Statement of John C. Varrone
Acting Deputy Assistant Commissioner
Office of Investigations
United States Customs Service
before the Senate Judiciary Committee
Subcommittee on Criminal Justice Oversight
on Drug Smuggling in the Caribbean
09 May 2000 

Introduction

Good morning, Mr. Chairman and other members of the Committee. It is
my pleasure to have the opportunity to appear before this Committee to
discuss the law enforcement activities of the Customs Service, and, in
particular, our enforcement efforts against drug smuggling in the
Caribbean.

First, I will discuss smuggling trends in the Caribbean and how law
enforcement efforts force smugglers to change their operations. I will
also provide the Committee examples of Customs recent enforcement
successes.

As the Committee is aware, the Customs Service is one of the primary
Federal law enforcement agencies with responsibility for the
interdiction of drugs in the "arrival" zone. In addition, the Customs
Service shares the lead with the U.S. Coast Guard in the skies over
the transit zone. Through our Air and Marine Interdiction assets, we
provide significant assistance to other domestic and international law
enforcement agencies who have responsibilities in both the "source"
and "transit" zones.

Smuggling Trends in the Caribbean

I will begin by briefly describing our assessment of the drug
smuggling threat in the Caribbean. As this Committee is aware, the
Customs Service continually develops, collects and evaluates a variety
of drug intelligence from the Caribbean area. It is estimated by the
Interagency Assessment of Cocaine Movement (IACM) that approximately
43% of the cocaine destined for the United States arrives from the
Caribbean.

These estimates are clearly validated when you examine drug seizure
activity in the Caribbean. In Fiscal Years 1998 and 1999 the Customs
Service seized 20,673 and 20,492 pounds of cocaine, respectively, in
the Caribbean. In Fiscal Year 1999 Customs seized 3,442 pounds of
marijuana in the Caribbean, an increase of more than 500% from Fiscal
Year 1998 when we seized 664 pounds. Thus far in the first half of
Fiscal Year 2000 we have seized 15,639 pounds of cocaine, an increase
of more than 42% over the same period last year. In addition to our
successful seizure statistics, in Puerto Rico and the U.S. Virgin
Islands, the Customs Service effected 383 arrests in 1998, and 551
arrests in 1999 for drug related crimes, a dramatic increase of 44%.

In assessing the overall drug smuggling threat, we are routinely
confronted with a multitude of smuggling modes. The interdiction
operations of the Customs Service and other Federal law enforcement
agencies in the Caribbean have demonstrated that non-commercial
smuggling operations remain a significant, if not our principal,
threat.

While the criminal organizations responsible for these smuggling
operations remain primarily Colombian, it is important to note that
other groups from Caribbean countries are emerging in the drug
smuggling and associated distribution networks, These expanding
criminal organizations are now operating in the Dominican Republic and
Haiti.

Customs intelligence analysis and recent drug interdiction successes
have provided insight as to how these drug smuggling operations are
conducted. For example, private aircraft are not used as often for
direct flights from source countries to the United States as they once
were. Rather, they are now being used more frequently to conduct
airdrops in the transit zone to a variety of vessels. These drops are
predominately made to go-fast boats, who then smuggle the drugs into
Caribbean nations for staging and subsequent delivery to the United
States. This activity most frequently occurs in the waters off Haiti,
the Dominican Republic, Puerto Rico and the Bahamas.
 
We believe that this change is due, in large measure, to our success
in the interdiction and seizure of private aircraft use for smuggling.
Our success often raises the costs to drug smuggling organizations and
forces them to constantly modify their tactics.

As I mentioned earlier, our Air and Marine Interdiction assets fly in
the Source Zone in support of the administration's Andean Region Plan.
We have seen how our support in the Source Zone to both producing and
transshipment countries has affected drug smuggler operations and how
they adapt to our efforts. A good example of this impact or
displacement is the use of Venezuelan air space by drug smuggling
pilots as a refuge to avoid the Colombian shoot down policy and our
detection and monitoring assets.

While drug smuggling via private aircraft remains consistently high, a
potentially more significant threat is posed by non-commercial
maritime shipments, especially in Puerto Rico. This is primarily due
to, among other things, the minimal investment required for a maritime
smuggling venture as compared to the cost and potential loss of an
aircraft during and air smuggling operation. The minimal investment
required for a go-fast boat is also complemented by a much higher drug
load capacity that can be carried in go-fast boats, on average, at
least 1,000 pounds in vessels versus 250 to 400 pounds carried by
private plane. The number of go-fast boats intercepted or found
abandoned on the Puerto Rican coastline by Customs and other agencies
validates our current intelligence that drug smugglers consider these
to be "disposable platforms."

To provide the Committee examples of our recent successes, I would
like to discuss two recent seizures which highlight the importance of
the Caribbean corridor to smugglers.

On April 4, 2000, Customs Agents in Puerto Rico received confidential
source information which led them to obtain a search warrant for a
palletized shipment of 100 computer central processing units (CPU's)
bound from Puerto Rico to Queens, New York. As a result of the
execution of the search warrant our agents seized more than 1,000
pounds of cocaine hidden within the hollowed out CPU's. As a result of
the seizure, two Dominican nationals were arrested.

Just last Friday, Customs Inspectors in Port Everglades, Florida,
seized approximately 820 pounds of cocaine that had arrived from the
Dominican Republic in containerized cargo.

We believe that these two cocaine seizures demonstrate how these
criminal organizations are smuggling cocaine into the Caribbean in
non-commercial conveyances, before it is being delivered to the U.S.
in commercial shipments.

I would also like to point out that our investigative operations in
Puerto Rico are also aggressively focused on the internal groups that
have established bases of operation in Puerto Rico to support their
drug smuggling ventures.

Another example which illustrated the increasing drug and related
money laundering threat involved an investigation which we lead,
between November 1997 and September 1999. Our office in San Juan
conducted a long-term investigation, titled "Operation Double Impact",
that targeted a large scale heroin smuggling and money laundering
organization operating in and around San Juan. The investigation used
several long-term wire intercepts to gather evidence on the group
which was laundering more than $1.3 million a month through money
remittance businesses. As a result of the investigation, 47 people
were arrested and 44 of them have already been convicted or pled
guilty. In addition, the investigation resulted in the identification
of more than $8.5 million dollars in drug related proceeds which is
pending forfeiture.

I would also like to point out for the Committee that the Island of
Puerto Rico was recently designated under the Treasury and Justice
Departments 1999 Crime Strategy as a High Intensity Financial Crime
Area (HIFCA) in recognition of the high level of drug related money
laundering activity that investigations like Operation Double Impact
have highlighted.

While we continue to view Puerto Rico as one of the most significant
"avenues of approach" in the Caribbean, we know that these criminal
drug smuggling organizations continually change their operations based
on many factors.

Haiti -- A Path of Least Resistance

Haiti provides a telling example of how drug smuggling organizations
adapt their operations in response to law enforcement pressures and
capabilities. The political instability in Haiti, combined with its
lack of law enforcement capabilities provides a safe haven to drug
smuggling organizations. Haiti is clearly well positioned for
traffickers to use as a "path of least resistance," particularly when
enforcement activity in Puerto Rico is high.

In response to the increased threat from Haiti, the Customs Service
led a multi agency enforcement operation called "Operation
Riversweep." This operation focused on Haitian coastal freighters
attempting to smuggle cocaine into the U.S. along the Miami River.

In one two-week period in early February, Customs Officers seized more
than 3,400 pounds of cocaine from five vessels which had arrived from
Haiti. During April 2000, we have made two seizures totaling more than
359 pounds of cocaine secreted within two Haitian freighters which had
arrived into the U.S. on the Miami River. I have brought with me today
some pictures of these seizures to illustrate the types of concealment
that routinely confronts us.

When you add these recent seizures to our Fiscal Year to date totals,
the Customs Service has seized more than 6,000 pounds of cocaine
arriving directly from Haiti. In excess of 5,000 pounds of this
cocaine was seized as a direct result of "Operation Riversweep" along
the Miami River.

As we have succeeded against Haitian smuggling organizations, we have
seen them move their concealment areas for cocaine into more
sophisticated and difficult to examine compartments. We believe that
this movement towards "deeper and harder" concealments indicates that
Haitian drug smuggling organizations are adjusting their concealment
techniques in an effort to thwart our aggressive enforcement efforts.

Our Air and Marine interdiction assets have also been active both
interagency and multilaterally in and around Haiti, working with other
agencies to interdict cocaine moving from South America to that
country. On March 1, 2000, we documented and recorded an ongoing
suspected cocaine airdrop operation in Haiti. Mr. Chairman, with your
concurrence, I would like to present this short video before the
Committee at the conclusion of my remarks.

While Haiti is clearly an area where there is currently a high level
of activity, other areas in the Caribbean, particularly Jamaica and
the Bahamas, are also continually used by drug smuggling groups as
alternate delivery and storage locations prior to subsequent movement
to the United States. I have brought a second short videotape with me
that depicts a pursuit of a go-fast boat to the Bahamas in 1999 in
which Customs Agents were rammed by drug smugglers in an attempt to
evade our officers. With the Chairman's permission, I would also like
to show this tape at the conclusion of my remarks.

Customs International Assistance Efforts

The Customs Service has also been very active in sharing our law
enforcement experience and providing training and operational
assistance to other Caribbean and Latin American law enforcement
agencies that are also engaged in combating drug smuggling and money
laundering.

In the Caribbean, the Customs Service is an active member in the
Customs Caribbean Law Enforcement Council and we are currently
involved in a project with the Dominican Republic, Haiti and France to
work cooperatively to strengthen the land border between Haiti and the
Dominican Republic where cocaine is smuggled on its way to the United
States.
  
Through the Department of State, Bureau of International and Narcotics
Law Enforcement Affairs, the Customs Service has provided several
training courses to Haitian Customs officers in both the areas of
contraband detection and, more recently, integrity training. We are
currently scheduled to conduct another contraband detection training
seminar later in May.

In addition, in March we sent several Inspectors and Special Agents to
work side by side with Haitian Customs and Haitian National Police
during Operation Conquistador, a regional interdiction operation that
focused on the movement of drugs throughout the Source and Transit
Zones.

Conclusion

Together, our Customs Inspectors, Special Agents and Air and Marine
Interdiction Division personnel form the core of our interdiction and
investigative strategy in the Caribbean. While our Customs Inspectors
and Air and Marine Division personnel disrupt and displace trafficking
groups primarily through interdiction operations while our Special
Agents are focused on taking a proactive investigative approach to the
identification and dismantling of these drug smuggling organizations
and their illicit profits.

On behalf of the men and women in Federal law enforcement who are
engaged on a daily basis in counter-narcotics activities in Puerto
Rico and the Caribbean, and specifically our U.S. Customs officers, I
thank you for all your support and the opportunity to present to the
Committee some of our enforcement activities and recent successes.
 
This concludes my remarks.