Episode 2: The Trapdoor

The police operation that ensnared Derek White was years in the making. We sit down with one of the investigators on the case and get a rare peek into the inner workings of an international criminal organization. 

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Episode Transcript

Speaker 1 (00:01):
Campsite Media. Do you know where the name Project Mygale? Like,
could you say what it means? That means tarantula? Right.
That's Michelle, my editor, and we're sitting down at a
dinner table with Italian sandwiches, soda cans, and this guy
this question. He's an investigator, a retired cop of forty

(00:24):
years who worked on an undercover sting operation called Project
my Gal. He asked to be anonymous, so we're disguising
his voice with a filter. So my Gal refers to
a family of spiders that build trap doors. Did you
ever see on like the National Geographic Channel, spiders that
make little holes in the ground and then above them

(00:46):
they weave little sticks and grass together and literally make
a trap door, and they wait for a bug to
come on and wham, they fucking nail it. When Project
Miguel got started in routine, it was one of the
biggest cross border police operations in US Canadian history. It
employed hundreds of officers and several law enforcement agencies, including

(01:09):
the d e A and Homeland Security. The operation targeted
cartel runners, money launders, and narcotics traffickers on both sides
of the Atlantic Ocean. Duffel bags of cash, zip blos
full of hills and bricks of cocaine. Classic bad guy stuff,
My gal, I guess we could say it was a
trap door that bag I just walked Then what would

(01:31):
you say? That trapdoor was of easy money and these
people would just go down that hole. And one of
the people who walked right into that trap was an
enterprising businessman named Derek White Card A Little Amazing Love
It Yeah from Camps Media and Dan Patrick Productions. I'm

(02:02):
Roger Gola and this is Running Smoke, Episode two, The Trapdoor.

(02:23):
When Derek made a deal to take raw tobacco as
payment for renting out as race cars, it turned out
to be much more than a simple business transaction. Derek
had unknowingly stepped right into a gigantic undercover police operation
that had been building for months. Police sketched a profile
of Derek as a major figure in the criminal organization.
But from what I could tell, all he was doing

(02:45):
was buying and selling raw tobacco on his mohawk territory.
So you're probably wondering, how the hell did that make
him a criminal? Isn't tobacco legal? Answering that question turned
out to be more difficult than I anticipated. The problem
was every time we reached out to a law enforcement agency,
they told us they couldn't comment on an open case.

(03:07):
But after months of calling around, we did find someone
who would speak to us, A retired police officer who
helped investigate the case against Derek, the same investigator you
heard earlier through a voice changer. His name was never
revealed in the court proceedings or media reports around Project Miguel,
so he asked that we don't reveal his name either,
so we'll call him Jimmy. When I started doing this,

(03:30):
I had this have somebody explained to me what a
list of tobacco was, and I guess after ten years
of doing this, they become a subject matter expertal and
basically all I focused on was contraband tobacco between the
States and Canada, specifically how New York plays into it. Now,

(03:51):
on its face, the phrase contraband tobacco doesn't make a
whole lot of sense, because, well, tobacco is legal just
about everywhere in the world. But the difference between regular
legal tobacco and illicit or contraband tobacco comes down to taxes.
Almost every government in the world taxes tobacco. So someone
manages to sneak tobacco into a country without paying those taxes, Well,

(04:16):
now that's considered contraband, which comes with the criminal charge
of defrauding the government. Jimmy has been working as a
cop since he was nineteen, but after he retired about
ten years ago, he started working on contraband tobacco investigations
for different law enforcement agencies. He was eager to peel
back the curtain on an issue that not a whole
lot of people understand. He had packs of smuggled cigarettes

(04:38):
and stacks of printed documents laid out on his dinner
table for me to flip through. He'd also been up
late the previous night working on a power point presentation
just for us. The numbers that all get into here
with you are just staggering, just staggering, the billions of dollars.
One thing I wanted to know is one pound of tobacco,
one pound of royal leaf process tobacco, or what I

(04:59):
call cut rag. You could fit one pound of cut
rag tobacco approximately in a one gallon zip block back
no plugment for zip block, zip block the bag for smugglers,
and the choice of smugglers around the world. Black please
sponsor s okay. So one pound of tobacco makes five

(05:20):
hundred cigarettes or roughly two and a half corns. A
tractor trailer holds thirty four thousand pounds of cut rack tobacco.
So here's the problem for Canada. Thirty four thousand pounds
of cut rag times five hundred cigarettes per pound. If
you run all the numbers, what you come out with
is that a single tractor trailer of contraband tobacco that

(05:41):
illegally crosses the Canadian border comes out two around seven
and a half million dollars innovated taxes, and those trucks
cross every day. It was a massive logistical accomplishment. I mean,
we can organize a coffee and donut run without an
argument for ten minutes. These people are doing international money laundering.
They're they're transporting contraband for thousands of miles. Tobacco brought

(06:07):
a lot of different groups together. The project my Gal
exposed that if you want to bring tobacco attractor trailers
worth up into your facility, you need an organized network
to do that. Who better than organized crime. Tobacco is
a commodity for organized crime. Whenever they could make money

(06:28):
off of their going to exploit it's funding their other businesses.
They used to use cash to fund their drug businesses,
They used to use cash to fund their human trafficking business,
to fund their their gun business. Elicit tobacco has become
the new currency for organized crime. They use cigarettes and

(06:51):
it makes my skin crawl. And the thing about organized
crime is that it needs someone at the top to
or nize the crime. In this case, investigators had their
eyes on a man named Sylvan et Tier by Day.
Etia was the owner and operator of a prohibition themed
bar in Montreal's suburbs called Well Prohibition by Night. Though

(07:16):
he was an alleged associate of the Hell's Angels, managing
tobacco transport and money movement among various criminal organizations. Sylvan
Sylvain's function was he was the sort of the the frontman,
if you will, for for the organized crime slash Hell's
Angels organization that was running these operations, or I should

(07:37):
say that was profiting from these operations. Sylvan's operation worked
like this. First, he would have his guy's wire money
to a broker in North Carolina to purchase a load
of tobacco attractor trailer's worth, which would run you about
eighty thousand dollars. Then Sylvan's guys would arrange for drivers
to go pick up the tobacco with a semi truck.

(07:59):
Under Cover police would be staked out at the North
Carolina warehouse, writing down license plate numbers of suspicious trucks
and sending them to colleagues at the border, But the
smugglers were one step ahead. The drivers would stop and
we're in Jersey or New York, unload their tobacco and
swap trailers to throw cops off the trail. Then they
would drive on up to the border. This was the

(08:21):
most policed part of the tobacco route. Customs agents from
both countries would be watching every vehicle going across that line,
and they were trained to spot illegal shipments. If the
cops were gonna nab one of sylvan etsgates trucks, this
is where it would happen. They will take those tractor

(08:43):
trailers in regular commerce and drive into a regular border,
crossing like you or I could cross, like tractor trailers
cross each and every single day, and it's welcome to candidly,
what do you have in your truck at that point.
The driver will show the border agent paperwork that documents
what the truck is caring, except that paperwork doesn't say tobacco.

(09:03):
It's false, but from legitimate companies like Thomasville Furniture. Everybody
knows Thomasville. So the Canadian border service guy looks at
that paperwork and sees Thomasville. Well, hey, it's a legitimate load,
and he'll let them go through. And some of it
was pretty ingenious, but some of it was pretty stupid too.
Sometimes we've also seen idiots. We're on the bill of lading.

(09:26):
They put sawdust. Sawdust going into Canada, the number one
producer of lumber in the entire world. You think they
got to import fucking sawdust. Groundballs like that were easy
to catch for border agents. But truth be told, a
lot of trucks full of illicit goods across that checkpoint
every single day with no problem. You have to remember

(09:48):
these are busy international borders. Agents can't open up and
search every single semi truck that comes through, or the
line would be backed up all the way down to Florida.
So more often than not, so then it's eight trucks
got into Canada without a hitch from there it was
smooth sail in the Silvan's warehouse on the outskirts of Montreal.
According to Jimmy, this is where the Hell's Angels come in.

(10:12):
Now it gets to these warehouses where literally you now
have millions of dollars worth of cut rag tobacco store
in your facility. Bad guys steal from bad guys all
the time. That's where God invent the guns. You need security. Oh,
you can't call up the local police and ask them
to guards of contraband, not, can't you? And that was

(10:35):
the talian with organized crime and Hell's Angels. So the
current rate is about six fifty to sixty thou dollars
to both smuggle attractor trailer load up into Canada and
to guard it until it's done. And that number is
the cut that the Hell's Angels and truck drivers would

(10:56):
get for both the smuggling and storage, so it'll be
like a smuggling fee of transportation fee. You break it
up how you want. It cost sixty dollars to get
the stuff from North Carolina into Counda's safely and securely,
so it's quite profitable just for the muscle on the street.
Solvan's operation was massive. It involves brokers, money, launders, outlaw bikers,

(11:21):
and truck drivers in two different countries. He got in
the entire supply chain down to his science, and the
folks involved were making money hand over fist. But as
the organization got bigger, it also became more vulnerable. When
you have an operation the size and scope of Mygale,
with so many loads of cut rag moving back and forth,

(11:42):
it is inevitable that one of those loads is going
to get picked off by Canadian Border Services, or a
tractor trailer is going to have an accident and the
back's gonna open up and tobacco is gonna spread out everywhere.
Stuff is gonna happen. Flukes and freak accidents were one thing.

(12:02):
What Stivan was really worried about, though, was being infiltrated
by cops. When you have cases of this scope and
you have players from warehouse employees to forklift drivers, to brokers,
to bankers, to truck drivers, to sled operators to boat operators,

(12:24):
you have a great opportunity to insert and undercover coming
up after the break. You saw me declared to that

(12:47):
you just wanting that we will get is the truth
and nothing but the truth I do. I do. The
tape you're hearing, we got it from the Montreal courthouse
after months of waiting through forums and files. It's a
recording of a testimony from one of Sylvan's key collaborators,
a convicted money launderer named Martin Grennier. He was an
asset for a guy like Sylvan because he had a

(13:09):
skill set that was central to any smuggling operation, money
laundering and transport. So this is a message I received
from its He he's asking me if I know well
the driver of the truck that brings the tobacco from
the US to Canada, the transfer I was able to

(13:31):
move money to UH to outside of Canada, the the
the contact and I also had contacts in the transport
world for bouge in order to remove some tobacco. He
was put in charge of running the nuts and bolts
of the smuggling operation and making sure things went smoothly.
Here he is telling the court about a time that
Sylvan centem a text asking if he knew why cops

(13:54):
were sniffing around the warehouse. The reason he gives me
is that after we went to pick up a load
of tobacco in Buffalo, three or four weeks after the
police went there because then the libor, so the police
went there to verify everything. And then he tells me
also that after we dropped the load of tobacco at

(14:18):
Saint me there was four cars watching or following the
dirt truck. That dirt truck that pick up the tobacco,
saying to me and to bring it to another destination.
Police were swarming at the DRA applications and tailing his trucks,

(14:40):
and he was starting to get nervous. Et A wanted
to know if the drivers could be working with the cops.
Grant told him not to worry. His guys were legit batties.
They were experienced narcotic smugglers. And so when when he
says that, how do you answer him? So I'm telling him,
I don't think the proble limids coming from us, because

(15:02):
my driver is also crossing white referring to cocaine. So
I don't guarantee you that he's not hot, mean that
he doesn't have police following him. But I confirmed to
him that my driver is sitting down at his house,
so there's no problem from my side. But all of

(15:24):
that was a lie because the man still then et
C was texting was a double agent. Martin Grenier had
been working with the cops for years, feeding information back
to his handlers on every single money transfer and tobacco shipment.
Oh and the drivers that Sylvan was worried about, Yeah,
they were undercover officers too. Do you know who did

(15:46):
the transporting for you? Yeah? HSI don't tell. So it
was HSI um so undercover agents working honor and security
in the United States. What my gal offered was a

(16:09):
very unique opportunity to insert undercover agents anywhere along the line,
from the truck driver to a warehouse operator. It was
a very complete and complex operation. Tell me about how
you place undercover officers in key positions in this trade.

(16:30):
You need an informant, You need an inform at the
vouch for you. You need an informant to say, hey,
this guy is buying from you, or this guy is
looking for a new whatever, and it's an introduction. Fortunately
for investigators, they had the perfect person for the job,

(16:50):
Martin Grenier. You got arrested in the United States for
money laundry, Is that right, Okay? And it was. It
was as a result of that arrest for money laundering
in the us that you started to work for the police.
Is that correct? Okay, yes, all right, so can you

(17:13):
tell us day? Long story short. He worked with criminal
organizations for years until he was arrested in twenty twelve
on money laundering charges. Not long after that he made
a deal with the d e A and the Quebec
Police Force. We're unclear on the exact terms of that deal,
but beginning in Martin Grenier was back on the street
and put word out that he wanted to work with

(17:34):
his old boss again. And how do you know, Mr
at Enormous. I know him for having done some criminal
activities for him over two periods. Back in the day,
Grenier had been part of Savant Ettier's crew, and after
his arrest, he managed to rejoin the group. For years,

(17:57):
Grenier worked as a double agent, managing the legist six
of Besier's tobacco business and feeding all that information back
to the cops. Grenier was particularly well placed to get
high level intel on all the wire transfers and semi trucks,
and when an order came in for a load of
tobacco heading to a Native territory on the south shore
of Montreal, Grenier got a message directly from sylvan Etta.

(18:19):
I received a message from Chia attended to nine. He
was asking me if I know someone buy a class
bar the same good transport I from Sarah. Why they
y house is to the client client being an individual
on an engine reservation. When you said the um, you

(18:41):
had mentioned where the client was located? Sorry, where was
the client located? Don't so like a yeah, on an
engine reservation on the south shore. Did you know exactly where? No?
Did you know the name of the reservation. So during

(19:03):
a meeting face to face with you, we talked about
the kawanaki A Reserve and from stage left from the
Gnawaga Reserve enters Derek White will be right back. What

(19:27):
debut dis invades you? So at the beginning, who are
investigating the organization? What you're hearing is court testimony from
a Canadian border officer who worked on Project My Gael.
Somehows combed a little bit later on on the during
the investigation, we can to realize that Mr right On

(19:47):
is on organization. Also, as it so happened, Paul John,
the driver that offered Derek Tobacco in exchange for renting
his race car, well he turned out to be a
close associate Sylvan Etier, So when Derek made a deal
with Paul Jean for raw tobacco, it meant he was
now doing business with Sylvan Ettier's organization. Now, to be clear,

(20:09):
Paul Jean was never a Hell's Angel or associated with
them in any way, and he denies having any knowledge
of Silvan's associations with any criminal organizations. But the fact
is that because Sylvan was already under heavy surveillance, Paul
Jean unknowingly wrote Derek into the traps set by law enforcement.
Derek wasn't the intended target, but now he was impossible

(20:30):
to ignore, and according to Jimmy, he played a vital
role in the larger operation that Sylvan was running. White's
role in this was he was making money and he
was using, in my opinion on what it appears, his
native status as sort of like let's run it through me.
Nobody's going to touch the tobacco on the Indian Reservation.

(20:52):
A to some extent, He's right, more or less police
won't go on the Indian reservation certainly and offered tobacco.
So it's sort of having somebody like White afforded that
like home plate, like just get it here and we'll
be safe. Derek was now caught up in the massive
surveillance operation that had been wired, tapping and tailing Etta's

(21:15):
crew for months. His text and phone calls were intercepted
and disseminated to investigators. So the first communication four old
tweet Mr Derrick White, Texas Mr Samuel Baker sur Baker.
Mr White, Hey buddy period, which White replies the letter
k at eight a m. From Mr Jason Hill. Let's

(21:37):
hear the phone call. These one thirty three in transcripted
might have camera though fight your fight a remadurant teeth.
The truck broke down hopefully Tuesday or Wednesday. Attack to
be legal. These are text messages between Mr Derrick White
and Samuel Make need the tires. I'll send sponsorship a

(21:59):
am Monday work question mark. Yeah. That last message might
sound unrelated and innocuus on its face. Derek is a
race car driver. Of course he's buying tires and looking
for sponsors. But investigators already knew who Mr sam Baker
was one of North Carolina's biggest illicit tobacco brokers. He

(22:22):
was the guy buying tobacco from growers and processors. In
the States and selling it to buyers in Canada or
in Mohawk territories. Derek was using code words to speak
with Sam Baker, and over the course of the investigation,
Derek had sent him over two million dollars with memo
lines like racing expenses and NASCAR parts. Derek wasn't just

(22:44):
a small player in a tas game anymore. He was
running his own operation wet Phy. So at the beginning
he was doing business with the organization Little One. And
in October twenty fifteen and some rounds roundscomb so we

(23:09):
we came to the realization that he had his own
truck the amountain to pick up to tobacco from us.
Turns out Derek had been buying and selling wholesale tobacco
for years before he met Paul Jean, but until then

(23:30):
cops had no idea what he was up to. As
soon as he shook hands with Paul john though, cops
started paying attention very closely and they started filling in
the picture of Derek's tobacco operation. And from all the
intercepted messages, investigators figured out how Derek was wiring his
money and handling his logistics. Maybe we could uh, moved

(23:51):
it up maybe a two a week or three a
week or something, you know, for you and they don't
bring into him anymore. It's going to make you, Lauren,
everybody will be at our circle. And how he organized
for someone to warehouse's product, a guy they code named
the old Man. Yeah, okay, And how Derek directed his

(24:21):
driver's once the tobacco got into Kenny, the trailer riding
loaded and then be ready to go Sunday nine. Yeah.
There were heavy criminal elements to the larger organization that
project Mygale was investigating folks that were even bigger than
Sylvannetti and who were dealing narcotics and hard drugs, but

(24:44):
Derek seemed to be totally independent of it. Derek never
met silvan Ettier, never spoke to him, texted him, or
communicated with him at all. From what investigators found, Derek
was only dealing with tobacco and he never had any
contact the rest of the criminal operation. But that didn't matter.
Derek was on the Mygale radar and investigators were on

(25:06):
Derek's trail. They had an informant inside his warehouse and
undercover officers driving his trucks. Cops knew exactly where every
shipment was coming from and where it was going, And
even though they could stop every truck at the border,
they didn't. They wanted to pounce at the right moment
when they had enough evidence to go after the Kingpins.

(25:27):
Jimmy the Anonymous Investigator explained the logic to us, So
you typically don't want to take off a load if
you don't have to, because imagine going through this multi
year operation like Mygale, and then do something at the
end that screws it up, that makes the bag. I say,

(25:47):
we're not doing this for two years, we're backing out.
But when you've got as many trucks going across the
border as Derek and Sylvanne did, there's gonna be some
surprises no matter what. Stuff is gonna happen. And it
always sends a wrench in the works when that happens,
because the first thing the bad guys do is close
ranks and go, we have an informant here. But truck

(26:10):
could have been hit by a fucking meteor, right, and
they're going to think they have an informant, which is
exactly what happened in November, just a few days after
Derek got back from a NASCAR race at Texas Motor Speedway,
he got the news that one of his money runners
was pinched by the cops. Investigators saw the whole thing
unfold from the texts and calls they intercepted from Derek's

(26:32):
cell phone. They start at eight thirty six A and
Mr White writes to Mr Hill, they jacked my friend.
I'll let you know later. Don't want to talk too much.
The car fucking a little made, fucking loved it. I'm

(26:53):
just bringing it to what the fucking deal is to
get rid of it. Yeah, a lot of your Fortunately
for the cops working this case. Derek got over it
quickly and chalked up the arrest to bad luck. My
lawyers said the same thing. It was just a fucking
arrest of food. I saw silent saying, you know anything,

(27:16):
fucking sitting anything old verdable that when I said, they really,
I did fu Trying to the fun ship, Derey thought
he'd gotten off scott free, but police were biding their time,
waiting for the perfect moment to open the trapdoor coming

(27:42):
up next time on running smoke. I thought there was
no risk because they told me they were doing it
all legal. I took their word for it. The first
thing you want him to know is you're screwing your
gun and issier. The peacekeepers called me and they said
that we have a warrant for your arrest. So I
went turned myself in. Running Smokes a production of camp

(28:07):
Side Media, Dan Patrick Productions and Workhouse Media, written and
reported by me Roger Golan. Our producers are Leah Paps,
Laine Gerbig and Julie Dennische. Our editors are Michelle Lands
and Emily Martinez. Sound designed and original music by Mark McAdam.
Additional sound and mixing by ewen Lyone from Ewan. Additional
reporting by Susie McCarthy. Our executive producers are Dan Patrick,

(28:30):
Josh Dean of camp Side Media, Paul Anderson, Nick Vanella,
and Andrew Greenwood for Workhouse Media. Fact checking by Mary Mathis,
artwork by Polly Adams and additional thanks to Greg Horne,
Johnny Kaufman, Sierra Franco, Elizabeth van Brocklin, and Sean Flynn.