Chemical Cowboys

by Lisa Sweetingham

  Gagne didn't have the time or resources needed to launch an intensive money-laundering investigation on his own, but he believes that it would have been different had he called four years later, when Karen Tandy was appointed to head DEA in a post-9/11 world. Tandy took on money laundering with a passion, changing the focus of DEA and giving agents greater power to chase after the highest-level networks. She put a premium on “revenue denial,” hitting drug traffickers where it hurt by taking the money that gave them the power to purchase precursor chemicals, rent stash houses, and pay couriers and soldiers. Every business needs money to make money. The drug business is the same. Tandy set earmarks for cash seizures and DEA reached a milestone in 2007 of $2 billion seized in drugs and cash from trafficking chains. Because DEA operates off a presidential budget that is approved annually by Congress it can't enhance its budget, so the illicit cash goes into the DOJ's asset forfeiture fund, where it's divided up among the assisting city and state law enforcement agencies, drug enforcement task forces, foreign enforcement, and confidential sources whose information directly led to seizures.

  Today, America has some of the most sweeping anti-money-laundering laws in the world. For instance, under the Patriot Act, there is a provision that doesn't exist in any other country that allows the American government to forfeit assets from correspondent accounts even if the illicit money was never physically parked in an American bank. Because every single U.S. dollar transaction is wired through New York, no matter what the country of origin or destination, under the American interpretation, once dirty dollars pass through America it's a domestic crime. In other words, if Bank Leumi unwittingly sent $45 million from Israel to Holland at the request of a criminal client, the government could theoretically seize the equivalent amount from Bank Leumi's correspondent accounts in New York if they were proven to be ill-gotten funds. Many sophisticated criminals now do all their transactions in euros to reap the benefits of the stronger currency and to avoid American banking laws.

  Erez's money-laundering trail was a whisper of a thread and efforts to freeze his millions in Israeli accounts proved fruitless. Israel had an asset forfeiture law that allowed it to seize property and money that were a direct result of criminal activity. But it wasn't enough—criminals just put assets in the names of trusted family members and assimilated illegal businesses into legal ones to evade detection. Israel was a dream for money launderers. That would soon change.

  The Financial Action Task Force (FATF), an influential anti-money-laundering organization made up of thirty-four member countries, reviewed the policies and practices of world governments and their banking centers and placed Israel on a list of fifteen “non-cooperative countries and territories” (NCCTs) in June 2000, alongside such financial havens as the Cayman Islands and Lebanon. The Israeli government had begun developing money-laundering laws in 1994, but the threat of international sanctions weighed heavily on the small country, and the Prohibition on Money Laundering Law was quickly enacted, with additional measures to follow that established specific record-keeping procedures for banks and the development of a financial intelligence unit that passed suspicious activity on to the Israeli National Police.

  Today Israel's anti-money-laundering, asset forfeiture, and anti-terrorism legislation incorporates some of the best aspects of the United States's RICO and drug kingpin laws to fight crime, and FATF removed Israel from its “noncooperative” list in 2002.

  But in 1999, Gagne and Lacewell found they could do little to successfully track down Erez's Ecstasy profits. After his arrest he had moved most of it—parked it in Israeli banks where it was likely converted to shekels, awaiting Erez's next directive.

  —————

  When it was all said and done, the Dutch wiretap recordings helped Gagne and Lacewell freeze just under $1 million in Erez's Luxembourg accounts. Gagne put in a request with DOJ's Asset Forfeiture and Money Laundering unit requesting that the Dutch government receive 40 percent.

  Evidence from the Erez case also helped the Dutch to secure convictions on drug trafficking and criminal organization charges for Wyste Lijklema and Michel Denies. (They were not convicted of money-laundering or weapons charges.) Lijklema was sentenced to nine years and Denies got five—the kind of terms that Gagne called “Dutch time.”

  Erez and Reicherter would fight extradition to the States for nearly three years, using every excuse they could muster, even claiming at one point that they would commit suicide if sent to an American federal prison.

  69 THE FRENCH CASE

  FALLS APART

  ON OCTOBER 21, 1999, Gagne got a call from Gerald Graves of DEA's Paris country office. There was a problem with the French case: the charges against Tuito had been dismissed over a technical error.

  “How can that be?” Gagne was incredulous.

  When the French police had arrested Tuito in February, he had the right to a prompt judicial appearance, within forty-eight hours, just as in American courts. But Tuito gave a fake passport and the police spent several hours just trying to confirm that “Eliyahu Mamo” was in fact Oded Tuito. It seemed that the French prosecutors thought the clock started when they identified Tuito through Interpol fingerprints. By October, when the issue was argued before the French magistrate, it was ruled that the clock had started when he was arrested. Tuito had been arraigned a few hours too late.

  The magistrate ordered that the Ecstasy-smuggling charges against Tuito be dismissed—and he would have been immediately released if not for the Israeli authorities, who quickly lodged a detainer for Tuito based on his fugitive status from the 1994 heroin conviction. It was the only thing holding him in jail, and they knew it was weak. Israel wanted the DEA to pursue Tuito's prosecution. They knew the Americans had a stronger case and that Tuito would face stiffer sentencing in American courts.

  Lacewell hammered out an emergency extradition request through Interpol and a provisional arrest warrant for Tuito.

  Gerald Graves's call came in on a Thursday, and the provisional was written, pushed through DOJ, translated, and put before the French courts by Monday. It was just in the nick of time. The judge dismissed the Israeli warrant, but agreed to hold Tuito in French custody based on the new American warrant.

  In November, Gagne and Lacewell had a meeting with Gagne's supervisors and the shot callers at Special Ops Division to discuss the Tuito prosecution game plan. There was no question in Gagne's mind: he wanted to work the Tuito case with Lacewell.

  Special Ops decided that New York would pursue Tuito based on evidence from the February Yakov Ariel arrest and Ecstasy seizure at JFK. Pittsburgh would file an indictment based on their case that sprang from the 1997 warehouse raid.

  On November 15, 1999, a grand jury in the Eastern District of New York returned a six-count indictment charging the Fat Man with conspiracy in the importation and distribution of Ecstasy from January 1 to February 9, 1998—the period dealing with the Ariel arrest. A month later, Gregg Drews and the U.S. attorney in the Western District of Pennsylvania secured their own grand jury indictment, charging Tuito with conspiracy to distribute cocaine, marijuana, and Ecstasy from 1995 to 1999.

  Gagne and Drews were in a race to see who would prosecute Tuito first. But both agents knew that extraditing Tuito to the States to face charges could take years. Bottom line: even if they got their hands on Tuito, it was going to be SOD's call who would try him first, and that honor would go to the district with the strongest case. The sixty thousand Tweety pills that Ariel tried to dump into New York at Tuito's command just weren't enough. Gagne would have to arrest and flip more couriers, figure out how the Fat Man laundered the money, trace his entire network. He knew that going after the heart of Oded Tuito's organization meant getting to Jackie Suarez. She was the linchpin to the New York case.

  He would have to work fast, not just to beat Pittsburgh to prosecution but because in seven months Kristen would give birth to their first child. He still needed to get them out of their little apartment and i
nto a home. Everything he had wanted was happening now.

  Just when he thought things couldn't get any more chaotic, Gagne heard bad news from L.A.: agents had found a dead man in the trunk of a Lexus SUV in Brentwood.

  IV THE CHAIN

  OF TRUST

  70 DECEMBER 1999:

  LOS ANGELES

  THE DEAD MAN, Allon David Giladi, had little more than juvenile assault and driving without a license on his rap sheet. But among his peers he was a known leg breaker, formerly associated with the Felix Abutbul Mafia clan in Netanya.

  Gagne's confidential sources had scant and conflicting intel on Giladi. Some said he'd gotten killed for trying to shake down Koki and Judy for a cut of their Ecstasy profits. Another source claimed that Giladi and Koki had been allies, not adversaries, and that Koki once paid Giladi $60,000 for knocking around a deadbeat debtor until he coughed up the $180,000 he owed Koki.

  Either way, Giladi had been pushing his weight around a little too confidently in Israel and was getting a reputation as an independent strong-arm.

  Giladi's fiancée, Keren Azrad, identified his body and told LAPD detectives in a teary interview that Giladi had been in L.A. visiting plastic surgeons because he wanted to fix the scars on his face. The scars, Azrad said, were from two previously failed attempts on his life in Israel. The first attempt to kill Giladi was in April 1999, when the couple was thrown from his Jeep after a car bomb exploded next to them. The second was in August, as they were leaving a wedding party and Giladi was shot by a passing gunman.

  Among those who wanted Giladi dead, his former boss Felix Abutbul may have been in the best position to pull it off. And if it was true that the Abutbuls were protecting drug, extortion, prostitution, and gambling operations, then letting a fast-rising soldier such as Gi-ladi venture out on his own would be a mistake. They didn't need any more competition.

  Intelligence on the machinations behind Giladi's death has evolved over the years and remains classified. However, early U.S. police reports indicated that Felix Abutbul was believed to have put a $100,000 bounty on Giladi's life and that Nahman Cohen facilitated the hit. Cohen was in an Israeli prison at the time, serving fifteen years for the attempted 1997 hit on Ze'ev Rosenstein's rival Meny Aslan. But prison was no obstacle. All Cohen had to do was inquire among his colleagues. His cellmate, Yossi Harari, who was in custody awaiting trial for a bombing incident, was no stranger to liquidations.

  As the leader of the Ramat Amidar gang, Harari and his rival Itzhak Hadif of the Pardess Katz gang (named for their neighborhoods of origin) had been engaged in an endless cycle of vengeance. (Harari's sixteen-year-old nephew had been shot in the head on his way to school after the boy tried to kill Hadif himself. In 1998, Hadif's brother—a rabbi with eleven children—was blown up in his car by a remote-controlled bomb.)

  It was never proven that Nahman Cohen asked his cellmate Yossi Harari to help facilitate the hit on Allon Giladi on behalf of Felix Abutbul. But the circumstantial evidence was powerful: Nathan Hanan and Ben Cohen—the two suspects in Giladi's murder who abandoned the SUV in Brentwood—were members of the Ramat Amidar gang and Yossi Harari was their boss.

  And when Hanan and Cohen traveled to Los Angeles, it was Ecstasy dealer Judy Ben Atar who made arrangements for their stay.

  Judy, Jackie, Hanan, and imprisoned hit man Nahman Cohen were links in a chain of trust. Judy was known to pay tribute to Cohen like a godfather, and Israeli police suspected that Judy was a dangerous link between the yordim Ecstasy dealers who worked in relative peace abroad and the mafiosos from the motherland. But most American law enforcement still hadn't considered that a bunch of love-drug dealers posed a serious threat. Soft-spoken Judy Ben Atar was barely a blip on DEA radar—until a dead body showed up.

  Toxicology reports on Allon Giladi came back negative for drugs. An autopsy revealed that his hyoid bone was crushed, and he had suffered blunt-force trauma to the neck with compression—meaning he was strangled to death and perhaps even kicked in the neck by Nathan Hanan, who allegedly boasted of his martial arts training. LAPD Detective Mike Whelan, who investigated the case, got the impression that Hanan had been the leader of the job. After all, phone records indicated that it was Hanan who had called his pal Judy to say he was coming to Los Angeles in November and needed a favor. Based on what Judy had just been through during a recent visit home, it was possible that Judy really owed Hanan that favor.

  On September 9, 1999, a few months before Giladi's murder, Israeli police got a call about a suspected armed robbery at a pet store in a busy gas-and-go center at the Mesubim intersection, not far from Ben-Gurion airport. The victim, Jonatan Cohen, was manning the register when he was shot to death by a gunman who escaped on a motorcycle driven by a second assailant.

  Eyewitnesses described the killer with a kind of bewildered awe: He entered the pet store with his pistol cocked in the air, stalked to the back of the long, narrow shop to the register counter, and shot Jonatan Cohen several times. As Cohen hit the ground, the killer slowly walked out, got on the back of the bike, and sped off. He never tried to hide his pistol. The cash in the register was untouched.

  Judy Ben Atar and Nathan Hanan had arrived in Israel on a flight from South Africa the morning of the murder. Judy became a suspect when police learned Jonatan Cohen had been harassing Judy's sister Mazal. It was theorized that Judy was the cold gunman who ended the life of his sister's antagonist. Hanan was rumored to be the driver. Judy denied any involvement, but intelligence surfaced about Cohen that led authorities to suspect that Judy and his sister were hiding something.

  When victim Jonatan Cohen was thirteen, he discovered he had been adopted. His real parents were the Ben Atars, which meant Judy was his brother and Mazal was his sister. It wasn't exactly news to celebrate.

  Lawyers for Judy Ben Atar have plainly described his vicious upbringing in court documents and confidential sources have concurred that Judy was repeatedly beaten and demoralized by his alcoholic father, who used belts, hammers, and anything he could find to throttle his children. Broken bones and bruises were a rite of passage in the Ben Atar home. Judy's mother had tried to take her five children and leave, but she had no means of support. She felt trapped.

  When Judy was seventeen, he came home one day to find his mother and siblings lying on the floor, debris strewn about, and his father on a violent rampage. Judy pointed a gun at his dad, pulled the trigger, and missed. After that, every tough on the streets of his Jerusalem neighborhood talked about the kid who had shot at his own father. It was the defining moment that established Judy's reputation for violence.

  Jonatan Cohen eventually connected with his sister Mazal and they began living together and running the pet store. All kinds of rumors spread about them, all of which were vehemently denied by Mazal. But it was clear to those who knew her that she was desperately unhappy.

  Authorities suspected that Mazal had shared her grief with Judy and that he ended his sister's pain the best way he knew how, by killing his own brother. But there was not enough evidence to truly unravel the complicated relationships. Jonatan Cohen's murder remains unsolved.

  A month later, Nathan Hanan called his friend Judy Ben Atar to say he was coming to L.A. and needed a favor. Judy asked his partner Itzhak “Jackie” Cohen to pick up Hanan and Ben Cohen from LAX and put them in a safe house, the vacant residence at 6606 Whitaker Avenue. (Incidentally, none of the Cohens were related.)

  The victim, Giladi, and his fiancée, Keren Azrad, had been staying at the Encino apartment of Azrad's uncle, whom Giladi previously knew from Netanya. Giladi also knew his accused killers. He brought them home for dinner four days before he was killed. Giladi told Azrad a mutual friend had introduced him to the men in Israel a month earlier.

  Azrad thought Hanan was acting nervous and she caught him staring intently at her fiancé.

  On November 29, Giladi told Azrad that he had a “private meeting” at a hotel with some business associates. Azrad asked if she could join
him, but he refused. She had no idea that it would be the last time she would see him alive.

  When Giladi failed to come home, Azrad and her uncle filed a missing-person report.

  LAPD Robbery-Homicide Division detectives dug up receipts for the rubber gloves and cleaning supplies that Hanan and Cohen purchased immediately after Giladi's death. They also found bleach stains and a section of carpet missing from the downstairs bedroom of the vacant house. Tests for blood were negative.

  Israeli National Police surveilled the two men when they returned to Israel on December 1 and Hanan and Judy were overheard on wiretaps discussing alibis for the period of time that Giladi went missing. They did not speak of murder. Hanan and Cohen were eventually arrested in Israel and charged with manslaughter in 2000. They were each sentenced to seven years.

  Hanan and Cohen may have gotten off easy. But after Giladi's murder, no one at DEA would call Ecstasy kiddie dope again, and nothing would be the same for the Ecstasy dealers.

  71 OMINOUS SIGNS

  GADI ESHED LIKED TO call America the “Sleeping Beauty,” and Bob Gagne knew exactly what he meant. It was the kind of place where independent and well-connected drug traffickers could run billion-dollar Ecstasy businesses in Beauty's house while she slumbered, waking now and again to shoo away violent heroin and cocaine dealers, but leaving the love drug in peace.

  Oded Tuito had made a fortune spreading his Tweety pills from sea to shining sea—and the Fat Man worked for no one but himself. He needed no backing from crime families in Israel. He was strong and independent—he was yored.