A few days later, the Robert Wayne’s propeller shaft broke. The ship was drifting now, a few hundred miles off the coast of Japan. As the hold was full of drugs, Engle couldn’t exactly call the Coast Guard. Fortuitously for the boat’s crew, it turned out that Danny’s sister was an escort at a Tokyo bar called Maggie’s Revenge, where she was popular with some yakuza men. (Danny’s sister was an exotic girl for a Japanese gangster to have on his arm—six feet tall, blonde, congenitally blind, and, according to Conklin, who later interviewed her, “a total knockout.”) Danny managed to arrange an intervention from the yakuza, who agreed to tow the boat to Yokohama and oversee repairs.
The yakuza wanted $300,000 for their services, on top of $250,000 for the Robert Wayne’s repairs. Ed negotiated a loan from a Company investor and brought the down payment to Chichi-Jima, a tiny island in the Pacific, in a suitcase. As insurance, the yakuza kept Danny Tuna with them “as a guest” until the mission was complete and the rest of the money was delivered.
Incredibly, the Company’s crisis management came through. The Robert Wayne made it to California and the off-load went smoothly. Some of the cargo was converted to cash, and the rest was transported back to Santa Barbara, to be sold in a few days. Lou agreed to store some of the pot and cash at his house—a breach in his usual security protocol, but he figured they’d get it to distributors in a few days. In the meantime, the Company threw a classic victory party at Bob’s place. This score would put everyone over the top, they thought, a couple million each for the partners. It felt good to be together again, everyone smiling, laughing, raising a toast to a clean getaway.
* * *
Conklin looked at his watch. It was 11 a.m. on November 5, 1981. He and his team were in position around Santa Barbara, waiting. Then another agent called in an approaching silver four-door Mercedes, license plate 1ATM158. The car turned west on Alston Road and then south on Cima Linda Lane, where other surveillance units made the driver: Ed Morgan, a.k.a. Kenneth Eugene Cook, Jr., a.k.a. Edward Otero.
It was early November, and the DEA had been sitting on the houses of Ed, Bob, and Lou for months now. Lou had no idea his Hilton Head contractors had led the heat to his doorstep on the opposite coast. The Agnors had told the feds that they’d been burned by Lou, stiffed $50,000 for services rendered. (Lou would claim that the money discrepancy was actually their lost investment in Company commerce.) Now Conklin had teams in place. “Let’s do it,” he said.
Ed saw the tail and tried to run, but he didn’t get far. The DEA boxed him in at the wheel of the car he loved so much, less than a mile from his house. Shortly thereafter, DEA agents saw Lou driving his matching Mercedes 6.9 and started following him.
Lou was by himself, heading for Bob’s house. It was a beautiful day, and Lou had just had lunch with the girls at home. He was feeling good, thinking about the pot in his basement and how much it was worth. When he saw that he was being tailed, he turned down the radio. He changed course, but the car followed. After a half-dozen turns, Lou found himself in a cul-de-sac. The cops didn’t even need to flash the lights.
“Keep your hands on the wheel,” Lou heard. Before the feds got a chance to yank him from the leather-lined interior, Lou recalls, one of the agents had pulled his .45 and stuck it in Lou’s mouth. The agent’s hand was shaking, as if he was overwhelmed by finally seeing the man he and his colleagues had been chasing for years. “You will never forget this day,” the agent said. “And your life will never be the same.” Lou knew he was right.
The DEA had caught up with Bob and Dave, too. They happened to be riding in Ed’s car when he was caught. For all his investigative efforts, Conklin didn’t realize who Dave was or the important role he played in the organization. But in Ed’s car, along with $20,000 in cash, the agents found Dave’s valise, which contained two fake IDs, an airline ticket, and several notebooks—all detailed accounting ledgers. It was a phenomenal bit of luck; the DEA had caught the Company principals en route to an accounting meeting.
By the end of the day, they were arrested, and Bob’s house was surrounded with yellow tape, its contents tagged as evidence: three safe-deposit keys, photos of landing sites, and records showing payments to ship captains. At Lou’s house, Conklin found $557,829 and 892 pounds of product from the latest shipment, worth about $3 million. In Lou’s enormous safe were envelopes, each containing $25,000 and labeled “Johnny,” “Terry,” and “Fred”—pay for the crew. Lou had never before accepted delivery of pot on the premises. Now, handcuffed in his own living room, he could hear the agents in the basement taking down the secret panels that hid the stash. “Holy fuck,” one of them shouted. “We hit the fucking jackpot!”
It was quite a haul—for Conklin, too. He’d worked for years, with inferior equipment and funding, to put cuffs on these guys. His resources were so thin, in fact, that his agents had nearly run out of gas on the way to Santa Barbara; they were over their fuel budget and had to refill out of pocket to catch their targets. But now the Company’s leadership was all in a cell together, and the DEA had confiscated $12 million in cash, contraband, vehicles, and property from the organization. (To Conklin’s chagrin, he never did find the Duck.) When the news broke, McKinney told reporters that the Company had grossed $96 million over the past decade. At a minimum, Lou thought in his cell.
Cat and Mouse
1981
Fuzzy heard about the arrests on the news. Drug lords busted in upscale Santa Barbara. Sounds familiar, he thought. Then the phone rang. “Hey, Fuzzy, it’s been a while.” Fuzzy would’ve recognized that goofy nasal voice anywhere. “I’m sure you know why I’m calling,” Lance went on. “I got you into this. And now I’m going to get you out.”
Lance had already arranged for Fuzzy to sit down with the DEA. Fuzzy was conflicted, but as he considered the cards he had been dealt, he realized that he had only one to play. “It’s every man for himself,” Lance said.
The DEA loved Lance and Fuzzy from the moment they walked in the door. “You guys were the A-team,” Conklin said when Fuzzy and Lance sat down in the San Diego DEA offices, a tape recorder in between them. “Light years ahead of everyone else. We want to know how you did it.”
Fuzzy recognized one of the agents who had been on hand when he was arrested in Maine. Another agent, Fuzzy noticed, had pulled into the parking lot in one of Ed’s corvettes. Fuzzy looked at the DEA team assembled around him, everyone with their notepads and Hawaii 5-0 suits. He rationalized that he would just confirm what they already knew. Besides, he had taken a fall once, and become a convicted felon, in the service of the Company. This time the feds were threatening 30 years. That was a long time away from his motorcycle. So Fuzzy gave them a tape he’d already recorded, describing the information he knew that would be valuable to the DEA. “Hi,” the tape began. “My name is Fuzzy, and I’m going to tell you a story about the Coronado Company.”
* * *
At the Metropolitan Correctional Center in San Diego, where the Company members were housed, the higher-ups were still sticking together. Lou was running damage control, even managing collections from jail. At their individual arraignments, the partners gave DeMassa instructions to collect money from distributors, through their attorneys, whom they’d fronted. Some of it DeMassa used to pay the beach crew from the last operation, some he kept, and some he gave to the partners’ girlfriends.
“I need information,” DeMassa told Jack Palladino one night over lobster bisque at the Stanford Court Hotel. Palladino was DeMassa’s trusted private detective, one-half of the husband-and-wife detective agency Palladino & Sutherland; together they’d worked with DeMassa on other major criminal-defense efforts, defending the Hells Angels against the government’s RICO investigation. Jack and Sandra’s job was to gather as much information as possible about the DEA’s case against the Company and how the agents had gotten their evidence; maybe it was coerced or otherwise tainted. Find out what people know, DeMassa told Jack, and how they know it.
Bu
t the DEA already had a strong case. With the testimony of Fuzzy and Lance—now known as Confidential Informants SR2820012 and SR2820013, respectively—Conklin was able to issue a second round of indictments with wider scope and more detail, the kind that comes from inside information. DeMassa wanted Jack and Sandra to figure out who’d flipped.
There was no shortage of suspects. Coronado was full of people the Company left behind who had nursed resentments for years. “They burned a lot of bridges,” one early beach-team member told Jack. Any number of disgruntled ex-employees could have dropped a dime. During grand jury testimony, Jack sat in a white van with painted-over windows in front of the courthouse where the jury convened, taking pictures of everyone who walked in, but found no familiar faces.
Having mostly worked in criminal defense, Jack and Sandra had a philosophical opposition to informants. In her office, Sandra kept an original World War II–vintage poster that warned: “Loose Lips Sink Ships.” Their odds-on favorite, of course, was Lance, but nobody had any proof. Meanwhile, Lance was playing his own game. More than once as Sandra traveled around the country talking to Company associates, she found that Lance had gotten to them first, fishing for intel he could use as a bargaining chip with the DEA.
The private detectives met with Lance over a few dinners and meetings, each side hoping the other would slip up. At first everyone involved played coy, pretending they were on the same team. “Who do you think is talking?” Sandra would ask.
“Who do you think is talking?” Lance would reply.
The encounters settled into a routine of I-know-that-you-know-that-I-know-that-you-know-what-you-don’t-know gamesmanship. Jack and Sandra saw these meetings as opportunities to allow Lance, who always talked too much, to impugn his own credibility. They wore wires, hoping he’d put his foot in it. Extortion, for instance, would count him out as a government witness, and Lance had intimated that money might make him “go away.”
Lance knew they were taping him, and he tried to get around it. At one meeting, at a hotel in Reno, Jack bugged the room. Lance switched rooms at the last minute. He figured (correctly) that Jack was miked anyhow, and to be safe, he walked in with a note announcing that the entire meeting would be conducted on Magic Slates, the children’s writing pads where you pulled up the cellophane flap to make the words disappear. There they were, two private detectives and a drug smuggler, sitting in silence, negotiating on a kid’s toy. Nothing was said or written, and there was no record of their meeting, which Jack thought was very clever.
Lance didn’t like turning on his friends, but all’s fair in love and war, he thought. He felt bad threatening Ed, Bob, Dave, and Lou—they all still had affection for one another—but the Company had screwed him over. Now it was their turn to get screwed.
* * *
For months, Lou sat in the San Diego Metropolitan Correctional Center, still waving his scepter against Company foes. With money there was yet power. According to DeMassa, Lou wanted to bribe his way out. Judge, jury members, maybe a congressman if he had to. Ed, Bob, and Dave were all on different floors of the jail. They never talked directly, coordinating instead through DeMassa. Harlan and Dave both started teaching themselves law, to get into the statutes themselves.
Dave faced an “848,” the federal government’s continuing criminal enterprise statute—it was the trafficking equivalent of RICO, dubbed the drug kingpin law, carrying the prospect of decades in prison. Dave wasn’t a kingpin, but a heavy charge was how the government put on the squeeze, looking for cracks in the foundation. The Company felt abused by the inflated charges, but from the DEA’s perspective, it was the sole means of pressing an advantage. When a crew was as successful and as tight as the Company was, the DEA had to find leverage where it could. So the feds wheeled out the 848s, investigated friends and families, and, for good measure, indicted all the Company girlfriends.
Jack and Sandra tried to trace the DEA’s footsteps, looking for evidence that the agents overstepped their bounds. Sandra went around reminding everyone not to talk without a lawyer present and offering protection to people like Ed’s father, a Navy janitor, whose pension the DEA had threatened. At one point, Jack discovered that he was under surveillance himself. A well-known rock photographer let the DEA use his apartment, across the street from the Palladino & Sutherland offices, to spy on them.
There was more than enough resentment to go around. The DEA hated DeMassa; he was, according to Conklin, a “shyster attorney” who used “crooked detectives” to get criminals off. Jack and Sandra thought the DEA took it personally that anyone would dare stand up to the agency. “It wasn’t common to do that,” Jack recalled later. “And we were good at it.”
But the DEA was chipping away at the Company. DeMassa was on the defensive; he knew that the DEA was gunning for him as well. Bob eventually chose to go to trial, but DeMassa encouraged Ed and everyone else to plead out. Lou arranged a plea bargain before he could be charged with an 848. The kingpin never faced the kingpin law, but he got 10 years anyway. So did Ed, who struck the same deal. During Lou’s sentencing, he looked up at the judge and told himself that he would never again lose his freedom. When he got out, he vowed, he would change his life, again. Freedom wasn’t worth all that money. But what was it worth?
* * *
In 1982, Lou was transferred to the Federal Correctional Institution on Terminal Island, just off Los Angeles Harbor, to “do his dime,” as it was called in the yard. He looked around and thought: I can’t spend 10 years here. In the MCC library, he had met a prisoner who traded homespun legal advice to his fellow inmates for cookies. “Want my advice?” he told Lou. “Get yourself out of here. That’s what all these other motherfuckers are trying to do. And they’re actually supposed to be in here.”
The jailhouse lawyer knew a former U.S. attorney named Kevin McInerny, who talked Lou through becoming an informant. Conklin was shocked when he got the call from McInerny: “Lou Villar wants to talk.”
The Deal
1982
It was controversial within the DEA whether or not to let Lou turn. He was too high up in the Company, some said—what was the point of rolling up the organization if you were going to let the kingpin walk? But Lou could provide detail on financing, suppliers, and dealers—the entire Thai network that Conklin had in his sights. Conklin had been able to indict a lot of those people based on Lance's and Fuzzy's testimony, but for convictions he needed someone to take the stand. He also had his eye on a target closer to home. He wanted to go after DeMassa.
Lou already felt cheated by DeMassa. The Company had paid him half a million in fees, and in Lou’s mind all he did with it was negotiate some rather unfavorable plea bargains. Lou asked McInerny to reach out to Dave. Lou knew Dave could get out if he wanted to. So far he’d held firm, even though DEA agents had visited him in prison, stalked his wife, and harassed his sister, the prosecutor. Dave’s family had pleaded with him to turn on the Company. Finally, Conklin came to him and told him he had one last chance. He showed Dave the 848 paperwork with his name on it. “There’s a train leaving the station,” the agent told him. “Do you want to be on it or under it?”
Conklin felt like he was doing Dave and the others a service. In a way, he thought, the Company guys were lucky to get caught now: The days of fun-loving hippie smugglers were giving way to the violence and gangsterism of cocaine culture. Arrest was a way out, informing a path to redemption. “You have a chance to be a regular guy again,” Conklin told Dave. Dave waited until he thought everyone who had worked for him had been dispositioned, so his testimony wouldn’t affect his employees. And then he switched sides.
* * *
In his cell at the MCC, Harlan was still fighting the prosecutors, poring over court documents. He’d been imagining that Pops and the Company might still mount a cavalry charge. Instead, his boss and friends would testify against him.
It was understandable that Lance would turn state’s evidence; he’d been shafted. Maybe Fuzzy, too
; he was an outsider, never one of the Coronado boys. But Lou? Lou had been at the center of everything. It was as if the Godfather broke omertà. And that broke Harlan’s heart.
He remembered when he did his first piece in jail, how Lou took him aside and coached him on doing his time. Now it was Lou’s turn, and Lou was skipping out. We were a fucking championship lineup, Harlan thought. And Lou was the coach. Harlan sometimes still felt an echo of remorse from 14 years earlier, when he disappointed Lou on the basketball court. He never imagined then that Lou would disappoint him in return. “We loved him,” Harlan would later tell the journalist Mike Wallace. “And he rolled right over on us.”
On one of Harlan’s trips to the courtroom, he was being led into the elevator when he ran into Lou, accompanied by prosecutors, on his way to testify. Harlan was dressed in corrections orange. Lou was in his civilian clothes, looking sharp as always, with a big smile on his face. “How are you doing?” Lou said. He looked Harlan in the eye and shook his hand. “Don’t worry, kid,” he said, just like in his coaching and Company days. “Hang in there.”
They got off on different floors. Harlan spent six more months on the ninth floor of the MCC and was then transferred to Terminal Island for the rest of his sentence. Lou walked out of the building and into the California sunshine.
* * *
The fallout from Lou and the other informants’ testimony was widespread. Many Company members and their associates did time. The Fort Lewis helicopter pilots were court-martialed. The Indians from Neah Bay were arrested. A third indictment came down in 1984, naming more suppliers and distributors; Conklin was disabling the Thai network, just as he had hoped. Eventually, more than one hundred people were indicted. Lou gave up many of them himself, even Kerrie’s brother Kent, who had worked with the Company on the beach. Some people, like Kent, spent just a few months in prison, others years.
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