Big money requires big risks
A story of Thai marijuana smuggling
By GREG MOORE
Express Staff Writer
A 124-page indictment of two Blaine County men arraigned
earlier this month on federal drug charges sheds light on the complex and
risky world of big-time, international narcotics trafficking.
David S. Brocklebank, 54, of East Fork, and Patrick O.
Cannon, 54, of Ketchum and Malibu, Calif., allegedly funded more than 20
years of well heeled, resort lifestyle by smuggling high-quality Thai
marijuana through California. Now they face 20 years in prison.
Both pleaded not guilty to the charges Feb. 9 in federal
court in Boise.
Brocklebank, nicknamed Rhino, is alleged to have imported
at least 15 tons of marijuana, worth $1,500 dollars a pound, between 1980
and 1985. He is also alleged to have invested in a 72-ton shipment seized
off the coast of Washington in 1988.
Cannon was allegedly involved in part of those, as well as
his own, enterprises. He and Brocklebank are also accused of selling
cocaine.
Between the early 1970s and early 1990s, the two allegedly
earned about $11 million in drug profits. Twenty-two shell corporations or
other institutions were allegedly set up in Asia, North America and Europe
to launder the money.
The alleged criminal enterprise may have been a family
affair. Steps taken to process drug money allegedly drew in Brocklebank’s
mother, grandmother and former wife.
Both Brocklebank’s and Cannons attorneys said they
expect their clients to be exonerated.
The charges, said Brocklebank’s San Francisco attorney,
William Osterhoudt, are "based on a great deal of unreliable
evidence."
"They’re old, they’re based on unreliable
witnesses who are very interested in saving themselves," he said.
According to assistant U.S. attorney Monte Stiles,
investigators first got wind of the Wood River Valley’s connection to
Thai marijuana smuggling in the mid 1980s. shortly after the Sun Valley
Athletic Club was built. Rumors, he said, indicated the business may have
been built with drug money. By the early 1990s, those rumors turned out to
be true. The club’s construction contractor, Don Trabert, was among
those convicted of federal drug charges. (The club’s current owners had
no involvement.)
"Once we got into that world, we came across lots of
people who had information on other people involved," Stiles said.
Before long, the trail led to Brocklebank and Cannon.
According to the grand jury indictment, their affairs involved the
following alleged sequences of events:
The Smuggles
The first big smuggling operation occurred during 1979 and
1980, when Brocklebank invested $100,000 in a 5-ton shipment of Thai
marijuana into Santa Barbara, Calif. He organized the offload and rented a
"stash house" on a date ranch in Indio, a small town in the
desert east of Los Angeles. Brocklebank sold three-quarters of the pot.
Former Ketchum resident Tom Gaglia, now incarcerated in federal prison,
sold the remainder.
Brocklebank organized the offload of another 5 tons in
1980 or 1981 that arrived on the coast north of Santa Barbara. The
shipment netted him between $500,000 and $1 million.
In October 1982, Brocklebank, Gaglia and a third partner
set up a shell corporation on Grand Cayman Island to conceal a $350,000
purchase of a 65-foot sailboat called the Tiare. The boat could hold up to
5 tons of marijuana.
The Tiare was dry docked in San Diego, where it underwent
$300,000 worth of repairs. The repairs, as well as the crew’s salary and
expenses, were paid in cash.
The boat was to be used to carry marijuana from Thailand.
At one point, Brocklebank told the hired captain, Duane Taylor, that there
were people in his organization who would kill Taylor if he screwed up.
Taylor sailed the boat to Honolulu in April 1983, where he
was met by Gaglia, who told him to continue to Tahiti and await further
instructions. Before Taylor departed, however, the boat was boarded by
police, who found a small amount of marijuana and firearms. The entire
crew, including Taylor, was arrested. While the charges were pending,
Taylor told Gaglia to retrieve the Tiare before it, too, was seized. The
yacht was sailed by another captain to Mexico and then to the Cayman
Islands, where it was sold.
In November 1983, Brocklebank and others met at Gaglia’s
Ketchum home to discuss a smuggle of two tons of Thai marijuana the
following year.
In May 1984, Cannon set up another shell corporation in
Hong Kong to buy another sailboat. The group decided on a 48-foot sloop
called the Island Style.
Cannon and Taylor left Hong Kong on the Island Style in
July, sailing toward the Gulf of Thailand, where the boat was to be loaded
with marijuana. Five days later, they were hit by a severe storm, which
damaged the boat. The smuggle was aborted, and the Island Style headed
back toward Hong Kong. A few miles outside Hong Kong territorial waters,
the engine broke down. On Aug. 5, the yacht was towed into Hong Kong by a
police vessel.
It was soon back afloat, however, and in June 1985 was
used to bring 3 tons of Thai marijuana to California. Anchored off the
shore of Jalama State Park, near Santa Barbara, the Island Style was
offloaded using Zodiak inflatables. The pot was stashed and repackaged in
a rented house in the town of Idyllwild, east of Los Angeles.
In March 1988, Brocklebank flew to Hong Kong to meet with
several people about an upcoming 72-ton Thai marijuana smuggle. He
withdrew $200,000 from a Hong Kong bank account to fund his share of the
load.
The investment proved a poor one. On June 30, the U.S.
Coast Guard seized the pot aboard a ship called the Encounter Bay near
Seattle. A year later, Brocklebank’s Hong Kong money manager, Bruce
Aitken, was indicted for participating in the attempted Encounter Bay
smuggle. Brocklebank and a partner paid him $60,000 to pay a fine and to
keep him from disclosing their involvement.
In spring 1993, Brocklebank traveled to Southern
California to visit Gaglia at the Terminal Island Federal Correction
Facility. The two discussed setting up another Thai marijuana smuggle for
the following year. In August, Gaglia arranged for a middle man to
communicate between the expected seller, John Daniels, and Brocklebank and
Cannon so they would not have to meet.
In September, Brocklebank traveled to Geneva to withdraw
about $110,000 from a bank account to fund purchase of the marijuana. He
then flew to Hong Kong to deliver the money.
On Sept. 22, Cannon called a cargo ship company to arrange
for transport of the Island Style to Hong Kong. His cover was that the
ship was to be entered in the Corum China Sea race, scheduled for April
1994. The yacht was shipped in January.
On March 30, Cannon departed Hong Kong on the Island
Style, ostensibly on its way to the ocean race. In reality, the yacht was
scheduled for an April 8 rendezvous with Daniels’ boat in the South
China Sea.
Unknown to Cannon, Daniels was arrested by the Vietnamese
Navy on April 4, in possession of over 3,000 pounds of marijuana. Daniels
was convicted and sentenced to 20 years in a Vietnamese prison.
U.S. authorities, however, are not convinced it was the
authorities who first nabbed him and took the marijuana.
"It’s very dangerous over there," assistant
U.S. attorney Stiles said. "You don’t know who you’re dealing
with, who’s chasing you in the boat."
On June 1, 1994, Brocklebank and Cannon discovered that
they, too, faced a future in prison when federal agents served search
warrants on their Blaine County homes.
Money Laundering
The vast amounts of money generated by Brocklebank’s and
Cannon’s drug deals required being filtered through apparently
legitimate entities before it could safely be spent.
"The defendants and their associates would transfer
money from foreign country to foreign country in order to...disguise the
criminal nature of their funds and to create complex financial
transactions which are extremely difficult to follow," the indictment
states.
The indictment describes 64 financial transactions made
between accounts in Hong Kong, Switzerland, Liechtenstein and the
Caribbean. Much of the money landed in four banks in Ketchum and Sun
Valley.
In 1970, in the early days of Brocklebank’s drug
dealing, an investment company was set up in Nassau by his grandmother,
Louisiana Brocklebank. Called Ontario Holdings, it was used by Brocklebank
to funnel money into the United States. At various times, Brocklebank,
Louisiana and Brocklebank’s mother, Joanne Bottome, served as officers
of the company.
In September 1982, a Cayman Islands money manager named
Lynford Evans set up for Brocklebank a Cayman shell corporation called
Agora Company. A shell corporation has a legal structure, but no operating
assets.
In October, a Lear jet flight from Ft. Lauderdale, Fla.,
to George Town, Cayman Islands, was chartered in Bottome’s name. On
board were herself and her son, carrying $426,520 generated by drug sales.
They gave the cash to Evans. A similar flight took place in December,
carrying $1,619,900.
Brocklebank filed his first tax return in 1985, aided by a
former IRS agent turned accountant specializing in helping drug smugglers
with their taxes.
In February 1986, Louisiana helped her grandson set up a
company called Foundation Reath in Geneva. Soon after, Brocklebank
transferred $1 million in drug proceeds from a numbered account in Hong
Kong to Foundation Reath. The money later flowed through Brocklebank’s
Cayman Islands account and Evans’ financial services company en route to
the United States.
Later in 1986, Evans was indicted in San Diego on a charge
of defrauding the United States government by concealing drug proceeds
(though not Brocklebank’s or Cannon’s). He remains a fugitive in
Canada.
In 1987, Cannon bought property at 130 River Bend in
Ketchum through an Idaho corporation called True Course. The corporation’s
registered agent was Cannon’s father. Its president was Cannon’s
brother.
Between March 1989 and April 1994, Brocklebank transferred
about $300,000 from the Foundation Reath account to Ketchum banks via two
law firms in the Bahamas.
He also funneled money from Swiss accounts through a
company owned by his cousin chartered in Los Angeles and Toronto. Called
Payments Plus, its principal business is to provide payroll services to
the movie industry.
Brocklebank and Cannon also transferred money through an
entity established in Liechtenstein called the Hellivisa Foundation. In
1993, Cannon "borrowed" $90,000 from Hellivesa to buy a
condominium in Hailey.
n
Whether the charges contained in the indictment are true
will not be known until the completion of an expected 40-day trial
scheduled to begin April 16.
If the accusations against the two prove correct, one has
to wonder, why take such risks? Brocklebank must have been aware that
authorities were sniffing dangerously close as early as 1984, when he
allegedly helped hide his mother so she would not be served by a San Diego
grand jury indictment to testify about a Lear jet charter to the Cayman
Islands. And yet, he and Cannon allegedly stayed in the business until
authorities arrived at his house with a search warrant 10 years later.
The money may have been too good to pass up. When things
went right, the profits were staggering. A 3-ton load of Thai marijuana
bought for $300,000, for example, is worth $9 million when sold for $1,500
a pound. According to the indictment, Tom Gaglia, who allegedly supplied
Brocklebank with cocaine, grossed an average of $75,000 per day.
In April 1994, Cannon was sent a letter from a prospective
crew member for the attempted Island Style smuggle.
"The $ would be wonderful, it would set me up for the
rest of my life," the man wrote. "It would pay all my debts. I
could be a happy camper."
However, he added, "Don’t know if any amount of
money is worth going to jail for 20 years."
