[iwar] The Technology Secrets of Cocaine Inc. (fwd)

From: Fred Cohen (fc@all.net)
Date: 2002-07-04 07:37:20


Return-Path: <sentto-279987-4949-1025793429-fc=all.net@returns.groups.yahoo.com>
Delivered-To: fc@all.net
Received: from 204.181.12.215 [204.181.12.215] by localhost with POP3 (fetchmail-5.7.4) for fc@localhost (single-drop); Thu, 04 Jul 2002 07:38:08 -0700 (PDT)
Received: (qmail 28705 invoked by uid 510); 4 Jul 2002 14:36:48 -0000
Received: from n33.grp.scd.yahoo.com (66.218.66.101) by all.net with SMTP; 4 Jul 2002 14:36:48 -0000
X-eGroups-Return: sentto-279987-4949-1025793429-fc=all.net@returns.groups.yahoo.com
Received: from [66.218.67.200] by n33.grp.scd.yahoo.com with NNFMP; 04 Jul 2002 14:37:10 -0000
X-Sender: fc@red.all.net
X-Apparently-To: iwar@onelist.com
Received: (EGP: mail-8_0_7_4); 4 Jul 2002 14:37:00 -0000
Received: (qmail 98929 invoked from network); 4 Jul 2002 14:36:58 -0000
Received: from unknown (66.218.66.216) by m8.grp.scd.yahoo.com with QMQP; 4 Jul 2002 14:36:58 -0000
Received: from unknown (HELO red.all.net) (12.232.72.152) by mta1.grp.scd.yahoo.com with SMTP; 4 Jul 2002 14:36:58 -0000
Received: (from fc@localhost) by red.all.net (8.11.2/8.11.2) id g64EbKe30968 for iwar@onelist.com; Thu, 4 Jul 2002 07:37:20 -0700
Message-Id: <200207041437.g64EbKe30968@red.all.net>
To: iwar@onelist.com (Information Warfare Mailing List)
Organization: I'm not allowed to say
X-Mailer: don't even ask
X-Mailer: ELM [version 2.5 PL3]
From: Fred Cohen <fc@all.net>
X-Yahoo-Profile: fcallnet
Mailing-List: list iwar@yahoogroups.com; contact iwar-owner@yahoogroups.com
Delivered-To: mailing list iwar@yahoogroups.com
Precedence: bulk
List-Unsubscribe: <mailto:iwar-unsubscribe@yahoogroups.com>
Date: Thu, 4 Jul 2002 07:37:20 -0700 (PDT)
Subject: [iwar] The Technology Secrets of Cocaine Inc. (fwd)
Reply-To: iwar@yahoogroups.com
Content-Type: text/plain; charset=US-ASCII
Content-Transfer-Encoding: 7bit
X-Spam-Status: No, hits=0.0 required=5.0 tests=DIFFERENT_REPLY_TO version=2.20
X-Spam-Level: 

http://www.business2.com/articles/mag/0,1640,41206,00.html

By: Paul Kaihla 
Issue: July 2002

Colombian cartels have spent billions of dollars to build one of the
world's most sophisticated IT infrastructures. It's helping them
smuggle more dope than ever before.

On a rainy night eight years ago in the Colombian city of Cali, crack
counter-narcotics troops swarmed over the first floor of a low-rise
condominium complex in an upscale neighborhood. They found no drugs or
guns. But what they did find sent shudders through law enforcement and
intelligence circles around the world.

The building was owned by a front man for Cali cocaine cartel leader
Jos=E9 Santacruz Londono. Inside was a computer center, manned in shifts
around the clock by four to six technicians. The central feature of
the facility was a $1.5 million IBM AS400 mainframe, the kind once
used by banks, networked with half a dozen terminals and monitors. The
next day, Colombia's attorney general secretly granted permission for
U.S. agents to fly the mainframe immediately back to the United
States, where it was subjected to an exhaustive analysis by experts
from the Drug Enforcement Administration and various intelligence
agencies. The so-called Santacruz computer was never returned to
Colombian authorities, and the DEA's report about it is highly
classified. But Business 2.0 has ferreted out many of its details.  
They make it clear why the U.S. government wants the Santacruz case
kept quiet.

According to former and current DEA, military, and State Department
officials, the cartel had assembled a database that contained both the
office and residential telephone numbers of U.S. diplomats and agents
based in Colombia, along with the entire call log for the phone
company in Cali, which was leaked by employees of the utility. The
mainframe was loaded with custom-written data-mining software. It
cross-referenced the Cali phone exchange's traffic with the phone
numbers of American personnel and Colombian intelligence and law
enforcement officials. The computer was essentially conducting a
perpetual internal mole-hunt of the cartel's organizational chart.  
"They could correlate phone numbers, personalities, locations -- any
way you want to cut it," says the former director of a law enforcement
agency. "Santacruz could see if any of his lieutenants were spilling
the beans."

They were. A top Colombian narcotics security adviser says the system
fingered at least a dozen informants -- and that they were swiftly
assassinated by the cartel. A high-level DEA official would go only
this far: "It is very reasonable to assume that people were killed as
a result of this capability. Potential sources of information were
compromised by the system."

The discovery of the Santacruz computer gave law enforcement officials
a chilling glimpse into the cartels' rapidly evolving technological
sophistication. But here's what is truly frightening: Since the
discovery of the Santacruz system in 1994, the cartels' technological
mastery has only grown. And it is enabling them to smuggle more dope
than ever before.

The drug lords have deployed advanced communications encryption
technologies that, law enforcement officials concede, are all but
unbreakable. They use the Web to camouflage the movement of dirty
money. They track the radar sweeps of drug surveillance planes to map
out gaps in coverage. They even use a fleet of submarines, mini-subs,
and semisubmersibles to ferry drugs -- sometimes, ingeniously, to
larger ships hauling cargoes of hazardous waste, in which the
insulated bales of cocaine are stashed. "Those ships never get a close
inspection, no matter what country you're in," says John Hensley,
former head of enforcement for the U.S. Customs Service. Most of the
cartels' technology is American-made; many of the experts who run it
are American-trained. High-tech has become the drug lords' most
effective counter-weapon in the war on drugs -- and is a major reason
that cocaine shipments to the United States from Colombia hit an
estimated 450 tons last year, almost twice the level of 1998,
according to the Colombian navy.

In a sense, the cartels are putting their own dark twist on the same
productivity-enhancing strategies that other multinational businesses
have seized on in the Internet age. Indeed, the $80 billion-a-year
cocaine business poses some unique challenges: The supply chain is
immense and global, competition is literally cutthroat, and regulatory
pressure is intense. The traffickers have the advantages of unlimited
funds and no scruples, and they've invested billions of dollars to
create a technological infrastructure that would be the envy of any
Fortune 500 company -- and of the law enforcement officials charged
with going after the drug barons. "I spent this morning working on the
budget," the head of DEA intelligence, Steve Casteel, said recently.  
"Do you think they have to worry about that? If they want it, they buy
it." That's an especially troubling thought just now, as the Bush
administration pressures Congress to expand the $1.3 billion
anti-narcotics plan for Colombia and to allow the U.S. military to
take a more forceful role in the savage fighting between Colombia's
left-wing rebels, right-wing paramilitary units, and the
drug-trafficker allies of both.

Archangel Henao is the man whom authorities credit with much of the
drug runners' recent technological progress. According to Colombian
and U.S. narcotics officials, Henao heads the North Valley Cartel, the
largest and most feared criminal organization to emerge from the chaos
that gripped Colombia's underworld after the old Medell=EDn and Cali
cartels were broken up in the 1990s by the country's military -- with
extensive U.S. help. Officials say that Henao, a heavyset 47-year-old
born with a withered left arm, controls Buenaventura, the principal
port on a stretch of the Pacific coast that is the launching point for
most of the cocaine and heroin smuggled into North America from
Colombia. His North Valley Cartel foot soldiers are known for
dismembering the bodies of their enemies with chain saws and dumping
them into the Cauca River. The U.S. Treasury Department has banned
Henao from doing business with U.S. companies because he is a "drug
kingpin," and the DEA publicly calls him one of Colombia's biggest
traffickers. He has never been convicted of a drug-related offense,
although a DEA official says the agency is "trying to build an
indictment" against him.

Henao's cartel is a champion of decentralization, outsourcing, and
pooled risk, along with technological innovations to enhance the
secrecy of it all. For instance, to scrub his profits, he and fellow
money launderers use a private, password-protected website that daily
updates an inventory of U.S. currency available from cartel
distributors across North America, says a veteran Treasury Department
investigator. Kind of like a business-to-business exchange, the site
allows black-market money brokers to bid on the dirty dollars, which
cartel financial chiefs want to convert to Colombian pesos to use for
their operations at home. "A trafficker can bid on different rates --
'I'll sell $1 million in cash in Miami,'" says the agent. "And he'll
take the equivalent of $800,000 in pesos for it in Colombia." The
investigator estimates the online bazaar's annual turnover at as much
as $3 billion.

Henao and other cartel leaders recruit IT talent from many sources,
intelligence officials say. The traffickers lure some specialists from
legitimate local businesses, offering scads of cash. They also
contract with Israeli, U.S., and other mercenaries who are former
electronic warfare experts from military special ops units. Cartel
leaders have sent members of their own families to top U.S.  
engineering and aeronautical schools; when the kids come home, some
serve as trusted heads of technical operations. Most of the high-end
gear the cartels deploy comes from household-name multinational
companies, many of them American; typically, front companies purchase
equipment from sales offices in Colombia or through a series of
intermediaries operating in the United States.

The talent and tools are among the best that money can buy, and it
shows. For instance, Henao's communications have become so advanced
that they have never been intercepted, Colombian intelligence sources
say. The last clear view inside the organization's technical
operations was provided in 1998, when a small army of Colombian police
arrested Henao's top IT consultant, Nelson Urrego. That bust soon led
to the discovery of an elaborate communications network that allowed
Urrego to coordinate fleets of North Valley Cartel planes and ships
that were smuggling 10 to 15 tons of cocaine each month.

The network's command center was hidden in a Bogot=E1 warehouse
outfitted with a retractable German-made Rhode & Schwarz transmission
antenna about 40 feet high, and 15 to 20 computers networked with
servers and a small mainframe. The same kind of state-of-the-art setup
existed in communications centers at Urrego's ranch in Medell=EDn, at an
island resort he owned, and at a hideout in Cali. Seized invoices and
letters show that Urrego or his associates had recently bought roughly
$100,000 worth of Motorola (MOT) gear: 12 base stations, 16 mobile
stations installed in trucks and cars, 50 radio phones, and eight
repeaters, which boost radio signals over long distances.

The range of Urrego's network extended across the Caribbean and the
upper half of South America. He and his operatives used it to send
text messages to laptops in dozens of planes and boats to inform their
pilots when it was safe to go, and to receive confirmations of when
loads were dropped and retrieved. According to one intelligence
official who analyzed Urrego's network, it was transmitting 1,000
messages a day -- and not one of them was intercepted, even by U.S.  
spy planes.

When Urrego typed a message into his computer, it created a digital
bit-stream that was then encrypted and fed through a converter that
parceled the data out at high frequencies. Digital communications over
a radio network can be put into a code much more easily than voice
transmissions, and thus are far tougher to intercept and decipher.  
"There's going to be a delay in sending and receiving messages," says
a surveillance expert who does code-breaking work for the DEA and CIA,
"but it's going to be fairly friggin' secure."

The cartel's fleets still had to dodge surveillance aircraft like the
dozen or so P3 Orions that U.S. Customs flies over Colombia. But by
bribing officials and drawing on an elaborate counterintelligence
database maintained by the cartels, Urrego learned the operations
schedule of the planes. According to a former narcotics operative in
the U.S. Army's Southern Command, cartel pilots routinely map the
radar coverage of U.S. spy planes by putting FuzzBuster radar
detectors in their drug plane cockpits and logging the hits. "They'd
use every piece of data to build a picture, just like a jigsaw
puzzle," the retired officer explains. "A piece of data could be 'One
of our airplanes was flying on this azimuth at this altitude, and his
FuzzBuster went off,' which means he was being painted by the radar.  
So they put that piece of data in the computer. Then another airplane
was flying on that azimuth at that altitude, and his FuzzBuster did
not go off. As they put that data together, they'd build a picture of
the radar signature."

Law enforcement officials believe that much of Urrego's system has
simply been reconstituted -- with upgrades based on the latest
advances in communications and encryption gear.

A lanky man with deep bags under his eyes sits in a cinder-block
office within a heavily fortified army base. He may have the most
dangerous job in Colombia. He is a top special operations commander,
and he probably knows more about the drug cartels' technological
prowess than anyone on the outside. He rarely gives interviews, but
late one Saturday night, he agrees to discuss one of his special areas
of expertise: Archangel Henao.

Lately, the commander says, he has been studying how Henao's cartel
uses technology for what amounts to corporate espionage and
competitive advantage against business rivals. The North Valley Cartel
has waged a war against other smuggling groups over a variety of
issues, including control of the port of Buenaventura. The commander
recites a litany of recent assassinations and bombings. In February
2001, for instance, North Valley Cartel operatives commandeered a Bell
helicopter used by the government in coca fumigation programs and
pressed it into service in an attempted assassination of a rival
trafficker. The rival was in jail in Cali at the time, so the hit men
flew over the prison and dropped a homemade bomb containing 440 pounds
of TNT. The detonator failed, but had the bomb gone off, it would have
killed more than 3,000 people, the commander estimates. Within a month
of that attack, the intended victim's organization retaliated with a
flurry of hits -- among them, a submachine-gun ambush of four North
Valley Cartel figures in a Cali hospital cafeteria. (In February,
Henao's brother-in-law, a top North Valley Cartel capo, was poisoned
to death in a maximum-security prison.)

Many of the targets in the power struggle, the commander says, were
located by signals intelligence -- things like pager and e-mail
intercepts, transmitters planted on vehicles, or bugs hidden in homes
and offices. "This is a technological war," he says.

Actually, it has been for a long time -- as the mysterious story of
the Santacruz computer suggests. According to Carlos Alfonso Vel=E1squez
Romero, a now-retired colonel who commanded the elite unit that
discovered the computer, one of the principal IT gurus behind the
system was Jorge Salcedo Cabrera, a former army intelligence operative
and electrical engineer who crossed over to the underworld. The
Santacruz computer wasn't his first big technological splash. When the
Colombian government launched the unit that Vel=E1squez would later
head, it established a toll-free tip line for information about Cali
Cartel leaders. The traffickers tapped the line, with deadly
consequences. "All of these anonymous callers were immediately
identified, and they were killed," a former high-ranking DEA official
says.

Henao's cartel built on this and other prior technology initiatives,
in part by creating what amounts to a narco research and development
program. One early fruit of that effort, intelligence officials say,
was an advanced version of a cheap boat called a semisubmersible.  
Shaped like the Civil War-era Monitor, the small craft cruises below
the waterline, except for a conning tower where one of its two-man
crew pilots the boat. The vessel has underwater propulsion, radar, and
short-band radio towers. And it's virtually invisible to even the most
sophisticated spy gear. "You basically need a visual sighting to
detect one, because you're not going to pick them up in a radar
sweep," says Hensley, the former U.S. Customs enforcement chief.

Semisubmersibles, however, are unstable, and narcotics officials think
the cartels have lost several at sea -- one reason that the
traffickers upgraded to submarines. According to the head of the
Colombian navy, Adm. Mauricio Soto, the North Valley Cartel and other
organizations have used real subs for years. Authorities believe that
the Cali Cartel purchased a Soviet sub in the early '90s, and that its
crew accidentally sank it off Colombia's Pacific coast during its
first smuggling run, probably because they lacked the 10 skilled
people needed to operate it.

More recently, the cartels have built their own subs, with help, Soto
suspects, from Italian engineers who stayed in Colombia after
overseeing the construction of the navy's own fleet of commando
submarines two decades ago. Henao, for instance, is believed by
military and intelligence officials to have a small fleet of mini-subs
-- used for, among other things, hauling dope to those toxic waste
freighters. So far, Colombian authorities have found only two drug
subs, both of which were under construction. The most recent one,
discovered 21 months ago outside Bogot=E1, was a 78-foot craft that cost
an estimated $10 million. Intelligence sources say it belonged to
Henao's North Valley Cartel. A Colombian official says Henao wanted a
vessel that could carry several more tons than the Buenaventura
mini-subs and travel as far as 2,000 miles -- say, to the coast of
Mexico or Southern California.

Arrayed against this formidable technological arsenal is, well, not
much. The commander of the narcotics agents in the Buenaventura area
is a world-weary man who rarely ventures outside his military compound
not far from town. He never goes into Buenaventura itself. Traffickers
have put a price of 35 million pesos (about $17,000) on his head.  
"Life is cheap here," he mutters. He displays boxes and boxes of
seized high-tech gear. Even personnel at the bottom of the cartel food
chain have Israeli night-vision goggles, ICOM radio frequency
scanners, and Magellan GPS handhelds.

The commander says an informant told him about mini-subs off
Buenaventura months ago. But neither he nor his men have ever seen
one. His outfit doesn't have the equipment to detect underwater craft.

Nor does the commander know many details about the Santacruz computer
bust that first alerted officials to how technologically advanced his
adversaries had become. He is unaware, for instance, of one of the
biggest reasons U.S. officials want details of the system and the
murders of U.S. intelligence sources it triggered kept top secret.  
Jorge Salcedo Cabrera, the main IT whiz who set up the Santacruz
computer, eventually became an informant against cartel bosses. The
DEA declined to comment on Salcedo. But according to several
intelligence officials, he is now living in America at taxpayer
expense, under the witness protection program.

------------------------ Yahoo! Groups Sponsor ---------------------~-->
Will You Find True Love?
Will You Meet the One?
Free Love Reading by phone!
http://us.click.yahoo.com/ztNCyD/zDLEAA/Ey.GAA/kgFolB/TM
---------------------------------------------------------------------~->

------------------
http://all.net/ 

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/ 



This archive was generated by hypermail 2.1.2 : 2002-10-01 06:44:31 PDT