Lauderdale Pilots Face Uncertain Future CIA Drug Plane Scandal Heating Up

elaltiplanoThe scandal surrounding two CIA-connected drug planes which flew from St. Petersburg-Clearwater International Airport to South America  before being busted in Mexico on the way back with multi-ton loads of cocaine grew  more serious last week..

A pilot arrested while awaiting the ill-fated landing in Mexico of the DC9 airliner carrying 5.5 tons of cocaine committed suicide by hanging himself… with his socks, in the maximum security Altiplano prison facility outside Mexico City.

The death of Marco Antonio Perez Gracia is just the latest to be blamed on the scandal surrounding the DC9 (N900SA) airliner, as well as  a Gulfstream II (N987SA) business jet which crash-landed and broke into three pieces in September in Mexico, spilling 4 tons of cocaine across a muddy field 25 km outside Merida.

Perez Gracia was in a Falcon business jet belonging to his employer, the Government of Mexico's Water Commission when he was arrested 18 months ago, waiting for the cargo-laden DC9 to land for "emergency repairs" at a small rural airport in Mexico's Yucatan.

pleje1Recently assassinated on his way to work was the Director of Civil Aviation in the Yucatan, Jose Luis Soladana Ortiz. Earlier that same day three tortured bodies were discovered alongside a road near the Merida airport.

Also Martin Gomez Soto, a traffic controller at Cancun International Airport,  abducted a month ago, and now presumed dead.

Potemkin Villages: A mind-share time-share

potemhouse2New developments last week began to poke huge holes  in the hastily-constructed story behind the two massive drug seizures, revealing a cardboard quality, a Potemkin Village-like false front.

One example: an FAA source confirmed to the MadCowMorningNews this week, that neither of the two “aircraft brokers” through whose hands the drug running planes are said to have passed (or been laundered)  before their ill-fated drug trafficking flights, had bought or sold any other planes at  all during the past year.

Buying and selling airplanes is, by definition, what an aircraft broker does.

So an aircraft broker that only buys planes that fly drugs begins rather quickly to look like a front for drug traffickers, and, if he is charged with no crime, like someone being “protected” by the very officials charged with bringing people just like him to justice.

The Gulfstream II which crash-landed in Mexico with four tons of cocaine was the only plane this supposed “aircraft broker” bought or sold all year.

Donna Blue Aircraft isn't an aircraft broker. It's a dummy front company.

The two Brazilian principals in the company, Joao Luiz Malago and Eduardo Dias Guimaraes, the FAA source told us, haven’t purchased or sold any planes in their own names either.

And the DC9 supposedly “bought” by California aircraft broker George Corrales was his only aircraft transaction of the year.

Some "broker."

Scratch the surface of the official story, and “there’s no ‘there’ there.”

Same old story: A Fox in the Henhouse

crew2Gregory D. Smith, one of two Fort Lauderdale FL charter pilots left holding the bag as the last registered owners of the Gulfstream II business jet (Cocaine Two) busted in Mexico with 4 tons of cocaine, worked for the CIA and DEA as a pilot during the late 1990’s Narco News reported last week.

Smith had, indeed, been a CIA/DEA pilot, confirmed a long-time aviation executive at Fort Lauderdale Executive Airport.

But flying for the DEA wasn’t all Greg Smith was doing.

At the same time Smith was flying luxury jets to Colombia for the CIA and DEA, the MadCowMorningNews has learned,  he was also a partner in a company called Hollywood Trenz, with a con man named Ed Showalter, who was, just then,  stealing millions from investors in a company for which Smith was a director.

An ethical dilemma? Probably not.

Pilot Smith was one of only three directors of Hollywood Trenz. Showalter raised millions of dollars to build an ill-fated chain of high-tech family entertainment centers… that never opened.

OfficePeopleGlen and Brent Kovar at SkyWay Aircraft never had a product either.

Showalter was allowed to defraud unsuspecting shareholders over and over again…

So were Glen and Brent Kovar, at SkyWay Aircraft, owners of the DC9, the 'other' CIA drug plane.

What a coincidence.

Tangled-Web City

1kovarShowalter was a Teflon-coated con artist whose securities fraud playbook seems strikingly similar to that of the owners of the SkyWay Aircraft DC9 caught eighteen months ago with 5.5 tons of cocaine.

While sticking it to the company he and Greg Smith owned, Showalter was already on probation for a felony conviction for grand theft, which seems to show a certain lack of contrition on his part.  And he's been accused of felony fraud at least three times by the SEC without ever gong to jail.

Exactly like Brent and Glen Kovar and their henchmen at SkyWay Aircraft—owners of  the the DC9, the ‘other’ CIA drug plane, Showalter stole millions from unsuspecting shareholders through frank, outright, and most of all, unpunished fraud.

A Homeland Security License to Steal?

Glen and Brent Kovar stole millions, too.  The figure $43 million has been suggested to approximate the amount this father-son team  stole from SkyWay investors, backers, and employees.

After Hollywood Trenz,  Showalter dabbled in stock fraud in two companies in California, High Park Investment Group, Inc., and Harbor Financial Investment.  Investors and shareholders never knew what hit them, and by the time these two “entities” had been disappeared, Showalter was ensconced in a mansion in San Clemente Ca.

A California federal judge in 2006  guessed he made as much as $20 million.

Nor have either of the Kovars,  to our knowledge, been troubled by law enforcement. We wonder:

Is this opportunity to get into financial crime and escape unscathed open to the general public?

Does being connected to a CIA plane come with a license to steal?

Two CIA drug planes share interlocking ownership

GlennBrentRosieSignLike pilot Greg Smith and Hollywood Trenz, SkyWay Aircraft was not a real business, either, in the sense of being a company engaging in commerce and selling a product for profit.

The company didn’t have one.

 Instead, they boasted a nearly worthless patent that a court last month—citing criminal intent—ruled belonged to another company, Satellite Access Systems.

Glenn Kovar and his son, Brent Kovar, who ran SkyWay as Chairman and President, respectively, earlier ran Satellite Access Systems (SAS). The scam was amazingly similar to SkyWay, with the same result: investors losing millions of dollars.

With no apparent fear of legal consequence,  Bernie Kovar, and his father, Glen Kovar, who often boasted of working for the CIA,  blithely stole $40 million from shareholders in SkyWay Aircraft in St. Petersburg, FL.

The Kovars were notorious scamsters who had “busted out” (stripped of value) and bankrupted several public companies before getting to SkyWay.

They appear to have something like "official “protection.”

If it was thee or me, we'd be in jail.

As we will see in our next story, the are so brazen and unconcerned that they've even admitted under oath that their aviation venture SkyWay Aircraft was a fraud.

They've said so themselves. Under oath.

The San Diego Connection, Again

And they had "help" from their  "friends" at San Diego defense giant Titan Corp.titan_corp

San Diego is on the other side of the country from Miami, where SkyWay was brought to life.

Yet Titan made a big early investment ($70,000) in a company without enough money on its balance sheets to pay for paper clips.

SkyWay also got money from Argyll Equities. Argyll became SkyWay's second leading shareholder. Another one of Argyll’s clients—they only had three—was Jose Serrano Segovia, a Mexican industrialist accused in published reports of involvement in drug trafficking, and of passing on Argyll’s investment in his company as a loan to a major Chileanargyll drug trafficker with whom Serrano was in business.

 Argyll, with offices in Austin and La Jolla, seems well on the way towards becoming the first  investment bank offering  specialty financing to drug traffickers, which "might could" be a pretty sweet market niche.

"No law to keep it from happening"

long trip22The Tampa Tribune reported several weeks ago that St. Petersburg-Clearwater International Airport is a focus of an international investigation into the purchase of airplanes by a Mexican drug cartel.

Now, from FOX News, of all places, we learn the fact that Mexican drug lords have been buying jets at the local airport has greatly disturbed some residents of St. Petersburg, Florida.

“You want to know what's going in and what's going out and when you're not keeping track, anything can happen,” reproved Tamara Jackson in an interview with the local FOX affiliate.

Another angry local resident, sounding outraged at the clear implications of the story, told FOX, “They screen every passenger, but they don't screen smugglers who want to buy entire jets.”

Local residents showed surprising sophistication about the legal loopholes necessary to ensure the smooth distribution network possible in the U.S.

“Private plane brokers rent space at the public airport, and sell jets for profit. Mexican police say members of the Sinaloa drug cartel showed up with money and made off with jets,” stated the FOX report.

The Loophole of the Century Award to…

SIGN1r“The airport director said it's not his job to scrutinize his tenants. The FAA said it's not their job either. Homeland Security also does not police who buys and sells private jets at our public airports. Neither does the Transportation Security Agency.”

“They make you take your jacket off, they make you take your belt off. They make you take almost everything off, yet we can have a major drug dealer right in our own back yard,” fumed Pinellas County Commissioner John Morroni.

“And there is no law to stop this from happening.”

Missing from the FOX report was any awareness that the fact that “there is no law to stop this from happening” may not be entirely an accident. Somebody (or something) really powerful wants it that way.

clydeThis week’s revelations provide further proof of CIA and DEA involvement, not just with the planes, but with at least one of the pilots as well.

While fleeing the U.S. for sunnier climes with, ironically, less heat, Fort Lauderdale pilot Clyde O’Connor, was recently busted in Canada on weapons charges. Freed in Canada after paying a fine, O’Connor made for the Azores.

He recently sold his personal plane there, the MadCowMorningNews has learned. Current whereabouts: unknown.

Hanging with Mark Foley at the Lying Low Hotel

One place to look, we suggest, would be wherever they whisked Republican Congressman Mark Foley away to the moment the page scandal began to break last year.

Private lodgings. The Lying Low Hotel.

O’Connor and his fellow Fort Lauderdale pilot Greg Smith, of course, first gained notoriety as the last registered owners of the Gulfstream II business jet which crash-landed in Mexico two months ago laden with four tons of cocaine.

Now lying in three pieces in a field 25 km outside the Yucatan capital of Merida, the Gulfstream (N987SA) was previously reported to have been used to fly CIA rendition flights to Guantanamo Bay Cuba.

The Yucatan is fast-becoming the drug route of choice that it was during the heyday of drug trafficking in the 1980’s, when it was known as the “Trampoline.”

The region’s location roughly halfway between Colombia and the United States made it ideal as a place for twin-engine private planes to land and refuel before “bouncing” back into the air for the last leg of the journey to Florida.

The Sound of 50 Gay Republican Senators…

Twice during the past 18 months Mexican officials have stumbled upon one of America’s big dark secrets, when two American planes with confirmed connections to the CIA were busted there, carrying between four and five-and-a-half tons of cocaine.

What people with (at least implied) connections to American intelligence were caught doing is, to the War on Drugs, what Abu Ghraib was to the War in Iraq.

The story reminds us that two million people in this country are apparently in jail for dealing small amounts of what American covert operatives feel comfortable bringing in by the ton.

It is disheartening and despicable. And it reeks of hypocrisy.

American drug policy is  like a men's room-full of Republican Senators, all running their hand suggestively back and forth beneath the bathroom stalls at once,  while assuming that Republican "wide stance" that Senator Craig talked about.

“So, um, do you, ah… come here often?”

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Daniel Hopsicker

Daniel Hopsicker is an investigative journalist and the author of two books on transnational crime, Welcome to Terrorland and Barry & the Boys.