Pubdate: Tue, 21 Sep 1999
Source: Miami Herald (FL)
Copyright: 1999 The Miami Herald
Contact:  One Herald Plaza, Miami FL 33132-1693
Fax: (305) 376-8950
Website: http://www.herald.com/
Forum: http://krwebx.infi.net/webxmulti/cgi-bin/WebX?mherald
Author: Larry Lebowitz, Herald Staff Writer

COPS GET $25 MILLION IN SEIZED DRUG CASH WINDFALL FOR MONROE SHERIFF

The Monroe County Sheriff's Office celebrated a $25 million windfall Monday
thanks to the incredibly profitable exploits of a former Broward and
Miami-Dade marijuana smuggler who revolutionized the business in the 1970s.

Monroe Sheriff Rick Roth accepted the oversized check from U.S. Customs
Service Commissioner Raymond Kelly for the department's 50 percent share of
a record drug asset forfeiture case.

"We've been waiting for this day, and this check, for a long, long time,"
Roth said.

Monroe's big payday comes from the $50 million surrendered in 1997 by
ex-smuggler Paul Edward Hindelang, formerly of Fort Lauderdale and Miami,
who has subsequently become a legitimate millionaire pay-telephone entrepreneur.

Roth said Hindelang's drug money is earmarked for the following:
approximately $8 million worth of high-tech radio systems, laptop computers
and in-car video cameras; $4 million to $6 million for a new substation and
jail in Plantation Key; $3.7 million for local anti-drug and -violence
programs; $2.2 million toward a new juvenile detention center on Block Island.

Hindelang helped pioneer the so-called "mother ship" marijuana smuggling
technique that revolutionized the illicit trade that dominated South
Florida's underground economy in the mid-to-late 1970s. A "mother ship"
freighter carrying up to 180,000 pounds of marijuana would be unloaded at
sea by a fleet of 50-foot fishing vessels, which would relay the drugs to
smaller craft that blended in with recreational boaters for the trip ashore.

Hindelang was arrested in 1981 on multiple smuggling conspiracy indictments.
As part of his plea deal with prosecutors, he forfeited $640,000 and agreed
to cooperate, in an undercover capacity, with Drug Enforcement
Administration agents.

He helped the feds investigate some of the largest marijuana and cocaine
suppliers of the day, including Medellin cartel kingpin Carlos Lehder, who
had transformed the Bahamian island of Norman's Cay into a way station for
cocaine flights to the U.S.

In return for his cooperation, Hindelang received a reduced sentence of 10
years; he served about 30 months. By the early 1990s, Hindelang was a
legitimate multimillionaire in Southern California, founding one of the
first independent companies to compete with the Baby Bells in the recently
deregulated pay-phone industry.

In 1992, Monroe Sheriff's Detective Charles Visco and Customs Service agent
Linda Hunt, using new and more sophisticated asset forfeiture laws, started
an ambitious money-laundering probe with a simple premise. Operation Cash
Extraction -- derived from the name of an early target, a disbarred
money-laundering lawyer from Broward named Toothaker -- tried to determine
if smugglers had forfeited all of their illicit assets, as they promised,
when they were convicted in the early 1980s.

They turned their attention to Hindelang.

Visco and Hunt spent years chasing bank records, deeds and money launderers,
tracking Hindelang's ties to ranches in Montana and Oregon, housing
developments in California, condominiums in Aspen, Colo., a restaurant in
Austin, Texas, and cable television and fruit businesses in Costa Rica. That
probing eventually led to millions of dollars stashed in offshore accounts
and corporations in Panama, the Turks and Caicos, the Netherlands Antilles,
the Cayman Islands and Switzerland.

Hindelang, 51, declined to comment on Monday. But his lawyer, Harland Braun,
said Monday the decision to forfeit the fortune was easy for Hindelang. Even
as he cooperated with DEA agents after his initial arrest in the 1970s,
Hindelang was allowed to keep large quantities of illicit assets, all the
better to preserve his "cover."

"A lot of these [plea] deals were kind of ambiguous, but not that unusual
for" the early 1980s, Braun said. "They'd say, `You keep your money, you
work for us'."

The harder part for Hindelang was making a clean breast of the past he had
so successfully concealed from his teenaged children, neighbors in the
exclusive enclave he developed in Santa Barbara and business partners. The
board of directors at Pacific Coin, the company Hindelang founded with a
handful of pay phones in some of Southern California's grittiest
communities, fired their CEO in December 1998, shortly after the forfeiture
case became public in South Florida.

This won't be the last big Cash Extraction payday for the Monroe Sheriff's
Office. In 1998, the brother of a Hindelang associate-turned-competitor, Joe
Harry Pegg of Weston, surrendered another $50 million in cash and real
estate to avoid a prison term. Customs, the sheriff's office and dozens of
other agencies are expected to vie for a chunk of the $50 million
surrendered in Macon, Ga., by William "Buck" Pegg, formerly of Hollywood, in
return for probation and no jail time.

- ---
MAP posted-by: Jo-D