Asia sees rise of meth megalabs - Part 1
December 03, 2006 - Oregonian

MANILA, Philippines -- Drug agents descending at dawn on a warehouse outside Manila in November 2003 glimpsed what could be the future of America's methamphetamine supply.

Inside, the agents found 1.1 metric tons of crystal meth and the enormous equipment used to make it. There were two steel tanks, 3 feet high and 2 feet wide, for high-pressure hydrogen reactions. A 20-foot-high factory "scrubber" filtered off fumes. Two walk-in freezers held basins of meth in liquid form.

It was one of the largest meth labs that law enforcement officials had ever seen. While a small user lab can manufacture an ounce at a time, and a Mexican "superlab" makes 10 to 100 pounds, the Manila-area megalab churned out 1,100 pounds a week. More megalabs followed in 2004 and 2005 -- in the Philippines, Malaysia, Fiji and Indonesia.

While Mexican cartels struggle to obtain chemicals needed to make meth, Asian meth traffickers retain easy access to ephedrine in the manufacturing countries of India and China. As a result, Asia has become a meth powerhouse that U.S. and international officials say could easily supply the United States.

"The risk is significant," said Mike Chapman, who ran the U.S. Drug Enforcement Administration's offices in East Asia until August. "Just by the sheer volume of methamphetamine that's being produced in this region, you would have to be naive to think that the stuff isn't going to make its way to the U.S."

Roughly 15 million of the world's 25 million users of crystal meth live in Asia, according to the United Nations. In the Philippines, where meth is known as "shabu," a government survey last year showed 10 percent of residents ages 10 to 44 had used the drug in the past six months. Fewer than 1 percent of Americans ages 12 and older reported using meth in the past year.

Asian crime syndicates meet the burgeoning demand by acquiring meth ingredients in bulk from India and China, home to eight of the world's nine leading manufacturers of ephedrine and pseudoephedrine.

The threat to North America was evident in August, when Indian police accused Canadian Gurdish Singh Toor, 29, of running an Indian-Chinese-Canadian network that procured hundreds of pounds of ephedrine for meth cooks in Canada. Toor spent his early years as a drug dealer in the Pacific Northwest. He was accused of selling 13,000 Ecstasy pills in Gresham in 2001 and later pleaded guilty.

Canadian police are now uncovering meth superlabs and bulk ephedrine from the Far East. The product so far is being shipped back to Asia, U.S. authorities say. But the price of uncut meth in the United States has doubled in the past year, increasing the attraction for smugglers in both hemispheres.

Qianrong Wang, a U.N. law enforcement adviser in Bangkok, called Asian meth a "very potential danger" to the United States. "America's always a big market," Wang said, "and there's always a strong linkage in this region, especially Chinese ethnic groups."

DEA agents across a network of offices in Asia are closely monitoring the movements of major Chinese traffickers.

"Without getting into specifics, we have seen some major Asian narcotics trafficking groups that had their principal members traveling into North America, into Canada, into the United States," said Anthony Placido, DEA chief of intelligence.

"This is a business like anything else, and the profit margin is in the actual retail distribution," Placido said. "If they can get a toehold and actually control this, we'd be concerned about them setting up their own distribution markets."

Asia's taste for meth

At a bustling all-night street market in Manila, smoke from a street vendor's barbecue mingles with the scent of fresh flowers. Down an alley, the closet-size home of Roberto Zaragoza is filling with a more pungent odor.

Zaragoza, 54, has pulled from his dresser a 1-inch-wide piece of aluminum foil, smoothed it with the side of a cigarette lighter, creased it down the middle and spilled half a gram of powder from a thumb-size plastic baggie.

The blue flame of an alcohol burner passes beneath the foil. In seconds, the shabu is liquefied, and white vapor is curling off the foil. Zaragoza catches the cloud with a water pipe and moves down the length of the creased foil, all the way to the end. In a phrase that locals have adopted from the world of Asian heroin, Zaragoza is "chasing the dragon."

Asia's meth habit began in World War II when Japanese soldiers received rations of the drug to motivate them. A Japanese crackdown on meth production in the 1950s drove labs and expertise to South Korea, Taiwan and mainland China, causing use of the drug to spread.

One form of meth popular in Asia is "yaba," a tablet made by Myanmar's rebel United Wa State Army and sold in Thailand. But outside the Golden Triangle, the form of meth that dominates the Pacific Rim is the smokable, crystal form of meth known variously as shabu, "ma gu," ice or P.

E.J. Mabazza, a 29-year-old Filipino who started using shabu at 18, said the allure is instant.

"It's really awesome," Mabazza said. "The first time, the first puff: 'Oh my God, I'm about to collapse where I'm sitting.' "

Mabazza, the son of a university professor, stopped going to classes. He stole from his mother. He sold his father's new Toyota sedan for the equivalent of $400. Now his mother is raising his two children because their mothers are addicted. Interviewed during his third attempt at recovery, Mabazza said he must learn to stop picturing shabu as a friend.

"I thought it was only me and drugs who understood each other," he said.

Meth factories

The huge lab discovered in the Manila suburb of Antipolo City offered clues to how Asia feeds its powerful demand for methamphetamine.

In some ways, the lab was typical of others set up by Chinese organizations in the Philippines. The syndicates are fluid, creating self-contained cells in different countries whose members cannot identify one another.

Edwin Roque, head of intelligence for the Philippine Drug Enforcement Agency, said Chinese chemists "come into the country, finish the job and then get out."

The group running the Antipolo lab came under surveillance in August 2003 following a tip, according to Philippines law enforcement officials. When the lab's operators began production, agents were ready. They arrested four Chinese nationals and one Filipino and, four months later, seized 3.7 tons of ephedrine from a home visited by the suspects.

Subsequent labs in the Philippines and around the region bore striking similarities.

One common thread was the use of a sophisticated technique called hydrogenation. Unlike Mexican labs, which heat ephedrine and red phosphorus in 22-liter globes made of glass, hydrogenation requires an airtight steel tank, hydrogen gas and a rare metal catalyst.

The labs also use identical, blue sheet-metal tents to suck odors into an enormous cylinder with air filters.

And the same suspects kept appearing. Philippine officials said Lin Tsung Huan, the suspected chemist at Antipolo, left his passport at another Manila-area lab that caught fire in 2002. He was arrested at a hydrogenation lab in Malaysia in 2004.

The links suggested the existence of a single organization operating seamlessly across borders.

The State Department's 2003 International Narcotics Control Strategy Report says the Antipolo lab was the work of Taiwanese drug kingpin Jao Ho. Two U.S. officials, without identifying Jao by name, said the same organization is responsible for most of the major labs that have been seized in Southeast Asia since 2003.

"It's too coincidental that they're all doing things in the same manner and hiring the same chemists and equipment manufacturers," said a U.S. official in Manila, who spoke on condition of anonymity.

U.S. officials say Jao's role is to assemble financiers from Hong Kong, chemical suppliers in India or China, and technical experts from Taiwan. Ethnic Chinese in the target country are liaisons, scouting out lab sites and hiring local unskilled labor.

The group has tested the waters in North America, U.S. officials say.

California court records show that on Aug. 1, 2003, drug agents responded to a tip from the DEA's Hong Kong office that Jao Ho's brother, Jao Chun Yin, was arriving in Los Angeles on a flight from Japan. He was followed to a house in San Gabriel, Calif., where police found a hydrogenator and a key to a storage locker that contained meth.

The case against the homeowner was thrown out because, a judge said, agents lacked probable cause to search the house, and Jao Chun Yin received probation.

Acquiring chemicals

Asian megalabs thrive because groups such as Jao Ho's have secured enormous quantities of bulk ephedrine from India and China. On the other side of the world, Mexican producers are struggling.

The Oregonian reported in 2004 that the meth trade is uniquely vulnerable to disruption because the drug cannot be made without chemicals manufactured by only a handful of factories.

Two years later, North American authorities have enacted tight controls on ephedrine and pseudoephedrine. Drug companies have responded with new cold medicines that cannot be converted to meth, and the amount of ephedrine and pseudoephedrine legally imported into North America has shrunk by 75 percent.

In the illicit market, U.S. and Mexican meth production has slowed, the purity of meth has dropped significantly, and Oregon meth users now report having trouble getting high.

Mexican traffickers are not finished with meth. Large-scale producers are seeking new routes for their necessary ingredient. But as the Mexicans try to adapt, Asia's cartels are exploiting one of the last loopholes in the international control system for meth ingredients -- enforcement in China and India.

Within India and China, authorities have failed to prevent middlemen from buying ephedrine at the factory and smuggling it out of the country, despite laws requiring companies to hold government licenses and retain sales records.

A 1-ton cache of ephedrine marked "bleaching powder" that authorities seized at the port of Manila in 2003 was traced to India. Chinese ephedrine is often found in sacks of fish food or rice.

Wang, the U.N. law enforcement adviser in Bangkok, said Chinese ephedrine factories by law must sell only to licensed distributors, the owners must retain records for three years, and local police are supposed to visit the factories. In practice, "it's not 100 percent."

"You see there, always, the distance between the laws and the implementation," said Wang, a former narcotics official and chemical control expert with the Chinese government.

The failure to deprive Asian drug traffickers of ephedrine, a chemical made in a few Indian and Chinese factories, poses multiple risks.

Trafficking groups in Asia can supply North American criminals the ingredients they need to make meth. And someday, meth labs in Asia could directly supply U.S. users.

"You get to a certain point, the U.S. market's really attractive," said Placido, the DEA intelligence chief. "It's a global economy. And if you're really greedy, and you're out there trying to make more money, we've got a significant addict population."