One day, Reyes Peralta, the ice-dealing bartender at Sid’s Pub, and Lim from the Chinese Triad happened to mention that the North Koreans had a surplus diesel-powered submarine for sale.
Just the ticket! LeRoux thought. If he had a submarine, he could evade the import restrictions. He could buy the chemicals in India or China, load them onto his sub, and drive it right up to his dock.
LeRoux negotiated for the sub. The talks broke down over the asking price of $5 million. LeRoux declared he would build his own sub. He promptly organized five of his engineers into a new “naval team” and told them to design and construct 10-meter and a 30-meter submarines. He started construction on a submarine dock at the Batangas boatyard.
Just before LeRoux was arrested, he learned that the design for the ten-meter submarine was done. It would have a range of two hundred miles, enough to smuggle the chemicals he needed from a larger vessel waiting in international waters. LeRoux estimated it would take just a month to build the sub.
“How do you know if it’s going to work?” Cindric interjected. “Are you going to test it?”
“Me? Noooo.” LeRoux laughed.
He had planned to order a couple of his Filipino employees to climb into it and submerge.
And if they stayed submerged?
“Ah, they’re marginals,” he grinned—throwaway people.
LeRoux said the Iran missile project was making progress, though it had some way to go. He said he had set up a wind tunnel and test facility in Batangas. In late 2011 or early 2012, his team set off a small test rocket, to study the effect of G-forces on the gyroscopes in a part of the missile navigation system under development.
A week later, the team spotted a small airplane flying over the site, checked out the tail number, and got some confirmation that the plane might belong to the government. LeRoux jumped to the conclusion that he was under surveillance, had been put onto a kill list—he wasn’t sure whose—and was being stalked. He used his cell phone intercept platform to scan the airwaves for signals that would indicate that police or military units using mobile phones were approaching his clandestine lab.
Many people would have run for cover. Hardly a week passed without news of a U.S. drone strike that killed some alleged terrorist somewhere. But for all LeRoux’s frenetic pace and impulsive ways, when he was deeply invested in a project, he didn’t run.
He burrowed underground. He dug a bunker near the Batangas test facility. The engineering team used a U.S. Federal Aviation Administration simulator to run algorithms that approximated missile tests.
The simulations weren’t very satisfying. LeRoux started planning a better, aboveground launch testing facility in a remote area of South Africa. He thought he would be safe there from spy drones and overflights. He set up a South African company called Maple Africa Tech and erected a website to make it look legitimate.
For a while, he thought of moving the research facility to an island he had bought, but before he could pack up the gear, it was overrun by militants from Abu Sayyaf, a small but vicious Muslim separatist group in the southern part of the Philippines.
“You have an island?” Cindric and Stouch exclaimed, almost in unison.
He smirked. Just the reaction he was after.
“Every villain needs his own island.”
He laughed, but he was also dead serious. He owned an island, no joke. He had bought it to advance his career as a villain. A supervillain! He hadn’t forgotten those Russian oligarchs on the Côte D’Azur, idling on their superyachts. Okay, they had big-ass boats, and they had their girls and guards and steel-gated villas. But they didn’t have their own islands. The island was a message to the Russian oligarchs, the Colombian cartel leaders, the Chinese Triad leaders, and anybody else he envied. Check out my island, bitches!
The killings looked like another kind of message, to people who had bullied him when he was a fat nerdy kid. You picked on me? Now go fuck yourself. I got you, and not only that, I got you even worse because I can snuff you out.
“I think he has the opposite of White Knight syndrome,” Cindric said. “He’s not the guy who comes in on the white horse with the sword to save the world. He is going to come in on the black horse and he’s going to conquer the world.”
LeRoux was the Black Knight, and he was damn proud of it.
Hours into the flight, LeRoux’s interview had filled dozens of pages of Carol Dillon’s notebook. The agents were struggling to grasp the details of the missile guidance project. At one point, LeRoux got frustrated and turned to Brown, who was sitting quietly behind Cindric and Stouch and who looked as if he might have a technical bent. “Can you get a couple of guys who understand what I’m talking about?”
There was a twist to LeRoux’s confession about Iran and missiles. Milione picked up on it first. Like they say, takes one to know one. As a master of the sting, Milione could spot another world-class seducer. LeRoux had guessed, correctly, that the agents would be transfixed by the yarn he was spinning out.
LeRoux appeared to be cooperating, and he was, up to a point, but he was also creating a massive distraction, like the flash-bang grenades SWAT teams used to cause bad guys’ heads to swivel so the snipers could shoot them. It would take months for the agents to corroborate LeRoux’s claims about his transactions with Iran, if it could be done at all, and to what end? Experts would have to be consulted. If he had violated U.S. export control and munitions laws and international sanctions, he could be prosecuted, but enforcing those statutes was the responsibility of an alphabet soup of agencies—FBI, ICE (Immigration and Customs Enforcement), and multiple branches of the departments of Treasury, State, Defense, Commerce, and Justice. An investigation of LeRoux’s dealings with Iran would inevitably become a committee effort.
Milione hated multiagency collaborations. The technical term was “cluster fuck.” If everybody had a voice in a decision, a decision never got made.
Milione wanted Cindric and Stouch to settle down and get back to a crime the DEA agents could prove on their own—a solid dope case. They had to elicit LeRoux’s confession to trafficking in meth. They had to support the charge in the indictment—“conspiracy to distribute 100 kilograms of methamphetamine knowing and intending it to be imported to the United States.” Everybody in the plane knew 100 percent of the facts in the meth case. A meth trafficking charge was simple, clean, and damning. If LeRoux lied about a single fact, they would know—and he would know they knew, and so on. If this was, as Milione suspected, a battle of wills, they needed to win it by preventing LeRoux from fabricating and delaying.
He had to admit trafficking in meth while they were in the air. Once on the ground, LeRoux could change his mind, invoke the Fifth Amendment, lawyer up, and shut up. They didn’t need his confession to convict him on the meth charge, because they had more than enough evidence—the sample, the recordings—that he was trafficking. But if they got him into a plea agreement straightaway, they could keep debriefing him and pursue spin-off investigations, chasing his many intriguing leads into the arms and meth trades in Iran and North Korea. They could turn their energies to finding his co-conspirators. There were, apparently, quite a few, in unexpected corners of the world.
Milione conveyed all that in a terse conversation when the agents took a break and Cindric flopped down next to him.
“You’re going to get a statement from him?” Milione said. It was not a question. “He’s going to admit his guilt, right?”
“Yeah,” Cindric said.
“Good. Good. Good,” Milione said.
He spoke softly, but everybody knew that if he had to ask—tell, really—an agent twice, the guy or gal was off the team.
Cindric slipped into his seat and told Stouch, “We’re getting back to meth.”
Stouch nodded, relieved. He had worked cases involving weapons technology smuggling to Iran before. He knew they were gnarly and didn’t always produce a guilty verdict. Milione was right. They had a slam-dunk meth case. Meth was pois
on. Juries totally got that.
Every time LeRoux tried to change the subject, Cindric and Stouch changed it back to meth. Meth, meth, meth. Finally, LeRoux confirmed what the undercover tapes showed, that he had tried to sell North Korean meth to Diego, knowing that the meth would be smuggled to New York. The confession was in the can.
Milione and Brown exchanged a look—that’s a wrap. They nodded to Cindric and Stouch. Good work all around.
The agents weren’t done, though. They wanted to squeeze LeRoux for more information about his most serious crimes before they landed. As the hours wore on, Milione, watching as Cindric and Stouch continued the interview, noticed that LeRoux had a tell. Whenever the agents raised names of people LeRoux was reported to have ordered killed, LeRoux said nothing, but he started coughing.
“Cottonmouth,” Milione called it. He had seen it before. It was a signal of discomfort. It meant that LeRoux was lying or evading. Milione edged a little closer to LeRoux and said, solicitously, “You seem a little thirsty. Your mouth seems a little dry. Do you want some water?”
LeRoux nodded and accepted a bottle of water. He gave Milione a look that said, You know. I know you know. You know I know you know . . .
The DEA plane landed at the White Plains, New York, airport early on the morning of Thursday, September 27, 2012. Cindric, Stouch, and Brown drove LeRoux to federal court in Manhattan and presented him for his first appearance. He was fingerprinted, photographed, and booked. He met the defense lawyers the court had appointed to represent him until he could hire a legal team of his own.
Then they took him to the Brooklyn Bridge Marriott and rented a suite with tables and chairs. They allowed him to take a shower. They handed him his overnight bag, brought from the Monrovia hotel. He changed into fresh clothes, a blessing for everyone.
It was time for LeRoux to play queen for a day. That was courthouse slang for the negotiating process that led up to a plea bargain.
Nobody prosecuted in the U.S. District Court for the Southern District of New York got immunity in the traditional sense. Nobody, not even if he claimed he could deliver the devil himself.
Southern District prosecutors had moved to a process known as a “plea agreement.” It gave judges and prosecutors leverage to persuade someone who participated in a crime to testify against others involved in the same conspiracy.
In the plea agreement, a criminal defendant agreed to admit guilt to certain crimes and to talk about his knowledge of other crimes, presumably more serious than those he committed. The prosecutors might agree to limit the charges to certain crimes and to recommend a sentence lower than the maximum.
However, the prosecutors honored the plea agreement only if they were convinced that the defendant had testified honestly and completely. If they found out that the defendant held back information or lied, they could void the plea agreement. Nor could they control what a federal judge would do at the time of sentencing. The judge could ignore their sentencing recommendations.
The plea agreement route was highly risky for the defendant. He had to tell all and was guaranteed nothing. Someone caught red-handed was looking at hard time. It was in his interest to make a plea agreement anyway, because the alternative was worse. That was LeRoux’s situation.
The prosecutors didn’t have to make a deal with LeRoux or anybody, ever. They did it when a criminal defendant had something important to say and his testimony was vital. If he offered testimony and evidence they couldn’t get any other way, they would consider—consider—a deal.
How would they know what he could offer? He would make what was formally called a “proffer,” short for “offer of proof.” This was informally known as a “queen for a day” disclosure. With his defense lawyers present, the defendant spelled out what he knew about the crimes under investigation, and other crimes the government didn’t know about. After days or weeks of debriefings, depending on the complexity of the case, the prosecutors and defense lawyers agreed on a written summary of the expected testimony, laid out in a “proffer letter.”
The federal courthouse in Manhattan was a gossipy place, and so were the usual lockups used for defendants-turned-witnesses. The agents didn’t know what they wanted to use LeRoux to do yet, but whatever it turned out to be, they needed to preserve the element of surprise.
LeRoux’s court-appointed lawyers, Jonathan Marvinny and Sabrina Shroff, arrived at the suite and discussed the opportunities and pitfalls of the plea-bargain process. They were joined by prosecutors Michael Lockard and his boss Michael Farbiarz, co-chief of the Terrorism and International Narcotics Unit at the U.S. Attorney’s Office for the Southern District of New York.
LeRoux had been told that the prosecutors, not the agents, would decide whether he could have a plea agreement. When they walked in, he went into full CEO mode, gracious, not disdainful. A client, not an employee. He put out his hand and said, “Hello, Attorney Lockard. Paul LeRoux. How are you?”
“Hello, Mr. LeRoux,” Lockard responded, just as formally. “I understand we’re going to talk about some things today.”
Lockard laid out the queen-for-a-day process. “This is your opportunity to tell your story without fear of it being used against you,” Lockard said. “The only way it can be used against you is if you take the stand and you lie.”
However, he said, the prosecutors and investigators could use his disclosures during the proffer sessions as leads to open new avenues of investigation. If these investigations brought in new evidence against him—something that didn’t come up in the initial proffer—he could be indicted on the new evidence.
All the more reason for LeRoux to tell the whole truth. That was not as simple for LeRoux as it sounded. He was a businessman who made his living negotiating deals. In business, negotiators never showed all their cards. Besides, he had no built-in moral compass. How would he even know when he was—or wasn’t—what these American lawyers called truthful?
Still, he wanted to get on with it. “He was driving that train,” Cindric said. He wanted to make a deal, fulfill the terms and the deal, and move on. He signed a statement saying that he understood what the prosecutors were saying. One of his attorneys initialed it, as did Lockard and Cindric. The statements and signatures would be collected every day, day after day after day until the prosecutors heard all the evidence he had to offer and decided whether they wanted to make a bargain with him.
LeRoux narrated the history of his early years, his young adulthood as a programmer and his turn to entrepreneurial ventures—founding RX Limited, escalating into arms and hard drugs, coming up with his idea for creating a global arms transshipment platform in Somalia. He explained how seemingly unconnected deals fit together like Legos. If he wanted to buy small arms made in China and meth from North Korea, he had to give the middlemen—the Chinese Triads in this case—something they wanted, which was cocaine. That meant he had to cut a deal with a Colombian cocaine manufacturer. If he wanted to sell arms to the Shan State Army, he needed to come up with Stinger missiles, which meant he had to get to know key people in the Serb mafia and find out what they wanted and couldn’t get from other sources.
LeRoux bought and sold influence as easily as pills and guns. Surprisingly, for a man who rarely spent time with strangers, he had gotten to be adroit at using relationships and money to lubricate societal gears, or throw sand in them. As he later put it, “I pay bribes everywhere. . . . I paid bribes to facilitate criminal conduct wherever I worked in the world.”
Sometimes he made payoffs just because he could. For instance, in 2007 or 2008, one of LeRoux’s Israeli employees told him that an Israeli tech entrepreneur had massive legal problems and could use his help. Kobi Alexander, CEO of Comverse Technology, a billion-dollar enterprise headquartered on Long Island, had recently fled to Windhoek, Namibia, a few steps ahead of an indictment in the Eastern District of New York, which was in Brooklyn, and SEC complaint charging him with a $140 million stock manipulation. The U.S. Justice Department was puttin
g pressure on the Namibian government to extradite Alexander to face the federal charges in Brooklyn. Since Alexander was a megarich business celebrity in Israel and son of the head of Israel’s national oil company, LeRoux thought that Alexander’s goodwill might be useful someday. Perhaps, now that he carried himself as the Dark Prince of the Cyber Realm, he considered it the thing to do for a fellow royal. He flew to South Africa with $750,000 in cash in a bag and gave the money to a fixer named Chris Miller, who drove to Namibia. What happened then? LeRoux didn’t have firsthand knowledge. He said Miller assured him that the money had been funneled to someone in the office of the president of Namibia. From there, it was supposed to go to the judge hearing the Alexander extradition case. Miller died of heart disease soon after his journey. LeRoux never found out exactly what happened inside the Namibian bureaucracy. He was pleased to hear that the judge was replaced and that the extradition proceedings dragged on for years. Alexander and his family stayed on in Windhoek, living comfortably and donating generously to local charities until 2016, when he was able to negotiate a settlement with the U.S. government to pay $53 million in fines and forfeiture and to serve thirty months in prison. In March 2018, after serving about thirteen months, Alexander was transferred to the custody of Israel and quickly released for “good behavior.” If he was grateful to LeRoux, he didn’t show it. LeRoux said he was never reimbursed his $750,000.
As he told the story, LeRoux didn’t seem particularly bitter. Corruption was just another routine business exercise, so, win some, lose some.
Just before his arrest, LeRoux had devoted most of his energy to his clandestine missile technology lab that was researching ways to reprogram cheap commercial GPS chips to improve Iran’s missile navigation systems. The agents and prosecutors asked LeRoux to write a memo spelling out what exactly he sought to sell the Iranian Defense Industries Organization. The memo, which was highly technical, suggested that he had already given significant useful information to the DIO to put together a missile guidance system that was “NOT ITAR restricted,” meaning, not hobbled by U.S. regulations meant to prevent rogue regimes such as Iran from harnessing GPS technology to navigate projectiles with precision.
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