The New Generation of Drug Traffickers

The following is an excerpt from Hunting LeRoux: The Inside Story of the DEA Takedown of a Criminal Genius and His Empire, by Elaine Shannon. Courtesy of Michael Mann Books, a line from William Morrow Publishers. 

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To understand the significance of Paul LeRoux, the creator of the Innovation Age’s first transnational criminal empire, start at the other end of the evolutionary scale.

When the last cocaine cowboy went down, it wasn’t classy.

On the run from the Mexican marines, Joaquin “El Chapo” Guzmán emerged stinking from a sewer pipe. His idea of keeping a low profile was to steal a fire-­engine-red Ford Focus from a grandmother. Black­-clad Mexican federal police intercepted him in a matter of minutes and locked him in a fetid rent-­by-­the-­hour sex motel until a government helicopter took him back to the prison he had tunneled out of six months earlier.

El Chapo, taken into custody on January 8, 2016, was one of the last relics of the first phase of the cocaine invasion—call it the Miami Vice era—when cocaine cowboys built their brands by festooning themselves in diamond-­encrusted guns and belt buckles and by surrounding themselves with cars, corpses, trucks, SUVs, dealerships, whores, horses, hotels, nightclubs, soccer teams, TV stations, zoos, boats, and more corpses. The most famous and fabulous shot and betrayed one another until nearly all of them were dead or in prison.

Phase Two began in the first years of the twenty-­first century. The global black market in illegal drugs had become a vast, mature industry estimated to generate $400 billion a year (and probably much more), exceeding the combined profits of the underground trade in arms, humans, and blood diamonds. Responding to attractive profit opportunities on the dark side as well as in the visible economy, the underworld globalized. As traffickers militarized, militants criminalized, and they met in a borderless swamp. Colombian cartels joined forces with Lebanese syndicates and Hezbollah operatives in South America, Africa, and Europe. Colombia’s Marxist guerrillas, the FARC (Fuerzas Armadas Revolucionarias de Colombia, or Revolutionary Armed Forces of Colombia) went into cocaine production on an in­dustrial scale; by the early 2000s, DEA officials estimated that the FARC supplied more than half the world’s cocaine. Mexican organi­zations turned up in Nigeria and China. The Serb mafia posted gun runners on every continent. The Russian mafia laundered money, smuggled, bribed, intimidated, and launched cyberattacks for pro t. Afghanistan’s Taliban insurgency was founded with money from Af­ghan heroin kingpins.

The men and women at the top of transnational organized crime had evolved for the era of globalization. They were discreet and smart enough not to go to war with one another. They were in the game to make money, not news. They embraced the tools of the Digital Age— encrypted mobile devices, satellite phones, cloud storage, the dark web. They were ardent capitalists who worshipped no god but money. They drank alcohol, gambled, whored, raped, and blasphemed. Radical ide­ology left them cold, except as a means of destabilizing governments that threatened their impunity. They invested strategically, in chaos, because the threat to their existence was not rivals or soldiers or cops but peace. They paid off armed bands who held territory, who con­ trolled roads, ports, rivers, border crossings, and air strips. They were never the face of conflict. But they were the money in the back room, and it was the money that kept things boiling.However sophisticated the infrastructure, during Phase Two, most criminal organizations were still working within an industrial model of organized crime. They had to control the supply directly and supervise the steps of production, from farm to arm.

That meant lots of people and facilities to grow, harvest, refine, transport, reprocess, produce, guard, smuggle, protect with internal security and counterintelligence, distribute, collect money, and launder money. Lots of people. Lots of organization. Lots of aboveground and belowground infrastructure, all of which was vulnerable to discovery and attack by adversaries and law enforcement.

Now Phase Three—the model for transnational organized crime of tomorrow—has emerged, and it is changing everything. It is the innovation of Paul Calder LeRoux, who has introduced the principles of twenty-­first-century entrepreneurship to the dark side of the global economy.

Born in the outlaw colony of Rhodesia, LeRoux has a complicated psyche and near-­genius intelligence. With his imposing 350-pound physique, anvil-­shaped forehead, and blue-­black eyes that gleam like lit cigarettes, he strides into a room and takes command, projecting the menacing gravitas of an absolutely powerful medieval monarch, a Gilded Age robber baron, or a Wagnerian antihero. His mannerisms evoke Marlon Brando’s Colonel Kurtz, the renegade Green Beret turned warlord in Francis Ford Coppola’s Vietnam War epic, Apocalypse Now. LeRoux conveys the tension roiling his soul just as Brando/ Kurtz did, by rubbing his pale shaved head, twisting his neck, and smiling when there is nothing to smile about. These are gifted, seductive souls who have weighed good and evil and chosen evil, justifying it as more honorable than hypocrisy. “There’s nothing that I detest more than the stench of lies,” Brando/Kurtz told his interlocutor, boasting that he had surrounded himself with warriors “who are moral . . . and at the same time who are able to utilize their primordial instinct to kill without feeling . . . without passion . . . without judgment! Because it’s judgment that defeats us.” Of course, for Kurtz, it was really about power. No judgment meant no reason and no remorse. That was madness, but who has more power than a madman?

LeRoux understood the usefulness of fear very well. In a similar vein, he bragged of buying an island off the Philippines coast because “every villain needs his own island.” The password that unlocked his laptop was “Hitler.” He sought alliances with malefactors he admired—Colombian cartels, Russian oligarchs, Somali pirates, the Serb mafia, and Chinese Triads. He surrounded himself with enforcers as pitiless as Kurtz’s headhunters.

For years, the chief operating officer of LeRoux’s empire was a hard-­drinking, meth-­smoking English sadist named Dave Smith, who, LeRoux said, “got great pleasure in torturing animals and killing people and torturing people. Obviously, he is very violent, and he is the type of person I needed.” LeRoux instructed Smith to hire more men like himself—men who “enjoyed killing and torturing and beating.”

Brando’s Kurtz adorned his jungle dwelling with human skulls. LeRoux updated the concept, loading his laptop with digital snapshots of the bloodied corpses of people he ordered killed. Inside his sparsely furnished penthouse, he toiled in lonely splendor, obsessed with accumulating dollars, euros, rands, rubles, dirhams, and rupees by dealing in chemicals, drugs, gold, timber, and arms. His customers, he said proudly, were “warlords, criminals, essentially anyone who had money.”

Greed and cruelty are as old as humankind. What is groundbreaking about LeRoux is his unique combination of dazzling intellect and absence of conscience. These qualities have allowed him to develop a formidable business style. He is transnational organized crime’s supreme innovator. He is Netflix to Blockbuster, Spotify to Tower Records.

For LeRoux, money is just a way of keeping score. He dresses with the ironic downscale look known as Silicon Valley billionaire—battered khakis and primary-­colored polo shirts that can be seen from space. He stuffs himself with Domino’s pizza and Big Macs. His women are expendable and interchangeable. For LeRoux, sex is a snack, like an energy bar or a stress reliever.

When doing business, he is crisp and focused. He has racked up numbers that Silicon Valley’s forward leaners would envy. Starting in 2004, when he emerged in East Asia as the brash young founder of a new kind of e-­commerce business, he built a criminal empire stretching from Manila and Hong Kong, across Jerusalem and Dubai, to Texas to Rio. By 2012, he employed close to two thousand people. His first venture generated at least 3 million orders valued at close to $300 million total. More recently, he has developed numerous unquantified cash streams for various criminal enterprises and legitimate fronts.

Paul Calder LeRoux in one frame of a video shot by undercover source “Jack” through
a camera lens hidden on his body. DEA source

Yet, typical of Silicon Valley style, in his operations there is little or no infrastructure. He wants no permanent administration, locale, or means of production; no retinue, no partying, no posse. He uses the gig economy to procure contract mercenaries and temp workers. He issues orders to them by email or text in his own unbreakable encryption, sending them to distant corners of the earth to sequester assets, bribe officials, and negotiate business agreements. At any given moment, his hired hands never know where he is or even what he looks like. Loyalty, the adhesive of mafias, Chinese Triads, and cartels, isn’t in his playbook. Once he is done with people, he abandons them or, if they annoy him, has them executed. He calls his Filipino, African, and Israeli subordinates “marginals,” meaning less than human and expendable.

Phase One and Phase Two criminal organizations tended to be linear, logical, and tied to physical geography. LeRoux is the first crime lord to operate in the realm of pure cyberspace. He browses among clients, suppliers, fixers, and networkers, meeting them wherever fiber optic cables and satellite links take him. His strange big brain empowers him to juggle multiple projects at once and remember everything. His ambitions are unrestrained by conscience and second thoughts.

His entrepreneurial style might be compared to his fellow South African Elon Musk and to Jeff Bezos, founder of Amazon, ranked among the world’s richest men. Like Musk, who zigzagged wildly from business directories to PayPal to outer space to electric cars to self-­driving cars to tunnels, LeRoux’s brain vaults effortlessly from online casinos to e-­commerce in pharmaceuticals to small arms to missile technology to North Korean crystal meth.

And like Bezos, who created the Everything Store, the online superstore that aspired to sell anything anybody might want, LeRoux set out to build the Amazon for arms, with an ultraefficient fulfillment and transshipping facility in a sparkling new, entirely self-­sufficient, heavily armed planned community in the Somali badlands.

Most of the buzzwords of twenty-­first-­century entrepreneurship apply to LeRoux—contempt for tradition, disruption, lean management, global reach, and rapid scalability. He knows how to find and exploit unfilled niches, upend markets, travel light, move fast, and stay nimble.

He has kept his dealings clandestine by creating his own, virtually uncrackable dark web. He is not a hacker. He never bothered to break into government or business systems, though he could have easily learned the knack. To him, computers are tools, like ballpoint pens and can openers. He used an old Dell that he configured himself. He was confident it couldn’t be breached, and he wasn’t so sure about newer models. Hackers as a rule don’t kill people. LeRoux did, personally and by proxy.

For years, LeRoux was a ghost, flickering on and off the screens of the Drug Enforcement Administration, the CIA, and United Nations, yet evading becoming a target of counterterrorism and global crimefighting units. He went almost unnoticed even when he started dealing with Iran and North Korea. The monitoring systems of the U.S. government and its allies were alert to signs of conventional criminal groups, with their predictable, visible hierarchies. The DEA agents who started hunting LeRoux in early 2012 saw only a spectral outline, far more mysterious and challenging than any crime lord they had faced before. “He was creating a whole new industry that transcended the concept of drug trafficker and gun runner and was becoming something original,” said Lou Milione, head of the unit that tracked him. “With the economies of scale of which he was capable, he was going to reach a point where, if nobody took him out, he would have continued to get stronger and more powerful, and God knows what he would have been involved in. And He. Would. Not. Have. Cared.”

The hunt began with a tip to two of Milione’s best agents, Tom Cindric and Eric Stouch, who had been partners for years and at that point were assigned to track international drug trafficking across Africa.

Cindric, Stouch, and their fellow agents in the 960 Group, a secretive element inside the agency’s Special Operations Division, are some of the boldest and most creative criminal investigators in the U.S. government. Milione was, in his youth, an actor with serious off-­Broadway and film credits. Within the DEA, he was famed for taking down Monzer al-­Kassar, the so-­called Prince of Marbella, his story splashed across the pages of The New Yorker. The ultimate arms merchant, Kassar, a Syrian, supplied every generation of terrorists and rogue leaders, from Abu Abbas, leader of the Palestinian Liberation Front and leader of the 1985 Achille Lauro Mediterranean cruise ship hijacking, to Iraqi dictator Saddam Hussein. Milione and his agents also arrested Haji Juma Khan, a kingpin of the Afghan heroin cartel. Most spectacularly, in 2008 Milione and his agents staged a sting that captured the Russian arms merchant Viktor Bout, the vaunted “Merchant of Death” who inspired the film The Lord of War.

Milione handpicked agents who were smart, curious, capable of deception, in constant motion, enterprising, irreverent, and not what they seemed. They revered the law but didn’t mind breaking rules. These qualities were personified by Cindric and Stouch. Their hunt for LeRoux, detailed for the first time in this book, is revealing and unsettling. With bold imagination, highly specialized partners, some luck, and faith in their own gut instincts—qualities that can’t be learned and can’t be taught—they recruited one of LeRoux’s confidants and penetrated his hidden world.

The ability to sense what’s over the horizon is not necessarily a blessing. The deeper they went down the rabbit hole, the more ominous their discoveries, the more acute their foreboding.

“Paul is who’s coming,” Cindric said. “He is steps ahead of everyone. And we are not ready for that.”

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Excerpted from Hunting LeRoux: The Inside Story of the DEA Takedown of a Criminal Genius and His Empire, by Elaine Shannon. From Michael Mann Books, a line from William Morrow Publishers.

Photographs courtesy of William Morrow Publishers.