by Jason Ryan
“Mark was kind of a new breed and a refreshing breed,” says Lemnah. “I’m sure he took some flak over it, but he still did it.”
Another annoyance was the issue of paperwork. Proper documentation of debriefings and interviews was critical to the investigation. Initially this paperwork was essential to understanding the scope of the smuggling networks. Ultimately the agents knew the documentation of their investigation would be important in the courtroom as evidence. Among the five agencies represented on the task force, there were a handful of different forms used to make reports, and, of course, each agent was partial to the one he was accustomed to using. The solution, Lemnah says, was to type up reports on sheets of blank white paper. That idea, he says, took six months to initiate.
“It sounds simple but it was a big thing back then,” says Lemnah. “I think every agency had heartburn over that one.”
Overseeing the effort was Wells Dickson, an assistant U.S. attorney who considered himself the secretary for the task force, keeping the paperwork straight and the agents engaged. He’d receive calls all day from agents in the field, hearing reports of whom they talked to and what they said.
“You’d get a call. We talked to somebody in Beaufort, we talked to somebody in Myrtle Beach, we talked to somebody in Greenville,” says Dickson. “It was that kind of a situation.”
Outside of the office the agents were dismayed to be occasionally stonewalled by potential witnesses and suspects. Despite its promise the investigation was fragile, and the top suspects, Foy and Riley, were nowhere to be found. In fact, people the government interviewed had not seen them for months, if not years.
In September 1982 Forbes, McDonald, and one other agent visited the half-finished home of Jimmy MacNeal, a carpenter who had participated in a number of smuggling ventures in South Carolina. MacNeal was helping his neighbor move furniture when the agents arrived. They asked MacNeal to step into his own yard for a minute, then tried to get him to come in to Charleston’s Custom House and make a formal statement to the government. They had talked to his old girlfriends, they told him, and it would be a good idea for him to cooperate. They weren’t after the little guys, the agents said, but instead the kingpins, including Foy and Riley. MacNeal wasn’t biting.
Walking around the house, one agent then remarked, “Gee, this is a big house. How many feet is it?”
MacNeal told him: eighteen hundred square feet.
Looks bigger, the agent said. How much money you got in it, the agent asked. Is that dock on deepwater?
MacNeal said he wasn’t sure what the agent was implying, and that he would not be interviewed in his backyard. The agents left, but not before offering more advice.
“Get a lawyer,” they told MacNeal, “but don’t go see Andy Pracht.”
Another time, Forbes recalls looking over the flight records of Harvey Hop, owner of charter jet service Hop-A-Jet, and seeing landings in Savannah, Georgia, but no passenger lists. When asked about the passengers traveling to and from Savannah, Hop, who was not required to keep passenger records, would not disclose his clients’ names. This upset Forbes and the other agents.
“He knew, but he wouldn’t tell us,” says Forbes. “Asshole.”
Subsequently, Forbes put Hop on a list of suspicious people. It was a lawful maneuver, he says, and one guaranteed to cause extra scrutiny of Hop’s comings and goings.
“We probably made his life miserable,” says Forbes. “You want to fuck with us? Fine. You’re on a hit list.”
Other men tried to casually dismiss the investigator’s inquiries. In a letter to Forbes, Butler said he was overwhelmed by recent events in life, including Forbes’s questioning, an imperiled engagement to be married, and separate legal matters.
“The pressure is frankly a little too much and too rushed and all at one time,” Butler wrote. “ … Becca and I are going to take a trip (maybe Honeymoon) and when I get back I’ll be happy to answer any additional questions you or anybody else have.”
Despite these difficulties, the task force was slowly building a massive case, requiring close cooperation with a growing number of assistant U.S. attorneys in Columbia and Charleston. These deputy prosecutors helped give direction to the case and assigned work to appropriate task force agents. The investigators kept returning with more and more leads.
“We all had different skills, and they just blended to make dynamite,” says Forbes. “I knew the financial end of things, and how to follow the paper trails that don’t lie. Claude remembered everything he ever knew, and every name he ever heard. He was able to make links that didn’t occur to the rest of us.
“Dewey had a lot of experience in DEA putting together evidence on conspiracies, and he knew how to tie up all those loose ends. [Mark] was our best interviewer. He had a knack of making people think he already knew, so they might as well just tell us their side, when the truth was, we were making a lot of good guesses and fitting together a lot of pieces of information like a jigsaw puzzle.
“Lemnah was the one who pursued the civil forfeitures. He’d spend hours at a time tracing one car or one piece of property.”
It was this action, the seizure of property suspected of being purchased with drug proceeds, that brought the task force to the attention of the public and helped spook a host of smugglers who had been lying low since catching wind of the investigation. For example, on October 4, 1982, federal agents seized property in downtown Charleston that was home to the fashionable restaurant 82 Queen. Assistant U.S. Attorney Bart Daniel described this seizure “as the shot heard round the world in our line of work,” and the press paid attention. After the seizure of 82 Queen, the Charleston newspapers wrote some of their first stories on the mysterious drug investigation, noting that besides the restaurant, the government had previously seized a home from Riley, more than $344,000 of his money held in an escrow account, and two lots on Hilton Head owned by Butler. The value of these properties and cash was estimated to be more than $750,000. Prosecutors, including McMaster, declined to comment extensively on the seizures, though the paper reported some details of Riley’s alleged smuggling that it found in court filings.
Since 1970 the government had the power to seize property like 82 Queen if it was suspected of being bought with drug proceeds, but only after a suspect was convicted as a drug kingpin. In 1978, however, a new law amended the government’s civil forfeiture provision, allowing for property to be seized from drug suspects before, or even without, their criminal conviction. If a defendant wanted to challenge the government and reclaim the property, he would have to respond to government questioning, submit tax records, and reveal other sensitive and potentially incriminating information.
Because the facts were rarely on their side, and because drug suspects were fearful of goading the government and risking potential arrest should there be a related ongoing criminal investigation, the civil forfeitures were rarely challenged. Despite its power, though, the new law was not well-known among federal prosecutors and was used sparingly in the first three years since its passage. In South Carolina federal prosecutors had little, if any, experience with civil forfeitures. These types of seizures were so rarely made, in fact, that when Forbes and McDonald suggested this law be used as part of their investigation, Daniel initially dismissed the idea and turned them away.
“I wish it could be written that I enthusiastically endorsed their cause. Such was not the case,” says Daniel. “However, their persistence paid off. I soon realized that the only hope for an end to their daily procession to my office would be to learn as much as possible about these civil forfeitures and convince them of the obvious: It could not be done. Surprisingly, I learned that such proceedings were possible but not commonplace.”
It did not take long for Daniel and his fellow prosecutors to embrace the tactic, working with investigators to identify the best assets to try to seize. For their part, the agents on the task force were eager to launch a first assault against the suspects, especially the o
nes who were nowhere to be found. Ideally the seizure of homes, cash, and vehicles would hamper the smugglers, as well as strip them of illegally gained assets.
“The whole concept was not only to put them in jail,” says Lemnah, the agent specializing in the seizures, “but to put them in jail broke.”
After the initial wave of civil forfeitures, more followed. Two weeks after taking 82 Queen, the government seized land from Riley on Hilton Head, as well as a classic 1960 Mercedes 220SE automobile. After that the government seized cash belonging to Rhoad and two lots outside Charleston on the Intracoastal Waterway owned by the wife of Roy Riley. By the end of 1982, the government possessed a $160,000 certificate of deposit belonging to the Riley brothers from a safe deposit box in the Bahamas.
Daniel describes the office as moving faster than the speed of light during the end of 1982, seizing property right and left. By mid- December the drug investigation was identified in Charleston’s News & Courier for the first time as “Operation Jack Pot.” Later newspaper accounts would discard that spelling in favor of one word, Jackpot. Strangely, these news accounts reported, despite seizures of more than $2 million in cash, coastal land, and a fancy car, no criminal charges had been filed. What’s more, the owners of all this property could not be found, not by reporters or, apparently, by the federal government. For the moment that didn’t matter. Operation Jackpot was turning heads. As Miami Herald reporter Carl Hiaasen would later write, “The U.S. government is snatching up prime property in a campaign to bankrupt smugglers by taking their real estate—lock, stock and mortgage.
“Perhaps no single investigation has prospered so handsomely from real estate forfeiture,” Hiaasen wrote, “as Operation Jackpot.”
Chapter Nine
Virginia, the slogan goes, is for lovers.
To the dismay of federal agents, Old Dominion was also quite the place for marijuana smugglers, as proved by the regularity of drug busts around the Chesapeake Bay and on rural Virginia airstrips. DEA agent Jim Mittica was convinced Barry “Ice Cream” Toombs was behind a good portion of the smuggling, but lacked proof. He and others began an investigation in 1980 into Toombs, working out of a basement in Old Town Alexandria. For months Mittica pieced together clues regarding Toombs and other suspected marijuana smugglers, combing through phone records and collecting information found on scraps of paper left behind in an abandoned sailboat, aboard a pot-laden plane, and tossed from the cab of a marijuanacrammed camper truck.
To Mittica’s satisfaction the notes all contained phone numbers belonging to Julian “Doc” Pernell, who had had been arrested with Toombs and Lee Harvey in Georgia in 1978. Other clues looped in Toombs. Mittica brought his findings to Assistant U.S. Attorney Karen Tandy, who, like her peer Bart Daniel in South Carolina, was initially underwhelmed.
“It was the hardest kind of [drug] case,” said Tandy. “We had no undercover agent [inside the suspected ring], no informer, no one close to the group who could confirm our intelligence. It took [Mittica] three to six months to get me moving on the case, the outlook was so bleak.”
Nevertheless Mittica and other police persisted. In the summer of 1980, Pernell and an associate of Harvey were seen, separately, leaving Washington, D.C. in chartered jets bound for the Bahamas. They carried a lot of luggage, but planned to return the same day. Agents suspected the men were leaving the country with bundles of cash, and they soon recruited IRS criminal investigator Patrick Lance Lydon to join their investigation. With Lydon’s help investigator’s zeroed in on Harvey, Pernell, and Toombs and discovered that drug proceeds were being laundered through the Caribbean and being returned to the United States for investment in legitimate businesses. By this point Tandy was interested, and Mittica and Lydon credit her with working tirelessly to lead the case, often staying in her office into the wee hours of the night. Although not even thirty years old, Tandy had a reputation for being tough. Colleagues said it was not unusual to see the tall Texan dress down an agent or subordinate if she was not pleased with his performance. She was also renowned for trying to use innovative legal strategies to the government’s advantage, including the use of forfeiture law.
“She wasn’t afraid to do anything,” says Lydon. “She came up with an idea to do something … [and her logic was] nobody’s ever done it before, so how will they know if we made a mistake?”
Tandy’s aggressive tactics energized Lydon, Mittica, and the other young investigators working the case. Lydon says Tandy’s intelligence and fearlessness contributed to a camaraderie in the office that was hard to beat. Most of the people working the case, he says, were in their late twenties or early thirties and “liked to win.” They were convinced their savvy targets could be defeated.
“It was cowboys and Indians,” says Lydon. “Bad guys versus good guys.”
As innovative as Tandy and her cowboys were, they still had to present their cases to a grand jury, the groups of sixteen to twentythree people who could review evidence for each case and listen to testimony subpoenaed by prosecutors before deciding if there was sufficient cause to charge suspects through an indictment. Judges, defense lawyers, and the general public are not privy to grand jury proceedings, which usually take place in a courthouse, behind closed doors. Presided over by prosecutors, grand juries do not render a verdict, but rather decide whether or not to grant approval for prosecutors to bring federal felony charges against a suspect. Unlike a trial, witnesses who appear before a grand jury are not protected by the Fifth Amendment and cannot refuse to testify without running the risk of punishment.
By February 1981, the government felt it had enough evidence to convene a grand jury in Alexandria, and began to introduce evidence of drug and tax crimes allegedly committed by Lee Harvey and his brother Michael. Not long afterward the government presented a separate set of evidence, again implicating the Harvey brothers, along with Toombs, Pernell, and others.
When presenting evidence to the grand jury in Alexandria, the government’s challenge in proving the Harvey brothers’ wrongdoing was considerable. From the start of the grand jury, prosecutors encountered resistance and endured obstinate witnesses. Outside the grand jury room, they fended off legal challenges from lawyers hired by the Harveys, including attempts to prevent the testimony of their mother and Lee’s new wife, Havens Anthony, whom Lee had married weeks earlier. The government suspected the marriage was prompted by a subpoena for Anthony to testify in front of the grand jury, and that she would attempt to invoke a privilege in which she did not have to testify against a spouse. The government was quick to note that this privilege only shielded a spouse from disclosing communications that occurred during marriage, not beforehand.
In any case, this technicality didn’t really matter. Lee’s wife was not going to cooperate, no matter the subpoena. She came to the grand jury room “dressed to the nines,” says Lydon, but didn’t say much of anything. The Harvey boys’ mother, he adds, was “really just a nice old lady” and was unaware of the details of her sons’ criminal actions. At some point the potential yield from these two witnesses was judged not to be worth the trouble of protracting their testimony.
To complicate matters further, two other witnesses, including Kenny O’Day, refused to testify altogether, despite being offered immunity from prosecutors. A judge jailed O’Day for contempt in October 1981. Additionally, investigators had little faith there was any single witness who could relate a detailed account of Lee’s criminal acts. Lee was extremely careful to divide jobs among accomplices so that few would understand the big picture. Even among his brothers, Lydon says, Lee could be mysterious. He didn’t seem to trust anybody.
While investigating Lee’s finances, Lydon learned firsthand how the alleged kingpin safeguarded his money, discovering an array of offshore corporations that held titles to his properties. He also found bank accounts in the Bahamas, Cayman Islands, Liechtenstein, Netherlands Antilles, and Switzerland. On Harvey’s most recent tax return, however, none of these assets were refle
cted. Instead, just a small income was reported, allegedly earned at the family gas station.
“We really had to work hard to scrape up some good stuff on Lee in terms of net worth and expenditures … he was a very slick guy,” says Lydon. “I would bet that he had a shitload more assets and investments than we ever found.”
One valuable asset the government did find—and seized—in November 1981, almost a year before the Operation Jackpot seizures, was Lee’s old farmhouse and ten acres of hilltop property on Burgundy Road in Alexandria. Lee had built a swimming pool near the house, and, during one winter, he had a dome inflated around the pool and heated the inside. From nearby Interstate 95, Lydon says, one could look up the hillside and see the glowing dome, which resembled a football cut in half.
More valuable, however, was a collection of Louis Comfort Tiffany lamps and glassware owned by Toombs that the government found in a New Jersey warehouse. Believed to be the largest collection of Tiffany glassware in the world, Toombs had purchased the art in 1977 for $550,000 from an elderly Armenian immigrant in New York City. During interviews with suspected smugglers, government agents had frequently heard mention of Toombs’s extensive lamp collection and his self-taught antiques expertise, but no one seemed to know where the lamps were or how Toombs had acquired them.
Frustrated by the missing glassware, Lydon finally sent two agents to visit antiques shops in midtown Manhattan, approaching dealers with a picture of Toombs and asking if they’d sold him any lamps. After dozens of shop visits, they finally got a break and found the previous owner of the lamps, Mardiros Krikorian, who confirmed the sale. Krikorian told agents he had known Tiffany, the son of jeweler Charles Lewis Tiffany, personally in the early 1900s and would buy a piece or two at a time with earnings made from his job as a theater projectionist for Thomas Edison. Giddy with this information, and fearful that the fragile Krikorian’s health could deteriorate quickly, IRS investigators soon picked Krikorian up at his apartment in New York and chauffeured him to Alexandria to testify in front of the grand jury.