Episode 2: The Trapdoor

a family of spiders that build trap doors. Did you ever see on like the National Geographic Channel, spiders that make little holes in the ground and then above them they weave little sticks and grass together and literally make a trap door, and they wait for a bug to come on and wham, they fucking nail it. When Project Miguel got started in routine, it was one of the

biggest cross border police operations in US Canadian history. It employed hundreds of officers and several law enforcement agencies, including the d e A and Homeland Security. The operation targeted cartel runners, money launders, and narcotics traffickers on both sides of the Atlantic Ocean. Duffel bags of cash, zip blos full of hills and bricks of cocaine. Classic bad guy stuff, My gal, I guess we could say it was a trap door that bag I just walked Then what would

you say? That trapdoor was of easy money and these people would just go down that hole. And one of the people who walked right into that trap was an enterprising businessman named Derek White Card A Little Amazing Love It Yeah from Camps Media and Dan Patrick Productions. I'm Roger Gola and this is Running Smoke, Episode two, The Trapdoor. When Derek made a deal to take raw tobacco as payment for renting out as race cars, it turned out

to be much more than a simple business transaction. Derek had unknowingly stepped right into a gigantic undercover police operation that had been building for months. Police sketched a profile of Derek as a major figure in the criminal organization. But from what I could tell, all he was doing was buying and selling raw tobacco on his mohawk territory. So you're probably wondering, how the hell did that make him a criminal? Isn't tobacco legal? Answering that question turned

out to be more difficult than I anticipated. The problem was every time we reached out to a law enforcement agency, they told us they couldn't comment on an open case. But after months of calling around, we did find someone who would speak to us, A retired police officer who helped investigate the case against Derek, the same investigator you

heard earlier through a voice changer. His name was never revealed in the court proceedings or media reports around Project Miguel, so he asked that we don't reveal his name either, so we'll call him Jimmy. When I started doing this, I had this have somebody explained to me what a list of tobacco was, and I guess after ten years of doing this, they become a subject matter expertal and basically all I focused on was contraband tobacco between the

States and Canada, specifically how New York plays into it. Now, on its face, the phrase contraband tobacco doesn't make a whole lot of sense, because, well, tobacco is legal just about everywhere in the world. But the difference between regular legal tobacco and illicit or contraband tobacco comes down to taxes.

Almost every government in the world taxes tobacco. So someone manages to sneak tobacco into a country without paying those taxes, Well, now that's considered contraband, which comes with the criminal charge of defrauding the government. Jimmy has been working as a cop since he was nineteen, but after he retired about ten years ago, he started working on contraband tobacco investigations for different law enforcement agencies. He was eager to peel back the curtain on an issue that not a whole

lot of people understand. He had packs of smuggled cigarettes and stacks of printed documents laid out on his dinner table for me to flip through. He'd also been up late the previous night working on a power point presentation just for us. The numbers that all get into here with you are just staggering, just staggering, the billions of dollars. One thing I wanted to know is one pound of tobacco, one pound of royal leaf process tobacco, or what I

call cut rag. You could fit one pound of cut rag tobacco approximately in a one gallon zip block back no plugment for zip block, zip block the bag for smugglers, and the choice of smugglers around the world. Black please sponsor s okay. So one pound of tobacco makes five hundred cigarettes or roughly two and a half corns. A tractor trailer holds thirty four thousand pounds of cut rack tobacco. So here's the problem for Canada. Thirty four thousand pounds

of cut rag times five hundred cigarettes per pound. If you run all the numbers, what you come out with is that a single tractor trailer of contraband tobacco that illegally crosses the Canadian border comes out two around seven and a half million dollars innovated taxes, and those trucks cross every day. It was a massive logistical accomplishment. I mean, we can organize a coffee and donut run without an argument for ten minutes. These people are doing international money laundering.

They're they're transporting contraband for thousands of miles. Tobacco brought a lot of different groups together. The project my Gal exposed that if you want to bring tobacco attractor trailers worth up into your facility, you need an organized network to do that. Who better than organized crime. Tobacco is a commodity for organized crime. Whenever they could make money off of their going to exploit it's funding their other businesses.

They used to use cash to fund their drug businesses, They used to use cash to fund their human trafficking business, to fund their their gun business. Elicit tobacco has become the new currency for organized crime. They use cigarettes and it makes my skin crawl. And the thing about organized crime is that it needs someone at the top to or nize the crime. In this case, investigators had their eyes on a man named Sylvan et Tier by Day. Etia was the owner and operator of a prohibition themed

bar in Montreal's suburbs called Well Prohibition by Night. Though he was an alleged associate of the Hell's Angels, managing tobacco transport and money movement among various criminal organizations. Sylvan Sylvain's function was he was the sort of the the frontman, if you will, for for the organized crime slash Hell's Angels organization that was running these operations, or I should say that was profiting from these operations. Sylvan's operation worked

like this. First, he would have his guy's wire money to a broker in North Carolina to purchase a load of tobacco attractor trailer's worth, which would run you about eighty thousand dollars. Then Sylvan's guys would arrange for drivers to go pick up the tobacco with a semi truck. Under Cover police would be staked out at the North Carolina warehouse, writing down license plate numbers of suspicious trucks and sending them to colleagues at the border, But the

smugglers were one step ahead. The drivers would stop and we're in Jersey or New York, unload their tobacco and swap trailers to throw cops off the trail. Then they would drive on up to the border. This was the most policed part of the tobacco route. Customs agents from both countries would be watching every vehicle going across that line, and they were trained to spot illegal shipments. If the cops were gonna nab one of sylvan etsgates trucks, this

is where it would happen. They will take those tractor trailers in regular commerce and drive into a regular border, crossing like you or I could cross, like tractor trailers cross each and every single day, and it's welcome to candidly, what do you have in your truck at that point. The driver will show the border agent paperwork that documents what the truck is caring, except that paperwork doesn't say tobacco. It's false, but from legitimate companies like Thomasville Furniture. Everybody

knows Thomasville. So the Canadian border service guy looks at that paperwork and sees Thomasville. Well, hey, it's a legitimate load, and he'll let them go through. And some of it was pretty ingenious, but some of it was pretty stupid too. Sometimes we've also seen idiots. We're on the bill of lading. They put sawdust. Sawdust going into Canada, the number one producer of lumber in the entire world. You think they got to import fucking sawdust. Groundballs like that were easy

to catch for border agents. But truth be told, a lot of trucks full of illicit goods across that checkpoint every single day with no problem. You have to remember these are busy international borders. Agents can't open up and search every single semi truck that comes through, or the line would be backed up all the way down to Florida.

So more often than not, so then it's eight trucks got into Canada without a hitch from there it was smooth sail in the Silvan's warehouse on the outskirts of Montreal. According to Jimmy, this is where the Hell's Angels come in. Now it gets to these warehouses where literally you now have millions of dollars worth of cut rag tobacco store in your facility. Bad guys steal from bad guys all

the time. That's where God invent the guns. You need security. Oh, you can't call up the local police and ask them to guards of contraband, not, can't you? And that was the talian with organized crime and Hell's Angels. So the current rate is about six fifty to sixty thou dollars to both smuggle attractor trailer load up into Canada and to guard it until it's done. And that number is the cut that the Hell's Angels and truck drivers would get for both the smuggling and storage, so it'll be

like a smuggling fee of transportation fee. You break it up how you want. It cost sixty dollars to get the stuff from North Carolina into Counda's safely and securely, so it's quite profitable just for the muscle on the street. Solvan's operation was massive. It involves brokers, money, launders, outlaw bikers, and truck drivers in two different countries. He got in the entire supply chain down to his science, and the folks involved were making money hand over fist. But as

the organization got bigger, it also became more vulnerable. When you have an operation the size and scope of Mygale, with so many loads of cut rag moving back and forth, it is inevitable that one of those loads is going to get picked off by Canadian Border Services, or a tractor trailer is going to have an accident and the back's gonna open up and tobacco is gonna spread out everywhere. Stuff is gonna happen. Flukes and freak accidents were one thing.

What Stivan was really worried about, though, was being infiltrated by cops. When you have cases of this scope and you have players from warehouse employees to forklift drivers, to brokers, to bankers, to truck drivers, to sled operators to boat operators, you have a great opportunity to insert and undercover coming up after the break. You saw me declared to that you just wanting that we will get is the truth

and nothing but the truth I do. I do. The tape you're hearing, we got it from the Montreal courthouse after months of waiting through forums and files. It's a recording of a testimony from one of Sylvan's key collaborators, a convicted money launderer named Martin Grennier. He was an asset for a guy like Sylvan because he had a skill set that was central to any smuggling operation, money

laundering and transport. So this is a message I received from its He he's asking me if I know well the driver of the truck that brings the tobacco from the US to Canada, the transfer I was able to move money to UH to outside of Canada, the the the contact and I also had contacts in the transport world for bouge in order to remove some tobacco. He was put in charge of running the nuts and bolts of the smuggling operation and making sure things went smoothly.

Here he is telling the court about a time that Sylvan centem a text asking if he knew why cops were sniffing around the warehouse. The reason he gives me is that after we went to pick up a load of tobacco in Buffalo, three or four weeks after the police went there because then the libor, so the police went there to verify everything. And then he tells me also that after we dropped the load of tobacco at Saint me there was four cars watching or following the

dirt truck. That dirt truck that pick up the tobacco, saying to me and to bring it to another destination. Police were swarming at the DRA applications and tailing his trucks, and he was starting to get nervous. Et A wanted to know if the drivers could be working with the cops. Grant told him not to worry. His guys were legit batties. They were experienced narcotic smugglers. And so when when he

says that, how do you answer him? So I'm telling him, I don't think the proble limids coming from us, because my driver is also crossing white referring to cocaine. So I don't guarantee you that he's not hot, mean that he doesn't have police following him. But I confirmed to him that my driver is sitting down at his house, so there's no problem from my side. But all of that was a lie because the man still then et

C was texting was a double agent. Martin Grenier had been working with the cops for years, feeding information back to his handlers on every single money transfer and tobacco shipment. Oh and the drivers that Sylvan was worried about, Yeah, they were undercover officers too. Do you know who did the transporting for you? Yeah? HSI don't tell. So it was HSI um so undercover agents working honor and security

in the United States. What my gal offered was a very unique opportunity to insert undercover agents anywhere along the line, from the truck driver to a warehouse operator. It was a very complete and complex operation. Tell me about how you place undercover officers in key positions in this trade. You need an informant, You need an inform at the vouch for you. You need an informant to say, hey, this guy is buying from you, or this guy is

looking for a new whatever, and it's an introduction. Fortunately for investigators, they had the perfect person for the job, Martin Grenier. You got arrested in the United States for money laundry, Is that right, Okay? And it was. It was as a result of that arrest for money laundering in the us that you started to work for the police. Is that correct? Okay, yes, all right, so can you

tell us day? Long story short. He worked with criminal organizations for years until he was arrested in twenty twelve on money laundering charges. Not long after that he made a deal with the d e A and the Quebec Police Force. We're unclear on the exact terms of that deal, but beginning in Martin Grenier was back on the street and put word out that he wanted to work with his old boss again. And how do you know, Mr at Enormous. I know him for having done some criminal

activities for him over two periods. Back in the day, Grenier had been part of Savant Ettier's crew, and after his arrest, he managed to rejoin the group. For years, Grenier worked as a double agent, managing the legist six of Besier's tobacco business and feeding all that information back

to the cops. Grenier was particularly well placed to get high level intel on all the wire transfers and semi trucks, and when an order came in for a load of tobacco heading to a Native territory on the south shore of Montreal, Grenier got a message directly from sylvan Etta. I received a message from Chia attended to nine. He was asking me if I know someone buy a class bar the same good transport I from Sarah. Why they y house is to the client client being an individual

on an engine reservation. When you said the um, you had mentioned where the client was located? Sorry, where was the client located? Don't so like a yeah, on an engine reservation on the south shore. Did you know exactly where? No? Did you know the name of the reservation. So during a meeting face to face with you, we talked about the kawanaki A Reserve and from stage left from the Gnawaga Reserve enters Derek White will be right back. What debut dis invades you? So at the beginning, who are

investigating the organization? What you're hearing is court testimony from a Canadian border officer who worked on Project My Gael. Somehows combed a little bit later on on the during the investigation, we can to realize that Mr right On

is on organization. Also, as it so happened, Paul John, the driver that offered Derek Tobacco in exchange for renting his race car, well he turned out to be a close associate Sylvan Etier, So when Derek made a deal with Paul Jean for raw tobacco, it meant he was now doing business with Sylvan Ettier's organization. Now, to be clear, Paul Jean was never a Hell's Angel or associated with them in any way, and he denies having any knowledge

of Silvan's associations with any criminal organizations. But the fact is that because Sylvan was already under heavy surveillance, Paul Jean unknowingly wrote Derek into the traps set by law enforcement. Derek wasn't the intended target, but now he was impossible to ignore, and according to Jimmy, he played a vital

role in the larger operation that Sylvan was running. White's role in this was he was making money and he was using, in my opinion on what it appears, his native status as sort of like let's run it through me. Nobody's going to touch the tobacco on the Indian Reservation. A to some extent, He's right, more or less police won't go on the Indian reservation certainly and offered tobacco. So it's sort of having somebody like White afforded that like home plate, like just get it here and we'll

be safe. Derek was now caught up in the massive surveillance operation that had been wired, tapping and tailing Etta's crew for months. His text and phone calls were intercepted and disseminated to investigators. So the first communication four old tweet Mr Derrick White, Texas Mr Samuel Baker sur Baker. Mr White, Hey buddy period, which White replies the letter k at eight a m. From Mr Jason Hill. Let's

hear the phone call. These one thirty three in transcripted might have camera though fight your fight a remadurant teeth. The truck broke down hopefully Tuesday or Wednesday. Attack to be legal. These are text messages between Mr Derrick White and Samuel Make need the tires. I'll send sponsorship a am Monday work question mark. Yeah. That last message might sound unrelated and innocuus on its face. Derek is a race car driver. Of course he's buying tires and looking

for sponsors. But investigators already knew who Mr sam Baker was one of North Carolina's biggest illicit tobacco brokers. He was the guy buying tobacco from growers and processors. In the States and selling it to buyers in Canada or in Mohawk territories. Derek was using code words to speak with Sam Baker, and over the course of the investigation, Derek had sent him over two million dollars with memo lines like racing expenses and NASCAR parts. Derek wasn't just

a small player in a tas game anymore. He was running his own operation wet Phy. So at the beginning he was doing business with the organization Little One. And in October twenty fifteen and some rounds roundscomb so we we came to the realization that he had his own truck the amountain to pick up to tobacco from us. Turns out Derek had been buying and selling wholesale tobacco for years before he met Paul Jean, but until then

cops had no idea what he was up to. As soon as he shook hands with Paul john though, cops started paying attention very closely and they started filling in the picture of Derek's tobacco operation. And from all the intercepted messages, investigators figured out how Derek was wiring his money and handling his logistics. Maybe we could uh, moved it up maybe a two a week or three a week or something, you know, for you and they don't bring into him anymore. It's going to make you, Lauren,

everybody will be at our circle. And how he organized for someone to warehouse's product, a guy they code named the old Man. Yeah, okay, And how Derek directed his driver's once the tobacco got into Kenny, the trailer riding loaded and then be ready to go Sunday nine. Yeah. There were heavy criminal elements to the larger organization that project Mygale was investigating folks that were even bigger than Sylvannetti and who were dealing narcotics and hard drugs, but

Derek seemed to be totally independent of it. Derek never met silvan Ettier, never spoke to him, texted him, or communicated with him at all. From what investigators found, Derek was only dealing with tobacco and he never had any contact the rest of the criminal operation. But that didn't matter. Derek was on the Mygale radar and investigators were on Derek's trail. They had an informant inside his warehouse and

undercover officers driving his trucks. Cops knew exactly where every shipment was coming from and where it was going, And even though they could stop every truck at the border, they didn't. They wanted to pounce at the right moment when they had enough evidence to go after the Kingpins.

Jimmy the Anonymous Investigator explained the logic to us, So you typically don't want to take off a load if you don't have to, because imagine going through this multi year operation like Mygale, and then do something at the end that screws it up, that makes the bag. I say, we're not doing this for two years, we're backing out. But when you've got as many trucks going across the border as Derek and Sylvanne did, there's gonna be some

surprises no matter what. Stuff is gonna happen. And it always sends a wrench in the works when that happens, because the first thing the bad guys do is close ranks and go, we have an informant here. But truck could have been hit by a fucking meteor, right, and they're going to think they have an informant, which is exactly what happened in November, just a few days after Derek got back from a NASCAR race at Texas Motor Speedway, he got the news that one of his money runners

was pinched by the cops. Investigators saw the whole thing unfold from the texts and calls they intercepted from Derek's cell phone. They start at eight thirty six A and Mr White writes to Mr Hill, they jacked my friend. I'll let you know later. Don't want to talk too much. The car fucking a little made, fucking loved it. I'm just bringing it to what the fucking deal is to get rid of it. Yeah, a lot of your Fortunately for the cops working this case. Derek got over it

quickly and chalked up the arrest to bad luck. My lawyers said the same thing. It was just a fucking arrest of food. I saw silent saying, you know anything, fucking sitting anything old verdable that when I said, they really, I did fu Trying to the fun ship, Derey thought he'd gotten off scott free, but police were biding their time, waiting for the perfect moment to open the trapdoor coming up next time on running smoke. I thought there was no risk because they told me they were doing it

all legal. I took their word for it. The first thing you want him to know is you're screwing your gun and issier. The peacekeepers called me and they said that we have a warrant for your arrest. So I went turned myself in. Running Smokes a production of camp Side Media, Dan Patrick Productions and Workhouse Media, written and reported by me Roger Golan. Our producers are Leah Paps, Laine Gerbig and Julie Dennische. Our editors are Michelle Lands

and Emily Martinez. Sound designed and original music by Mark McAdam. Additional sound and mixing by ewen Lyone from Ewan. Additional reporting by Susie McCarthy. Our executive producers are Dan Patrick, Josh Dean of camp Side Media, Paul Anderson, Nick Vanella, and Andrew Greenwood for Workhouse Media. Fact checking by Mary Mathis, artwork by Polly Adams and additional thanks to Greg Horne, Johnny Kaufman, Sierra Franco, Elizabeth van Brocklin, and Sean Flynn.