Pubdate: Sun, 31 Dec 2000
Source: Roanoke Times (VA)
Copyright: 2000 Roanoke Times
Contact:  201 W. Campbell Ave., Roanoke, Va. 24010
Website: http://www.roanoke.com/roatimes/
Author: Jen McCaffery, The Roanoke Times

'There's Still Liquor Flowing'

MOONSHINE IS SLOWED, NOT STILLED

Since Operation Lightning Strike and the indictments that followed,
illegal liquor production is down nearly 75 percent in Southwest
Virginia. And the cost is up.

The moonshine that has coursed for generations from Southwest
Virginia's hidden hollows to cities up the East Coast has slowed
because of a crackdown on the illegal liquor industry, a federal
authority says.

Virginia's trade in illegal whiskey is half what it was five months
ago, when 78 federal charges were handed down after a two-year
investigation called Operation Lightning Strike, estimates Bart
McEntire, an agent with the Bureau of Alcohol, Tobacco and Firearms in
Roanoke.

Twenty-seven people were indicted on federal charges including
conspiracy, money laundering, trafficking, perjury, obstruction of
justice and illegal still possession. Since the indictments, the price
of white lightning in Philadelphia - a key distribution center - has
gone from about $75 a case up to $110, McEntire said.

"If there was a lot of liquor out there, they wouldn't be paying what
they're paying," McEntire said.

He also cited the fact that agents have busted only three stills - two
in Franklin County, one in Pittsylvania County - since the indictments
as evidence of the trade's slowdown. He estimated that the production
of illegal liquor is down 65 percent to 75 percent in Southwest
Virginia. The remainder of the trade includes smaller operators who
have stepped up to supply more of the moonshine pipeline since the
indictments, McEntire said.

Nineteen defendants face trial this spring as a result of Operation
Lightning Strike. The eight other defendants have either pleaded
guilty, been convicted or been acquitted of their charges.

In a top-to-bottom sweep, indictments were doled out to everyone from
stillhands to alleged kingpins accused of overseeing the production of
millions of dollars of untaxed liquor and selling it up the East
Coast. Federal authorities contend that three moonshine-making rings -
two centered in Franklin County, one in North Carolina - have cost
state and local governments $11.5 million in tax revenue between 1992
and 1999.

McEntire based his estimates on how much criminal activity he has seen
since the indictments and on tips from informants. He said there were
no national figures available for moonshine production.

But he said that after working all over the South, "none of the other
states holds a candle to the volume of liquor that was being produced
in Southwest Virginia and the offshoots in North Carolina."

The spike in moonshine's price may also be a result of a cut in the
supplies used to make moonshine, McEntire said.

Farmers Exchange in Rocky Mount was targeted in the investigation for
providing sugar and jugs used to make illegal whiskey. Prosecutors
have alleged that the store supplied moonshiners with more than 12
million pounds of sugar, which generated enough illegal liquor to cost
the federal government $19.6 million in tax revenue between 1992 and
1999. Farmers Exchange is no longer in operation.

"Your main supplier of raw materials is closed down," McEntire said.
"They've had to find new suppliers." He also thinks the jugs - made of
thick plastic so they won't break when transported - are probably
harder to find.

Operation Lightning Strike is not federal authorities' first effort to
slow the flow of illegal liquor. Since 34 Franklin County residents,
including several law enforcement officials, stood trial for moonshine
conspiracy in 1935, the feds have tried repeatedly to slow the
production of moonshine and its distribution.

Though McEntire said the scope of Operation Lightning Strike was
unprecedented, he has no illusions that it has wiped out the illegal
liquor pipeline.

"I don't think any of us is naive enough to think it's dried up,"
McEntire said. "There's still liquor flowing into Norfolk and Richmond
and D.C. and Philly."

To law enforcement officials, making moonshine is organized crime. But
to some Franklin County residents, it's just a tax offense, a local
tradition as intrinsic to the landscape of Southwest Virginia as the
Blue Ridge Mountains.

Bill Davis, a Rocky Mount lawyer who has represented numerous
moonshiners over the years, was disqualified from representing
defendants indicted as a result of Operation Lightning Strike. Chief
U.S. District Judge Samuel Wilson ruled in November that Davis'
previous defense of clients facing moonshining charges posed a
conflict of interest. Davis said the recent crackdown is "meaner. I
think it's based on state ABC people being lazy as hell and then the
feds took it over."

"People have historically made liquor here, and they used it to make
money," Davis added. "But the hundreds of thousands the government is
alleging, I've never seen it."

Federal prosecutors have sought the forfeiture of $7 million in assets
they allege were acquired through money laundering.

"A lot of this case is about trying to get money, that's why there
have been so many forfeitures," said Jonathan Rogers, the Roanoke
attorney representing William Helms. Helms, 54, is the brother of the
late Ramsey Helms, who ran Farmers Exchange. Ramsey Helms committed
suicide after Farmers Exchange was raided in May. Charges against
William Helms include conspiracy and money laundering.

"There's no justification for the federal government to be involved,"
Rogers said. "Many of the defendants have been prosecuted in the state
system for the same offenses."

Federal prosecutors Sharon Burnham and Craig "Jake" Jacobsen sought
the forfeiture of $150,000 of the Helms brothers' money and about 100
acres of their land. Burnham said the government did not seize the
business itself and cause it to shut down.

But Rogers insists the Helms brothers were not rich.

"It's mythical money because Ramsey was always teetering into debt,"
Rogers said.

The case of 42-year-old Rodney Lee James, who was convicted of perjury
in November and required to forfeit his 43-acre farm, also angered
some who see the federal government as invading their territory.

"They've come down here and taken everything away from our good
people," Davis said. "I bet they've spent millions of dollars."

When asked how much Operation Lightning Strike cost, Burnham said the
U.S. Attorney's Office doesn't track investigations by case.

In McEntire's view, "this has nothing to do with our overreaching our
authority. It has to do with us investigating criminals. If they
weren't committing crimes, we wouldn't be investigating them."
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