Pubdate: Tue, 30 Apr 2002 Source: San Jose Mercury News (CA) Copyright: 2002 San Jose Mercury News Contact: http://www.bayarea.com/mld/mercurynews Details: http://www.mapinc.org/media/390 Author: Roxanne Stites Bookmark: http://www.mapinc.org/pot.htm (Cannabis) Bookmark: http://www.mapinc.org/find?115 (Cannabis - California) INDICTMENT SAYS HOUSE WAS TO BE MARIJUANA FARM Saratoga Family, Others Allegedly Ran Drugs, Laundered Money It was once the site of a nondescript two-story home in a residential neighborhood in Saratoga. But owner Michael Costa demolished the first level and propped the second on stilts. He dug a 4,000-square-foot hole and built a concrete vault. He told neighbors he was converting the property at 12623 Quito Road into an underground garage for his elaborate collection of Ferraris, Harleys, old Chevys and sport-utility vehicles. But an 18-month investigation that wrapped up last week with 14 federal indictments alleged that Costa, 37, was the head of a highly profitable marijuana-smuggling ring and was planning to use the site as an indoor oasis for more cultivation. Costa harvested pot in at least two other homes in Santa Clara County, and since January 2000 had peddled about 20,000 pounds of the drug for $8 million, laundering much of the profit through real estate, according to a 53-page affidavit recently unsealed in U.S. District Court in San Jose. Federal prosecutors allege that Costa, co-owner of a Santa Clara manufacturing company called Powerspec, directed people, including some of his relatives, to help him transport the drug from California and El Paso and sell it to large dealers on the East Coast, primarily the Boston area. For about $5,000 a trip, officials said, young couriers would pack 1,000-pound loads of leaves into secret compartments of vehicles, then drive across the country with a convoy of others serving as lookouts. They'd box the cash proceeds and send the money back via UPS or Federal Express, authorities said. When they flew, records said, they'd stuff the pot into checked luggage and tape the cash to their bodies. "He not only used drugs and luxury cars to bedazzle these people, but when the enticements didn't work, he'd use violence and guns," said Elizabeth de la Vega, chief of the San Jose branch of the Northern California U.S. Attorney's Office. She referred to an incident in September when Costa reportedly lured an employee and his girlfriend to San Jose, where he had the man beaten with fists and guns and threatened with a pit bull that licked his blood off the floor. The incident occurred at the same home at which authorities allege Costa ran an escort service, Naturally Naughty. As the courier remained tied up, the affidavit says, his girlfriend was sexually assaulted in the home by a man and a woman. Costa's lawyer, Phil Pennypacker, in a statement, said his client stands by his not-guilty plea and that he expects to present "a vigorous defense." The criminal complaint names Costa and several members of his family, including his father, Edward, and wife, Jessica, all Saratoga residents. Overall, 14 people have been linked to the nationwide smuggling operation, all but three of whom are in custody and scheduled to appear in court today. The fugitives are San Jose residents James Benninghove, 43, and Toribio Calvillo, 25, both of whom are accused of being drug and money couriers; and Shawn Lessieur, 29, of Massachusetts, charged with distributing pot for Costa in the Boston area. Many of the alleged conspirators reportedly helped Costa carry out the scheme by keeping his name off bank accounts and weapons permits, among other traceable evidence. Costa, a convicted felon whose past crimes include burglary and possessing stolen property, wasn't allowed to carry guns. Costa's father, co-owner and president of Powerspec, is accused of laundering drug proceeds for Costa by serving as a straw owner on real property. He also reportedly deposited large amounts of cash in many accounts to avoid detection. Some aspects of the case are not detailed in court records, because the investigation is ongoing, but prosecutors said it appears he invested the drug profits in real estate. Costa owned, or was linked to, 11 homes in Santa Clara County and one in Calaveras County. According to the affidavit, Costa also used a fictitious construction company, Power Development, to launder the drug money. Tanya Tran, who lives behind the "pit," as she called the Quito Road home, said it attracts gawkers on a daily basis. Seconds earlier, two people in a pickup inched by, laughing as they pointed out the home. Tran and her husband, Hai Luong, said they tried being patient with Costa until his hole-digging took down the fence dividing their houses and caved in their yard. "Imagine, they were going to have a little plantation over there," she said. "That's so dangerous for my children." - --- MAP posted-by: Alex