COVER

THE COCAINE KING

How a poor Colombian became Canada's biggest drug baron-and got away

PAUL KAIHLA July 10 1995
COVER

THE COCAINE KING

How a poor Colombian became Canada's biggest drug baron-and got away

PAUL KAIHLA July 10 1995

THE COCAINE KING

How a poor Colombian became Canada's biggest drug baron-and got away

COVER

PAUL KAIHLA

The two-lane blacktop south of Medellin tapers off into a mountain road so rugged that every so often it sounds as if the metal is about to be ripped right out from under the car. It traverses steep hills shrouded in dark green foliage and columns of mist, where the scent of sweet mangoes lingers in the moist tropical heat. The seductive Colombian scenery might fool a visitor into thinking that this is a latter-day Garden of Eden. But danger resides in the very soul of this sultry Andean landscape, famous for growing the world’s best coffee. Heavily armed guerrillas occasionally appear out of nowhere to kidnap wealthy fanners, who do not return home unless hefty ransoms are paid. And even by the standards of Colombia—a country with a murder rate 35 times higher than Canada’s—the region has a brutal history. Between 1988 and 1992, hundreds of bodies, apparent victims of the North Valley drug cartel, washed up on the shores of the nearby Cauca River. The heads and limbs of many of them had been cut off with chainsaws.

In the midst of this toxic climate of violence and insurrection, here and there among the coffee plantations and peasant cottages one can spot fancy estates owned by “narcos,” as they are commonly called in Colombia. Money launderers and drug

smugglers, they have acquired immense wealth from the global boom in the cocaine trade that this country began fuelling more than a decade ago. It is easy to recognize the narco ranches. They announce themselves with ornate heavily fortified gates, swimming pools, private baseball diamonds and razor-wire security fences.

In 1989, after living most of his adult life in Canada, Bernardo de Jesus Arcila Londono came home to one of them.

Most Canadians know the name of Pablo Escobar, the onetime boss of Colombia’s Medellin cartel who was shot to death by Colombian soldiers in 1993. But few have heard of the man reputed to be the largest cocaine trafficker in Canada’s history. The story of Bernardo Arcila, who turned 52 on July 2, reads like that of a Third

World Scarface, but without the gratuitous violence and, so far, tragedy. Arcila arrived in Toronto from his native Colombia as an immigrant in 1972 with barely enough money to buy a one-way ticket home for him, his wife and son. Just as cocaine was becoming the trendy drug of the middle class in the United States, Arcila established an underworld network that imported thousands of tons of the once exotic narcotic into Canada. “He was clearly the biggest Canadian distributor of cocaine in our history,” says James Leising, the main prosecutor of major drug cases at the federal justice department’s Toronto office. “He was the supplier for Toronto and Montreal, and his organization reached as far as Newfoundland. He grew the Canadian market by leaps and bounds.”

The RCMP and Metro Toronto police finally got the evidence—and the warrant—they needed to arrest Arcila in early 1989. But before they could act, he disappeared. Investigators later discovered that Arcila had fled to Colombia. Throughout the years, he had funnelled riches from his Canadian drug trade back to his homeland. And after his escape, the trafficker shrewdly liquidated his Canadian holdings—millions of dollars of investments in real estate and front companies—and spirited those proceeds out of the country as well. With that, Canadian law-enforcement officials lost track of Arcila. Six years later, they cannot say precisely where he is or what he is doing. Indeed, they frankly acknowledge having given up the search because Colombia’s Constitution bans extradition to other countries.

But a wide-ranging Maclean’s investigation in Canada and Colombia has uncovered disturbing revelations

about Arcila’s whereabouts and activities. The multimillionaire fugitive from Canadian justice now lives a reclusive life of luxury in Medellin and Colombia’s central Magdalena Valley, where he owns several cattle ranches and raises large-homed Zebu cows. Two weeks ago, according to a local cattle grower who requested anonymity, Arcila was in the township of Puerto Valdivia, where acquaintances say he owns a ranch called Cachireme and a restaurant by the same name. While one former underworld associate estimates that Arcila is worth $1 billion, no one seems able to determine the precise extent of his wealth. But one thing is clear: Arcila’s lavish Colombian lifestyle, which includes several cars, four-wheel drive vehicles and mistresses, is largely funded by the fortune he illicitly vacuumed out of the Canadian economy.

What Canadians might find even more distressing is information obtained by Maclean’s suggesting that the middle-aged playboy is still shipping drugs to his former adopted country. Since 1989, the Metro Toronto police force’s elite Amigo drug squad has arrested more than 100 people connected to Arcila’s organization. But some agents believe that Arcila is still supplying other traffickers who have so far escaped detection. “Arcila has several relations here, and he is probably sup„ plying them as we speak,” says Det. I Kevin Hotham of the Amigo squad, y “They have an organization, but we ^ have not been able to crack it.” | Indeed, in 1992, three years after 3 Arcila left Toronto, the U.S. Drug Enforcement Administration identified the onetime friend of Pablo Escobar as a shipper of cocaine to Canada through Miami. And one source who is intimately acquainted with Arcila’s tactics and associates insists that it is common knowledge among drug dealers in Canada that Arcila is still in business. “It’s not a rumor—it’s a fact,” says Picaro, a code name for a former cocaine importer whose testimony has helped to convict more than 100 traffickers in Canada, Miami and South America. “Arcila’s dope is still here. Everybody knows that.”

The assertion is buttressed by evidence that Arcila is linked with some of Colombia’s most powerful underworld figures, including Gilberto Rodriguez Orejuela, the Cali cartel boss apprehended by Colombian police on June 9 as part of a government crackdown on the drug barons (page 34). Fabio Castillo, an investigative reporter at Colombia’s second-largest daily newspaper, El Espectador, and the author of two books on the Medellin cartel, is familiar with Arcila. He is nervous discussing Arcila, however, explaining succinctly: “He is a very dangerous man.” Given Arcila’s apparent importance in Colombia’s cocaine hierarchy, his criminal history and strong indications that he is still smuggling drugs to Canada, it is striking that none of the heads of five Colombian law-enforcement departments contacted by Maclean’s had ever heard of Arcila, nor did they even have a file on him. Also puzzling is the fact that neither the RCMP nor the federal justice department has ever notified Colombian authorities of Arcila’s history of drug trafficking and his resettlement in Colombia. One high-ranking Colombian official reacted angrily when approached by a Maclean’s reporter with documentation about Arcila’s criminal career. “Mr. Arcila is a Colombian citizen, and he apparently

left Canada for Colombia six years ago,” said Fernando Mancilla, the regional prosecutor of Medellin. “Why didn’t Canada notify us?”

Urrao is a small agricultural community nestled in the mountains between Medellin, Colombia’s second-largest city, and the Pacific Ocean. While Medellin was world famous as the centre of the international cocaine trade until the death of Pablo Escobar in December, 1993, the town of Urrao is known for granadilla, a succulent yellow tropical fruit nicknamed “Colombian caviar.” Urrao is also the birthplace of Bernardo Arcila. Raised there in a middle-class family—a meagre existence by Canadian standards—Arcila married a local girl with dark curly hair named Lidia Jaramillo. Like him, she was bom in 1943.

Little is known about the couple’s early years together except that they had a son, Juan Fernando, in Medellin in 1967.

Five years later, at the age of 29, Arcila moved his young family to Toronto, de daring on his immigration application that he was a manual laborer. The three moved into a small apartment in a 12storey building near the University of

Toronto’s downtown campus. Arcila’s first job, and likely the only legitimate one he ever held in Canada, was delivering wieners as a truck driver for the Shopsy’s deli food business.

Arcila gravitated to Toronto’s small but growing Colombian community, whose members often gathered to watch soccer matches in a park called Christie Pits. There, in about 1975, the truck driver had a fateful encounter. “He was kind of a nobody,” Picaro says, recalling his first impression of Arcila. “But he didn’t smoke, drink or do drugs. He was clean.”

That made Arcila a good candidate for employment among the available Colombians in Picaro’s budding business. For at the time, Picaro was one of Toronto’s largest cocaine traffickers, and Arcila was gradually brought into his organization. At first, Picaro’s gang simply used Arcila’s apartment as a hiding place for cocaine, which earned him a few hundred dollars a time. But by the late 1970s, Arcila had graduated to the role of courier, picking up drugs in Buffalo, N.Y., from Colombian accomplices of Picaro’s who were based in Miami. Arcila usually made one run a month, crossing the border with his wife in the family Volkswagen to create the appearance of a couple on a weekend getaway. He earned a commission of $1,000 per kilo for his trouble. “He did it because the guy loves money like nobody else,” Picaro says in a strong Spanish accent.

Police first learned of Arcila in 1982, hearing from an informant that the immigrant was a small-time ounce dealer of cocaine. But by then, Arcila had already started his own crime family, directly importing several kilos of cocaine at a time from Picaro’s Miami contacts. “It didn’t take him long to get bigger than me,” says Picaro, who is now in the federal justice department’s witness protection program after becoming an informant. “By then, he was bigger than everyone in town. He was smokin’.”

Arcila then made one of the most insightful decisions of his criminal career. He went into business with the mob. By going outside the Colombian underworld and tapping into a ready-made network of criminals prepared to distribute an illegal product, Arcila vastly expanded the retail market for cocaine.

He forged his alliance with the Mafia through Diego Serrano, an Italian-born businessman now serving a 10-year drug trafficking sentence in Ontario’s Joyceville Penitentiary. Serrano had links to

ARCILA TAPPED INTO A VAST

CRIMINAL NETWORK BY ALLYING WITH THE MAFIA

Calabrian crime families in both Canada and Italy, but in 1983 he was in a bind. His partner in a door-making factory on the northern outskirts of Toronto had won the jackpot in a Canadian lottery and moved back to Italy without paying his share of the company’s bills. Serrano faced bankruptcy and a $500,000 demand loan from his bank when Arcila sent a messenger to offer help. According to Vincent DeBellis, a former courier for Serrano who is also now in the witness protection program, Arcila gave Serrano the money to repay his loan. In return, Serrano allowed Arcila and his partners to launder money through his company—and then began importing cocaine directly from Miami with Arcila’s team, and selling it through his mob contacts in Canada.

Arcila’s other exceptional advantage in the cocaine business was that he had a great connection in Colombia—Pablo Escobar. At his peak in 1991, Escobar was worth an estimated $3.3 billion, and the cartel he founded enjoyed annual revenues of more than $4 billion. According to Picaro, Escobar invited Arcila to meet him at his estate near Medellin in the early 1980s because the Canadian émigré had

become such a big customer. Between 1983 and 1989, Arcila apparently travelled to Colombia frequently to see Escobar. “Bernardo used to get a phone call in Toronto and Pablo would say, Tou’ve got to get your ass over here in two or three days,’ ” recalls Picaro. “It was more of a business relationship than a friendship.”

By 1986, Arcila had a fleet of about 20 identical Toyota Tercels shuttling between Toronto and Miami, the hub of coke transshipments from Colombia for the eastern seaboard during the 1980s. Custom-built hidden compartments in the door panels of the cars concealed cash and, for the return trip, 28 kilos of cocaine. The drugs were sealed in packages coated with grease to throw off police dogs at the border. And if each kilo was sold for the going price of $100 per gram on the street, that made each carload worth almost $3 million. Police had Arcila and dozens of his associates under surveillance, but the criminals confused investigators by constantly switching cars and using codes when discussing business.

Arcila began to enjoy his newfound power. At one point, one of his dealers tried to import cocaine on his own. But Arcila threatened to kill him if he operated behind his back again. Later, in early 1988, Joaquin Sevillano, who is serving a 17-year sentence in Collin’s Bay Penitentiary in Kingston, Ont., for his part in the drug ring, was slow in honoring a $350,000 debt to Arcila. Angered, Arcila put out a contract on Sevillano, but Serrano apparently talked Arcila into rescinding it. Even more audaciously, Arcila tried to have a Toronto police detective killed. “I understand that he put a price of $500,000 on my head,” says Det. David Caravella, who offended Arcila by trying, unsuccessfully, to get close to him to conduct an undercover drug buy.

At the same time, Arcila was enjoying his new wealth. “It was nothing for him to go to a jewelry store and drop thousands of dollars on a whim,” recalls Det. Steve Perkins. In fact, in 1984, Arcila spent $15,000 at one jewelry shop alone at Toronto’s Eaton Centre—paying $8,000 cash for a

watch. Police also later discovered that Arcila had begun amassing real estate.

Between 1985 and 1988, he purchased at least seven condominiums in Toronto and five cottage lots near Georgian Bay. He already owned a bookstore and several houses, and was a partner in an amusement park, a racetrack and Serrano’s door-making factory—businesses he and his partners used to launder drug profits.

Perhaps the peak of Arcila’s profligacy came in early 1989, when he walked into a downtown Toronto Mercedes-Benz dealership and plunked down $58,000 in cash for a customized black sedan.

But like most Colombian drug dealers in Canada, Arcila sent most of his money out of the country. In 1984, Arcila purchased the first of several fincas, or ranches, in the areas of Marsella, Antioquia and nearby Fredonia, where farmers have cultivated coffee for three centuries. He selected a ranch in Fredonia’s Zancudo district called Los Alpes, Spanish for “the alps,” as his main retreat. He built a luxurious two-storey house on the site with a pool featuring a swim-up bar, and stables that he filled with cattle and horses. Arcila loved to show off by inviting criminal associates from Toronto to Los Alpes, and even made a home video to screen for friends and family back in Toronto. In it, his half-brother, Jorges Arcila, describes how Bernardo planned to build a second house, an artificial lake and a tennis court on the estate.

According to a high-ranking Colombian intelligence source, Arcila also purchased large ranches in the Fredonia area called La Virgin, La Pedrera and Barbero, established a holding company named Inversiones Marjuly and funnelled his drug profits through a lottery business at the Medellin bus terminal in partnership with the drug cartel’s chief money launderer.

In addition, local residents say that Arcila acquired a ranch beside Los Alpes called La Poblanco, and a white-walled villa with a red Spanish-tile roof and 80 acres of fields in nearby Marsella. He purchased real estate in Medellin as well. A Toronto drug dealer who visited Arcila in 1985 recalls that the gangster had two adjacent houses in Medellin that were linked by a tunnel—a convenient escape route in the event of a police raid or a kidnapping attempt by rivals. And according to Canadian police, Arcila furnished his Colombian properties with container loads of high-priced goods from the Art Shoppe, a Toronto furniture store that caters to the wealthy.

Back in Toronto, authorities finally secured evidence that they thought could convict Arcila. On Nov.

28,1988, an undercover officer observed him handing a. kilo of cocaine to a low-ranking courier. But senior investigators gambled, and postponed arresting m Arcila because that would have risked exposing a | costly two-year undercover operation that was also o gathering evidence on dozens of Arcila’s associates.

The takedown finally came on May 16, 1989. Sixty suspects were arrested. But Arcila was not among them. When police raided his bookstore, family home and two hideouts, he was gone. Even in Toronto’s Colombian community, few people know what has happened to Arcila since that day. “He had good antennae,” says prosecutor Leising. “He knew the net was closing, and I guess he had a place to go.”

That place was Los Alpes. The estate is approached along a bumpy gravel road where old men with wrinkled faces and bad teeth sell man-

MONEY CONTINUED TO POUR IN FROM CANADA EVEN AFTER ARCILA FLED THE COUNTRY

goes for five cents each, and peasants barbecue plato montanero, a traditional dish of rice, beans and pork. Los Alpes is hidden from the main public road by a mountain, and can be reached only by a private driveway that stretches about five kilometres. The driveway turns into a long, winding set of concrete tracks that end at a gate. Arrayed outside an intimidating security fence are servants’ quarters and workers’ cabins; inside the fence are barking guard dogs and carefully landscaped grounds.

Locals know little of Arcila’s past. In fact, he is seen there as a great humanitarian and philanthropist. And a fair employer, according to an attractive teenage girl who jumped down from a pickup truck carrying schoolchildren as it stopped in front of the entrance to Los Alpes. Asked if the estate is her farm, she responded with a shy smile: “Oh, I wish I could one day own such a beautiful place.” Her family works for Arcila, the girl explained, adding: “He is a nice boss. He is very generous.”

Within months of fleeing Canada on drug charges, “Don Arcila,” as locals respectfully call him, gave the nearby town of Marsella about $165,000 to build a new cemetery and chapel. That is a considerable donation in a country where the annual per capita income is $920, about one-seventeenth that in Canada. The chapel, which has a bell tower and seating for a small congregation, is surrounded by only about a dozen graves so far. But its ornate grounds—protected by a high perimeter fence—sit on a choice lot with a stunning view of the Cauca River valley. Indeed, the local priest, Mario Mejia Escobar, paid tribute to Arcila by permanently fixing an engraved plaque to the front of the chapel that reads: “The Church of Marsella is grateful to Mr. Bernardo Arcila who generously made possible the construction of this cemetery.”

A short while later, Arcila once again demonstrated his beneficence—by donating more than $80,000, residents say, to complete construction of the church in the village of Hojo Frio, between Marsella and Fredonia. “He is a very rich man, and people love him because he built a church for us,” says Juan Quintero, the white-

haired owner of a snack bar and grocery store a few steps from the place of worship. “He helped many ways with money.”

Although the locals might not have known it, that money continued to pour in from the Canadian cocaine market even after Arcila fled Toronto in 1989. Upon his departure, he put his right-hand man, Serrano, in charge of his organization. During a three-year period, Serrano and his co-conspirators smuggled an estimated 12,000 kilos of cocaine into Canada. According to police, and court testimony by DeBellis, Arcila both supplied much of that contraband and earned commissions from its distribution—until police arrested Serrano and more than two dozen accomplices in 1991.

The profits apparently left Arcila with so much money that he can still afford to give it away. According to a farmer in Marsella, Arcila recently gave his impoverished half-brother, Jorges, a local company that manufactures cement blocks and interlocking bricks. “I haven’t seen him in a long time,” Jorges said when approached by a Maclean’s reporter outside his office. “I don’t want to talk about him too much.” Arcila has also made a tradition of handing out presents of dolls and money to families in Zancudo at Christmastime. “He is very rich,” said Monica, an eight-year-old peasant girl carrying a bag of

tropical fruit on the roadside in Zancudo. “He has many cars, horses and people working for him.”

He has many mistresses, too, according to a high-ranking Colombian intelligence source. And that habit, which Arcila also displayed in Toronto, led to the breakup of his marriage last year. Arcila apparently gave his La Poblanco and Los Alpes ranches to his wife, Lidia, and sold two others in the area. Neighbors say that Lidia Arcila continues to live at Los Alpes with the couple’s son, Juan, now 26, and their 17-year-old daughter, Gloria. Last week, a man named Freddy answered the phone at the ranch, but said that none of the Ardías were available. Messages for them went unanswered.

Acquaintances say that Arcila now spends most of his time at several ranches he owns in Caucasia and Puerto Valdivia, towns on the main highway between Medellin and the Atlantic coast resort city of Cartagena. Neighbors near Arcila’s Cachireme ranch in Puerto Valdivia confirm that the narco visits there two or three times a month. Four of Arcila’s brothers—Mario, Jaime, Fernando and Carlos—run the ranch and restaurant, which has a discotheque and a beach for swimming and sunbathing. The brothers also run a small taxi business for their wealthy sponsor.

While locals in that town say that Arcila makes a luxurious house in Medellin his principal residence, the Colombian intelligence official says that Arcila’s main base is in Planeta Rica, a town north of

Caucasia. Arcila apparently has a large ranch there, where he raises the herds of Zebu cattle, a hump-backed variety well adapted to tropical heat. According to Colombian experts, the farm’s location tends to confirm reports that Arcila is linked to the organization of Fidel Castaño, a warlord whose paramilitary troops control the area, also known as the central Magdalena Valley, and fight off guerrillas who harass narco ranchers. Rumored to have been killed in a shootout with the Colombian army this spring, Castaño founded the PEPES, a Spanish acronym for “Persecuted by Pablo Escobar,” in the early 1990s. According to sources both in Canada and Bogotá, Arcila turned against Escobar and became an informant for the PEPES, which killed dozens of Medellin cartel leaders.

Another Colombian source says that Arcila works with a gangster whose code name is Number 28 in an ongoing turf war in Medellin that has killed several of Escobar’s former henchmen. The gangster is believed to be a relative of Rodriguez Gacha, who was Escobar’s military adviser and the architect of a 1988 massacre in which 11 victims were killed at a poolside party by machine-gunners in helicopters. A senior narcotics official also believes that Arcila began working with the rival Cali cartel while Escobar was still alive. Phone records seized in a January, 1993, police raid on the Cali group showed that Arcila was in direct contact with cartel boss Gilberto Rodriguez Orejuela months before Escobar was killed.

Despite the fact that some Colombian officials are critical of their Canadian counterparts for not sharing the results of their investigation, the justice department’s Leising is unapologetic. In an interview, he hinted that he had little faith in Colombian law enforcement. “Would they have actually done something about it?” Leising asked. “It’s not too late.” Added Leising, who has won convictions against more than a dozen of Arcila’s co-conspirators: “One of the detectives in the case said we should go back and take a look at Arcila, but I didn’t want to put the investigative resources into it. We didn’t have a body, and we didn’t have any assets that we could seize. They had all been liquidated.”

Although a warrant remains in force throughout Canada for Arcila’s arrest on a drug trafficking charge, a 1991 amendment to the Colombian Constitution—a key demand of cartel leaders—bans extradition. And even if Colombian authorities had been notified by their Canadian counterparts, it is unclear whether they would have pursued Arcila vigorously in a country where citizens often regard it as an exception when a public official is not corrupt. Intimidation is rampant as well. So many judges, politicians and prosecutors have been assassinated by the cartels that major criminal trials now have to be conducted by “faceless” judges who sit behind oneway glass so that the accused cannot identify them.

In addition, records are so fragmented in Colombia that it is even difficult for police to locate a narco like Arcila by looking up his driver’s licence. Such records are neither computerized nor centralized, and many Colombians simply drive without a licence or obtain one under a false name. It is also easy for drug dealers to hide their holdings by registering them in the names of notaries or mistresses. Col. Guillermo Ramirez, whose national police detachment in Medellin is one block from the park where a terrorist bomb killed 29 people and wounded 205 on June 11, is not surprised that he has never heard of Arcila. “There are so many of them,” he says, shaking his head as he studies a photograph of the narco.

Because of the dearth of information, several mysteries remain about Arcila. How much is the drug lord really worth? If, as investigators suspect, he is still involved in the cocaine trade, how much is he shipping and how is he doing it? And finally, even if Arcila cannot be extradited to Canada, can he at least be brought to justice in Colombia? Medellin’s Fernando Mancilla, whose heavily guarded office is responsible for drug prosecutions in five provinces, seems intent on getting the answers to those questions. ‘With these facts you are giving us, we will start an investigation and get in touch with Canadian authorities,” he told a Maclean’s reporter. ‘We can investigate Mr. Arcila for illegal enrichment because his money seems to have come from the drug trade.” Six years after his flight from Canada, though, Arcila continues to live the high life from illicit drug profits made in his former adopted country. □