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Over 65 Arrested in International Methamphetamine Investigation
Today, the Drug Enforcement Administration (DEA) and the Royal Canadian Mounted Police (RCMP) announced the arrests of over 65 individuals in ten cities throughout the United States and Canada. The arrests are the result of an 18-month international investigation targeting the illegal importation of pseudoephedrine, an essential chemical used in methamphetamine production.
This investigation, dubbed Operation Northern Star, employed a comprehensive top to bottom strategy targeting the entire methamphetamine trafficking process, including the suppliers of precursor chemicals, chemical brokers, transporters, manufacturers, distributors, and the money launderers who helped conceal their criminal proceeds. Arrests occurred in: Detroit; Chicago; Los Angeles; Riverside, California; New York; Cincinnati; Gulfport, Mississippi; Montreal; Quebec; Vancouver, British Colombia; and Ottawa, Ontario.
As part of this investigation, agents targeted 6 executives from 3 Canadian chemical companies: G.C. Medical Products, Formulex, and Frega, Inc. The executives arrested today have all sold bulk quantities of pseudoephedrine to methamphetamine manufacturers in the United States. They did so with the full knowledge that their sales were intended for the illegal production of the highly addictive and dangerous drug methamphetamine.
"Methamphetamine is a devastating, addictive drug that destroys human dignity, tears apart families, and disrupts the peace and security of our communities," said Assistant Attorney General Michael Chertoff of the Criminal Division. "We believe that Operation Northern Star has disrupted a major pseudoephedrine pipeline from Canada and sent a clear message to pharmaceutical companies there and elsewhere that they will be held criminally responsible for dispensing their products in the United States for illegal use."
Roger Guevara, DEA's Chief of Operations, said, "Operation Northern Star sends a message to people at all stages of meth production that the community of nations is becoming far less tolerant of executives who are willing to destroy other people's lives so they can line their own pockets."
"Today, you have witnessed the power of integrated policing. As criminal organizations do not respect borders, it takes true cooperation between law enforcement in our respective countries to bring transnational criminal organizations to justice," said Superintendent Raf Souccar of the RCMP. "We have done this and we will continue to do this as the DEA and the RCMP are committed to working together to enforce the law to its fullest extent."
Operation Northern Star is the fourth in a series of investigations targeting the illegal diversion and importation of pseudoephedrine. Pseudoephedrine is a regulated chemical commonly found in over the counter sinus medications but also diverted and used in producing methamphetamine. Prior investigations regarding illegal use of pseudoephedrine were Operations Mountain Express I, II, and III.
Operations Mountain Express I and II targeted the domestic diversion of pseudoephedrine, primarily by individuals and companies registered by DEA to handle controlled substances and chemicals. With the success of these investigations and enhanced regulatory oversight by DEA, methamphetamine producers began to find it increasingly difficult to obtain sufficient quantities of pseudoephedrine domestically. As a result, they turned to Canada where pseudoephedrine was readily available in bulk quantities. In response, Operation Mountain Express III was initiated to address the importation of Canadian pseudoephedrine. In January 2002, Mountain Express III concluded with the arrest of over 100 defendants.
Thereafter, further investigation revealed that other pseudoephedrine brokers had stepped in to fill the void created by the Mountain Express III arrests. Investigators and analysts also determined that several Canadian pharmaceutical companies were continuing to export huge quantities of pseudoephedrine with knowledge - or in deliberate ignorance of the fact - that the ultimate consumers were methamphetamine producers in the United States. Operation Northern Star was initiated to address these developments.
During the course of Operation Northern Star, pseudoephedrine brokers identified in Chicago, Cincinnati, Detroit, and Los Angeles arranged for bulk pseudoephedrine shipments from Canada, most of which entered the U.S. through Detroit, Michigan in tractor-trailer trucks often hidden beneath "cover loads" of legitimate products like bottled water and bubble gum.
In some instances these brokers, many of whom are of Middle Eastern origin, had direct contact with Canadian pharmaceutical company officials. One company, Frega, Inc. is charged criminally in Detroit for its role in supplying bulk quantities of pseudoephedrine to brokers in Cincinnati and Chicago. Approximately 14,000 pounds (108 million tablets) of pseudoephedrine originating from Frega, Inc. was seized during this investigation. This pseudoephedrine, believed to be destined for meth labs in the western United States, would yield approximately 9,000 pounds of methamphetamine with a street value of between $36 and $144 million.
According to court documents and DEA statistics, trafficking in pseudoephedrine is a lucrative business. One box of Canadian pseudoephedrine containing 80,000 60mg tablets can be purchased in Canada for approximately $900 U.S. currency. After going through two to three brokers, that box of pseudoephedrine would be sold to meth manufacturers in California for $18,000 to $20,000. The New York indictment charges that some of these pseudoephedrine brokers were assisted in laundering their drug proceeds by two individuals who transferred the proceeds through bank accounts in the Middle East using a form of the ancient "Hawala" money transfer system.
The DEA and the RCMP were assisted in this investigation by numerous state and local departments and the following federal agencies: the Bureau of Immigration and Customs Enforcement (ICE), the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), the National Drug Intelligence Center (NDIC), and the Financial Crimes Enforcement Network (FinCEN).
Operation Northern Star was coordinated by a joint law enforcement program called the Special Operations Division which is comprised of agents and analysts from the DEA, FBI, ICE, IRS, and NDIC and attorneys from the Department of Justice's Criminal Division.
Michael J. Garcia, Assistant Secretary Designee of the Bureau of Immigration and Customs Enforcement, said, "Operation Northern Star represents a great example of cross-border cooperation. Thanks to the joint efforts of U.S. and Canadian authorities, methamphetamine lab operators in this country have been denied a huge source of precursor chemicals. This case should have significant impact on the ability of meth traffickers to make and sell their deadly product."
David B. Palmer, Chief of Criminal Investigation for the Internal Revenue Service, stressed the importance of IRS participation in Operation Northern Star by saying, "For the IRS, the link between where the money comes from, who gets it, when it is received, and where it is stored or deposited can provide proof of criminal activity."
For additional information on Operation Northern Star, please call the DEA Office of Public Affairs at 202-307-7977 or visit the DEA website at www.dea.gov.