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Montreal Mobster Cops To Drug Dealing

Alessandro Taloni, a reputed associate of the Montreal-based Rizzuto clan, has pleaded guilty for his role in an alleged $1 billion drug trafficking organization which brought hydroponic bud into New York and sent powder cocaine into Canada according to a press release from Brooklyn federal prosecutors: 

The organization allegedly transported tens of thousands of pounds of marijuana from outdoor growers in British Colombia to Montreal, Canada, and controlled numerous warehouses in and around Montreal for the manufacture of ecstasy and hydroponic marijuana. The drugs were smuggled into the United States using transportation networks run by the Hells Angels and Native American co-conspirators from the Akwesasne Mohawk Reservation along the U.S./Canadian border. Once the drugs were sold in the United States, much of it by distributors tied to the Bonanno crime family in New York, the organization used millions of dollars in drug proceeds to purchase more cocaine from the powerful Sinaloa Cartel in Mexico for exportation to and distribution in Canada.

Taloni operated in Los Angeles where he collected the cash from the pot sales which was flown weekly from New York on private planes and, in turn, made the cocaine buys from his Mexican connections as reported by Adrian Humphreys for the National Post.  The drug traffing mobster had two Beverly Hills homes where he stashed "millions of dollars and dozens of kilograms of cocaine" as reported by Joseph Serna for the Los Angeles Times.

Last month reputed Bonanno associate John "Big Man" Venizelos pleaded guilty for his role in the alleged operation.

The charged ringleader of the drug operation is Canadian national Jimmy "Cosmo" Cournoyer who is slated for trial in a Brooklyn federal court.

Maybe the Treasury Department should designate the Bonanno and Rizzuto mafia families as transnational criminal organizations pursuant to Executive Order 13581 in order to freeze their U.S. assets and ban Americans from conducting even legitimate business with them.

Further reading that may be of interest:

A Call For U.S. Treasury Department To Designate Gambino Crime Family As A Transnational Criminal Organization

Organized Crime Exploits Mohawk Nation

The Mohawk Nation of Akwesasne along the St. Lawrence river on the U.S.-Canada border is used by organized crime as a smuggling zone for cigarettes, drugs, pharmaceuticals, firearms and immigrants as reported by Lorraine Mallinder for the GlobalPost:

The reservation is split three ways among New York state and the Canadian provinces of Ontario and Quebec. Crime syndicates such as the Russian and Italian mobs have long taken advantage of the resulting jurisdictional jumble, running rings around the territory's two native police forces as well as a host of government agencies from both sides of the border. To move goods across the border, the organized crime groups often hire local runners. The sovereign Mohawk territory, with its traditional hostility toward outside authority is a fertile recruitment ground.

In response to the decades-long problem President Obama last January signed into law the meaningless Northern Border Counternarcotics Strategy Act which in mere precatory language directs the U.S. Office of National Drug Control Policy "to more effectively deploy U.S. agents and equipment along the Canadian border" as reported by Dan Freedman for Hearst Newspapers.

The U.S.-Akwesasne-Canada Border

Joseph Resnick, head of the NYPD's narcotics division, is investigating the alleged flow of marijuana and ecstasy from Canada into the United States through the Mohawk Nation of Akwesasne on the St. Lawrence river as reported by Brad Hamilton for the New York Post:

He spoke after a trip six weeks ago to the Akwesasne reservation, which straddles the US-Canadian border and which he said supplies most of the high-potency marijuana and ecstasy sold on city streets. "Once you cross into the US, you're on the Indian reservation, which is sovereign land. The whole border is the real point of origin. When we bust large numbers of ecstasy and hydroponic pot, most of it comes through there." * * * The crossing, featured in last year's Oscar-nominated movie "Frozen River," is also a major route for illegal immigrants as well as huge quantities of untaxed liquor and cigarettes, investigators said.

Tobacco & Pot On The U.S.-Canada Border

According to the RCMP the organized crime groups that smuggle contraband tobacco into Canada are the same ones smuggling marijuana into the United States:

Millions of smokers across Canada rely on the cigarettes — which retail for as little as $5 a carton, compared with up to $90 for a carton of legal smokes. According to the RCMP, which is engaged in a futile battle against the smugglers who crisscross the St. Lawrence at will, all of the tobacco manufacturers on the U.S. side are run by organized crime groups. "It's all the way from mom and pop groups to Hells Angels," says Sgt. Michael Harvey, of the Cornwall, Ont., RCMP detachment. "We've identified 25 organized crime groups in the Cornwall area that are involved in the illicit tobacco trade, the illicit drug trade, gun smuggling, people smuggling and currency," he says. "And it’s all related. The same organized crime groups that are producing the cigarettes north are the same ones using the same smuggling routes to move the drugs south."

And the May 2008 shooting death of Daniel Simonds, a 31-year-old former U.S. Marine in rural upstate New York, underscores the point.  According to federal prosecutors in New York, Simonds was murdered after he attempted to cut cigarette magnate Alan Jacobs out of a marijuana deal:

About a year before the shooting, Mr. Simonds had gone to work as an electrician at a cigarette factory owned by Alan Jacobs in Akwesasne, the reserve at the heart of the contraband tobacco business. Mr. Jacobs’ family business — Jacobs Tobacco Company — is headquartered in a modern 47,000-square-foot factory in an industrial park on the U.S. side of the Akwesasne reserve, just a few kilometres from the Canadian border. * * * Police and prosecutors say that after he started working on the reserve, Mr. Simonds started to do marijuana runs for Mr. Jacobs. * * * Mr. Jacobs, police and prosecutors say, was buying high-grade Canadian hydroponic marijuana from Canadian Hells Angels, smuggling it into Akwesasne and shipping it to customers elsewhere in the United States — part of a lucrative two-way trade over the border that made Mr. Jacobs rich. * * * Prosecutors and police believe Mr. Simonds and Mr. Jacobs had a falling out after Mr. Simonds decided to start serving a marijuana customer in Ohio himself, cutting Mr. Jacobs out of the deal.

In 2008, contraband product had 32 percent of the cigarette market in Canada, and much of the illegal product is smuggled from New York:

It is a huge black market trade, and it is growing rapidly. * * * 95 per cent of the smokes come from clandestine factories on reserves, mostly from the New York State side of Akwesasne, the centre of a massive spiderweb of smuggling operations. The riverside Mohawk community of Akwesasne straddles three borders, Ontario, Quebec and New York State, and it is a smugglers' paradise.

Obviously, a black market of this size has attracted the attention of some big players:

The Mounties say there are 105 organized crime groups in Canada involved in the tobacco trade, from mom-and-pop operations that only deal in cigarettes to violent groups, including the Italian mafia, Hells Angels, Asian street gangs and Jamaican posses. The Mounties can point to a growing list of busts involving gangsters and illegal tobacco. The most recent was March 12, when they charged 22 people, including two Hells Angels and two Kahnawake Mohawks, in connection with a cigarette and methamphetamine ring around Quebec City. This kind of thing makes even the Mohawks who are involved in the business nervous. The Mohawks of Kahnawake have mixed feelings about the trade. Although it employs many people on the reserve, they don’t want gangsters on the streets. In Akwesasne, police have seized AK-47s and rocket launchers, several people have been killed during police chases with smugglers, and Hells Angels ride down the street in their colours.

News: Cigarette Smuggling; & Organized Retail Crime

***  Alleged illegal cigarette smuggling through the Akwesasne Mohawk territory in New York State across the border into Ontario, Canada costs the province an estimated $1 billion a year in tax revenue, and "it is also widely believed that proceeds from contraband cigarettes often support organized crime": 

The RCMP has identified 42 organized crime rings in the Cornwall-Valleyfield area which use contraband cigarette sales to finance weapons and drug trafficking. * * * The RCMP believes organized crime groups are taking advantage of some Aboriginal communities in Canada and the United States to further their contraband tobacco trade.

***  "According to the Retail Industry Leaders Association’s 2008 Current Crime Trends Survey, retail crimes are trending up and will likely continue to increase through the rest of 2009":

[M]any of these crimes can be linked to organized retail crime. Organized retail crime, or ORC, involves sophisticated crime rings that steal and stockpile huge quantities of merchandise that is sold later to unwitting buyers. The stolen merchandise is sold through flea markets, swap meets, pawn shops -- and increasingly through Internet auction sites such as eBay. RILA says retailers lose billions of dollars each year due to ORC schemes. In the 2008 Current Crime Trends Survey, 80% of retailers reported an increase of organized retail crime . . . . "Unlike simple shoplifting or other crimes of opportunity, ORC growth attributed to a slowed economy is less likely to decline as the economy improves," RILA’s report states. "The criminal enterprises associated with ORC become reliant on the revenue derived from the commission of this crime and thus will likely continue to commit these crimes as the economy improves."

Several bills currently are pending in Congress specifically to address organized retail crime.

Tobacco Underground: The Booming Global Trade in Smuggled Cigarettes

The Center for Public Integrity last week published a number of investigative reports extensively detailing the role of terrorist groups and criminal syndicates in the black market for contraband cigarettes which constitutes 11 percent of all tobacco sales and robs governments of $50 billion annually in tax revenue:

Organized crime syndicates and terrorist groups such as the Taliban and Hezbollah facilitate global distribution and use the profits to finance their activities. In Canada alone, police believe that 105 organized crime groups are engaged in the illicit tobacco trade, including motorcycle gangs and the Italian Mafia. Criminal organizations “are doing more than just smuggling cigarettes,” notes John W. Colledge, who oversaw international tobacco smuggling programs at the U.S. Customs Service between 1999 and 2002. “They are engaged in human, drugs, and weapons trafficking.”

Among the reports by the Center for Public Integrity are the following:

***  Made To Be Smuggled:  Russian Contraband Cigarettes "Flooding" EU:

Europe is being flooded by smuggled Russian-made cigarettes worth at least $1 billion a year, an international investigation has discovered. * * * The new underground smoking trade involves only one brand, Jin Ling, which is turning up in more cities and countries across Europe every month. Jin Ling, virtually unknown to the authorities three years ago, has grown so rapidly that law enforcement officials say it now rivals Marlboro as the top smuggled brand being seized in the European Union. * * * It is only sold illegally — smuggled by gangs who hope to pocket immense profits by selling unlicensed, untaxed cigarettes on black markets across Europe. * * * The scale and striking growth of Jin Ling smuggling has marked it as a major new development in organized crime, prompting European customs agencies to respond by launching “Operation Baltic” early in 2008. * * * German customs and police investigators believe that Jin Ling is being distributed and sold through organized crime networks, including Vietnamese and Lithuanian gangs, and policed by local enforcers.

***  Going Undercover:  Inside Baltic Tobacco's Smuggling Empire:

ICIJ’s reporters went to Russia to uncover the truth about the billions of black market Jin Ling cigarettes turning up across Europe. They quickly learned that packets of Jin Ling could not be purchased even in the shops, markets, or street stalls of the Russian city where they are made, Kaliningrad. But Jin Ling was available to smugglers, in huge quantities, from its manufacturer, the Baltic Tobacco Factory. Kaliningrad can be a dangerous place to ask questions about smuggling. The Russian territory, sandwiched between Poland and Lithuania, went into rapid and cataclysmic decline after the break up of the Soviet Union, but has since profited immensely from its close proximity and excellent transport to the European Union. It has also gained a reputation as a haven for smugglers and money launderers, and for a police force accommodating to smugglers’ interests. The city is home to a noisy night life and frontier atmosphere, with luxury limousines a frequent sight on the streets.

***  The Guy In The Wheelchair:  How an El Paso Smuggler Moved a Half-Billion Cigarettes Across America:

Jorge Abraham sits in his parents’ living room in a single-story rental on a rutted street in El Paso, Texas. His soft, sloping shoulders twitch involuntarily. His head and contorted right hand are the only parts of Abraham’s morbidly obese frame that move by volition — the result of a 1988 motorcycle accident that left him quadriplegic. * * * Abraham was the unlikely kingpin of one of America’s biggest ever cigarette smuggling rings — a racket that spanned three continents and six states and moved as many as a half-billion contraband cigarettes across the United States. As lucrative as narcotics, but with far less onerous penalties, tobacco smuggling is booming around the country — and around the world. Abraham, released from federal custody in June, recently talked for the first time publicly about his operation, the cheap, illegal smokes that Americans increasingly crave, and the bungled case against him that led from Chinese counterfeiters and American Indian smoke shops to a chilling Mexican house of death. * * * The Indians became big business for Jorge. He moved truckloads of the tax-free smokes to the Cattaraugus Indian Reservation in western New York state, the largest reservation of the Seneca Nation — a wealthy tribe known for its sweet-grass woven baskets and elaborate corn husk dolls. The rural 2,400-person, 22,000-acre spread bordering Lake Erie was home to Abraham’s biggest buyers, who, along with other “smoke shops,” peddled millions of under-the-table cigarettes to the general public. * * * From the reservation, the contraband cigarettes flooded into New York City, eventually being sold openly by the city’s bodegas and street vendors. So popular were Abraham’s smokes that he became notorious among local smugglers, who referred to him simply as “the guy in the wheelchair.”

***  Smoking Dragon, Royal Charm:  A Tale of Four FBI Agents, 62 Chinese Smugglers, and a Billion Bogus Cigarettes:

Here in California, it’s possible to pass within a mile of the Los Angeles-Long Beach port complex and never once suspect it’s there. East of the Palos Verdes Hills, the port’s surrounding warehouses easily obscure the mass of steamers that daily arrive studded with stacks of containers bearing international cargo. Yet the complex is the busiest in America, the arrival point for nearly half the volume of all U.S. imports. And it’s here that, like so many other smugglers, Charles and May Liu first struck gold. * * * By the time the FBI arrested them in August 2005, the Lius had led a team of agents straight into the heart of a vast Chinese smuggling network — one that sold, among other goods, counterfeit pharmaceuticals, fake $100 bills, and weapons from North Korea. And then there was their real gold mine: cigarettes. Low-grade, brand-name counterfeits. * * * Like drug trafficking, the trade in fake cigarettes is big money. While in China it costs as little as $125,000 to manufacture a 40-foot container of cigarettes (or 10 million individual sticks), here in the United States, such a container’s contents can be sold for as much as $2 million. * * * Undercover FBI agents Lou Calvarese, Jack Garcia, and Tom Zyckowski know a lot about being patient. For six years, the trio painstakingly worked to cultivate Charles and May Liu’s confidence. Over the course of some 1,000 meetings, their investigation — dubbed “Operation Royal Charm” — would pull the agents deep into a tangled Chinese underworld spanning coasts and continents. Together with a parallel California case, “Operation Smoking Dragon,” the twin investigations would result in 10 indictments, with 87 individuals charged, mostly ethnic Chinese.

***  Blame The Distributor:  How Gallaher Stayed in the Smuggling Game:

In 2004, Cyprus-based tobacco distributor Tlais Enterprises Limited (TEL) was told it had received a “red card” from British customs, a warning that the company was suspected of cigarette smuggling. TEL’s owner, Ptolomeos Tlais, was surprised. Born in Lebanon to a wealthy trading family, Tlais was doing, he said, exactly what his supplier, Gallaher Tobacco, had told him to do: quickly dumping large amounts of cigarettes onto developing countries. Everyone involved, he insists, knew that some of these smokes — especially their low-end Sovereign brand — would find their way back to the U.K., where avoidance of high tobacco taxes guaranteed smugglers a windfall. In fact, Tlais had even signed a unique deal with both Gallaher — the U.K.’s largest cigarette manufacturer — and the U.K. customs service, giving them unprecedented access to his shipping records. In the deal, Tlais agreed to unload tens of millions of moldy cigarettes by mixing them with new cigarettes and selling them overseas. If anyone deserved a red card, Tlais felt, it was Gallaher for coming up with the plan.

***  How To Get Away With Smuggling:  Canada's Billion-Dollar Deal for Big Tobacco:

The investigations had gone on for so long that most Canadians probably wrote them off as another victory for big corporations. Then suddenly on July 31, after a year of secret negotiations, Canada’s two largest tobacco companies — Imperial Tobacco Canada and Rothmans Inc. — pleaded guilty to aiding and abetting tobacco smuggling from 1989 to 1994, defrauding Canadian governments of more than a billion dollars in unpaid taxes. The two companies agreed to pay an unprecedented C$1.15 billion (US$1.12 billion) to Canadian governments and to plead to one count of “aiding persons to sell or be in possession of tobacco products manufactured in Canada that were not packaged and were not stamped in conformity with the Excise Act and its amendments and the ministerial regulations.” Imperial Tobacco, maker of 16 cigarette brands including Canada’s top sellers Players and du Maurier, agreed to pay US$582 million. Rothmans, parent of Rothmans, Benson & Hedges Inc. and maker of 16 cigarette brands, agreed to US$534 million. Key to the settlement was the government’s readiness to release all former and present executives, employees, directors and officers from civil or criminal prosecution. Also released were the companies’ foreign owners and affiliates. Tobacco bosses who oversaw the smuggling could now live out their retirements without fear they might be interrupted by a spell in prison. It wasn’t an idle fear. Two former executives with Canada’s third largest tobacco company, RJR Macdonald, have been convicted. One served four years in jail. Six others are awaiting trial or procedures that could eventually send them to trial. * * * Ironically, the belated crackdown has not affected the flood of smuggled cigarettes pouring into Canada, which, in fact, has grown larger since the government’s case began. The major route remains largely the same — a tiny 5-mile section of the St. Lawrence river near Cornwall, Ontario, where the Akwesasne Indian Reservation straddles the U.S.-Canada border. The billions of brand named cigarettes that Big Tobacco helped push through this funnel in the early ‘90s no longer are in the game. But with taxes back up to 1990 levels, dozens of small, unlicensed companies have sprung up on the reservation. They are making vast numbers of illicit cigarettes with impunity. Today, those reaping huge profits off the smuggling are no longer the executives of cigarette companies, but renegade firms with distributors that range from biker gangs to the Italian Mafia. Even as Big Tobacco pays a billion-dollar settlement to the citizens of Canada, the wealth that once flowed into its hands is now staying with organized crime. But that is another story.