The Caviar Kings

Plants & Animals / by Simon Cooper /

Inside the cartels that built empires and destroyed species.

The caviar trade is an incestuously small world. Everyone knows everyone, knows everyone else’s business. If you work in the caviar trade you will undoubtedly have worked with, sold to, or bought from everyone else in the trade within a few years. You compete with a rival one minute, cooperate the next; undercut today, supply with caviar at a reasonable price tomorrow. One minute you will be partners, the next suing each other over some egg deal or another that has gone south for the winter.

Like the “brotherhood of the reeds,” that common calling binding together the poachers of the Caspian, the dealers form a loose but exclusive clique, rather like those who control the world’s other great cartels of luxury and excess—gold, diamonds, and drugs.

Some 40-odd caviar dealers, shop owners, and store reps made their way out to St. John’s for a Fish and Wildlife Service–sponsored meeting that would introduce a radical change to their world. They arrived, signed in at the door, and took their seats in the auditorium. Panchernikov was there, as was Eugeniusz Koczuk, owner of Connecticut-based Gino International, a caviar importing and wholesale business.

The attendees were told that sturgeon as about to be included on a list of endangered species policed by the Convention on International Trade in Endangered Species of Wild Fauna and Flora—or CITES for short. Indiscriminate overfishing and poaching of the three major caviar sturgeon—beluga, oscetra, and sevruga—had depleted Caspian Sea stocks by some 70 to 80 percent, to a level so low that beluga could be wiped out altogether. In an attempt to clamp down on the caviar trade, the US and Germany had successfully lobbied for the species’ inclusion on the CITES list.

As of April 1, 1998, all species of sturgeon would be added to Appendix II of the list. In order to trade in products derived from Appendix II animals, going forward, dealers would need a CITES certificate issued by the government of the country where the product had been obtained, stating that the product had been legally acquired and that the trade represented no threat to the continued survival of the animal.

The rules were spelled out: For every caviar shipment, the importer would need a CITES permit. Each CITES permit would be unique to that shipment and could be used only once. After the shipment was received, the permit would expire. If a dealer wanted to reexport what had just been received, a new permit would be required. The same went for importing another shipment.

It appears now that much of what was said that day fell on deaf or disinterested ears. But no one who attended could say they didn’t know the new rules; and the FWS had the sign-in sheet at the door to prove it.

Eugeniusz Koczuk liked Warsaw. It was his home city, and he was something of a player in its flourishing caviar-export business. He was on top of his world, a millionaire—and best of all, there seemed to be no end to the flow of Russian caviar entering his country.

Poland has no sturgeon fisheries of its own, yet it is one of the world’s most notorious caviar hubs. Poached blackmarket caviar arrives from Russia, where it is collected by middlemen who work for one of the many mafia groups there. The caviar is then “laundered” through Poland, which as a CITES member is allowed to issue reexport permits for the eggs. Technically the Polish CITES authorities can only issue reexport certificates if the shipment was accompanied by a valid import certificate when it came in from Russia. But for the right amount of cash, technicalities can be, and often are, overlooked.

Koczuk was working hand in hand with a Polish exporting company called Munnix, which, according to evidence collected by various law-enforcement agencies, is one of the world’s principal laundering points for poached caviar.

Koczuk was an old hand at smuggling—as was his “marketing director” Wieslaw Rozbicki. Both Koczuk and Rozbicki had previously been caught smuggling caviar into the US. In December 1994, on a trip from Poland, Koczuk tried to smuggle 27 pounds of caviar in his suitcase. Though caught red-handed, he petitioned to get his caviar back, telling customs agents, “This is my first customs offence.… I will not do this again.” Just two years later, Rozbicki was caught with 30 pounds of caviar, also in his luggage, after arriving in the US from Poland. Rozbicki, too, applied to be spared forfeiture. His words had a familiar ring: “This is the first time that I made this mistake. I used poor judgment. I promisse[sic] that this will not happen again.”

With CITES restrictions inhibiting the market, the price of caviar was skyrocketing. Suddenly the little black eggs were valued more like little black dots of gold. Smuggling went from being a way to cheat on customs duty to being a virtual license to print your own money.

In late October 1998, Koczuk met with his two chief smugglers, the husband-and-wife team Andrzej and Katarzyna Lepkowski. Andrzej was currently deputy police chief of Warsaw, Katarzyna an air hostess for the Polish national carrier, LOT. Together they were responsible for recruiting “mules” to smuggle Koczuk’s caviar into the US. Katarzyna had just returned from a smuggling trip to the US with Rozbicki and a mule, known only as “Majko.”

Rozbicki and Katarzyna had smuggled 136 kilos of oscetra between them; Majko had brought in 50 kilos of beluga. The retail value of the smuggled caviar was more than $300,000.

Within two days the eggs were sold to reputable retailers, including the Park Avenue restaurant Caviarteria and the exclusive food shop Urbani Truffles. Their customers had no idea the delicacy they were paying up to $100 an ounce for, and that was supposed to have been kept at a constant 26 degrees Fahrenheit, was an illicit purchase that had spent at least a day sweating and stewing inside the unrefrigerated suitcase of a smuggler. 

Rozbicki remained in the States, ready to greet Lepkowski and receive Koczuk’s next wave of smuggled sturgeon roe at JFK International Airport.

As much as 465 kilograms of caviar and over 102 tons of sea products have been confiscated from poachers, TASS learned on Thursday from the press service of the North Caucasian agency of the Russian Federal Border Service.

However, this does not stop poachers. 300 meters of nets for catches of sturgeon were spotted and confiscated by border guards as a result of a surveying flight by a Mi-8 helicopter. Firearms have also been confiscated from poachers.—ITAR-TASS News Agency

The bucket on the floor of the warehouse was clearly labeled with a sticker that read “Salmon Eggs—Bait. Not for Human Consumption.” This was bad: The warehouse belonged to a specialist food company that sold thousands of pounds of salmon eggs annually to US stores.

Inspectors of New York’s Department of Environmental Conservation (DEC) found the bucket in the warehouse of Gold Star Smoked Fish, a company Panchernikov and a business partner owned along with Caspian Star Caviar. The DEC had discovered that Gold Star was the major client of a company called Tempotech Industries, which had just been shut down as part of a wide-ranging investigation into allegations that contaminated salmon eggs were being sold illegally as food. The eggs had been harvested from salmon fished in Lake Ontario, a body of water so polluted with toxic chemicals that the State of New York banned the sale of salmon from it.

A few years after the ban, Tempotech, run by George Jackson and Robert Gehl, obtained a contract to harvest salmon and salmon eggs from Lake Michigan, where, because the waters were considered relatively uncontaminated, salmon (and its roe) was deemed fit for human consumption. Tempotech maintained two egg-processing facilities—one at its headquarters in Hart, Michigan, and one
in Pulaski, New York.

However, Jackson and Gehl decided to use the Michigan contract as a cover to launder Lake Ontario salmon eggs,
which could only be legally sold as fisherman’s bait. Tempotech’s own analysis of the eggs showed high levels of polychlorinated biphenols (PCBs) and mirex—a banned pesticide linked to cancer, stillbirths, and reproductive disorders—but still Jackson and Gehl sold nearly one million pounds of the contaminated eggs, most of them to Gold Star. The eggs would have an eventual market value of $16 million.

The salmon eggs processed at the Pulaski plant were packed into 45-pound buckets clearly labeled with the warning stickers. But once in Michigan, the eggs were repacked, this time without the “bait” label, and then shipped to Gold Star, where they were resold directly to the public for consumption as caviar. Caspian Star’s records indicate that each bucket was referred to as a “piece” of caviar. A typical shipment contained ten pieces—450 pounds. A Tempotech manager confirmed to DEC investigators that “all Pulaski caviar went to Gold Star.”

DEC tests performed on Gold Star’s salmon eggs confirmed high levels of mirex. One investigator noted that Jackson had personally delivered the contaminated caviar to Gold Star.

Panchernikov paid for the shipments with shopping bags and attache cases full of cash—payments which totaled, according to court papers, “cumulatively many millions of dollars.” As a result of the DEC’s investigation, Gehl and Jackson were convicted in February 1995. Gehl was sentenced to 87 months in prison and fined $250,000, and Jackson was sentenced to 70 months. Tempotech itself was fined and forced to forfeit funds totaling nearly $1,500,000.

While no criminal charges were filed at the time against Gold Star or Panchernikov personally, the company was identified as an “unindicted coconspirator” in the Jackson and Gehl case, and the DEC instead pursued a civil action against Gold Star. The company admitted violating New York State’s Environmental Conservation Law by improperly harvesting and selling contaminated salmon eggs, and got off the hook with a $230,000 fine.

Koczuk may have been on the top of his world for many years, but climbing to the top always pisses off someone. By October 28, 1998, he had clearly pissed off somebody very close to the heart of his organization.

The tip-off call came in to a US customs office in Frankfurt. The anonymous caller gave specific information: the airport, the flight, the date of arrival, the names of all the smugglers, and what they would be carrying.

The customs agent dialed his counterparts at JFK, who in turn placed a call to their colleagues at the US Fish and Wildlife Service. The call was answered by FWS Special Agent Ed Grace, member of an elite investigative core at the heart of the FWS that trains alongside the FBI. Many Special Agents are biologists, and all are armed. One of their jobs is to take down smugglers of endangered species. Grace wrote down the smugglers’ flight arrival time and looked at his watch.

There were only two hours to go.

“Look, how are we supposed to fight corruption when a police lieutenant doesn’t make enough to feed his family?” one lieutenant colonel in the Astrakhan fisheries police says bitterly. “I have served 25 years and earn less than $300.” But despite the police’s professed economic woes, nearly half of the cars in the parking lot of the dusty fisheries police building were BMWs or Volkswagens. When asked whose cars they were, the department’s senior officers claimed they belonged to “visitors.” The cars were in the same parking spaces three days in a row.

Although 1,400 people were caught for poaching last year in the Astrakhan region, police admit that not one of them received a prison term, which could be up to three years for a convicted poacher. Most were instead fined between $40 and $2,500, the maximum penalty.—The Moscow Times

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