United States: To Catch A Wildlife Thief: Strategies And Suggestions For The Fight Against Illegal Wildlife Trafficking

I. INTRODUCTION

Wildlife trafficking is very much in the headline news these days. Booming demand for wildlife products such as ivory and rhino horn—especially in Asia—coupled with uneven enforcement and porous border controls has fueled a big uptick in the illegal wildlife trade.¹ In recent years, trafficking rings have morphed from small-time gangs into sophisticated and well-organized criminal organizations, borrowing many of the tactics we've come to expect from the narcotics cartels.² The increase in wildlife trafficking has had a devastating impact, with a number of species, including elephants and rhinoceroses, facing the risk of significant decline or even extinction.³ As President Obama's Task Force on Combatting Wildlife Trafficking has explained:

Much of the battle against trafficking appropriately has focused on reducing demand by raising public awareness.⁵ The United States and a number of other countries have organized highly publicized ivory "crushes," destroying confiscated ivory in part to educate consumers about the poaching crisis and in part as an effort to dry up the market for ivory.⁶ Non-governmental organizations (NGOs) have been busy raising public awareness through advertising, much of it focused on curbing demand in the Asian market.⁷

This article focuses on the enforcement side of the fight against the illegal wildlife trade. Drawing on a case I handled as a federal prosecutor in Manhattan—United States v. Bengis⁸—the article explores how a typical international wildlife trafficking scheme may work in practice. By understanding how wildlife trafficking actually works—how a ring must work in many instances—we will be in a better position to know where traffickers necessarily must leave evidence. With such an understanding, law enforcement agents and prosecutors will be in a better position to gather the evidence they need to prove the case. And legislators and policymakers will be able to craft laws and enforcement policies that will help ensure that the full force of criminal law is employed in the fight against wildlife trafficking.

Part I of this article provides a brief, high-level overview of the Bengis scheme, examining some of the methods the ring used in its decade-long fish trafficking scheme and focusing on where the co-conspirators had to leave behind the evidence that law enforcement later would use to catch them. Part II focuses on the investigation and prosecutions of the ring in South Africa and in the United States, highlighting how the evidence that the ring members necessarily left behind ultimately was used to disrupt their criminal organization and bring them to justice. Finally, Part III provides some lessons learned from the Bengis prosecution to highlight some of the challenges law enforcement faces in investigating and prosecuting wildlife trafficking. It also offers several reform proposals that legislators and policymakers (both in the United States and abroad) might consider in their efforts to bolster the legal landscape, with an eye toward giving prosecutors and agents better tools in the fight against traffickers.

II. A TYPICAL INTERNATIONAL WILDLIFE TRAFFICKING SCHEME—UNITED STATES V. BENGIS

From at least 1987 through approximately August 2001, Arnold Bengis headed a ring of co-conspirators engaged in an elaborate scheme to illegally harvest massive quantities of South African rock lobster and Patagonian toothfish and then export the illegal seafood to the United States, where they sold it for a significant profit.⁹ As part of the scheme, the Bengis organization routinely would harvest and purchase rock lobster far in excess of applicable quotas. A report prepared by Ocean and Land Resource Assessment Consultants (OLRAC) estimated, conservatively, that the ring illegally harvested approximately 856 metric tons of South Coast rock lobster during the course of the scheme,¹⁰ which significantly depleted the South Coast rock lobster resource.¹¹ One co-conspirator, who ended up cooperating with the investigation, reported that the ring also bought large quantities of illegally harvested West Coast rock lobster from local fishermen throughout the duration of the conspiracy—estimating that, in the final year of the scheme, approximately 93% of the West Coast rock lobster the ring handled had been illegally harvested.¹² By OLRAC's conservative estimate, the ring caused damages of between $46.7 million and $61.9 million to South Africa's rock lobster resource.¹³

A. The Supply Side

Any illicit trafficking operation—whether it involves wildlife, narcotics, blood diamonds, guns or even counterfeit goods—involves a supply side, a demand side, and a flow of money. The supply side of the Bengis scheme was centered in Cape Town, South Africa, where the ring operated a fish-processing plant (known as Hout Bay Fishing Industries (PTY) Ltd), and where it engaged in the fishing and fish-processing aspects of the operation. Hout Bay Fishing ran several ships that were used primarily to fish for South Coast rock lobster. It also bought West Coast rock lobster from a fleet of smaller local fishing vessels that operated around Cape Town. After the West Coast and South Coast rock lobster was processed in Hout Bay Fishing's factory, much of it was loaded into shipping containers and exported to the United States and Asia.¹⁴

So how did the Bengis ring manage, for over a decade, to overharvest such a massive quantity of illegal fish, land it on docks in the middle of Cape Town harbor, process it in their Cape Town factory, move it through South African customs, and export it to the United States and Asia—all without being detected by South African authorities? In fact, they did what any trafficker would do if she was trying not to get caught. Worried that they might attract attention if they offloaded the illegal fish during the day, they offloaded it at night. Aware that authorities could pop up on the docks to see them unload the illegal catch, they bribed fisheries inspectors to look the other way. To keep up the façade that they were a legitimate operation, they reported to the South African fisheries authorities that they had, in fact, caught some fish. But they significantly underreported their catch, which allowed them to "stretch" the applicable catch quotas. And, to get the illegal fish out of the country without getting caught, they submitted false export documents to South African customs authorities, dramatically underreporting the quantity of rock lobster they were exporting.¹⁵

B. The Demand Side

The demand side of the Bengis trafficking scheme was centered in New York City, where the co-conspirators had an office, and Portland, Maine, where they had a fish-processing factory. Importing multiple containers of illegal fish into the United States required the ring members to make a choice: what should they tell the United States border authorities was in the containers? On the one hand, they could have mislabeled the shipments, or told U.S. Customs the same lies that they told the South Africans, significantly underreporting the rock lobster in the containers. That was a risky option, though, because the U.S. border officials could always open a container, and then they would find that there was a great deal more lobster in the container than the ring had declared in the forms they submitted to U.S. Customs. The other option would be to tell the truth to U.S. Customs, accurately describing the contents of the containers. But that option also involved some risk, because then the declarations made to the United States during import would be different from the declarations made in South Africa during export. In the end, the co-conspirators elected to file truthful declarations with U.S. Customs, apparently banking on the idea that the U.S. and South African authorities would never compare notes, and that the inconsistencies between the declarations would go undetected.

C. The Money Flow

Of course, all of this overharvesting costs money. As mentioned, as part of the scheme, the ring bought large quantities of illegal West Coast rock lobster from local fishermen; these fishermen needed to be paid. Hout Bay Fishing used its own boats to harvest South Coast rock lobster; but the massive overharvesting meant the traffickers had to pay more money for extra fuel, extra time at sea, and extra wages to the crew. Processing fish at Hout Bay Fishing's factory also cost money, and processing all that extra illegal fish meant extra processing expenses.

So how did the co-conspirators go about paying for their scheme? The money due to the local South African fishermen and crew was tied to the quantity of fish they caught. Paying them in South Africa could pose a problem, because they were making way too much money compared to the amount of fish that they reported to the fisheries inspectors. The co-conspirators could solve that problem, however, by paying the local fishermen and crew the extra amounts in bank accounts in places outside of South Africa, such as Switzerland or Spain.¹⁶ But what about all of the extra profits made by selling illegal fish in the United States? Some of that money had to go back to South Africa; Hout Bay Fishing was posing as a legitimate operation, and South African authorities would expect that it would be making at least some profit. But it would be a rookie mistake to send all the money back to Cape Town, because the South African authorities might have figured out that Hout Bay Fishing was making too much money. There were plenty of ways to handle the problem of too much money: they could keep the extra money in U.S. banks or, better yet, send it to accounts in countries such as Switzerland that were known to have strict bank secrecy laws.¹⁷

The ring members had to keep track of what they had represented to the South African authorities, to ensure both that the numbers they declared kept within their allotted quotas, and that the revenue they reported comported with the declared catch. But they also had to keep track of the true amounts they had harvested, in part because the wages they owed to the fishermen and to their own crewmembers were based on the amount caught.¹⁸ The ring members kept themselves organized by using two sets of books. One set—termed "Sheet A"—kept track of the legal fish: that is, the amounts of fish that were within Hout Bay Fishing's allotted catch quotas and reported to the South African fisheries authorities. The amounts actually harvested were reflected in a separate sheet, "Sheet B," which included the illegal fish that the ring had harvested or purchased.¹⁹

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Originally published by University of Pennsylvania Asian Law Review.

Footnotes

* The author is a partner at Arnold & Porter LLP and served on the President's Advisory Council on Wildlife Trafficking from 2013 to 2016. I would like to thank Katherine Ghilain, Daniel W. Levy and Lisa Handy for their helpful insights and comments.

1. PRESIDENTIAL TASK FORCE ON COMBATTING WILDLIFE TRAFFICKING, NATIONAL STRATEGY FOR COMBATTING WILDLIFE TRAFFICKING (2014) [hereinafter NATIONAL STRATEGY].

2. See id.; see also Bryan Christy, Tracking Ivory, NAT'L GEOGRAPHIC (Aug. 12, 2015), http://www.nationalgeographic.com/tracking-ivory/article.html, archived at https://perma.cc/RB9N-M3RT (investigating links between ivory trafficking and funding for the Lord's Resistance Army); Statement for the Record on the Worldwide Threat Assessment of the US Intelligence Community, Before the S. Armed Services Comm., 114th Cong. 11-12, https://www.armed-services.senate.gov/imo/media/doc/Clapper_02-09-16.pdf, archived at https://perma.cc/Z2DQ-SBCS (2016) (statement of James R. Clapper, Director of National Intelligence) ("Organized crime and rebel groups in Africa and elsewhere are likely to increase their involvement in wildlife trafficking to fund political activities, enhance political influence, and purchase weapons. Illicit trade in wildlife, timber, and marine resources endangers the environment, threatens good governance and border security in fragile regions, and destabilizes communities whose economic well-being depends on wildlife for biodiversity and ecotourism. Increased demand for ivory and rhino horn in East Asia has triggered unprecedented increases in poaching in Sub-Saharan Africa.").

3. NATIONAL STRATEGY, supra note 1, at 4.

4. NATIONAL STRATEGY, supra note 1, at 4.

5. PRESIDENT'S TASK FORCE ON COMBATTING WILDLIFE TRAFFICKING, NATIONAL STRATEGY FOR COMBATTING WILDLIFE TRAFFICKING, 2015 ANNUAL PROGRESS ASSESSMENT (2015), at 20–23 (summarizing U.S. efforts to reduce demand).

6. The U.S. Ivory Crush at Times Square, FISH & WILDLIFE SERVICE, https://www.fws.gov/le/elephant-ivory-crush.html, archived at https://perma.cc/9Z8L-H8FK (last visited Aug. 27, 2016).

7. See, e.g., Ivory Demand Reduction Campaign Launched in China, AFRICAN WILDLIFE FOUNDATION (Dec. 6, 2013), https://www.awf.org/news/ivory-demand-reduction-campaign-launched-china, archived at https://perma.cc/D8WD-22BP. China recently announced that it would ban commerce in ivory by the end of 2017. See, e.g., Edward wong & Jeffrey Gettleman, China Bans Its Ivory Trade, Moving Against Elephant Poaching, N.Y. TIMES (Dec. 30, 2016), http://www.nytimes.com/2016/12/30/world/asia/china-ivory-ban-elephants.html?_r=0, archived at https://perma.cc/MB4N-KXLP.

8. United States v. Bengis, 03 Cr. 308 (LAK) (S.D.N.Y. 2003). The district court documents referenced herein are publicly available, and many of them may be found on PACER. Where possible, the docket number for particular filings is indicated with the citation.

9. United States v. Bengis, 631 F.3d 33, 35 (2d Cir. 2011) (holding that South Africa suffered direct harm from Bengis' scheme to illegally harvest lobsters, and therefore is a victim for restitution purposes); see also Indictment at 6-8, 23-28, United States v. Bengis, S1 03 Cr. 308 (LAK) (S.D.N.Y. 2003), ECF No. 201-1 [hereinafter Indictment] (laying out the Grand Jury charges to defendant Bengis' and co-defendants' conspiracy to violate the Lacey Act and commit smuggling); Brief for the United States of America at 4-6, United States v. Bengis, 07-4895-cr (2d Cir. May 9, 2008) [hereinafter Gov't Appeal Bf.] (providing the statement of facts for the defendants' offensive conduct); Government's Memorandum of Law in Opposition to Defendants' Joint Motion for a Departure from the Applicable Sentencing Guidelines Range at 7-9, United States v. Bengis, No. 1:03-cr-00308-LAK (S.D.N.Y. May 26, 2004), ECF 195-28 [hereinafter Gov't Sentencing Mem.] (elaborating on the defendants' criminal scheme to illegally import into the United States large quantities of South African rock lobster, as well as Patagonian toothfish).

10. Gov't Appeal Bf., supra note 9, at 9–10; OCEAN AND LAND RESOURCE ASSESSMENT CONSULTANTS, REVISION OF CALCULATIONS OF DAMAGES SUFFERED AS A RESULT OF OVERCATCHES IN THE SOUTH AFRICAN SOUTH COAST AND WEST COAST ROCK LOBSTER RESOURCES 38 (Table 6) (Dec. 22, 2004), ECF Nos. 195-13 & -14 [hereinafter OLRAC REPORT].

11. J.C. Groeneveld, Under-Reporting of Catches of South Coast Rock Lobster Palinurus Gilchristi, With Implications for the Assessment and Management of the Fishery, 25 AFRICAN J. MARINE SCIENCE 407 (May 2003) (attached to Gov't Sentencing Mem., ECF No. 195-28); Victim Statement of H.G.H. Kleinscmidt, Deputy Director General, Marine and Coastal Management, at 2 (attached to Gov't Sentencing Mem., ECF No. 195-28); Gov't Sentencing Mem., supra note 9, at 16.

12. Declaration of Special Agent Jeffrey Ray ¶¶ 4g-i, United States v. Bengis, S1 03 Cr. 308 (LAK) (S.D.N.Y. Dec. 22, 2004), ECF No. 195-15 [hereinafter Ray Decl.]; Gov't Appeal Bf., supra note 9, at 7–8; Government's Recommendation Concerning Restitution at 12, United States v. Bengis, No. 1:03-cr-00308-LAK (S.D.N.Y. Dec. 22, 2004), ECF No. 195-12 [hereinafter Gov't Restitution Recommendation].

13. United States v. Bengis, 631 F.3d at 36–37; Gov't Appeal Bf., supra note 9, at 24–25; Gov't Restitution Recommendation at 6–8, 18–19; OLRAC REPORT, supra note 10, Summary Chart.

14. Indictment, supra note 9, at 14–15; Ray Decl., supra note 12 ¶¶ 4.e., 5.b., 5.f.; Gov't Restitution Recommendation at 12; Gov't Appeal Bf., supra note 9, at 5, 8.

15. Indictment, supra note 9, at 6–7, 14–18; Gov't Sentencing Mem., supra note 9, at 10–11, 37; Gov't Appeal Bf., supra note 9, at 5–6.

16. Gov't Appeal Bf., supra note 9, at 7; Gov't Sentencing Mem., supra note 9, at 3, 13.

17. Gov't Appeal Bf., supra note 9, at 10; Gov't Sentencing Mem., supra note 9, at 13–14.

18. Gov't Sentencing Mem., supra note 9, at 19.

19. Ray Decl., supra note 12, ¶¶ 4.c., 4.j.; Gov't Appeal Bf., supra note 9, at 6–7.

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