Hunting LeRoux

by Elaine Shannon

  By 2009, LeRoux was confident that his defensive measures were adequate, and he doubled down on his expansion plans. He had to feed the beast—the narcissism and need that drove him. He had to go bigger and badder.

  The solution, he decided, was to diversify, found more companies, buy more protection, erect more walls. Have a Plan B, and Plans C and D and E. Hire more front men. Get fake passports, like a stack of playing cards. Get more. Keep moving.

  The agents in Minneapolis learned a great deal more about the inner workings of RX Limited when they got onto the trail of Jonathan Wall, a dual U.S. and Israeli citizen who lived in Kentucky and made purchases for LeRoux. Wall was eventually charged with 23 counts of violating U.S. pharmaceutical laws and mail fraud. In December 2015 Wall would agree to cooperate with federal prosecutors and would plead guilty to one count of violating the federal Food, Drug, and Cosmetics Act.

  Wall was born in Louisville, Kentucky, and for a period made a living as a federally licensed firearms dealer there. In 2012, as agents of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives were conducting a routine inspection of his gun sales records, he told them that he had lived in Israel, had served in the Israeli military, and had married an Israeli citizen whose father worked for an Israeli firearms company. When he returned to Louisville, he imported guns from his father-in-law’s company.

  His story to the ATF agents sounded straightforward, but, it turned out, he had another line of work. Delving deeper, the DEA agents found that in 2007, between Israel and Louisville, he made a detour to Manila and took a $3,000-a-month job as manager of one of LeRoux’s call centers. (He later testified that he got the job because he had gained experience in a shady Israeli call center that sold fake diplomas.) The employees working under Wall were essentially telemarketers. Their job was to telephone people who had already bought drugs from RX Limited and push them to buy more. A separate call center handled customer complaints and questions about shipping and other matters. If a particularly vexing problem came up, Wall later testified, it was referred to Moran Oz and other senior figures at what he called the “brain center” in Jerusalem.

  Wall did something that annoyed LeRoux. In a fit of pique, LeRoux fired him from the call center after a few months. But then LeRoux reconsidered and rehired him at another of his business locations in Manila. He used Wall to do all sorts of odd jobs, including as a courier to carry cash to Hong Kong, where another LeRoux associate banked it. Wall was assigned to buy equipment and handle paperwork involving lawsuits about business properties.

  It occurred to LeRoux that Wall could be very useful as a straw man back in the States. As an American citizen, Wall could buy things that would have attracted unwanted attention if a foreigner had tried to acquire them. LeRoux told Wall to move back to Kentucky in June 2008 and raised his salary to $3,500 a month, which was paid via a wire transfer from Hong Kong.

  In his new role as LeRoux’s purchasing agent, Wall acquired cars, boats, computers, and dive equipment for RX Limited. When LeRoux decided he wanted his own jet, Wall bought it for him. It was a 1982 Westwind manufactured by Israel Aircraft Industries. The plane, tail number N127PT, was registered on October 17, 2008, in the name of the Bank of Utah, listed as trustee. Between that time and 2012, the jet was recorded landing at such diverse destinations as Brussels, Bangkok, Sendai, Japan, and Sabah, Malaysia. (LeRoux himself was seldom aboard. Playing the ghost required self-discipline. “He traveled most of the times in economy class, as he had the idea he would blend in among the common people,” Jack said.)

  In Kentucky, Wall established a shipping company called Phalanx Trading to facilitate his shipments of goods to LeRoux overseas. According to Wall’s plea agreement and testimony in Minnesota, LeRoux told him set up a wholesale pharmacy operation to supply RXL’s growing network of American pharmacists. The move was designed to maximize RXL’s profits. He obtained Kentucky wholesale pharmacy licenses under the fake names Jesse Merced and Wayne Hatfield. Building on these bogus credentials, he got wholesale pharmacy or drug distributor permits from several states. In 2010 or 2011, he applied to the DEA for a controlled substances registration under the name Wall Wholesale. This permit would have allowed him to handle pharmaceuticals on Schedule V, the least restrictive section of the federal Controlled Substances Act list. The DEA turned down his application in 2011. “I knew that it was illegal,” Wall later testified of the wholesale pharmacy idea. He said he dragged his feet so it would not become reality. Why didn’t he quit LeRoux outright? “I needed the job, and I needed the money,” he testified. “This was at a time when there were not jobs. It was the middle of this recession.”

  Wall worked for LeRoux until sometime in 2012. The DEA agents in Minneapolis calculated that between 2008 and 2012, he personally received at least $1.9 million from LeRoux-controlled bank accounts, all wire-transferred from Hong Kong.

  In his plea agreement and testimony in federal court in Minneapolis, he admitted that he had carried out duties relating to pharmacy business and had made purchases vaguely described as “hard goods.”

  The story LeRoux would tell was considerably more interesting. LeRoux said he gave Wall a shopping list of hardware and technology items which his engineers needed to develop items and technologies requested by the Iranian Defense Industries Organization. LeRoux later claimed he didn’t know the purpose behind the list. The reason the Iranians wanted some items were obvious. The DIO requests for Honeywell jet engines, X-plane flight simulator software and certain electronic and mechanical components for aircraft made sense. Obstructed by trade sanction, Iranian engineers had been struggling for decades to develop an indigenous industry to make aircraft parts to maintain and modernize Iran’s fleet of aircraft, both commercial and military.

  The purpose of other electronic, mechanical and chemical items had to be inferred. For instance, what did the DIO want with potassium perchlorate? The chemical is a powerful oxidizer that makes fireworks flash and supplies the thrust that propels rockets and missiles skyward.

  In short, the list was trouble, but whose trouble? Who wanted this stuff? Why? Wall didn’t know.

  “The longer I worked for Mr. Le Roux, the more aware I became of, you know, how illegal everything he was doing was and how much disregard for the law he had,” Wall would later testify. For instance, he said, “he was having me ship him things without licenses.” The U.S. government requires exports of technology classified as “munitions” to have a license from the U.S. State Department. Exports of items classified as “dual-use,” meaning that they can be used either for military or civilian purposes, must be licensed by the U.S. Commerce Department. By his own account, Wall suspected that at least some of the things LeRoux was ordering him to ship abroad should have been disclosed to government regulators and license applications submitted. He didn’t do so.

  He didn’t ask LeRoux if the shipments were problematic. LeRoux didn’t put up with questions or backtalk. Everyone who worked for him had to call him Boss, with a capital B.

  “He was a bad boss,” Wall later testified. “. . . He would ask for kind of unrealistic things. He had me fire people, good employees, for no reason.” But he stayed on. “I needed the job,” he explained, more than once.

  As RX Limited prospered, acting through Wall and other brokers and middlemen, LeRoux bought several yachts, both motor yachts and sailboats. They were normal fifty-footers, not the super- or mega- variety. He had yet to achieve the Triple Commas Club and full Russian oligarch status. He was fine with that, for the moment anyway. His empire on the dark side was in the building stage. It was wise to blend in.

  Chapter Five

  Magic!

  SOMETIMES LEROUX ACTED AS IF HE HAD SUPERNATURAL POWERS. WHENEVER he made a new business connection or scored a deal, even the purchase of a few barrels of chemicals, he chuckled and exclaimed to anybody who was around, “Magic!”

  Maybe it started out as an offhand remark, but he kept it up. There was something hyp
notic about the way he planted subliminal hints that he had special powers. He managed to convince his subordinates and interested outsiders that he was all-seeing and all-powerful, so he kept doing it.

  For a long time, LeRoux’s incantation—magic!—beguiled Jack. It was probably why he took a job and stayed on even after he realized that a lot of people who worked for LeRoux ended up dead. When Jack first traveled to the Philippines in 2007, he intended to take a brief holiday to recuperate after a bruising divorce and a burnout work schedule. He had sold his construction company, so he had a little money in his pocket. He had been a diver and deminer for his nation’s navy, and before that, a swimming champion, so he went to Subic Bay to do some diving, catch some sun, catch his breath, and figure out his next move.

  Once he saw Subic, he cashed in his return ticket. The Pacific Rim was what he’d been missing all his life! Those reefs! All those shipwrecks! Such history! Glorious islands and bright blue water! Golden girls! Even the city markets and pubs were vibrant and full of laughter. He decided to stick around awhile longer, freelancing as a dive bum—a diving instructor paid by tourists.

  He met a lithe young Filipina, simple and willing, nothing like his uptight ex-wife and the other tweed-encased women back home. Only problem was, dive-bumming wasn’t enough to cover the bills for two. In June 2008, as he was pondering where to find an extra paying job, he happened to run into Leo, an acquaintance from back home. Leo had served in the military, then drifted around the Far East and Africa, doing security gigs. The mercenary Facebook led him to Manila and a job as one of LeRoux’s enforcers.

  Leo thought Jack was the Boss’s type—ex-military, extremely fit and disciplined. He wasn’t into the rough stuff, as Leo was, but there might be something for him. Leo took Jack to the LeRoux security team hangout, Sid’s Sports Bar, a dimly lit Irish-style pub on Jupiter Street in Makati, the upscale financial district in metropolitan Manila. It was a short walk from LeRoux’s RX Limited office in the Cityland building, an address favored by international corporations.

  The bar didn’t advertise, but expats working in the city center—English, Irish, Australian, American, and Western European—heard about it and drifted in. A homesick bloke could sit down with a Guinness and a nice pile of bangers and mash or shepherd’s pie, watch football—soccer, to the Americans—on the flat-screen TVs and play pool on the table in one end of the place. It was relatively quiet on weekdays—no hookers, no K-pop to jangle hungover nerves. On weekends, there was live music and women stopped by.

  Leo introduced Jack to his boss, Dave Smith, an Englishman who claimed to have served in the British military. In his younger days, Smith had taught weapons and tactics classes in the U.S. and probably elsewhere, but when Jack met him, he was not a pretty sight. Probably because of his meth, coke, and whiskey habits, his cheeks were caved in, his skin was rough and grayish, and his teeth were just awful. He held court at Sid’s, pretending he owned the place. The bar really belonged to LeRoux. LeRoux always operated through front men, and at that moment, Smith was the ranking front man. He was also LeRoux’s bagman and “chief of security,” a euphemism for head enforcer.

  LeRoux had hired Smith in 2005, on the recommendation of a lawyer at the Philippines Department of Justice who was on LeRoux’s payoff list. Smith told LeRoux that the lawyer “was responsible for arranging non-judicial killings for the Philippines government.” The phrase “non-judicial killings” was a euphemism for the acts of government death squads. Smith boasted that he had been involved in many murders and as many as five hundred rapes meted out as punishment for angering government officials. Could that be true? How? LeRoux didn’t care. He liked the idea that Smith was brutal in the extreme.

  “Dave Smith said he had a group of mercenaries available who enjoyed killing and torturing and beating and those mercenaries were available for me for any projects I had in mind,” LeRoux said later. Smith named the security team Echelon Associates. It was a company with one client, no independence and no assets. LeRoux owned Smith’s house and the houses and condos where he housed his several girlfriends. Smith joked that the stress of keeping five or six women sashaying around Manila in diamond necklaces and designer pocketbooks was killing him.

  As LeRoux grew to trust Smith, he expanded his role as a front man for LeRoux’s growing business empire. He put Smith’s name on deeds, permits, licenses, and other documents pertaining to ownership of businesses, real estate, boats, and cars. Smith became LeRoux’s public face.

  When Jack met him, Smith was driving around Manila with a million dollars in cash in suitcases in the back of his Infinity SUV, just in case LeRoux needed him to pay someone. All of LeRoux’s workers’ salaries came out of the trunk of Smith’s Infiniti, which was Smith’s workaday car. Smith’s weekend rides were a Lamborghini and the highest-end Mercedes, worth $300,000. His special joy was his MV Agusta motorcycle, a gorgeous Italian job that set him back at least $50,000.

  Jack found it bizarre that LeRoux entrusted a dissolute creep like Smith with so much money and property, but then, everything about LeRoux was inscrutable. All Jack could figure was, Smith was not only LeRoux’s alter ego but also his lightning rod. Smith attracted all the attention. If anything bad happened, it was easy to believe that this central-casting bad guy was the guilty one. Nobody seemed to ask who was behind him.

  Over a beer or two, Smith satisfied himself that Jack was who he said he was. In a couple of days, he decided it was time for Jack to meet the Boss.

  But not at Sid’s. Never at Sid’s. LeRoux never darkened the doors of the pub. For one thing, he didn’t drink. “His brain had to stay clear all the time,” Jack said. For another, he didn’t like to socialize. Smith, Leo, and the other mercenaries who frequented the place were just hired hands—tools. Their conversation, about tits, sausages, and guns, was too basic to interest LeRoux.

  Smith escorted Jack to LeRoux’s penthouse for the job interview. At the door, Smith handed Jack off to three Filipino bodyguards who searched him for weapons and wires and ushered him into the cavernous living room.

  LeRoux lumbered in, lowered himself onto one of the straight-backed chairs, pulled it up to the square table, and motioned for Jack to sit across from him. He didn’t offer his guest as much as a cup of tea.

  When he walked into the penthouse, Jack assumed that LeRoux was a fat tech mogul with a boatload of cash and an itch to do something more colorful. A nerd. But when the big man began to speak, Jack changed his mind. This guy was no nerd, and he wasn’t soft. He was a force of nature, like a big wave that bowled you over if you resisted but floated you upward if you gave in. He expressed himself clearly, in complete sentences, no “uhs,” “ums,” “y’knows,” “likes,” or the dreaded “Know what I’m sayin’?” His supremely confident attitude was overpowering. He clearly knew what he wanted and where he was going to get it. When Jack was in LeRoux’s presence, it didn’t occur to him not to obey.

  LeRoux saw that Jack wasn’t a mercenary, which he later defined as “a trained person with military experience with an aggressive posture who will beat, intimidate, threaten, shoot and/or kill anyone on instruction.” Jack obviously had no appetite for muscling people around. LeRoux was looking for someone to oversee a major construction project in a shithole without asking too many questions. He saw that Jack had a head for figures, knew how to read and execute architectural plans, and could get on with people, even black Africans, whom LeRoux regarded as beasts of burden, useful if managed. He didn’t tell Jack that. Instead, he flattered the newcomer.

  “LeRoux, I think, saw in me that when I loved something and put my head to it, I could get anything done,” Jack said. “I had a great historical and cultural knowledge, good people skills, and, for some reason, I’m a trustworthy and likable person. He saw someone who could do more for his business and crazy ideas. For me, the adventure came first.”

  LeRoux read Jack like a big-print kid’s book. He offered him all the adventure travel he could manage. He
gave Jack a list of places in the South Pacific and Africa and sent him to check out luxury real estate and villas that might serve as safe houses for LeRoux. Jack’s itinerary was straight out of a Somerset Maugham novella—Madang and Port Moresby, Papua New Guinea; Hai Phong, Vietnam; Krong Kampot, Cambodia; Phuket, Thailand; Jakarta, Indonesia; Chinde and Maputo, Mozambique; Dar es Salaam, Tanzania; Nairobi and Mombasa, Kenya; Pretoria and Nelspruit, South Africa; Addis Ababa, Ethiopia; Djibouti; Accra, Ghana; Lome, Togo; Cap Ternay, Seychelles, and the Comoro islands.

  It was on these all-expense-paid jaunts that Jack began to wonder if he had been a little naïve and the Boss had something to hide. Many of the spots he visited weren’t for jet-setters. When Jack got to Port Moresby, the capital of Papua New Guinea, a dirty, expensive city with a pricey yacht basin, shantytowns, and roving bands of muggers and pickpockets, he said to himself, “Bloody hell. Who the fuck am I working for? Why would you need a house here?”

  But Jack was having too much fun to quit. His next task for LeRoux was as a bagman. “He divided his money over multiple accounts all over the world, preferable in countries with no tax and no questions asked,” Jack said. “He invested large amounts in gold. The rest he used to fund other ventures. I believe his trick was to wire by bank and send money by Western Union or money exchange houses, in small amounts and always from different names. Most of the time it was sent to countries where they ask few questions about anything. I remember receiving $8,000 through Dahabshiil, [a money exchange house in] Nairobi. I just walked in and said, ‘This person sent 8K from that place.’ They paid me without showing any ID or signature. In Asia and Africa, it’s so easy to hide anything you spend or have.”