Wide Net for Illegal Caviar

The tip came from Poland. An unidentified Warsaw airport official with a keen eye--or, as federal investigators suspected, an inadequate share of the action--had blown the whistle on a group of fellow countrymen.

Seven Polish passengers aboard Finnair Flight 003, bound for New York via Helsinki late last October, had checked 16 heavy bags on departure. Thanks to the whistle-blower, U.S. authorities knew their names, itineraries and seat assignments. And they knew there was not so much as a change of underwear in that collection of hard-sided suitcases.

The seven passengers were couriers, their luggage stuffed with canisters of black market Russian caviar--about 1,000 pounds of premium beluga. Menu value at any number of fine Manhattan restaurants: $1.2 million.

A hastily assembled reception committee of agents from the U.S. Customs Service and the Fish and Wildlife Service greeted the flight at John F. Kennedy International Airport--and launched the nation’s first criminal prosecution of caviar smuggling.

The agents’ first arrest: a high-ranking Warsaw police officer, the head of an anti-organized-crime section. Federal investigators allege that he helped recruit the couriers and acted as a ringleader. He and two officials of a Connecticut importing company face trial later this year in a Brooklyn federal court.

The Brooklyn case is one of the most dramatic outgrowths of a newly expanded international treaty, barely a year old, intended to protect the ancient roe-producing sturgeon. Its numbers have fallen drastically since the collapse of the Soviet Union in 1991.

The prehistoric fish of the Caspian Sea, among the oldest forms of living vertebrates on Earth, have been plundered to endangered status by unregulated entrepreneurs and caviar pirates. It turns out that these gilled survivors of whatever cataclysm doomed the dinosaurs may finally have met their match in modern poachers--what the Russian press calls “the caviar mafia.”

Illegal caviar trade is the primary reason the adult sturgeon population is down to only 30% of what the World Wildlife Fund estimates it was 20 years ago in the Caspian Sea. Without effective intervention, conservation experts fear, sturgeon in the Caspian Sea, now the source of more than 90% of the world’s caviar, could be on the verge of irreversible devastation.

“There are people out there who don’t mind making a profit off the last one,” said William Donato, senior resident agent at the U.S. Fish and Wildlife Service office responsible for monitoring cargo through JFK Airport.

As much as half of the caviar entering the U.S., the world’s biggest caviar importer, is believed to have origins in the black market, according to the Customs Service.

Nonetheless, the criminalization of caviar is a very recent development.

Since a year ago, when the new international caviar restrictions went into effect, Donato says, his overwhelmed staff of four investigators has been “up to our eyeballs in caviar” cases. Not that the Fish and Wildlife Service is interested in making the world safe for caviar connoisseurs.

“We have only one purpose in enforcing these new rules: to save the sturgeon,” Donato said.

Low-Tech Industry, High Profits

The sturgeon went into precipitous decline after 1991, when caviar harvest restrictions collapsed with the Soviet government. Today, says U.S. Customs Service food import specialist Barry Braverman: “Everyone with a rowboat is out on the Caspian tossing sturgeon into the backs of their boats.”

In fact, the Caspian has become a sort of watery version of old Dodge City. Armed gangs enforce unofficial claims to coastal fisheries. Bribes to local authorities are required to operate a boat in sturgeon waters. Shootouts and showdowns are common.

Growing demand for caviar drives a flourishing black market. Worldwide demand exceeds supply by three to one, according to U.S. government figures.

Unlike oil, gold, diamonds and other natural resources mined by state enterprises in the old Soviet Union, sturgeon recovery requires no investment in heavy equipment or technology. And the mark-up is dazzling by any capitalist standard.

Fresh beluga caviar, harvested by the ton by sweaty fishermen on the Caspian Sea, is sold by the ounce by tuxedoed waiters on some of the most glamorous avenues of the world for as much as $80 a dollop.

For years, the closest thing to illicit caviar was that sometimes eggs were brought through U.S. ports without declaration for payment of import duties. Such incidents generally resulted in little more than embarrassment and a fine.

Then, on April 1, 1998, under pressure from the United States and Germany, the two biggest caviar importers, 27 species of sturgeon were granted international protection.

The Convention on International Trade in Endangered Species of Wild Fauna and Flora, a 20-year-old treaty with 148 signatories, including Russia, seeks to protect a broad range of wildlife. Unlike its absolute ban on trade in such black market goods as ivory, CITES (pronounced: SIGHT-ease) does not outlaw caviar harvests, but the treaty does require all caviar shipments to have a permit issued by the country of origin.

The primary aim: Help Russia enforce protective fishing quotas by closing consumer markets to black market caviar.

Poor Quality on Black Market

Traders greeted the new rules with mixed feelings. Many caviar importers already were having difficulty meeting increased demand from their customers. The import restrictions were sure to reduce supply even further.

But many old-line traders welcomed the rules as a way to restore some order to, and preserve the quality of, caviar shipments. Under fishing quotas imposed and enforced by the former Soviet police state, caviar traders at least had confidence in Russian quality standards.

For caviar consumers, one troublesome side effect of the post-Soviet surge in black market trading is a huge increase in deteriorating and mislabeled import stocks.

Properly handled and refrigerated, fresh caviar has a shelf-life of about six weeks. Without proper care, it begins to deteriorate in days. And proper care is not a hallmark of the black market.

Eve Vega, executive director of U.S. operations for Petrossian Caviar, one of the oldest trading companies, says bluntly that retail stocks are saturated with “garbage product” from the black market.

“It’s bad, but the price is cheap,” she said.

Last fall, Fish and Wildlife officials, using DNA testing on samples from a series of shipments to one New York importer, found that much of the so-called high-grade Russian beluga was neither beluga nor Russian.

Federal agents seized much of the caviar, and a civil court battle over control of the remaining viable cargo continues before a federal judge in Brooklyn.

In fact, until last October, when Finnair Flight 003 landed at JFK with seven Polish caviar couriers, all prior caviar import disputes had been handled with similar civil complaints or relatively minor administrative actions. About the harshest action taken was confiscation.

Fish and Wildlife authorities acknowledged their early enforcement strategy was to proceed slowly.

“This is an industry that was never regulated before, so we wanted to give everyone a lot of room to adjust to the new rules,” said Donato, chief of the New York region.

But a slow pace also was dictated by the small force of agents available to police the huge flow of cargo entering the U.S. through New York area ports.

That’s why on Oct. 28, 1998, the tip from a Polish informant was especially helpful--a suspected smuggling operation served up on a silver platter.

This time, the understaffed border and wildlife agents were ready and waiting.

The customs duty officer that afternoon at JFK was Agnieszka Klus. Her colleagues called her Agnes. She was a relative newcomer to the job, hired by the Treasury Department agency 16 months earlier after earning a degree in criminal justice.

Most significantly, she grew up in a small town outside Krakow. And she spoke Polish.

The intelligence alert, relayed to Klus from the customs attache in Bonn, arrived a few hours ahead of the Finnair flight. A special team of inspectors was dispatched to JFK to assist.

At Fish and Wildlife offices a few miles away--a warren of offices crammed with aquariums, closets and refrigerators storing an exotic inventory of fish, skins, skeletons and caviar cartons--investigator Ed Grace was summoned to JFK’s Delta terminal, where the flight was scheduled to arrive around 4 p.m.

A former game warden in Florida, Grace had recently handled an investigation that led to a prison sentence for a Manhattan shop owner trading in the remains of Native Americans.

Also headed for the Delta terminal was Weislaw Rozbicki, marketing director of the Connecticut-based caviar trading firm Gino International. He and an associate left a van in the airport parking lot and headed inside with $4,000 in cash.

Aboard the Finnair flight, Andrzej Lepkowski held baggage tags for three caviar-filled suitcases stowed in the belly of the jumbo jet. Among Lepkowski’s carry-on items: his badge and Warsaw police ID.

This was, according to court records, the police officer’s third trip to America in a few weeks, each time as a caviar courier. Two weeks earlier, in fact, he had made the same trip with his wife, a flight attendant for a Polish airline, carrying about 300 pounds of caviar between them in four suitcases.

Unanimous Denials, Then Capture

As is customary on international flights, passengers aboard Finnair 003 filled out customs forms identifying any food products or other items of value they were bringing into the country.

According to federal investigators, Lepkowski and the others checked “no.”

On the ground at JFK, each courier was asked again if he or she was bringing in food. Each denied it, investigators said, and each was directed to one of 10 separate tables staffed by customs inspectors. Abdul Malik was one of those inspectors.

“I remember the suitcases were heavy. It took two hands to lift them,” Malik said. He watched closely as each passenger opened his own suitcases.

“Some of them were perspiring quite heavily. They were nervous. The police chief [Lepkowski] was very nervous.”

The 16 suitcases contained nothing but caviar--901 tins ranging in size from 250 grams to 4.4 pounds each. Some of the containers were leaking, filling the luggage with what Malik called an unpleasant aroma.

Customs agent Klus was uncertain where to start her interrogation. She greeted one courier in English. His documents showed he had once lived in the U.S. The courier shrugged, indicating he didn’t understand English.

Klus smiled, then advised him of his Miranda rights--in Polish. Several agreed to cooperate.

According to statements they made to investigators, the couriers were recruited by Lepkowski and his wife. They were given free airline tickets and the pre-packed suitcases when they arrived at the Warsaw airport. They expected to receive $500 each upon arrival in New York.

Lepkowski said his flight attendant wife was first recruited by Gino International owner Eugeniusz Koczuk when she met the Connecticut man on one of her flights. Lepkowski, in turn, made at least three trips as a caviar courier.

Federal agents later raided Gino International’s Connecticut headquarters, a white ranch-style single-family residence in Stamford, about a 45-minute drive from JFK.

There, stored in three refrigerators in the one-car garage, they found another 1,000 pounds of caviar that investigators allege was smuggled into the country.

Documents seized during the raid also showed that Gino International sold nearly 10 tons of imported caviar to U.S. retailers after the April 1 restrictions went into effect. Only 88 pounds of the 19,000 pounds of caviar that Gino sold was legally imported, according to court papers.

In an indictment issued late last year, two Gino officials--Koczuk and Rozbicki--and police officer Lepkowski were accused of smuggling and conspiracy. They pleaded not guilty. One called the allegations “a big misunderstanding.”

Lepkowski is free on bail but not permitted to leave New York pending trial. The other six alleged couriers, including a second high-ranking Warsaw police officer, were released and returned to Poland.

Battle Against Greed

Fish and Wildlife’s Donato says the case should serve as a wake-up call for all importers still doing business in the caviar black market.

“We think this case got everyone’s attention,” he said.

But this is no time for the sturgeon to take comfort. Donato and his overwhelmed investigators know they lack the resources to end all the smuggling activity they believe continues.

Despite international treaties, tougher U.S. enforcement of import rules and renewed Russian promises of a crackdown on the poachers, the caviar black market is no more likely to be eliminated than the drug cartels, they say.

“There’s too much money and too much greed involved in the caviar market,” said investigator Grace.

“The problem’s not going away--not as long as this stuff’s as valuable as cocaine.”

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Rempel is a Times staff writer. Kistner is an associate of the Center for Investigative Reporting.