The Biggest-Ever Coke Bust at Sea

It was like something out of "Miami Vice." Hiding under the cover of darkness, the U.S. Coast Guard cutter Sherman snuck up on the blue-hulled Panamanian freighter Gatún as it lumbered through the inky waters off the Pacific coast of Panama. Pulling up alongside the Gatún, Capt. Charley Diaz snapped on the Sherman's blue law-enforcement lights and sent 20 of his crew aboard the 300-foot freighter, armed with pistols, shotguns and M-16s. As the Gatún's 14-man crew waited nervously, the Coast Guard scoured the 300-foot vessel, looking for anything suspicious. The ship's alleged master, Francisco Valdez-Gonzalez, appeared unusually hazy about the contents of the 12 cargo containers on deck, so the search party decided to open them first, starting with two green containers nearest the stern. Little did the search party know when they opened the sealed containers they were about to make a discovery to put Sonny Crockett and Rico Tubbs to shame. Stacked amid ceramic tiles inside was 21 tons of cocaine, with a street value of $300 million, bound for Mexico and eventual distribution in the United States. That makes the March 16 bust the biggest ever on the high seas—and, in the annals of American drug seizures, second only to the 23.5 tons discovered in Sylmar, Calif., in 1989.

The bust provides a window into the important role that maritime smuggling now plays in the cocaine trade. During the 1980s, Colombian drug lords—principally the Cali and Medellin cartels—shipped cocaine into the United States, often by air. Over time, the Colombians began dealing more frequently with the Mexican cartels, selling to them—and leaving it up to them to figure out how best to smuggle the drugs north from Colombia. "That way, the Colombians don't have to take the risks anymore," said a Drug Enforcement Administration official in Washington, who requested anonymity because he didn't have permission to discuss the case publicly. The Mexican smugglers typically pick the drugs up off the coast of Colombia and ferry it north, using a combination of speedboats—nicknamed "go-fast boats"—as well as fishing vessels and freighters to cross the nearly 2,000-mile area U.S. law-enforcement officials call "the transit zone." The drugs are broken into small shipments and ferried overland into the U.S.

The transportation shift has made Panama, with its vast shipping industry and proximity to Colombia, a tempting way station. And as the cartels have concentrated on Panama, the DEA and Panamanian cops have been in hot pursuit: coke seizures in Panama, which averaged only 9 tons annually from the early '90s through 2004, spiked to 32 tons in 2005, and 25 tons last year. In just four months this year, Panamanian busts have already netted 47.5 tons, according to the DEA, which says it has boosted cooperation with Panamanian drug officials in light of the surge in traffic.

From beginning to end, the Gatún caper lasted less than 40 hours. "It was fast and furious," says Joseph Evans, the DEA's country attaché in Panama. The case began with a routine tip on dry land. Around midday on March 16 in Panama City, a source alerted Panamanian federal drug cops that two visiting Mexicans were preparing to use the Gatún (rhymes with dragoon), which was passing that day through the Panama Canal, to haul cocaine north. In the hours that followed, agents from DEA and Panama scrambled to learn more about the ship and its history. They found that the Gatún was owned by a 2-year-old Panamanian company called Marine Management and Chartering run by two men from Mazatlan, Mexico: José Núñez, a 36-year-old attorney, and Jesús Ernesto Mondragón, 37, an accountant. The company looked legitimate and owned three ships, including the Gatún, which it had bought in 2005 for $2 million, according to Panamanian officials. But not everything looked legitimate, said José Abel Almengor, a top Panamanian drug prosecutor. Some of the company's officers appeared to be "men off the street," he says, and Núñez and Mondragón had aroused suspicion around the docks by leasing cargo containers without having much cargo to load in them.

Agents traced the pair to a Best Western hotel and began round-the-clock surveillance. That afternoon—Núñez's birthday—the men took a taxi to the Canal to watch the Gatún make its way to the Pacific. On the morning of March 17, the Panamanian agents watching Núñez and Mondragón had seen enough. When the two men arrived at the airport to leave the country, they were detained at the gate on suspicion of drug trafficking. The officers seized two laptop computers, four cell phones and two BlackBerry devices. On the computers, Almengor says, they found pay and fuel records of the ship, as well as photos of the two men and the Gatún. The ship had had no cocaine aboard when it passed through the Panama Canal the prior day, according to law-enforcement accounts. But after entering the Pacific, the ship cut south toward Colombia, where agents say it rendezvoused around 2 a.m. with a half dozen "go-fast boats," and hoisted 765 bales of cocaine aboard. The Gatún then turned north toward Mexico.

"Tell the captain we have been arrested at the airport," Mondragón dashed off in an e-mail to his wife before officers could seize his BlackBerry. The cops don't know whether the message was intended for the Gatún's captain or a drug lord in Mexico. But if the warning reached the ship, the crew showed no sign. "We surprised them," says the Sherman's Capt. Diaz. The Gatún's operators, along with the 14 sailors who were arrested on board, were "aligned with at least one significant Mexican drug-trafficking organization," alleges Joseph Evans, the DEA's country attaché in Panama—though he says investigators still aren't sure which one. The Gatún was bound for a port in Sinaloa, home of a major cartel, but given the huge volume of narcotics, several cartels may have pooled their coke on the ship. "Sometimes many organizations will work together and all put a share of their narcotics in one load," Evans says. It took the Coast Guard five hours to move the 21 tons of coke from the containers. Panamanian officials suspect the Gatún may have been used in earlier runs.

All 16 men have pleaded not guilty to drug-smuggling charges. The 11 sailors who are Mexican nationals were charged in U.S. District Court in Tampa. Lawyers in Florida for several of them declined comment; one said he believed that thanks to a procedural issue, the lawyers may demand that at least some of the accused should be tried in Panama, not the U.S., where drug offenses typically carry stiffer sentences. Núñez, Mondragón and three Panamanian sailors face international drug-smuggling charges in Panama. Carlos Herrera Morán, the Panamanian attorney for Núñez and Mondragón, did not return NEWSWEEK's calls. But he told reporters in Panama that his two clients had no knowledge that cocaine was on the ship. He said the cargo containers in which the cocaine was found were already sealed when the ship picked them up in Colón, on the Caribbean side of the canal.

Agents say the operation was a curiously incautious one for big-time drug smugglers, if indeed that's what they were. It would have been unusually indiscreet for Mondragón and Núñez to keep photos in their laptops that could tie them to the Gatún if the ship ran into trouble later. And smugglers almost always strive to hide even large multiton loads in hidden compartments such as false fuel tanks, or stashed in hidden recesses in a ship's hull. "The way they just threw the narcotics into the containers on deck was arrogant," notes prosecutor Almengor. "They probably thought they controlled the route and weren't going to have any problems." They couldn't have been more wrong. "It was a great bust," said the Sherman's Diaz.