guzman and Taliban-affiliated heroin trafficker Bashir Noorzai, are considered “the most prolific international drug trafficking and money laundering organizations” by the DEA. Le Roux was the first person ever included on the list based on prescription-drug operations alone.
It took Brill and her colleagues years to develop the evidence establishing Le Roux as the kingpin behind the organization, with some of the connections so faint that he almost avoided detection altogether. “If he had gone the anonymous route a little bit earlier in the enterprise, we would have no chance of figuring out who was really behind this,” Jody said. “It would have just taken too long to get past that first layer.
“He got greedy,” Jody continued. “He probably could have closed up shop in 2006 or 2007, been a rich millionaire, and never have been investigated at all.”
The financial hub for Le Roux’s operations, investigators quickly discovered, was Hong Kong. At any one time, tens of millions of dollars from American customers were coursing through bank accounts of Le Roux–controlled shell companies there, with names like GX Port, Vischnu Ltd., East Asia Escrow, Ajax Technology, and Quantcom Commerce. These were connected to central accounts held by Le Roux, which wired money around the world to cover various operational expenses, including call centers in Israel and pharmacists like Schultz.
Each new person I spoke to had an ever larger estimate of the size of this empire. According to the U.S. government, RX Limited earned between $250 million and $400 million a year at its height. Those figures might be hard to trust, given the government’s incentive to maximize the value of their busts, both for public relations and to enhance the sentences of anyone convicted. But then some of Le Roux’s employees are convinced that he was a billionaire.
Whatever the ultimate amounts, Le Roux needed more than everyday banking. He needed a way to clean the money coming in, to obscure its illegal origins, and transform it into something untraceable.
Gil, the former Le Roux employee whom I met in Manila, explained to me how the system worked. After expenses were paid, much of the remaining money was funneled into hard assets: primarily gold bars, but also diamonds and small round granules of silver called grain, all of which was stored in Hong Kong before being shipped to the Philippines, where it was delivered to Le Roux. And a literal fortune in gold and jewels called for a high level of security.
In 2009, Doron Zvi Shulman was 23 and just out of the Israeli military when a friend from his former unit told him about a “security job” in Hong Kong. Fit and handsome, with a penchant for wraparound sunglasses, Shulman was born in Zimbabwe and spent his formative years in Australia. A dual Australian-Israeli citizen, he came to Israel for military service, where he was selected to join an elite special-forces unit called the Duvdevan.
A subject of some controversy and intrigue, the Duvdevan—which means “cherry” in Hebrew—specializes in undercover work amid Palestinian communities in the West Bank and Gaza. Most famously, its agents have dressed as Arab women to infiltrate Palestinian militant groups in order to capture or kill high-value targets. It was natural for former members of the unit to drift into international security work, and Shulman became the latest to pass through a Duvdevan pipeline into Le Roux’s organization.
Shulman’s initial job in Hong Kong was to guard properties and valuables owned by Le Roux, for which he was paid $5,000 a month. Before long, however, he became one of Le Roux’s point men on the ground, conducting transactions for at least ten of the shell companies, which at one time held some $220 million between them. Over a three-and-a-half-year period, three of these companies acquired $30 million in one-kilogram gold bars from Metalor Technologies, a Swiss gold dealer housed in a sparkling glass tower.
Gil told me that Le Roux owned a collection of houses and condos in Hong Kong used almost exclusively to manage his hoard of precious metals. Each house contained a safe where the gold, silver, and diamonds were stored until they could be relocated to the Philippines. Sometimes the entire safe would be transported by boat. Other times bags of gold bars were flown by private plane back to Manila. “It was a constant influx of money turned into gold,” Gil told me—money primarily coming from prescription-pill customers in the United States.
In January 2012, Shulman hired a 27-year-old named Omer Gavish to guard a house in Hong Kong. It was located on Nga Yiu Tau street in Yuen Long, a rapidly developing district in the northwest part of the city. Gavish had served in the Duvdevan along with Shulman and, after he left the service in 2009, traveled the world doing contract security work, including two years in the Philippines. He was living in Israel when an acquaintance connected him with Shulman; the gig paid $3,000 a month, plus travel, to protect the Yuen Long house.
After four months in Hong Kong, Gavish had to renew his tourist visa, so Shulman bought him a ticket back to Manila. When he returned on May 1, Gavish found that his post had been taken by another Israeli. Gavish called Shulman to straighten out the issue. But Shulman seemed to have disappeared.
In Minneapolis, the DEA investigators were homing in on Le Roux. In 2009, they’d traveled to Manila in the hopes of convincing the Philippine government to monitor him on wiretaps. The local authorities never followed up. When the arms ship MV Captain Ufuk was intercepted off the coast, Sol told me, the DEA “knew that Le Roux was behind that shipment right away. Because La Plata Trading and Red White and Blue Arms”—companies tied to the shipment—“connected back to ABSystems, and the websites were registered to him.”
Le Roux’s addition to the CPOT list in 2009 meant additional resources to track the flow of money and more opportunities to get to the man himself. The investigators had obtained warrants to monitor email addresses being used to contact doctors and pharmacists in the operation’s network. It was through those emails that the agents discovered RX Limited’s customer-service centers in Israel, which traced back to the email addresses email@example.com and firstname.lastname@example.org.
But it wasn’t enough to make a case. “The real problem is, if all you are doing is getting email accounts, people are going to say ‘someone is using my identity.’ It’s hard to have someone say ‘I saw so and so send that email,’” Jody said. What they needed were informants or another way to understand how Le Roux worked in real time. “You’ve either got to have someone on the inside—and at that point we didn’t have anybody—or you need a wiretap.”
CPOT resources provided for extensive phone taps, which allowed agents to see how Le Roux’s pharmacy business began to suffer as federal laws caught up with the pill-mill phenomenon. After FedEx shut down RX Limited’s main account, Le Roux sent two employees to the U.S. to find alternate ways of shipping the medications. According to Jody, Babubhai Patel, the owner of the 26 Detroit-area pharmacies, was allegedly heard on DEA wiretaps “telling Le Roux’s folks that they need to pay more money because things are getting too risky.”
In 2011, the DEA declared Soma, one of RX Limited’s three bestselling drugs, a controlled substance, which meant that pharmacies needed special DEA approval to dispense it. Le Roux lost a significant chunk of business, forcing him to close down his call-center operations in Israel.
Still, the man at the top proved elusive. “We hoped that we might get Le Roux on those wires,” Jody said. “But it became clear that he was not going to talk on those phones.”
Even as the DEA was desperately searching for a direct line to Le Roux, former members of Le Roux’s organization were desperately searching for a direct line to the DEA. Le Roux had become more ruthless, commanding employee loyalty through fear and intimidation. But sometimes his threats backfired.
One morning in Manila, I sat with Gil, the former high-level Le Roux associate, at a Starbucks as he described how the paranoia of working with Le Roux nearly drove him out of his mind. Back in 2011, Le Roux practically admitted to Gil that he’d killed Dave Smith, his right-hand man: “I didn’t need Dave. You’re lucky I need you,” Le Roux told him. Soon after, Le Roux sent Gil to the U.S. to register some new companies. When Le Roux asked him to return not long afterward, Gil began to wonder if he would be the next to die.
Listening in on wiretaps between Gil and other members of the organization, Sol told me, “you could hear it in his voice that he was troubled.” The agents prepared a plan to recruit Gil as an informant against Le Roux. But before they could make contact with him, he’d flown back to the Philippines.
On arrival, Gil was so overcome with stress that he checked himself into a psychiatric hospital. After a few weeks, he decided to turn Le Roux in. Even sitting across from me several years later, he still had the nervous energy of a man who spent years looking over his shoulder. Gil told me that he contacted a friend in military intelligence, who put him in touch with the FBI. “They were excited” at first, he told me. “And then it dried up.”
The same happened with Robert McGowan’s initial approach to American authorities. McGowan, a Zimbabwean who had worked with Le Roux on a timber project in the Democratic Republic of the Congo, found his name attached to ABSystems and other firms. McGowan had emailed an attorney friend in the U.S. in 2010 to ask whether there was any possibility of getting his name removed from Le Roux’s companies, and he tried again in 2011. He’d discovered that his identity was attached to Southern Ace, the company cited in a UN report as a backer of a Le Roux–funded militia in Somalia. The attorney told him he’d reach out to an acquaintance in law enforcement but couldn’t promise anything.
Several months later, McGowan got a call from the FBI. When I spoke to him recently, McGowan told me that soon afterward he also heard from the DEA. Both Jody and Sol confirmed that McGowan had approached the agency and that he’d been employed as an asset in the investigation.
I asked McGowan what motivated him to help the DEA. “Because of them stealing my identity and using my name and my details without my permission,” he said earnestly. “That to me was just not on.”
Lulu, the source who’d told me about Le Roux’s early life, had also been angling to get the attention of law enforcement. He first tried to turn in Le Roux, his relative and former employer, in late 2009. He’d emailed an address through the website of the Australian Federal Police (AFP) and said he had information about an Australian and Zimbabwean citizen, based out of the Philippines, who was dealing in weapons and drugs.
When I first asked Lulu, in an online chat in mid-March, why he’d decided to go to the authorities, he said sardonically that he “was feeling a bit insecure” that Le Roux “was trying to blot me.” Le Roux believed that Lulu had some connection to $1 million that he’d lost in Africa, but when Bruce Jones, the captain of the MV Ufuk, “got blotted” in the Philippines, Lulu’s fear spiked. There was another reason: Le Roux had used the name of a person related to Lulu to register a company connected to one of his arms deals. Lulu wouldn’t specify except to say that the relative was put into a potentially deadly situation through the revelation that they owned a company behind a weapons shipment.
“That’s why I ratted him out,” he said.
Lulu was living in Africa at the time. An AFP agent agreed to meet him in Johannesburg, and Lulu brought along a friend who had also worked with Le Roux and was willing to talk. After hearing their stories, the agent put them in touch with an American CIA attaché there. “We had a few meetings with them, but they didn’t seem interested,” Lulu told me. A year passed.
“Then something changed,” he said, and “they got real excited”
By early 2012, the DEA agents had Le Roux in their sights; they just needed more direct evidence linking him to the prescription-pill business. But as they reached out to agency after agency around the world, hoping to build international cooperation to capture Le Roux, they realized that they had underestimated how thoroughly he had secured his freedom. Both Sol and Jody told me that the U.S. suspected that someone in one of the Philippine police agencies—the Philippine National Police or the National Bureau of Investigation—tipped Le Roux off to the U.S. investigation.
They were unable to provide further specifics, but their accounts were consistent with what I’d heard before. Other sources told me that Le Roux doled out money to police and other officials and spent over a million dollars to avoid prosecution in the MV Ufuk affair. (Gil, for instance, told me that he believed Le Roux had bought off contacts at the highest level of the government and even paid to have certain friendly officials installed in their posts. As I was writing this story, another source told me that Le Roux had hired a former NBI official to be in charge of distributing bribes to law enforcement.) By late 2011, Le Roux was preparing to make the jump to Rio de Janeiro.
I first came across Le Roux’s Brazil escape in a newspaper article by Marco Antonio Martins in Folha de S.Paulo. In December 2013, Martins noticed something the rest of the world had missed: Le Roux had made two short visits to Rio in 2011 and 2012, before settling there permanently in May 2012. He was joined by several Israeli associates, who brought along, according to Martins, over $1 million in American currency.
In an online database, I found the 2011 registration for Rainbow Force, a company Le Roux set up in Brazil, purporting to have ten employees and provide “custom programming services.” It was based in a bland 20-story office building down the street from the harbor. Martins also reported that Le Roux had bought a pair of luxury apartments. He lived in one with a Filipino girlfriend, Cindy Cayanan, and their newborn son, along with a nanny. (On immigration forms, Le Roux—who was still married to Lilian Cheung Yuen Pui, a Dutch citizen—claimed Cayanan as his wife.) The other apartment was for a Brazilian mistress, whose name I also found on the Rainbow Force registration, with whom Le Roux had reportedly fathered a child soon after his arrival.
At first the DEA saw Le Roux’s move to Brazil as a setback. Along with a constitutional provision barring the extradition of its citizens, Brazil provides similar protections to parents of Brazilian children. “He went to Brazil because he thought it was the easiest place to avoid extradition,” Jody told me.
I asked if they believed that Le Roux had a child in Brazil for the sole purpose of creating a safe haven to avoid extradition. “That’s my understanding,” Jody said.
It turned out, however, that Brazil also gave the DEA an unexpected advantage. Brazilian law allows authorities to obtain an “informal” wiretap for several weeks without a warrant, and then use the evidence acquired from that tap to file for fully sanctioned surveillance. Now they just needed someone who could get Le Roux on the line and verify his voice. That’s when they turned to Robert McGowan.
Several months after McGowan initially made contact with law enforcement, a DEA agent asked him to call Paul Le Roux. Less than a year before, McGowan had traveled to Manila to confront Le Roux about pulling the plug on a timber operation. Now, with the DEA on the line, he called him up to urge him to restart the company. “They didn’t coach me or anything,” McGowan told me. “I just dialed the number and talked to him.”
At the same time, the DEA enlisted local police to follow Le Roux, who could be found in his usual shorts and flip-flops at a nearby mall, meeting with deputies, including Manila-based Israeli Shai Reuven, who served as one of Le Roux’s right-hand men.
The Rio wiretaps were a revelation, a treasure trove of leads and evidence, a chance to finally hear from the man himself. Here was Le Roux, living with his girlfriend and another mistress abroad, urging Lilian Cheung Yuen Pui to stop buying real estate. As Jody recalled it, Le Roux warned her that property was too easy to seize if he was arrested. When his wife seemed to discount that possibility, he reminded her that “I’m not running a fucking McDonald’s.”
The DEA caught much more than just domestic disputes on the wiretaps in Rio. In April 2012, according to Sol, they heard either Le Roux or an associate discussing a large shipment of fertilizer passing through Hong Kong. The agents tipped off the Hong Kong police, who raided a warehouse in Tsuen Wan, north of the city. There they discovered 24 tons of ammonium nitrate fertilizer, divided into 960 bags labeled as sodium chloride. It was enough to create an explosive ten times bigger than the one used in the Oklahoma City bombing. According to local news reports, police discovered Doron Zvi Shulman’s name on the warehouse lease and the shipping documents for the fertilizer.
On April 30, 2012, the cops converged on the office of Ajax Technology, in an office tower on a busy downtown street lined with banks, and took Shulman into custody. While Gavish tried and failed to reach Shulman, the police were searching Shulman’s apartment in a complex called Laguna City. There they found bank records for other Le Roux front companies, the deeds to the Yuen Long property and another stash house, and five kilos of silver grain.
Shulman’s lawyer would later argue that, because of Shulman’s military background, “he was trained to follow orders without any questions,” and when told “to look after some valuables in Hong Kong, he did it diligently without any question. Being simple and without experience in finance, he landed himself into deep trouble.”
The trouble for Le Roux, however, was just beginning. Shulman’s arrest set off one of the more cartoonish episodes in the years-long pursuit of Le Roux by the authorities. On May 1, the day after Shulman’s arrest, two Israelis in Hong Kong received a call from their South African boss, “John”—likely Le Roux himself. John told them it was time to liquidate some assets. The only problem was, those assets were locked in safes inside the two stash houses, and neither one of them had the keys.
First they tried getting into Shulman’s apartment, but when they arrived, they found it sealed off by the authorities. So John told them to use brute force: They went to a hardware store, bought some metal-cutting tools, and got to work. At the Yuen Long house, they found that the safe was embedded in a wall. Using a crowbar, they pried it free and then cut a hole in the back, discovering—to their surprise, they would later claim in court—181 gold bars, which they placed into duffel bags.
When they arrived at the second house, they were met by another Israeli dispatched from Manila. After a locksmith dismantled the gate, which he himself had recently installed, the Israelis set to cutting open the safe behind it.
By May 2, the now three and possibly four Israelis—the Hong Kong court documents are somewhat confusing on this point—took 342 gold bars, worth around $20 million, and climbed into a taxi. On John’s instructions, they drove to Chungking Mansions, a sprawling 17-story gray edifice widely regarded as the cheapest immigrant lodging in Hong Kong, and checked into a youth hostel.
Over the next two days, together with a Filipino named Gordo who had also arrived in the intervening time, they alternated taking the gold back to Metalor, where it had originally been purchased. They unloaded 85, then 32, then 64 of the bars, depositing over $9.4 million in an account of Cycom, a Le Roux–controlled company.
Meanwhile, a baffling collection of Le Roux operatives converged on Hong Kong, either in a frenzied attempt to keep Le Roux’s massive store from slipping away or, as Le Roux would later claim, to get some for themselves. Besides Gordo, there was someone traveling under the name John Miller, who collected corporate documents for Cycom and then disappeared. There was an Eastern European who was arrested by authorities on May 2 but immediately jumped bail and flew to Rio. There was also a mysterious South African referred to only in passing in the court documents, and another Filipino arrested at the airport holding bank-transfer records for $8 million. He, too, jumped bail.
As the Israelis desperately tried to hide the remaining gold, scouting a new house in Yuen Long, the police were on their trail. Investigators found the CCTV footage from the two houses, which showed men loading heavy bags into a cab. The police tracked the men around the city, and at 2:45 in the morning on May 7, the remaining Israelis were arrested in a raid at Chungking Mansions. In their possession were five bags containing 161 gold bars, plus four five-carat diamonds and receipts from the previous days’ sales.
Three days later, Le Roux’s wife, Lilian Cheung Yuen Pui, was arrested trying to enter Hong Kong on her Dutch passport, carrying a bank slip for a $300,000 transfer to Cycom. I couldn’t locate a record of her being prosecuted, and no one I spoke with seemed to know why. But Le Roux’s fertilizer “wasn’t even explosive quality,”Sol told me. “I think he got duped.”
While the Hong Kong police were working to seize as many of Le Roux’s assets as they could find, the DEA agents in Brazil were listening to him try to refill his coffers. From Rio, Le Roux was making plans to send 200 kilos of cocaine on a ship called the JeReVe to a buyer in the South Pacific. Based on conversations the agents overheard, they believed that the vessel would leave from Ecuador. Le Roux and his associates bought the boat and transported it from Panama to Ecuador, then arranged to bribe Ecuadoran coast guard officials.
The JeReVe, according to an advertisement I found preserved online, had been listed for sale a year before in Panama for $105,000. Its previous owners had sailed the 44-foot luxury sailboat around the Mediterranean and the Caribbean before giving it up. The boat’s name was French for “I dream.” “JeReVe is ready to sail and to give a lot of pleasure at his next owner,” read the listing. In August, the boat arrived at its Ecuadorean berth, prepared to carry Le Roux’s lucrative shipment.
Le Roux couldn’t have known that this new venture had made him a narco-terrorist in the eyes of the U.S. government. Until he had fled for Brazil, his case had been the province of the DOJ’s Consumer Protection Division, the federal prosecutors that handle pill-mill cases, and the Minnesota investigation team anchored by Kim Brill. But the revelation that Le Roux was into large-scale narcotics dealing, together with his arms-trafficking adventures in the Philippines and Somalia, suddenly made Le Roux a target for the DEA’s narco-terrorism investigators. These agents were part of the agency’s Special Operations Division, working with the U.S. Attorney’s Office in the Southern District of New York, in Manhattan. In recent years, the DEA has vastly expanded its operations around the globe, based on the DOJ’s calculus that drug traffickers represent a security threat to U.S. interests.
In Ecuador, DEA agents distracted the crew of the JeReVe and placed a tracking device on the craft before it departed, with only a captain and first mate on board. After a brief stop off the coast of Peru, it began its journey across the ocean. The DEA planned to follow it to its destination and then bust the buyers as well. But as the JeReVe neared the Cook Islands in late September, the tracking device failed, and it disappeared from the agency’s radar.
To capture Le Roux, the DEA needed to get him out of Brazil, preferably to a country that wouldn’t require an extradition proceeding before letting agents bring him to the U.S. They came up with a scheme to lure him abroad: the meth-chemicals-for-cocaine deal with the Colombian cartel, introduced to Le Roux by a trusted associate. The Colombian cartel was a fake, and the associate was coached to lay the deal out carefully for Le Roux. It had to happen in Liberia, he was told, and he had to make sure Le Roux understood that the meth would be sold in New York—a ploy to ensure that the charges would stick back in the U.S.
Le Roux, meanwhile, had every reason to turn the invitation down. He was, as far as he knew, safe in Brazil, protected from extradition. (Later, he would demonstrate his fine-grained knowledge of Brazilian law, noting, “As far as I’m aware, Brazil lacks a conspiracy law, so I do not believe any crimes were committed in Brazil.”) The JeReVe was en route to its destination. The pharmacy business was on the rocks, certainly—particularly without the Hong Kong accounts—but there was still money in the Philippines, and his network remained in place.
But Le Roux’s appetite exceeded his caution, tipping into megalomania as he evolved from an online gray-market entrepreneur to an old-school crime boss, expanding into weapons, cocaine, and meth and ordering murders without a second thought. Among employees there had been rumors that he was importing drone parts into the Philippines to make his own drug-delivery vehicles, and the DEA overheard him discussing the use of remote-controlled submersibles to transport meth chemicals from Hong Kong to the Philippines. The Liberia deal catered to his unquenched ambitions to remain a major player. He bought a ticket to Monrovia and arrived on September 25.
It was a variation on a trap the DEA had set before, for other narco-terrorism suspects, all over the globe, and Le Roux walked off the plane into its delicately poised jaws. The next day, he was swept up by Liberian police. His first response, according to court testimony by James Stouch, a DEA agent who participated in the operation, was to offer a bribe to the Liberian police. It didn’t work; the Liberians handed him over to the DEA agents, who explained that he would be taken to the United States. “I apologize in advance, but I do not want to get on your plane,” he told them, and then made himself as heavy as possible. Getting him into a van, Stouch later said in court, was like “trying to move somebody that’s just kind of described as dead weight.”
Halfway to the airport, however, Le Roux switched tactics, said Stouch. “He just essentially said he was no longer going to resist and that he would cooperate with our commands.” According to the DEA, Le Roux waived his Miranda rights somewhere over the Atlantic and agreed to tell them everything he knew. This wasn’t a total surprise: Jody told me that on the wiretaps Le Roux talked like a man who knew that “at some point he felt like he was not going to get away forever.”
Still, the whole bust seemed as surreal as much of Le Roux’s operation had been. Here was a man calculating enough to father a child in Brazil in order to avoid extradition, who then took a chance on traveling to Liberia for a meth deal. “It really was a stupid mistake,” Jody said.
Through 2011, Lulu had continued talking to U.S. authorities. Their interest had perked up, he suspected, when he’d mentioned that Le Roux had servers in Brazil. The DEA sent a team to meet him in Africa. Eight agents came the first time, from a variety of agencies, and then some months later two DEA investigators came to ask more questions. Among the groups were Brill, Ocken, and Stouch, and Lulu related to them the same tale that he told me after contacting me last month.
Then, after months of silence, in October 2012, those same agents suddenly arranged for Lulu to fly to Minneapolis. There he told his story to a federal grand jury that had been convened to indict Paul Le Roux on charges of wire fraud, money laundering, and conspiracy to illegally import prescription drugs. Afterward, they took him to a Vikings-Titans game. “Thoroughly enjoyed it,” Lulu told me. “That running back was excellent.”
Six weeks after Le Roux was arrested, two recreational divers found the JeReVe washed up on a shallow reef off the shore of Luatafito Island, one of a cluster of tiny uninhabited atolls in the northern part of Tonga. The yacht was lying on its side, saltwater lapping against its brick red hull and broken tiller.
One of the divers climbed onto the clean white deck of the ship and made a grisly discovery. At the helm was the badly decomposed body of a man. The divers fled the ship, climbed into their own boat, motored to the nearby port of Neiafu, and called the local police.
Bad weather rolled in, and the authorities couldn’t return to the JeReVe for two days. When they did, a group of shorts-wearing officers examined it. Inside the hull, they found a pile of clear garbage bags filled with dozens of neatly wrapped brown plastic bricks. All told those bricks contained 204 kilos of cocaine, worth over $120 million on the street in Australia, where authorities suspected the drugs had been headed. It was, according to the Tongan government, the largest drug haul ever confiscated in the South Pacific.
After the boat had disappeared from radar, authorities from the U.S., Australia, Tonga, and the Cook Islands had coordinated a massive search. Despite the fact that the yacht had been found by accident, they declared its seizure a victory for the Pacific Transnational Crime Network, an international cooperative aiming to stop the flow of drugs from South America to Asia, often in small boats like the JeReVe. “By using our networks and working together, we were able to prevent over 200 kilograms of cocaine from entering our community,” an Australian customs official said.
Tongan authorities identified the dead man on board the JeReVe by passport as the second mate, a 35-year-old Slovakian named Milan Rindzak. They also found other passports on the ship, along with a few hundred American dollars, some Dominican pesos, and a handful of Polish zloty. At first the local police asserted that there was no foul play in Rindzak’s death but, following an autopsy, amended that conclusion to “cause of death inconclusive”; he had been dead for days, if not weeks. The captain of the boat was never found.
For months afterward, the Tongan police tried to locate Rindzak’s next of kin in Slovakia but were unable to track down anyone who would claim his body. Finally, in January 2013, they buried Rindzak’s remains in a local cemetery overlooking the placid blue waters of a harbor called the Port of Refuge.
When the DEA plane landed in New York, Le Roux was assigned a court-appointed attorney and placed into secret custody in New York City. The day after his arrival, he signed an agreement stating his intention to plead guilty to the methamphetamine charges, which granted him immunity against other crimes that he might admit to. Then he promptly admitted to, among other offences, arranging or participating in seven murders.
But the DEA agents did not hold a press conference announcing that they had caught a singular criminal, a man who’d transformed himself from an internet pill mogul into a drug and arms dealer and murderer. They did not make a tour of morning shows as they debriefed Le Roux about his past and the strange connections he’d made along the way.
Instead, the DEA said nothing. The agency had other plans, which required that no one know that Le Roux was off the street. Unlike a typical organized-crime case, in which authorities might flip lower-level participants to inform against their bosses, the U.S. was preparing to invert the pyramid. They’d caught the man at the top of the food chain, and now they were about to work their way down, cloaked by a blanket of secrecy.
Le Roux had quickly transitioned from kingpin to informant. “It was obvious that my situation was a bad situation,” was all he would say when, later, he was asked in court why he’d flipped so easily.
The agents wanted Le Roux to continue communicating with his associates and employees as if nothing had happened. “We were trying to maintain the image that he was still free and moving about, specifically in Brazil,” agent Stouch later recounted.
There was only one problem: All of Le Roux’s email passed through his own server, Fast-free-email.com, which he had designed to periodically destroy his messages. The agents needed to mirror that email address so that they could preserve all of Le Roux’s communications as evidence. Fortunately, there was one person in the room technically proficient enough to execute such a maneuver. And he seemed happy to be back in the game, even if on the other side.
Later, at a court hearing in Minneapolis, Le Roux was asked whether he had consented to the DEA monitoring his email after his arrest.
“Yes,” he said, leaning into the microphone, with a slight air of condescension. “I set it up.”