"Top Russian Mafiosi from Russia, Europe, and the United States, convened in Israel three times between 1993 and
1994 to decide upon their investment policies and to settle disputes."
-- Alan Block, 1996, p. 33]
"The element of trust is vital in the diamond trade, and religious orthodoxy, curiously enough, is often regarded as the ultimate guarantee of a Jew's honesty."
-- Howard Sachar, 1985, p. 47]
"The Prohibition Act of 1920 allowed every American family up to ten
gallons of wine annually for religious or 'sacramental' purposes. Jews
used wine in the synagogue and at home for celebrating the Sabbath
and Jewish festivals. According to the law, members of the clergy could request allotments of wine for their congregants. A number of local rabbis exploited the sacramental wine privilege and supplemented their meager incomes by producing wine in their cellars and bathtubs for sale in the marketplace."
--Robert Rockaway, 2001, p. 113-
"I can't believe it. A rabbi stole my money. A rabbi stole my money."
-- comments of prominent Jewish American mobster Joseph
"Doc" Stacher, arrested over the years for "atrocious assault
and battery, robbery, burglary, larceny, bootlegging, hijacking
and murder," then an Israeli citizen after being deported from
America in 1965. These comments were made upon winning a
lawsuit after being swindled by Rabbi Menachem Porush of the
ultra-Orthodox Agudat Israel Party. [ROCKAWAY, R., 1993,
p. 116-117)
23
DRUGS AND DRUG MONEY LAUNDERING WITHIN JEWISH NETWORKS: THE ‘RUSSIAN MAFIA,' 'ULTRA-ORTHODOX' CORRUPTION,
AND OTHER CRIMINALS
Jews in America have been prominent in the narcotics underworld since the early twentieth century. As Rich Cohen notes:
"The first major American drug dealer was probably Arnold Rothstein
... [COHEN, R., 1999, p. 131] ... In the mid-nineteenth century, when
the government started to ban certain narcotics, drugs were smuggled
in from Europe and the Far East. But it was a slapdash affair -- not a
business. Rothstein changed all that. He saw Repeal coming and knew
drugs could fill the void left by alcohol ... So in the late [19] twenties
Rothstein retooled a mechanism he had built to carry booze. It would
now carry, among other things, heroin and cocaine ... [It became] a
blueprint for smuggling drugs into America." [COHEN, R., p. 132]
"By 1926," notes Israeli scholar Robert Rockaway,
"[Rothstein] was allegedly the overlord of the foreign narcotics trade
in America. Beginning with Rothstein, American Jewish underworld
figures became prominently involved in smuggling and distributing
opium and opiates in the United States. During the 1920s and 1930s
Jews competed with Italians for dominance of the trade. The Italian-
American's racketeering predominated during World War II. This
was because of the Nazis. When the Germans began to exterminate
European Jewry, they also destroyed the Jewish criminals who
supplied American distributors." [ROCKAWAY, R., 1993, p. 8]
Rothstein's right-hand man was Louis Lepke, who took over the drug empire when his boss died in 1928. In the 1930s associate Yasha Katzenberg journeyed to Shanghai, China, contacted underworld figures there, and "taught them how to make heroin." "In the last thirties," says Cohen, "when officials at last figured out what Katzenberg was up to, the League of Nations declared him an international menace. A few years later Yasha was indicted, along with Lepke and twenty-eight others, for violation of narcotics laws." [COHEN, R., p. 133-134] In the late 1940s, there were still "dozens of Jewish drug dealers roaming New York City, the remnants of Rothstein's machine." [COHEN, p. 139] Particularly noteworthy were Solly Gelb, Solly Gordon, Tudi Schoenfeld, Artie West, Niggy Rutkin, Harry Koch, Sam Haas, Moe Taubman and Harry Hechinger. Tolly Greenberg even invented a machine to turn liquid heroin into pill form. [COHEN, p. 139-140] Harry Strauss, "Philadelphia's gambling czar," later became involved in smuggling "heroin into the United States from France. He reportedly earned $20 million a year from the trade." [ROCKAWAY, R., 1993, p. 33-34]
An important foundation of the old opium trade was the Jewish Sassoon family (of which famous hair mogul Vidal Sassoon is an heir):
"The legend of the Jewish clan can be traced back to David Sassoon (1792-
1864). Born into a Sephardic Jewish family in Baghdad, Iraq, David Sassoon
set up the Sassoon company in Bombay, India, in 1833. In 1844, he set up a
branch in Hong Kong, and a year later, he set up his Shanghai branch on the
Bund to cash in on the opium trade. At that time, about one-fifth of all opium
brought into China was shipped on the Sassoon fleet. They brought China
opium and British textiles and took away silk, tea and silver." [SHANGHAI STAR,
5-10-01]
Today's drug dealing is probably the world's most profitable crime; profit margins can range from 200% for cocaine to 1,200% for heroin. The Colombian international drug cartel, "Kali," which monopolizes the trade in Los Angeles and Miami, is estimated to distribute over 80% of the world's cocaine and a third of its heroin. Illegal drug syndicates are estimated to take in about $25 billion a year in the United States alone. In 1998, 59 tons of cocaine and 770 pounds of heroin were confiscated by American police authorities.
Little known -- and little publicized -- in America, in recent years the Jewish "Russian mafia," and Orthodox religious and Israeli business networks with deep links to drug cartels, have been instrumental in maintaining the United States drug problem. Many of these criminals are particularly pious Jews, and a number of Orthodox Jewish religious institutions have been used for the laundering of literally hundreds of millions of dollars in drug money in (particularly) New York City. (Money laundering here refers to the task of getting huge sums of money that were paid for drugs, originally in small bills, into a form of assets that has the appearance of legality.) In 1994 Israeli journalist Ben Kapit exposed this story of Jewish culpability and corruption in America's growing drug problem; he wrote in Hebrew, to an Israeli audience, in the newspaper Ma'ariv.
American Jews and Israelis dominate the jewelry and precious stones and metals trade in Manhattan, mostly located in the 47th Street area. "75-80% of the active traders on the street are Jews," said Kapit, "A large part of them are very pious Orthodox Jews, mainly Hassids. There is also a respectable representation of Jews from Iran and Syria, usually also very pious ... the place is also the biggest launderer for drug money in the United States." [KAPIT, p. 2]
Daily transactions of huge sums of money -- including interstate and international -- is part of the diamond business (as is backroom secrecy, based on "personal acquaintance and trust," [KAPIT, p. 2]; boxes, large packages, and armored trucks come and go regularly under heavy security. All this provides a convenient front for the laundering of massive amounts of drug money, most of it in $10 and $20 bills. "One of the most popularly successful ways to launder money," notes Kapit, "is through Jewish religious institutions, such as yeshivas and synagogues. Since the majority of the 47th Street gold and diamond merchants are religious Jews, the process is made easier." [KAPIT, p. 4]
"Today," noted Newsweek in 1977, "the Japanese give diamond engagement rings nearly as often as American, and wealthy Arabs who once eschewed diamonds for the more colorful stones, have become insatiable diamond buyers ... Little wonder, then, that tampering robberies and even murders have come to haunt the business, not only along West 47th Street in New York -- where the mostly Jewish dealers see an 'Israeli mafia' behind the murder last month of one of their numbers -- but the world's other diamond centers as well." [ATLAS, p. 95] "The robberies that plague the diamond districts of New York and Tel Aviv," notes David Koskoff, "are almost always perpetrated by people from within the diamond community." [KOSKOFF, p. 191] In 1990, the Jerusalem Post, paraphrasing the Los Angeles County Sheriff, Sherman Block (also Jewish), noted that "Los Angeles' small but potent 'Israeli mafia’ has spread across America, graduating in the last two decades from extorting poor Jews -- often concentration camp survivors -- to major drug-dealing and fraud schemes against the rich ... Cocaine is the favored product of the mafia's drug dealing, and their clients tend to be affluent people who demand the highest quality." [DERFNER, 9-9-90, ONLINE]
U.S. Federal agents have identified, says Kapit, what it calls "the Cocaine Triangle. Its sides are: Colombian drug barons, Israeli-Jewish money launderers, and Jewish-Russian mafiosos ... You need only look at the list of arrests and indictments of the past three years in order to grasp the enormous scope of Israeli involvement in the field." [KAPIT, p. 3] There are numerous murky criminal interfaces between these Israeli drug dealers, the so-called "Russian" mafia, and some of the most pious Jewish Orthodox religious circles. The link between Israeli weapons dealing and South American underworld organizations is also deep. In 1988, for example, an Israeli paramilitary training company called "Spearhead," directed by a former senior army officer, Yair Klein, was hired to train members of a drug cartel in Colombia. Klein was eventually fined all of $13,000 by Israeli authorities for "exporting defense know-how not covered in his permit." [HIRSCHBERG, p. 13] In 1990 the Jewish Week reported that "three United States officials were in Israel ... investigating possible Israeli connections to the Colombian drug cartel" and that earlier NBC had reported that "Israeli reserve officers.... [were providing] military training to drug-cartel gunmen." [GOLBERG, A, p. 51]
An associate of Klein, Israeli Arik Afek, known publicly as a "flower importer," was found dead in the trunk of a car at the Miami airport in 1990. The Washington Post noted that
"Afek's name first surfaced last summer when NBC News broadcast film
allegedly showing foreign mercenaries training Medellin cartel gunmen in
ambush assassinations and other paramilitary activities." [ISIKOFF, p.
A14]
Still, in May 2000, Colombian authorities busted four Israelis and one Colombian citizen in an "arms trafficking ring" that sought to funnel weapons into the country. [XINHUA GENERAL NEWS SERVICE, 5-27-2000] Itzik Richter, Ofer Zismanovich, David Birnbaum and Yaron Cohen with known links to the Cali drug cartel, were arrested, also on charges of a scheme to counterfeit dollars. A few weeks earlier another Israeli, Amos Shimoni, had been arrested in Panama on similar charges. [KRAU, 5-29-2000]
"Among the recent items of news that failed to make more than passing mention," noted R. T. Naylor in 1989, "... is the scandal over the chummy relations senior members of Israel's military maintain with both the Colombian cocaine barons and their Panamanian affiliate, General Manual Noreiga." [TAYLOR, p. 136] Noreiga's alleged "right hand man" was a Mossad agent, Mikhail Harari. In 1988 the Jewish Week reported that "[U.S.] Senate investigations have turned up information linking Panama's recently indicted military strongman, General Manuel Antonio Noreiga, to the Mossad, Israel's external intelligence agency." [WAGMAN, p. 5] Jose I. Blandon, a former influential Noreiga adviser and Panamanian counsel in New York, told Congress that Michael Harrari, "described as a former Israeli army general who later worked for Mossad," lived in close contact with Noreiga for 5-7 years and trained "Noreiga's private guard -- a unit separate from the Panamanian army. Guard officers report to Noreiga through Harari." [WAGMAN, p. 5] Brandon also noted that "Harrari often acts as a middleman in weapons purchases that Noreiga makes in Europe," and that "when Noreiga travels in Europe, Harari arranges for his protection by Israeli military intelligence and Mossad personnel." "Investigators believe Panama," reported the Jewish Week, "a kind of Switzerland of the Caribbean, has become a center of Israeli financial dealings and for so-called front companies -- corporate shells operating for secret owners, in this case the Israeli government. Investigators believe another of Harari's functions is to oversee bank accounts and shell companies ... Panama [functions] ... as a haven for shadowy financial transactions." [WAGMAN, p. 5] Secret reports were also in Noreiga's possession of various United States politicians, from Senators Edward Kennedy to Jesse Helms; "Some [Senate investigators] speculate," said the Jewish Week, "the files may have come to Noreiga through Harari." [WAGMAN, p. 5]
In 1985, Israeli Shmuel Targan, who used a fake shoe store in New York City as the front for his drug operation, was arrested for cocaine and heroin smuggling. Rudolph Giuliani, then the U.S. District Attorney for Southern New York, noted that Taragan's store "was one of a 100 Israeli-operated legitimate businesses in the city that disguised illegal operations." [FISHER, A.] In 1986 five Israelis were arrested in New York for a million-dollar-a-week heroin and cocaine operation. In 1988 five more Israelis were busted in Boston for drug running by the FBI. Also in 1988, in Los Angeles, Israelis Abraham Zarchia and Yitzhak Edvi received ten year prison sentences for drug trafficking -- $22 million over a five month period. [HUNTER, LINK, p. 4, 6, 7]
In 1985, Max Mermelstein, described by his lawyer as "just a nice Jewish guy who got into the wrong industry," [MURPHY, pt. 1, p. 3] became a government witness against a number of former accomplices in Colombia's international Medellin drug cartel. Over seven years, Mermelstein was himself responsible for the smuggling of 55 tons of cocaine, worth $360 million, into the United States. (Curiously, the town of Medellin was actually founded by Spanish Jews in 1616).
Elsewhere, a pioneer in the laundering of Colombian drug money (particularly that from marijuana and cocaine) was Isaac Kattan-Kassin, son of a Sephardic Jewish family that had fled Hitler's Germany in the 1930s. In the late 1970s, over $100 million a year of the tainted bills passed through his family's currency exchange business in Cali, Colombia, although Kattan established business offices in New York and Miami, where he spent most of his time. In 1977, he "went to work full time for several cocaine organizations" [POWIS, p. 34] and he eventually became known as "the most famous of the money launderers of this period." [POWIS, p. 32] Another prominent drug money launderer in this era was Beno Ghitis, who also headed a Colombian currency exchange business founded by his father, Alter. Victor Eisenstein was also a crucial partner in the drug money ring, and Abel Holtz, president of Capital Bank in Miami, was a participant as the American depository. [POWIS, p. 74]
