There are some notorious characters in South Africa. I am sure you will recall the story of Paul
Le Roux, a criminal who dealt in anything that made money whether legal or illegal.
The question is “who is the South African Arms Dealer and does he/she know more”?
No wonder South Africa is regarded as the crime capital of the world.
The US finally catches up with Australia's new Mr. Big Paul Calder Le Roux, The geek Paul Calder Le Roux, the guns, the drugs and
the bodies.
THE AUSTRALIAN www.theaustralian.com.au
Our journey begins at Unit 5C, 75
Lakemba Street, Belmore, a block back from the railway line in a treelined
pocket of Sydney’s west. This was where it started for Paul Calder Le Roux, a
newly married computer coder with a big idea.
Those who knew him back then, in
the mid1990s, remember a tall, awkwardlooking man who spoke with a rough and
ready southern Africa accent. He had left his native Zimbabwe as a teenager and
migrated to Australia via London, where he met his wife, a Gold Coast woman who
discovered that he lived for his work.
Le Roux evidently wanted to do
good. He worked day and night in that cramped flat to write a program called
E4M — Encryption for the Masses.
In effect, this created a digital
safe to lock up the secrets contained in a personal computer. The data
protection system was a leap forward on anything else on the market at that
time.
Le Roux uploaded it to the internet
as freeware. Never before had technology
of its kind been made available to the public. And
never before would law enforcement and intelligence agencies across the globe have
such cause to rue an Australian invention or the man behind it.
Like
Le Roux, E4M ran off the rails. While he became the lord of a criminal empire that
reached to blood diamond smuggling in Africa, drugrunning in and out of North Korea,
sponsored murder and dirty wars in forgotten corners of the world, the sinister
child of his original encryption program, TrueCrypt, would be adopted by
terrorists with alQa’ida and Islamic State to mask their crimes.
No one knows for certain who
developed TrueCrypt, which emerged in 2004,
after Le Roux left his wife and the quiet of suburban Sydney to embark on his
life of high crime. But those who have followed
his rise and fall see his fingerprints all over the supercipher.
“I’m
not sure if TrueCrypt would have existed if it wasn’t for him publishing his source
code to the world,” says former colleague Shaun Hollingworth, a British computer
programmer who worked with Le Roux at a German software company, SecurStar, in
2000, a pit stop on his road to infamy. “I doubt it, to be honest. It was certainly
heavily based on E4M. They didn’t even
bother changing the look and feel of certainly
heavily based on E4M. They didn’t even
bother changing the look and feel of the user interface.”
Last year, Australian Federal
Police say TrueCrypt was found on the
computer of a Melbourne teenager accused of plotting a terrorist bombing.
According to court documents, police were unable to break the encryption. They
gained access only after coming across the 17yearold’s password. Bombmaking
instructions allegedly were among the encrypted files.
In December 2012, US traitor
Edward Snowden, then still a contractor to the US National Security Agency,
hosted a “crypto party” in Hawaii where he lauded TrueCrypt as being beyond the
reach of Western intelligence services. When Snowden betrayed US national
secrets, TrueCrypt was known to have been used by several of those who received
and published the explosive document dumps. The software was described as
“military grade”, as though it were a weapon itself.
Says Hollingworth: “I must admit
that I did wonder if Paul was involved in
it and, if so, I’m sure there would have
been money behind it. “The strange thing about it was that they (TrueCrypt’s
distributors) always seemed to have access to information that was hard for
anyone else to get, even those of us working professionally in the encryption
business. Paul was a genius at sussing things out and would have been one of
the few people I’ve known who could have done this.
“Paul seemed to have a gift in
being able to work out how to achieve things software- wise that he wanted to
do, quicker than anyone else I’ve ever met in all my 30plus years in software
development.”
But
in May 2014, the website used to distribute the software was updated
with a warning in red to users: “TrueCrypt is not secure as it may contain
unfixed security issues.” People wondered what it meant for TrueCrypt and its
shadowy progenitor, Le Roux.
Conspiracy theories abounded. What no one in the cryptology
community knew was that he had spent the previous 18 months working with US law enforcement agencies to identify, trap
and arrest members of the global criminal network of killers and drug dealers
he had created, according to US prosecutors.
Across 15 months, an Inquirer
investigation has followed in his footsteps from Sydney to Africa, London and New York, interviewing family and
associates, detailing the lives he destroyed far from prying eyes, to piece
together his destructive life and crimes. This is the story of the most
powerful, murderous and determined criminal to emerge from his country.
Le Roux’s former wife is a
bespectacled professional woman who can’t
believe what he became. The man she knew would talk of his birth in the Zimbabwean city of Bulawayo on Christmas Eve
1972 and how his family moved to South Africa when he was 11. He spoke
admiringly of his father’s work as a mining contractor, sealing damaged
concrete, and of his childhood in Krugersdorp, outside of Johannesburg. He was
a nerdy boy who resolved to make a career out of software programming. He wanted
to see the world and vowed never to be tied down in one spot.
The couple met in London in 1994,
when Le Roux was 21, holding down a legitimate job, and within a year had moved
to Australia and were married. There was no time for a honeymoon; Le Roux was
too busy with E4M. His day job was with a London software company, work that
took him frequently to Britain and the US. Soon after he released E4M, they
divorced — amicably, Inquirer has been told — and he left Australia for good.
Clearly, he struggled before
landing a job at SecurStar, a legitimate supplier of computer and phone
encryption services. In 2002 Le Roux
posted a plaintive plea for work on an internet message board: “Hi guys, I’m looking for crypto/or other contract programming
work, anybody out there have anything available? If your (sic) reading this
group probably I don’t need any introduction, but I can send my CV as needed.”
Within six months, however, his
confidence had returned. Le Roux was describing himself as a “private investor
based in Rotterdam”, in The Netherlands, and was advertising for a USbased
partner for a “new online business I am setting up in the states”. During the following 12 months, a suite of
professionally designed websites went live, targeting US consumers. Call
centres were set up all over the world — from Florida to The Philippines and
Israel. Each promoted “highly stringent” online pharmacies, where prescriptions
from “legitimate US doctors” would be properly dispensed and sent by mail. The
drugs concerned were often powerful painkillers.
The business was called RX Limited and its corporate registration was
probably the only thing legal about the operation, US prosecutors now allege. But it was immensely profitable. The US
Internal Revenue Service calculated that RX Limited owed more than $US1.5
million in tax from 2005 alone. The debt is still outstanding.
For years, no law enforcement
agency in the US or elsewhere had Le Roux or RX Limited on their radar, despite
the company reaping annual revenues of up to $US200m. It wasn’t until September 2007 that the US Drug
Enforcement Administration began investigating. It would take agents another
five years to catch Le Roux.
Meantime, he was funnelling funds
into forestry concessions in Mozambique in southeast Africa and the Pacific
island state of Vanuatu, as well as diamond concessions elsewhere in Africa. He
traded gold bullion in Hong Kong, Mali and the Democratic Republic of the
Congo. US prosecutors say he also bought cocaine in South America and
manufactured and trafficked crystal methamphetamine, or ice, across Asia.
His business managers knew him as
“Alexander”, “Johan”, “John” or the “Dutchman”. “This guy, I thought he was in some sort of mafia,” says a former associate tracked
down by Inquirer in South Africa. “Money was never the issue.” He hired a
former US Army sniper instructor, Joe Hunter, as a lowlevel operator in Mali
and the DRC before promoting him to head of security for the entire business.
By 2009, Le Roux’s henchmen were being linked to gunrunning in lawless Somalia
on the Horn of Africa. His “general” there, identified by the UN as former
Belgian soldier Erwin Bockstaele, was said to command a private army that had
been enlisted by the Ethiopian government to take on the jihadists of
alShabab, a vicious alQa’ida offshoot. For a time, the 220strong militia
looked to set up as a contract force to police the Somali coast against pirates, investigators told Inquirer.
Instead, the group’s main
compound sprouted greenhouses to grow seedlings for opium poppies. Crops of
marijuana and coca also were planted, only for Le Roux to discover his men were
cheating him, paying themselves twice the normal
rate. The operation was shut down on his orders.
At the same time, a battered and
rusting freighter was steaming across the Indian Ocean bound for Indonesia on
its maiden voyage for its new owner. The MV Captain Ufuk was already four
decades old when Le Roux’s La Plata Trading company in The Philippines bought
it. Le Roux would have been confident that the ship and its cargo of assault
rifles, loaded in Jakarta, would not be touched by authorities when it entered Philippine
waters. La Plata Trading had an enduser certificate that listed the owner of the
rifles as Mali’s Ministry of Internal Security and Civil Protection, according
to court documents obtained by Inquirer.
The problem for Le Roux came from
an entirely unexpected quarter when the pregnant wife of the skipper, Briton
Bruce Jones, became ill as the ship passed Subic in The Philippines. Jones
handed over to another captain and left on a yacht; coincidentally or not, the
ship was raided by the Philippines Bureau of Customs when it docked in Mariveles
Port in August 2009.
Jones went into hiding and was
gunned down in his car north of Manila 13 months later. Soon enough, another
British man linked to Le Roux’s criminal enterprise, David Smith, died
violently. He was reputed to have been Le Roux’s closest friend. Parttime real
estate agent Noimie Edillor — who happened to have the same name as
a woman identified as a La Plata Trading employee and was the wife of a
Filipino Customs officer — was shot dead on a Manila street on June 23, 2011.
Contacted on Facebook, neither her widowed husband nor sister would discuss her
death, or whether she had had connections with Le Roux. Hunter was later recorded by the DEA boasting of
killings that his boss had ordered — including that of Edillor, to whom he referred as a Customs agent`, perhaps because
of her husband’s occupation.
“There was a lady. She was a
Customs agent. I guess they had some kind of business ... with her, when they
get stuff through customs right? But she didn’t ... they paid her and she
didn’t do it,” Hunter said during that March 2013 meeting in Phuket, according to
a transcript filed in a New York federal court.
“Our friend ... another guy had
that job and ah, they was doing the
surveillance on her and everything and
they saw that she was also a parttime real estate agent.” The killers posed as
potential clients and met her at a house she was marketing. “They didn’t even go inside,” Hunter said. “They shot
her at the door. Left her there.” Le Roux was beginning to feel the heat of the
multiple investigations. He had tried to limit his exposure, setting up shell
corporations and front companies in country after country, predominantly in
other people’s names, using employees to launder his illicit gains.
AustralianIsraeli dual national
Doron Zvi Shulman initially went to work for Le Roux handling contraband gold
and diamonds, as Hunter had done. “All we know is that as a young student he was recruited into working for what he believed
was a legitimate investment company and only found out after his arrest that the
financial backing for the company was
questionable,” a relative of Shulman said through Facebook. Shulman was arrested in April 2012, before raids on Le
Roux’s business premises, houses and
warehouses in Hong Kong turned up millions of dollars in gold and diamonds that
were being used to launder cash — and 24 tonnes of ammonia nitrate for which
the young man was never prosecuted.
According to Hong Kong court
documents, two other Israelis were flown in after Shulman’s arrest to retrieve
even more gold bullion. During their trial, evidence was given that they were
being instructed by the boss, “John”, in
The Philippines. In the end, Shulman was jailed for five years for laundering
342kg of gold bullion, two diamonds and
5kg of silver grain worth more than $US25m.
Three other people arrested over
the matter — including a man named Ivan Vaclavic,
holding Bulgarian and Slovakian passports and a plane ticket to Rio de Janeiro
in Brazil — jumped bail in Hong Kong. The trio had entered the Chinese
territory in the weeks following Shulman’s arrest and allegedly had receipts
for millions of dollars that were wired
from Hong Kong to offshore accounts.
Later
in 2012, a man who passed himself off as Ivan Vaclavik, with those same Bulgarian
and Slovakian passports, cropped up in news reports in central Europe over a
cocaine run that went bust when the yacht carrying the haul hit a reef off the
Pacific island state of Tonga, en route to Australia from Ecuador.
According to Slovak media
reports, Vaclavik was an alias used by fugitive Maros Deak. The DEA had been
tipped off about the shipment as it left Ecuador and notified the Australian
Federal Police. The body of another Slovak national, identified as Milan Rindzak,
was found on board the stricken yacht JeReVe along with 200kg of abandoned
cocaine. The whereabouts of Vaclavik/Deak remains a mystery: no one has been
arrested or charged over the failed shipment.
By then, Le Roux was in US
custody, having finally overreached. He had been trying to set up a new deal
to manufacture and smuggle ice into the US, and to send more cocaine to his
suppliers in Europe. According to indictments before US federal courts in New
York and Minnesota, Le Roux met a middleman in a Rio de Janeiro highrise on May
11, 2012, then sent a 24.2g sample of his nearpure methamphetamine to traffickers
in Liberia to prove his credentials. He asked for a barter: 100kg of ice for 100kg
of cocaine.
When he flew to Liberia in September 26, 2012, for a followup meeting,
the DEA pounced, arresting him. The middleman was an informant who had set up a
sting to snare Le Roux. Special Agent James Stouch told Le Roux that he was
facing drugs charges in the US. For some reason, Le Roux apologised, but then
refused to comply when told by the agents he was to be put on a chartered jet to New York. He was bundled into a car
and on the way to the airport had a change of mind,
the DEA would say later. Le Roux turned, pledging to cooperate. On
landing in the US, he emailed his associates and employees, pretending he was
still free. He even helped the DEA set up a Gmail account that allowed agents
to see every email he sent or received in his personal account.
In
secret 2014 federal court hearings in the Southern District of New York — which
Inquirer can now detail — he made a series of extraordinary admissions,
including that he had illegally sold prescription pills via RX Limited, and
laundered the cash via fraudulent means; that he conspired to traffic crystal
methamphetamine into the US and ordered or assisted in the murder of seven
people.
Le Roux owned up to computer
hacking and bribery — and, jawdroppingly, to selling to Iran technology
believed to be in the form of a missile guidance system. The coffee shop in which we meet in South Africa could be any all day
breakfast bar, anywhere in the world. The arms dealer takes his seat and scans
the room, his back to the wall.
In April 2013, the arms dealer had a meeting in
Mauritius with men claiming to work for Le Roux. They initially said they
wanted Iranianmade arms and asked if the arms dealer had a network that could
supply them.
Then they changed the request and
dropped a bombshell: Le Roux had sold a missile guidance system to Iran. The
software was uploaded to a secure
website, but “contact went dead at the Iranian end”. Money was owed. Could the arms dealer find out what had
happened and try to recover the money owed to Le Roux?
The arms dealer never sought out
the requested information because he demanded an upfront payment for his
services — something Le Roux never had issues with in other business
dealings. “If they could cross that hurdle, I would know they were serious,” he
told Inquirer. He heard once more from them about the request, and heard nothing more about the deal until his fears were
confirmed: US authorities had charged Le Roux over an illegal sale to Iran and he had struck a plea deal.
According to the indictment
against Le Roux filed in the federal court in the Southern District of New
York, Le Roux began his dealings with Tehran as long ago as 2009, breaching
strict embargos when he “did export, and cause to be exported, reexported, sold, and supplied” technology to Iran.
Tacked on the end of that count in his document are allegations that he was
involved in the murders of seven people outside the US in just 2010 and 2011
alone. Le Roux has admitted to the allegation
in court, along with trafficking crystal methamphetamine into the US, hacking a
computer and organising a bribe for foreign officials to stop an unnamed person
from being extradited to the US.
On March 2, Le Roux made his
first appearance in a public court. With the exception of a dark woolly beard,
he looked much the same as he did in the few grainy photographs that are
available of him as a younger man. There
was no slouch in his 188cm frame, and his silver hair was fashionably styled. Confident and defiant, he told the
Minnesota courtroom — where an RX Limited underling
is awaiting trial — that his cooperation had come about solely because of his
“bad situation”. Having protected the
truth of his criminal life for all those years, the keeper of secrets was
giving them away.
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