For the week of July 23 - 29, 2003

Drug smugglers enter guilty pleas

Local men face 20 years in prison

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By GREG STAHL
Express Staff Writer

Two Blaine County men face upward of 20 years in prison for their admitted involvement in a massive and complex drug trafficking and money laundering operation.

David S. Brocklebank, 57, of East Fork, and Patrick O. Cannon, 57, of Ketchum, were charged in June 2000 with trafficking tens of tons of Thai marijuana through California and laundering drug proceeds in illegitimate businesses. The two men entered guilty pleas in U.S. District Court in Boise last week to two of 121 original counts alleged in a June 28, 2000, federal indictment and to two counts alleged in a July 15, 2003, supplemental accusation, called Information.

In entering guilty pleas, Brocklebank and Cannon agreed to cooperate in government investigations, debriefings and proceedings concerning their roles, and the roles of others, in drug trafficking and money laundering operations.

The men admitted guilt to conspiracy to launder money, conspiracy to import and distribute in excess of 1,000 kilograms (roughly 1 ton) of marijuana, and agreed to money, property and business forfeitures.

Their sentencing is scheduled for Oct. 16 at 1 p.m. in Boise. The maximum penalty for the drug trafficking charge is 10 years in prison and $250,000. The maximum penalty for the money laundering charge is 20 years in prison and $250,000.

In signing the plea agreements, Brocklebank and Cannon admitted to conspiracy to import and distribute controlled substances and conspiracy to launder money. The plea agreement also requires the defendants to forfeit to the United States "any and all" property and money, "which are traceable to proceeds of the continuing criminal enterprise, drug trafficking and money-laundering offenses…"

For Brocklebank, the plea agreement lists 11 world-wide and local bank accounts, property in East Fork and Hawaii, and the assets of 14 businesses. For Cannon, the agreement lists 11 Wood River Valley properties and condominiums, six bank accounts, a Ford pickup truck, a sailboat, and the assets of eight businesses.

Upon their compliance with the plea agreement, including cooperation in ongoing investigations, each man is to retain a vehicle and $200,000 "for the benefit of the children, to a trust or other third party."

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.

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 American and Europe to launder the money.

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 took them deep into a risky world familiar to most U.S. citizens only in novels and movies.

The first big smuggling operation allegedly occurred during 1979 and 1980, when Brocklebank invested $100,000 in a 5-ton shipment of Thai marijuana into Santa Barbara, Calif. He allegedly 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 residing in federal prison, sold the remainder.

Brocklebank allegedly organized the offload of another 5 tons in 1980 or 1981 that arrived on the coast north of Santa Barbara. The shipment is said to have netted him between $500,000 and $1 million.

The smuggling continued until 1994. That’s when Brocklebank and Cannon discovered they faced a potential future in prison when federal agents served search warrants on their Blaine County homes.

The vast amounts of money generated by Brocklebank’s and Cannon’s alleged 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 alleged 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.

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 allegedly helped her grandson set up a company called Foundation Reath in Geneva. Soon after, Brocklebank was said to have 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.

Between March 1989 and April 1994, Brocklebank allegedly transferred about $300,000 from the Foundation Reath account to Ketchum banks via two law firms in the Bahamas.

He also allegedly 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.

 

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