“Good afternoon, Mr. Ortega. I hope God finds you well. I have something very interesting for you today,” Mohammed said as he steered Ortega towards the back of the store. They were alone, but Ortega knew his every move had been watched from the moment he disembarked from the Cessna. The stakes were high on both sides.
Mohammed motioned to a seat at the small table in the back of the store.
“Omar, get us some tea,” he barked to a young, slight boy of about ten years old.
Ortega's eyes followed the boy as ran out through the front of the store.
After the boy left, Mohammed opened a briefcase to display an array of rough diamonds of various sizes.
The boy returned with the tea, studiously avoiding eye contact or the contents of the briefcase. Ortega wondered whether it was fear or motivation for the cause that bought his trust.
Although he knew it was considered impolite in Arabic culture, he decided to get straight to the point.
“Are you having problems with your supply chain, Mr. Mohammed?”
Ortega did not hide his disappointment with the contents. In the two years since Ortega had dealt with Mohammed, the quality of the stones had deteriorated substantially. Although the volume was there, it was becoming difficult to command a high enough price for stones of mediocre quality. Mohammed was holding out on him. And he knew too much.
“My dear Mr. Ortega—these diamonds are top notch. I have assurances from my sources that these are highly sought after.”
“Mr. Mohammed, there has been a noticeable decline in quality over the last year. I am merely inquiring after your well-being. If you are having issues with your supplier, perhaps I can be of assistance.”
Mohammed’s stones were high grade until two months ago. Then, almost overnight, the quality had dropped. The good ones were obviously going to the competition. Was it Mohammed himself, or a new player? Ortega didn’t know, but he intended to find out.
The Lebanese had a seemingly endless supply of the rough stones, for which Ortega provided guns, hand grenades, rocket launchers, even used helicopters, something that always seemed to be in short supply in the Middle East. He never actually took possession of the weapons, but instead brokered the deal between the Arabs and a few corrupt officials from Western governments. It was all about connections. Relationships were everything, particularly with the Arabs. A few solid deals and you gained their trust forever.
He’d diversified into diamonds after 9/11 when anti-money laundering laws were enacted. Western governments could freeze billions of dollars in bank accounts operated by terrorist organizations and their charity fronts. Diamonds on the other hand, were portable, easy to smuggle, untraceable, and easily convertible to cash.
Ortega didn’t ask where they came from, though he knew it would be from some conflict-diamond country like Sierra Leone, where the Lebanese had entrenched themselves as buyers of the rough stones. The arrangement provided a black market to compensate for the official channels not available to Sierra Leone. It also provided Ortega with a market for his arms as long as the wars continued.
Until now the arrangement had been mutually beneficial. The Lebanese found a ready market for stones they would not otherwise be able to unload easily, certainly not in the large quantities they dealt in. Ortega bought them for about twenty percent of the value of legitimate diamonds. Only the stones crossed the ocean into South America; the weapons traded for them would be delivered to the location specified by the buyer. Neither side knew with whom they were really dealing, which conveniently increased the options and lowered the prices. Using Ortega as an intermediary also meant that both could transact with parties they could not openly deal with.
Ortega knew the Lebanese brokered deals for most of the Middle Eastern terrorist organizations, including many who fought against each other. Fighting amongst themselves resulted in large profits for Ortega. As much as they continued to protest their hatred of the West, Ortega knew most of the weapons would be used on inter-factionary violence within the various religious sects. In many cases he provided the equipment for both sides. As long as they continued to fight amongst themselves, Ortega was enriched.
The current struggle for control of Palestine between Hezbollah and Fatah was particularly profitable. The price of diamonds was directly proportional to the level of frustration with the conflict. As long as they were fairly evenly matched, and no side gained an obvious advantage, Ortega’s operation did well. It required a fine balance to supply both sides equally, while convincing each that you were sympathetic to their spiritual struggle and understood the doctrine.
Everything was good until Mohammed had to screw things up with his greed. This would be the last shipment through Triple Border, Ortega decided. It was time to carry out the exit strategy.
15
Kat inhaled the crisp air as she ran along the English Bay seawall, trying to keep pace with Cindy. The sky was clearing, and a light tailwind pushed at their backs as they sidestepped puddles left over from this morning’s rain. Already she felt calmer, ready to face Jace at the house later today. She would just tell him. She couldn’t move in. Or come up with her share of the money either. She needed out.
“It’s about time you got back into it. You’re going to have a hard time running the marathon on the mileage you’ve been doing.” Cindy slipped in behind Kat, letting a man and his dog pass in the other direction.
Kat and Cindy had signed up for their first marathon four months ago. Now it was just three weeks away, a bit late to catch up on her training.
“I know. I’ve just been so busy.” Kat decided not to mention yesterday’s break-in. Cindy thought Gastown was run-down and sketchy, and the break-in only proved her right.
“You’ve got a commitment problem, babe. Why is it so hard for you? All you have to do is show up for the runs.”
“Easy for you to say. You breeze through your workouts. It’s harder for me.” Any run with Cindy was tough. At five-foot-four and size zero, Cindy seemed to glide alongside Kat’s heavy, pounding stride. Cindy’s delicate appearance belied the fact that she was as physically tough as any of her male counterparts in the Royal Canadian Mounted Police. Mentally she beat them hands down.
“It’s tough for you because you’ve only done a quarter of the runs. It’s a pattern with you, Kat. No one can pin you down.”
“Maybe I like to keep my options open.”
“Like with Jace?”
“What’s Jace got to do with it?” Why did Cindy have to mention him? The run was supposed to make her forget about Jace, not focus on him.
“You break up with him, then you keep him hanging on.”
“That was over two years ago. We’re just friends now. Nothing more.”
“But you bought a house together.”
“We’re not a couple!” Kat protested. “We’re investing together. It could have been you and me. There’s no difference.”
“C’mon, Kat. You’re afraid of commitment. Admit it. You guys are good together. Jace is still crazy about you, but he’s not going to stick around forever. One day…”
Kat didn’t let Cindy finish.
“I’m not in the mood for psychoanalysis right now.”
“Fine. I didn’t want to mention it, but your marathon’s going to be twenty-six miles of pain. And I’m not talking about French bread.”
“Funny girl. I see you’re immersing yourself in the language.” Their marathon was in Paris. Another expensive reason to solve the case.
“Oui. And you should take my advice.”
“I’ll think about it.” Anything to change the subject.
They passed the next few minutes in silence, settling into a steady cadence as they left the asphalt seawall, heading for the trail around Lost Lagoon.
Cindy never talked about her undercover work with the RCMP. Kat knew very little, except that it involved organized crime, including local biker gangs, Asian triads, and occasionally international crime rings. Kat hope
d Cindy could shed some light on laundered diamonds, but she had to be careful how she asked. The last thing she wanted was another lecture from Cindy.
They turned onto Bridle Path trail and headed towards Prospect Point, their breath dispersing into the air in front of them in quick bursts of vapor. The slow but steady incline took all of Kat’s energy. Cindy on the other hand, effortlessly bounded up the hill. Kat decided to let Cindy do most of the talking; an easy task since Cindy loved to talk about crime in general.
“Cindy, is diamond smuggling a big thing?”
“It’s fairly big, and becoming more common. Diamonds are easy to conceal and convert to cash. It’s been more popular since anti-money laundering rules came into force. They’re supposed to prevent the drug cartels from converting their illegally obtained cash into legitimate bank deposits. The laws were enacted to shut them down.
“After 9/11 the requirements became even more stringent. The U.S. government strengthened the reporting requirements to stop terrorist networks by freezing their access to capital. The rest of the world had to follow suit if they wanted to continue to trade with the U.S.”
“So that made all monetary transactions traceable, because banks were required to report them?”
“That’s right. The banks have to do a lot more checks and aren’t allowed to accept money from countries without similar anti-money laundering legislation.”
Cindy paused and gave Kat a sideways glance. “Gee, Kat, is your cash flow that bad? You’ve still got a lot going for you. You don’t need to resort to a life of crime.”
“Very funny. I wouldn’t even have enough cash to make a down payment on a shipment. Do they take Visa? I just got my credit limit bumped up.”
“Seriously doubt it. Anyways, the anti-money laundering laws meant that diamonds often became the preferred method of settlement. Terrorists and organized crime turned to them because they’re easily hidden and transportable, high in value, and until now, untraceable. You’ve heard of conflict diamonds?”
“A little.” Kat paused to catch her breath. Oxygen and hill running weren’t mutually exclusive, but it sure felt like it. Why did Cindy always push the pace on the hills? “Is that the same as blood diamonds? Smuggled out of poor African countries, where they use slave labor?”
“Pretty much. The rough diamonds are produced by countries that don’t follow the requirements under the Kimberly Process Certification Scheme. It was designed to break the links between diamonds and violence, and is supported by the United Nations. The regulations were meant to stem criminal and terrorist activity.”
“But how can you trace diamonds?”
“Under the Kimberly Process, a diamond’s provenance or origin must be identified. The idea is to eliminate the sale of blood or conflict diamonds from war-ravaged countries like Sierra Leone and Angola. Rebels take over existing mines by force and then terrorize the local population with violence including murder, rape, and amputations. When people flee, the terrorists are free to run the diamond mines and profit from them. The Kimberly Process makes it very difficult for criminals to sell the conflict diamonds.” Cindy turned as the trail wound to the left and Kat followed.
“But how can they do that? You said yourself that diamonds are untraceable.”
“Countries that participate in the Kimberly Process must provide a certificate of origin certifying that the diamonds are not conflict diamonds. If they can’t produce the certificate, they can’t sell the diamonds on the open market.”
Kat glanced sideways at Cindy. She wasn’t even breathing hard. Kat on the other hand, was practically hyperventilating.
“But some still make it out, right? Don’t they still manage to circumvent the controls and sell them illegally?”
As they crested the hill, Kat felt herself finally fall into a steady rhythm.
“Oh, yes, definitely,” Cindy said. “Until recently it was easy to sell diamonds from anywhere—you just lied about their origin and the buyers didn’t care. But there’s more at stake now. A country can lose its status if found to be funneling conflict diamonds, and then won’t be able to sell its own production. Its economic well-being is at risk if it allows it to happen.
“It does still happen, though. Nearly fifty percent of the world’s total production is known to come illegally from noncompliant countries. There simply isn’t enough legitimate production to account for all of the diamonds on the market today. What it does do, though, is make it less profitable. We can’t eliminate it as long as someone’s willing to buy it. What does all this have to do with Liberty?”
“Well, you know those suspicious production numbers I mentioned? I’m starting to wonder if they are funneling conflict diamonds through the mine. What I still don’t get, though, is how a piece of paper proves that a diamond is or isn’t a conflict diamond?”
“There’s a little more to it than that. In fact, there are scientific techniques now available to determine a diamond’s provenance. In chemistry terms, all diamonds are pure carbon. To the naked eye, they’re identical—just a crystalline form of carbon, really. So, it’s difficult to tell where they’re from. But there are ways to verify the source.”
“Really? You can pinpoint where a diamond came from?”
“In theory, yes. The RCMP has a method of fingerprinting diamonds. Though all diamonds are carbon, within every diamond exists trace amounts of impurities, which can be traced back to the host rock in the mine or pit. By collecting this information in a database, they can tie a particular diamond back to a mine. Every other rock from that mine has the same chemical makeup. So, you wouldn’t find the same chemical composition in a rock from Canada as one from Sierra Leone, for example.”
Suddenly Kat’s legs felt better. A wave of energy engulfed her as she thought of the possibilities. She wanted to bolt through the underbrush and race to her office.
Cindy appeared oblivious to Kat’s sudden mood change.
“In order for it to work, the RCMP and international intelligence will have to document and inventory a diamond from every single mine on earth. Once that’s done, they should be able to stop the illegal trade. It’s very time consuming and expensive, but once we have the database, it will be next to impossible to pass off illegal diamonds as legal.”
Cindy cast a suspicious eye at Kat. “Tell me you’re not chasing terrorists!”
“No, of course not.” Kat struggled to find an explanation. “But I’m uncovering some suspicious goings-on at Liberty. It seems like they may have purposely overstated their production output. Can you help me get some diamonds fingerprinted?”
“Gee, Kat, I’ve only heard about the testing—I’m not actually involved in it.”
“But you’ve got connections. Could I give you some diamonds and have them tested?”
“What makes you think that they could be involved in diamond smuggling? Don’t they operate mines up north? It seems a bit extreme to smuggle in diamonds all the way to the most frozen, remote reaches of Canada. Don’t they have to travel on ice roads up there?”
“They do, but—I don’t think they’re actually smuggling them to the mine site. All they have to do is get them to the cutting center where they’re processed. It only has to appear they came from the mine site. As long as they appear to be coming from Liberty when they reach the cutting center, it won’t arouse any suspicion. Think about it. The security leaving the mine site will obviously be high, but no one is expecting something to be smuggled into the cutting center.”
“Sounds unlikely, Kat.”
“But if they can then pass off the diamonds as Liberty’s and funnel the diamonds through a legitimate source, they can get market prices for them, instead of the black market price. It would greatly increase Liberty’s profitability. It might even be cheaper to buy black market diamonds rather than mining them legitimately. Can’t you see it happening?”
Cindy cast a skeptical glance at Kat and didn’t reply.
“What if you could make it seem l
ike it came from a mine in the Northwest Territories? Wouldn’t it be great if you could produce a mine sample in Canada that corresponded to the diamonds? You could fool this whole Kimberly Process thing.”
“You mean, like at a new mine? Smuggle in the rock and produce it as the host rock?”
“Exactly. Not only can you then legitimize your dirty diamonds, but if you do it at a new mine with no output history, in a country just beginning to discover vast reserves, you don’t arouse suspicion. There’s no track record. It doesn’t attract attention because production isn’t suddenly spiking. Canada’s diamond mining industry is still in its infancy, so there’s no long-term diamond mining history for the country as a whole.”
“I don’t know, it sounds kind of farfetched, Kat. Possible, but hardly seems worth the risk.”
“So, I guess the next step is for me to get you some samples from Liberty?”
“Wait a sec—I didn’t say yes. Besides, we don’t have a complete database yet. There’s no guarantee that we can find anything conclusive.”
“I know there’s no guarantee. But if there is a match, at least I’ve got a lead. Right now I’ve got a CFO who’s vanished without a trace, five billion dollars they’re counting on me to find, and what appears to be falsified production. No one’s going to believe me at this stage without any proof, and since Liberty’s my client, I want to know what I’m dealing with before I make any accusations.”
“Okay, Kat, I’ll see what I can do. But, you have to promise you’ll call me before you start taking on any international terrorist rings.”
“Oh, I would never—”
“I’m serious, Kat. Don’t mess with these people. You don’t know what you’re getting into. Please tell me you won’t do anything illegal or dangerous.”
Kat felt elated. Once again she was back on track.
[Katerina Carter 01.0] Exit Strategy Page 8