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The plot to smuggle 100 kg of ‘N. Korean’ meth into America

NK News, Oct 16, 2015

It was the 27th of August, and on the dock at New York City’s southern district court Scott Stammers was pleading guilty of planning to bring 100 kilograms of crystal meth – allegedly made in North Korea – into the United States. If sold on the streets, it’s estimated the drugs would have been worth $6 million.

A British citizen, Stammers was on trial with his alleged accomplices in the scheme: Philip Shackels, also a Brit, Ye Tiong Tan Lim, Allan Kelly Peralta Reyes – Chinese and Filipino respectively – and Adrian Valkovic of Slovakia. All have pleaded guilty with the exception of Shackels, who is set to take the stand any day now.

So who was Scott Stammers, the ringleader of this motley crew of wannabe Tony Montanas, and where did he come from?

SECURITY TO SMUGGLING

Stammers’ background was in private security, and on his LinkedIn profile he claims to have experience with everything from training unnamed national police and armed forces in the Asia-Pacific region to organizing protection for corporate events at luxurious hotels.

Stammers grew up and was educated in Hong Kong, and in 1992 he began working as an operations officer for a company called Guardforce Limited before leaving to work for a number of security firms in the Philippines. He ended up in Thailand, working as director of operations – security and aviation services for the ASA Group, a company providing private aviation and VIP services for wealthy corporate clientele, where he worked for three years.

His boss at ASA was founder and CEO Simon P. Wagstaff, who insisted in an email to NK News that Stammers worked for the company “briefly” and that the two men parted ways in 2010 and have not been in contact since. But, as noticed by the eagle-eyed Andrew Drummond, a British journalist who has covered the case extensively, Stammers appeared in an article in Charter Broker magazine in February of that year, where he was named the newly appointed head of ASA’s Singapore office and as a “senior executive” of the company. Wagstaff said that Stammers left that year because there was no job for him to return to in Thailand, and so decided to go into business for himself.

“Scott worked for us for I think a little under three years up to early September 2010,” Wagstaff told NK News. “He left by mutual agreement on contract completion over five years ago and we have had no further contact.

“I don’t recall anything unusual about him or his behavior at that time and was shocked to learn of his involvement in the illegal activities mentioned.”

After leaving ASA, Stammers became Operations Director of a company called SAS Consulting & Management Services Company Limited, a company naming Stammers as its only employee on LinkedIn and which remains listed as “active” on Thai government business registries, citing an office address in the Suriya Wong neighborhood in Bangkok.

So what drove an experienced and professional expat, with excellent contacts and references, into organized crime? A source familiar with the world of Western expats working in private security in Thailand, and who had worked with Stammers in the past but wished to remain anonymous, told NK News over email that theirs is a world full of people with difficult backgrounds willing to do a lot just to get by – but said that in all his interactions with him there was nothing to hint he was involved in criminal activity.

“From my understanding a number of expats living in Thailand are usually getting away from the world for one reason or another,” he wrote in an email. “And if he had fallen on hard times financially then it’s not inconceivable to come into contact with the types of characters that were mentioned in the story.

“In my dealings with him he came across as above-board and professional – in the security sector reputation is hugely important as a lot of the industry, in our pocket of it, anyway, is referral-based.”

Despite this, Stammers was certainly involved in a conspiracy stretching back to 2012, it seems, when he came close to getting caught – and the men on the docks in New York had worked together before getting busted. That year, law enforcement agents seized 30 kilos of methamphetamines supplied by Lim and Peralta Reyes, with Shackels and Stammers having agreed to store and protect the drugs once they had been delivered to them in Thailand. According to police, the stimulants had a purity of greater than 99 percent – virtually heard of, since crystal meth is notoriously impure, with a street purity of, on average, only 10 percent.

Despite their scheme having been foiled, the quartet were determined. A year later they again got in touch, but this time they were hoping to acquire 100 kilos of meth – and it was destined for the United States. Once again, Lim and Peralta Reyes were to be the suppliers, providing samples of the allegedly North Korean meth “for testing in the New York market,” and the Brits agreed to look after the drugs, and arranging for the test sample to be moved around in advance of its journey to New York.

WITH FRIENDS LIKE THESE

This is where defendant No. 4 comes in. Also referred to as “Alexander Checo” and “Alexander Semenco,” he’s referred to as Alexander LNU (last name unknown) in court documents from the first indictment but Adrian Valkovic in more. A Slovak resident of Thailand, Valkovic played a particularly important role for anyone hoping to move a lot of drugs: He was sergeant at arms (MC slang for the senior member responsible for security) for the Thailand branch of the Outlaws Motorcycle Gang, and was well-connected. Court documents say Valkovic agreed that “eight armed associates from his motorcycle gang” would protect the drugs.

Just how a legitimate private security professional came to know members of a violent motorcycle gang is something of a mystery.

There’s also little information about the other Brit, Philip Shackels. A discussion on a forum from 2013 suggests he came from Dungannon, Northern Ireland, and had been “scooped with a load of drugs in Thailand a few years ago,” and that his father had raised 25,000 from an unspecified currency for his bail and had subsequently fled the country. It’s impossible to verify these claims.

But the DEA was now on their trail, and on or near January 24, 2013, according to court documents, in Thailand Ye Tiong Tan Lim, identified in an article in Chinese state media as a “Hong Kong gangster,” and Reyes Peralta – his Filipino colleague, met with a Drug Enforcement Administration source posing as another dealer. With secret video and audio rolling, the DEA source said he’d heard that the methamphetamine “comes from the ‘NK’ place.” Peralta and Lim replied “yes,” before boasting that theirs was now the only organization capable of getting the coveted pure meth from North Korea.

“Because before, there were eight,” Lim said. “But now only us, we have the NK product … (I)t’s only us who can get from NK.”

Curiously, the DEA’s source then asked whether he might be able to visit North Korea to get a firsthand glimpse at the country’s meth production facilities and, presumably, direct evidence of the government’s role in the drug trade.

“No, we can’t go to North Korea,” Lim responded. “We take it out. If we don’t talk Korean language, they’ll have suspicions.”

Fearful of the American government finding out, he said, the North Koreans had “burned all the labs,” save one – Lim’s supplier.

They met again the next day, with an associate of the DEA source and another undercover agent – also posing as a drug trafficker. When the source asked Lim to confirm the quality of the drugs, Lim simply responded with “NK.”

“NK, okay, North Korea?” the DEA source pressed.

“Yes.”

A few days later, Scott Stammers showed up, meeting with the two DEA sources in Thailand. When they expressed an interest in acquiring North Korean meth, Stammers said that would be hard to pull off.

“The NK stuff,” he told them, “it’s expensive first of all, and it’s so hard to get in.”

“The NK one is gonna be difficult,” he added. “What I’m gonna do is, I’m gonna leave there and call my guys, because Phil (Shackels) is the one dealing with this one.”

The DEA sources arranged with the defendants for a sample of the drugs to be shipped to New York testing in the market, before the larger shipment could be arranged, to be smuggled into the U.S. in auto parts, via Liberia. On March 7 Stammers sent an email to an associate of the DEA’s source, who was purportedly another dealer involved in the case, letting him know the tracking number for the package. Liberian law enforcement intercepted the package – testing the two samples of meth as being 96 percent and 98 percent pure, before letting it go on its way.

Again, the DEA sources met with Stammers and Shackels, who confirmed the drugs had come “from these North Korean people – sample ‘A’ and sample ‘B.’”

A month later Stammers emailed his accomplices – the New York connection (linked to the DEA) claimed to have liked the samples, and wanted more – much more.

“HQ likes both samples … and asked for prices and manufacturing quantities/capabilities,” he told them.

But to move the drugs, they would need the skills of Valkovic, who met the DEA’s sources, along with on May 17, 2013 to discuss the operation. The same day, they met Lim and Reyes Peralta, who agreed, on camera, to supply the meth for $60,000 a kilo. But at the last minute, they decided to take their chances and up the sale.

“My friends, can you do the 60, a little bit, a little more, like a hundred if we’re doing the same risk,” asks Reyes Peralta, once again being recorded.

“Yes, yes and, uh, I am more concerned because maybe after next year, my stuff will not last after next year,” adds Lim.

Lim argued that the supply of North Korean meth was running dry, and that amid tensions on the peninsula had been moved from the DPRK to the Philippines – where they had over a ton in storage.

“North Korea, we cannot get things out from North Korea,” he said. “Because we already anticipated this thing would happen between America, Korea, North Korea, South Korea, Japan – all the satellites are now – we cannot bring out our goods right now.”

The DEA sources agreed to the sum, and they soon met with Valkovic, who was to be “ground commander” for the operation, along with a crew of OMC comrades.

But you don’t try to smuggle 100 kg of meth from Southeast Asia to the United States without being completely certain your supply routes are secure. They carried out a “dry run,” transporting a shipping container of tealeaves from the Philippines to Thailand.

When this was successful, they were good to go, and the plan was made that Stammers, Valkovic and Shackels would protect it when it arrived in Thailand. The drugs were to land by boat, and Stammers and Shackels were to take it to a warehouse where it would be counted, re-packaged, and then taken to the docks to be transported to the U.S., with Valkovic and his OMC colleagues in tow.

LOOK NORTH

It was all, of course, a sting operation. There was no big-time client in New York waiting for their drugs – it was the cops. On September 23, 2013, Lim and Peralta arrived in Thailand to claim their money, and two days later – along with Stammers and Shackels – they were arrested by Thai law enforcement.

Before long, the group was extradited to the United States to face trial and a triumphant DEA, thrilled they had busted a drug smuggling ring – and exposed a former member of George W. Bush’s so-called “Axis of Evil” in one fell swoop.

“Like many international criminal networks, these drug traffickers have no respect for borders, and no regard for either the rule of law or who they harm as a result of their criminal endeavors,” DEA Administrator Michele M. Leonhart told the press in New York.

“This investigation continued to highlight the emergence of North Korea as a significant source of methamphetamine in the global drug trade,” she added. “I wish to thank the Thai government for their outstanding efforts and partnership in completely dismantling this sophisticated and dangerous international criminal enterprise.”

Despite the evidence the case presents, not everyone is convinced, however, that North Korea is even involved in the case. Drummond, a British journalist who has covered the case extensively, told NK News that he doesn’t see any evidence that that’s where the meth came from.

“I am not convinced North Korea is involved at all and there is nothing in the indictment to suggest a named person from Korea,” he told NK News in an email. “Only a statement by the defendant as to where it was coming from.”

It’s not a secret, however, that the North Korean state has long been desperate for hard currency to fund military projects and keep the country’s elites supplied with Danish Ham and Cognac, among other things, and the trade of methamphetamine is one of a number of ways this has been accomplished

It’s been long known, too, that the North Korean government has surreptitiously developed an internal market for producing and exporting crystal meth. A report published last year by the Committee for Human Rights in North Korea lays out in stark terms the extent to which Kim Jong Un’s government is involved in the drug trade – and the international networks it has developed to generate hard currency for the regime.

“For almost 40 years, North Korea has exhibited extensive involvement in transnational criminal smuggling networks,” it argues, pointing to numerous incidents involving the country’s diplomats and overseas agents that demonstrate the country not only exports the drug for sale, but that there is a significant problem with its use among the general population.

Unsurprisingly, the government of North Korea denies this charges. In response to the extensive press coverage which followed the beginning of the case back in 2013, a KCNA report, citing a spokesman for the DPRK Foreign Ministry, in traditionally bombastic tone rejected the allegations, blaming South Korea for the offense, and calling for the U.S. and its allies to “mind their own business.” It is one of the few times that the country has ever addressed these allegations.

“In recent days the Western reptile media are spreading sheer sophism that the DPRK is a major hotbed of international drug-related crimes,” the spokesman said. “Its origin is none other than the U.S. and the south Korean puppet regime.”

“The DPRK totally rejects it as it is another politically motivated puerile charade invented by those hostile forces keen on the base smear campaign aimed to isolate and stifle it. Drug manufacture and smuggling are strictly banned in the DPRK, and such practices are never tolerated under its social system.”

Someone with first-hand experience of North Korea’s alleged role in the meth trade is former FBI agent Bob Hamer, who worked in undercover cases for the Bureau for 26 years. One of his last assignments was a case known as Operation Smoking Dragon, an operation which began as an attempt to break up an Asian gang running counterfeit cigarettes – and ended with a plan to smuggle surface-to-air missiles, North Korean printed “super notes,” and drugs into the U.S.

Posing as a wealthy benefactor keen to make illicit investments, Hamer spent significant time infiltrating a group run by two Chinese gangsters, who he calls “John Wu and Chen,” who tried to involve him in a plan to build a crystal meth manufacturing facility they were gathering funds for. While having not discussed the plan with any North Korean officials himself, Hamer says that the North Koreans had given the idea their seal of approval, they just needed money, and that the plan was to manufacture a set amount of crystal meth in the facility, before it was transformed into a laundry detergent factory.

“The deal was, it was gonna be a one time use manufacturing facility,” he told NK News, “where we were gonna make 600 kilos of crystal meth, we had to give 200 kilos to the North Koreans, John (Wu) and Chen were gonna take 200 kilos and I was gonna take 200 kilos.”

“The North Koreans would guarantee it and then once we got our 600 kilos … we had to turn to manufacturing plant over to North Korea and they were gonna make it a laundry facility.”

But despite the lack of a distinct “smoking gun” evidence that the DPRK supplied the drugs for the Stammers and co, the U.S. government and its officials seem certain that the crystal meth was made in North Korea, with the endorsement of the government.

“Scott Stammers conspired to import into the United States 100 kilograms of dangerously pure North Korean methamphetamine,” U.S. Attorney Preet Bharara triumphantly told reporters after Stammers’ guilty plea.

“Thanks to the work of the DEA and the cooperation of law enforcement partners around the world, including in Thailand, Liberia and Romania, Stammers’s scheme ended, not with the North Korean methamphetamine flooding American streets as he had intended, but rather with a guilty plea in a Manhattan federal court.”

The DEA, the FBI, as well as the defense’s legal team, could not comment while Shackels remains on trial, and the Thai branch of the Outlaws MC declined to answer NK News‘ requests for comment. But it is clear that Stammers and his comrades face a long time in prison. With his guilty plea, he faces the potential of life imprisonment. Valkovic, Lim, and Peralta have all plead guilty, too, and Shackels’s plea is due any day now.