Inside the U.S. sting that took down Miami's '70s kingpins
Operation Lone Star, which tried to trace laundered drug and oil money, was one of the longest and costliest investigations in U.S. history.
While my father was turning the [Bahamas’] Darby Islands into the center of a multimillion-dollar transnational drug smuggling empire, federal agencies were already laying the groundwork for his downfall.
Ironically, their investigation didn’t start with the drug business. It began in Texas, as a probe into oil price manipulation. A joint operation between U.S. Customs and the Internal Revenue Service, it was named Operation Lone Star after the favorite beer of the assistant U.S. attorney in Houston—and it would become one of the longest and costliest investigations in U.S. history.
By its end more than 50 businessmen, government officials, drug smugglers, and money launderers would be indicted; at least one witness would be murdered; a plot to assassinate a federal prosecutor would be exposed; and an assistant U.S. attorney would be in jail.
Though Operation Lone Star was launched in 1979, its origins dated back to October 1973, when members of the Organization of Arab Petroleum Exporting Countries—OPEC—imposed an oil embargo on the United States.
The embargo was in retaliation for America’s support of Israel during the most recent Arab-Israeli conflict. Overnight, the price of oil in the United States doubled. Then it quadrupled. Lines formed in front of gas pumps as cars snaked down the street. The Dow Jones Industrial Average plummeted. The economy tanked. OPEC’s embargo lasted for six months, until U.S. officials were able to convince Israel to pull out of the Sinai peninsula.
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One of the measures to come out of the oil embargo was an increased effort to develop domestic energy sources. That included drilling new wells. A classification system emerged in which domestic oil was categorized as either “new” oil or “old” oil. New oil was pumped from wells drilled after 1973 and was of higher quality. Its inferior counterpart, old oil, came from pre-1973 wells. New oil wholesaled for roughly $10 a barrel, while old oil sold for $5 a barrel. Which meant the playing field was ripe for illegal arbitrage. All it took was some logistical finagling to buy old oil at reduced prices and sell it as new oil using a falsified domestic crude oil sales certificate. In just one year, the Energy Department estimated that oil price manipulation tallied between $500 million and $2 billion.
In an effort to crack down on these cases, federal agencies launched investigations into domestic oil companies. One investigation in particular—Operation Lone Star—hit pay dirt. In March 1979, as the result of the investigation, the government issued indictments for the heads of two companies accused of conspiring to sell more than 750,000 barrels of old oil at new oil prices. Five top oil executives were arrested. They each faced a maximum sentence of 20 years in prison.
Twenty years for wealthy, well-connected Texas oilmen?
Please. That’s not how this story goes.
The 84-count indictment, which included charges of federal racketeering, was quickly dropped by a U.S. district court judge. The judge insisted the indictment was too vague. It didn’t do enough to explain the details of the crime, he claimed. The federal racketeering statute, the judge said, was “intended to keep racketeers out of business, not to make racketeers out of business-men.” And so the Texas oilmen were set free.
While the oil executives walked away from their charges, the federal agents of Operation Lone Star found something they were even more interested in—the money trail behind the oil deals. They discovered the man responsible for laundering illegal profits from the oil schemes and funneling cash through secret bank accounts in the Caribbean: [my father’s tax attorney] Lance Eisenberg. It turned out that Eisenberg was laundering money for a lot of people, not just the Texas oilmen and my dad. According to Eisenberg’s 1981 indictment, his clients also included the Colombo organized crime family in New York and a separate crime family in New Jersey.
Investigators eventually discovered millions of dollars funneled through the Columbus Trust Company in Nassau, the bank founded by Don Aberle, who had arranged the sale of the Darby Islands to my father. Columbus Trust was an umbrella firm for 450 shell companies, including my father’s Caribe Shores. The bank handled money from a variety of illegal activities—oil price manipulation, fraudulent coal shelters, drug smuggling, and a number of businesses run by the mob. The shell companies were used to wire money back to the United States, laundered and ready to be spent.
Investigators believed that Columbus Trust was initially funded by the fugitive American financier Robert Vesco, who had stolen more than $200 million from U.S. investors (and was hiding out in the Bahamas). The Bahamian prime minister and a Bahamian Cabinet member were minor shareholders in the company, though they both denied any role in the way the bank conducted its business.
Operation Lone Star uncovered dirt on a lot of people, but my father—who by that point had become one of the most well-known and successful marijuana smugglers operating at the time—was a priority on the government’s target list. The reason? The War on Drugs.
The War on Drugs had been formally launched in 1971 under the Nixon administration. It was a reaction to the 1960s counter-culture movement and the widespread use of marijuana, especially by people protesting the war in Vietnam. Marijuana was seen by the establishment as a threat to American values. Nixon called it “public enemy number one.” Marijuana was demonized, and those who brought it into the country were considered the worst kind of villain. By this time, my father’s operation had grown to massive proportions. Between May and June 1979, his crew smuggled 31,000 pounds of marijuana into the United States.
As a result of the Operation Lone Star investigation, the government held a series of grand juries in Houston. Agents began to subpoena witnesses. In response, my father assembled his own legal team. The first lawyer he hired was Jeffrey Bogart, a young attorney from Long Island. Bogart was in his early thirties when he worked for my father, but he’d already served as the assistant district attorney in Brooklyn, where he’d prosecuted organized crime and corruption cases. He’d moved to Atlanta and done a stint as the assistant district attorney there before going into private practice. Bogart had followed the money to the other side of the legal aisle, but he never lost his sense of right and wrong. His roots were working class, and he’d punched a clock in a factory before his legal career took off. But those days were long gone by the time he was hired by my father. Now bearded and bespectacled, he was more polished, less brash, with only an occasional [curse word] thrown in for good measure.
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Bogart brought along another attorney, Mark Kadish, who came with a northeastern pedigree and a heavy dose of notoriety. Kadish had launched his legal career as part of the U.S. Army’s JAG Corps. In 1969 he was appointed defense counsel for the commander of the company of U.S. soldiers charged with murder in the My Lai massacre in Vietnam. At My Lai, several hundred unarmed Vietnamese men, women, and children were killed by U.S. soldiers. It was widely considered to be one of the most heinous moments of the Vietnam War, and it came to symbolize the brutality of the U.S. role in the conflict. The commander Kadish represented was ultimately acquitted.
It’s hard for me to stomach that this was one of the men defending my father. My dad’s moral code was defined in terms that I will never fully understand. He saw himself as a good guy, yet he wasn’t above associating with “bad guys” if they could help him in some way. Kadish had a proven track record with difficult cases. That’s all that mattered to my father.
Even with Bogart and Kadish on his team, my dad was still worried. That’s why he called in Bobby Lee Cook to serve as his lead counsel. Cook was a spitfire attorney from Summerville, Georgia, who held court like a preacher in the pulpit. He was famous for being unbeatable. His style was classic southern gentleman—tweed suit, wooden cane, pipe stuck in the corner of his mouth, chauffeured everywhere in a Rolls-Royce. He had the kind of folksy demeanor that juries loved and used expressions like What’s good for the goose is good for the gander in court. Though Cook was ten years older than my father, he’d also grown up poor in rural Georgia. Both men had a fierce need to win. “He’s the most vicious man I’ve ever known,” my father once said about Cook. “I love him.”
If Jimmy Carter had made it to another term, he might have legalized marijuana. But the newly elected Reagan administration was coming down hard on users, dealers, and smugglers. The administration fought drug use with policy and police activity, but its most effective tool was propaganda. Pot smokers became the scourge of American society. They were demonized as losers and criminals. Those associated with marijuana were just as bad, cast in the same shameful light. That included smugglers like my father.
Though the public hated anyone involved in the drug trade, in private circles, my father had made a considerable name for himself. The Ocean Reef Club in Key Largo was—and is—one of the most exclusive private clubs in South Florida. With a golf course, a marina, restaurants, and a private airstrip, it’s the kind of place where the well-heeled congregate. My father had a membership and regularly landed his plane on the club’s runway. It offered a good stopover point between the farm in Georgia and the islands in the Bahamas, and it was a swell place to have lunch.
Once, [my father] and his young attorney, Bogart, stopped at the Ocean Reef Club on their way down to Darby. The two men stepped out of the Cessna and slipped on sport coats. They walked to the Ocean Reef Club’s dining room for lunch, dressed like any of the other diners in jackets and slacks, just a drug smuggler and his attorney. On the way to the table, a man with dark hair and heavy eyebrows nodded at my father. My father nodded back.
“Do you know who that was?” he asked Bogart as they sat down.
“I have no idea,” Bogart said.
“That’s Bebe Rebozo.”
Rebozo was a businessman based in South Florida, and he was one of Nixon’s closest friends and confidants. Here’s my father, a poor kid from central Georgia with no college degree and no real refinement other than what money could buy, sitting in the Ocean Reef Club in a tailored jacket, acknowledged by a presidential adviser. He had, in that moment, reached an elite and seemingly untouchable circle.
But it wouldn’t last. They’d let him in their club, and they’d just as quickly kick him out again.
