- The Feds are investigating
one of the largest drug busts in US history.
- In June, 2019, news breaks of a massive seizure
in the port of Philadelphia.
20 tons of drugs in a single seizure.
- Authorities say the drugs could have a street value
of more than 1 billion dollars.
- This was not like just any other drug trafficking case.
Yes, drugs are smuggled on container ships every day,
but this one was extraordinary and this one was different.
It was not only the sheer quantity of drugs,
it was also the level of involvement of the crew.
- This wasn't just happening on one ship.
The cartel's penetration of MSC's crewing apparatus
was so deep that they could run multiple crews
on multiple ships with these massive loads of drugs
that were going to Europe.
It really has created this kind of
gangland feel that overlays global container shipping.
- The fact that there's the world's largest shipping company
that's at the center of this,
that makes it a very sensitive topic
and also one that could have ramifications
for the wider shipping industry.
There is this really interesting
and problematic tension
just in the nature of the globalized economy.
Most people don't give a second thought
to the way that their goods arrive.
It all arrives on these giant massive vessels
that are sailing around the world.
- 90% of global trade is conducted on ships, and every year,
14 dollars trillion of goods are moved around the world.
- The shipping industry is essentially the backbone
of globalization, of a global economy.
What that means is that there's this pressure on ports
and on shipping companies and on customs authorities
to ensure that global trade runs smoothly
and that it runs quickly.
Every time a container is opened, that slows down the trade.
- It also prevents security services, customs officials,
and others from really digging in
and examining the containers
as they move through this system.
- The ports of Northern Europe, primarily Antwerp in Belgium
and Rotterdam in the Netherlands
have long been central to global trade
dating all the way back to the spice trade
hundreds of years ago.
As a result, the infrastructure built up around these ports
has been increasingly efficient and spectacular.
As the market for cocaine has grown in Europe,
it only makes sense to be shipping them
through these two ports in the north.
That gives the traffickers an opportunity
to not necessarily service the markets
in the Netherlands or in Belgium, but all across Europe
and even down into Africa and Asia as well.
We visited one of these law enforcement customs stations
where they scan cargo that they believe
contains illicit goods.
On this trip, just a regular day in the port of Antwerp,
customs officials had pulled aside a shipping container.
It had a high risk level,
and they put it through the scanner
and ended up searching it.
It was cocoa beans from South America.
Upon searching the container,
they found almost a thousand kilos of cocaine.
- We have several examples of where they are
use all their creativity to get things past us.
I'm going to show you an image of import of a Cadillac,
a pink Cadillac, and then you see in the door
of the Cadillac all kind of strange packages.
So when we examined it, it was ecstasy, 50 kilos of ecstasy.
As you see here, they filled
like the shell of pineapples with cocaine.
This one is an import of teak from Ecuador.
The left pile of wood had darker edges.
The cocaine was hidden in the wood itself.
And also, the structure of the container and truck.
Sometimes they hid stuff in the structure
like in the floor or the ceiling.
- On a yearly basis, we are talking about
40 to 50,000 containers which are scanned.
The number of containers entering and leaving the port
are millions of millions, and today,
we do not have the infrastructure to scan
all the containers.
We scan 1.5% of the containers entering the port of Antwerp.
We stop a lot of tons, but if you look to the outcome,
the effect is zero.
There is still huge quantities of cocaine
entering the European market.
- For customs officials, they're essentially inundated
with this problem and really outmatched,
and that's something actually that the traffickers know
and realize and have taken advantage of.
For them to lose a thousand kilos here,
a thousand kilos there, is not the end of the world
because they just expect
that they're just going to continue shipping more.
Around 2008, 2009, there was kind of a new phenomenon
that police officials, customs authorities,
started noticing.
These large commercial ships,
before they entered the ports, crew on board the ship
would actually toss over bags filled with cocaine.
One of their collaborators or co-conspirators
would come up in a smaller kind of fishing vessel
and pick up the cocaine.
And this was known as "the drop-off".
And that was a really big breakthrough.
What this meant was that there was somebody on the ship
that was in on it.
As European law enforcement investigators
started kind of honing in on this problem
of commercial shipping companies
being at the center of the global cocaine trade,
they started finding patterns, putting together pieces,
and they realized that there was one shipping company
that seemed to be at the center of a lot of these drop-offs,
and that was MSC.
Mediterranean Shipping Company is known by its initials MSC.
They are today the world's largest shipping company.
- MSC is a really interesting company.
Over a period of five or six decades,
They go from one ship to a fleet now of 650
surpassing everybody.
It's a private company in Switzerland
so its finances in particular are pretty opaque.
It does sort of make the miracle that MSC is
in terms of the empire that they built
over a short period of time
all the more intriguing and all the more mysterious.
- Starting in the early 2000s,
MSC became a major player
in the sea lanes from South America to Europe.
They started investing heavily in what are called "reefers"
or refrigerated containers to move refrigerated goods.
- That turned out to be a golden opportunity
for the traffickers because you basically could put the coke
inside containers of blueberries or strawberries or bananas
and it would move quickly through the system,
and they don't wanna like slow those down
because the fruit is a perishable commodity, into Europe.
- The cooling compartment is a very popular place
to hide cocaine because that compartment can be opened
and closed without breaking the seal of the container.
- One of the key moments in the build out
of this infrastructure was the expansion of the Panama Canal
in 2016.
So you've got much bigger ships,
much greater amounts of cargo.
Again, much of it fruit and vegetables, meats,
other kinds of commodities, but that expansion around 2016
basically correlates with a big jump in cocaine seizures
in the ports of Antwerp and Rotterdam.
- Because MSC dominated this particular route,
they became an easy target by traffickers.
Law enforcement investigators started seeing
that cocaine that had made its way to Europe
had actually stopped through a US port.
So they started kind of working backwards at first,
thinking if all of this cocaine is ending up in Europe
but it's stopping in the US, how did we not detect it?
- At the same time, European authorities are also
conducting investigations where they're coming across
the infiltration of other parts of
the shipping industry generally, but especially MSC.
- So over the course of two to three years,
they started following about four ships,
and that was the MSC Desiree, the MSC Carlotta,
the MSC Avni, and the MSC Gayane.
The MSC Gayane is a monstrous ship.
This is a ship that is the length of three football fields.
It's one of the biggest ships sailing the oceans today.
- MSC Gayane was following a particular route
from the west coast of South America
through the Panama Canal up to Philadelphia,
and from there, from the east coast of the United States
over to Rotterdam and Antwerp.
- Gayane set sail in the spring of 2019.
In mid-June after the Gayane had been at sea for many weeks,
it pulled into the mouth of the Delaware Bay.
This day,
instead of the Gayane being met by a riverboat pilot,
they were met by the Coast Guard, Philadelphia Police,
Homeland Security officials,
customs and border protection officials.
There were over a hundred law enforcement agents waiting.
They corralled the crew, start questioning them,
swabbing their hands for any traces of cocaine.
Those came back positive.
They started doing a deeper inspection on the containers
and eventually found kind of their first hit of cocaine
and then they found more
and they found more
and eventually came up with the 20 tons.
Initially, law enforcement investigators were stumped.
How did they get so much cocaine on this ship?
So what they came to find out through interviewing the crews
and through other kind of physical evidence
that they were able to obtain was that
the cocaine was actually loaded onto the ship
while it was in the open ocean of South America.
As the Gayane was powering through the open ocean,
in the middle of the night, small boats pulled up alongside
and essentially loaded the cocaine that way.
The crew members used the crane of the Gayane
and basically hoisted up large nets
filled with the bales of cocaine onto the cargo ship.
Then they would take that cocaine
and then they pushed it into some of the containers
and basically stashed it on the ship.
So it was an extremely brazen operation.
- They do this loading at sea not just once,
but multiple times.
They load it as it's going down
the west coast of South America,
turns around at a port in Chile, and then goes back up,
and they do it several times on the way back up.
There were eight crew members in all on the Gayane
that was involved in the smuggling operation
including the chief mate,
and the chief mate plays a really key role on the ship.
He puts together the schedules, for example, of the crewman,
so he can get the crew that he knows
are in on this operation working, for example,
all at night
when he needs them to be there to load the cocaine.
He also has a lot of information about the stowage plans,
so which containers are going where.
US authorities did not arrest the captain of the ship,
but you don't need the captain.
But for an operation like this,
you do need a very senior officer
who can control the movement of the crew, the ship,
and all sorts of things.
And keep in mind that
this wasn't just happening on one ship.
US authorities had also made seizures
on the Carlotta and the Desiree
which they believed operated in exactly the same way.
This is something that was by 2019, June of 2019,
it was a pretty well-oiled system,
so that's why they were confident
they could move that that many drugs,
that tonnage of cocaine on a single load.
- In total, there were about eight crew members
that were implicated in the Gayane smuggling,
and of those eight, four of them had in fact been recruited
before ever stepping foot on the Gayane
on that particular voyage.
At least one of them had been recruited
in their home country of Montenegro.
- Montenegro has a long history of seafarers.
The country's right on the Adriatic,
produces a lot of sailors and crewmen and officers
who are very skilled at what they do
and they've been plying the oceans for centuries.
MSC taps into that in a way that's bigger
than any other shipping company.
They employ basically a third or more than a third
of all Montenegrin sailors.
- Organized criminal groups
are particularly strong in the Balkans.
There's a large network of individuals and groups
that have been operating there for years,
really in the wake of the breakup of Yugoslavia
and the Balkan Wars.
As the economy there collapsed, it beget a lot of crime.
If you're a cartel, if you're trafficking drugs,
it only made sense and it was easy for them
to target not only sailors,
but to target sailors on MSC ships.
- Senior law enforcement officials from
at least three countries approached MSC management
and said, look this is what the problem is.
They had been told that their crew were being recruited
by the Balkan cartel
and so from the point of view of law enforcement in Europe
and ultimately law enforcement in the US,
MSC had multiple opportunities to try and fix this problem
before 2019 and didn't do enough to do that.
MSCs view is that they did try and do things
that would help curb this problem.
Some cases, they put guards on some ships
going from the east coast of South America to Europe.
They tried to find other ways which they could
secure those logistic lines from traffickers.
But their point mainly is that we were doing
everything that every other shipping company was doing.
There's an ongoing investigation based out of New York
into the Balkan cartel and key individuals in the cartel.
Recently, there was a breakthrough arrest in Miami.
This individual was a former heavyweight boxer
from the Balkans, and according to the indictment,
he played a major coordinating role
helping to recruit sailors aboard MSC ships
and there are eight crewmen who were charged
and ultimately pled guilty and are in federal prisons now.
- After the crew members were sentenced,
it turned out the case wasn't entirely over.
There was still the lingering question of
what responsibility does MSC have in any of this?
And it turns out that there's a statute
that says essentially that if you're caught with any
illicit cargo, in particular, if you're caught with cocaine,
you will be fined 1,000 dollars per ounce.
Customs and border protection authorities
added up all the cocaine, the 20 tons of cocaine,
multiplied it by the 1,000 dollars per kilo,
and came up with what their fine would be.
It was over 600 million dollars.
The largest fine ever assessed against a commercial carrier.
The Gayane was seized by US officials
during the course of the search
and was detained for over a month.
- The Gayane is worth at least a hundred million dollars
but it's also, once you seize it,
you take one of these massive assets out of the lineup
of cargo ships that the company is using
to move goods around the world.
So it was a pretty shocking event for MSC.
They reached an agreement with US authorities
to pay 50 million dollars,
which is essentially putting the ship out on bail.
There's a civil case going on right now
where there's an effort by US authorities to show
that that initial seizure should turn into a forfeiture.
In other words, MSC should lose the ship.
MSC is arguing that they're not culpable.
US government is arguing that in fact they are
and that case has the potential to really change the map
for shipping companies.
US authorities really want to make an example of this case
for not just MSC, but the shipping industry generally.
It's absolutely clear MSC wasn't itself,
as a company, smuggling the drugs,
the Balkan cartel was smuggling the drugs.
But there's a question about how the company behaves
as its infrastructure is being used
and misused by drug trafficking.
- Even the most amount of money
that a shipping company can spend on this,
on guards, and on cameras,
and on other technology like smart containers
that can detect when a container is open,
even throwing money at that,
it's gonna be very difficult to make a dent in this problem
because you still have an enormous trade in cocaine.
- Even though there were 20 tons of cocaine on that ship,
it was just a fraction of the overall cargo
and the cocaine was found in seven different containers.
But that's seven containers out of 4,000.
It's a really, really, really hard problem to solve.