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Miami Ice: Freon Smuggling Rivals Contraband in Drugs

Forget marijuana, exotic animals, or Mayan archaeological treasures. One of the hottest illicit items among Florida's smugglers today is a gas coolant used in air conditioners and refrigerators.

It's called freon or CFC-12. And the black market in this potent chemical is thriving.

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"After illicit drugs, chlorofluorocarbons have become the most lucrative contraband being smuggled into the United States," says Michael Sheehan, a US Customs Service agent in Miami.

An estimated 10,000 tons of it will be smuggled into the US this year. Federal officials say "it's becoming like gold" for traffickers. Miami has become the central port for its entry and distribution.

The trade is spurred by an international agreement, known as the 1987 Montreal Protocol, that bans the manufacture of CFCs in 140 industrialized countries by the end of this year. There is evidence that the chemical erodes the earth's protective ozone layer.

"Because of this impending deadline," says Sheehan, "CFCs are becoming more valuable and that's creating huge profit margins for illegal traffickers."

Federal freon tax

To encourage the use of substitutes that do not harm the ozone layer, the Federal Government imposes a tax of $5.35 a pound on all sales of CFCs, and retail prices have soared to $15 a pound from $1 in 1989.

Black marketerrs can make huge profits by buying the chemical from Russia and other countries and selling it here for less than the taxed product. The illegal shipments cost the US government more than $100 million a year in lost excise taxes and customs duties.

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"The black-market refrigerant generally makes its way to distributors or automobile repair shops, where it's used in the repair and maintenance of older air conditioners," says Thomas A. Watts-Fitzgerald, an assistant US attorney in Miami. "Most of the indictments that have been handed down so far are against people who are legitimately involved in the automobile repair business."

Unlike the illegal-drugs business, smuggling in CFCs is considered a more palatable way to make illegal money. "Your average freon smuggler is a white-collar criminal who can still look at himself in the mirror," says a federal prosecutor in Miami.

Law enforcement officials' concerns about contraband CFC imports are shared by environmental groups like Washington, D.C.-based Ozone Action, which recently completed a study on the problem. "If this accord continues to be circumvented by the black market, even more of the ozone layer could be depleted.says Kalee Kreider, a spokeswoman for Ozone Action."

The growing black market in CFCs has led to a multi-agency task force and a global dragnet. Operation Cool Breeze involves the Federal Bureau of Investigation, the Environmental Protection Agency, the Customs Service, and even the Central Intelligence Agency and Interpol.

Since late 1994, government agents have targeted dozens of companies for investigation and impounded tons of CFCs in Florida, California, and New York.

The biggest criminal case yet involved a Fort Lauderdale, Fla., woman who was indicted in April on charges she smuggled into the US more than 3,000 tons of freon, with a street value of $52 million.

Alleged crooks nabbed

On Friday, two other Florida residents were charged with a 70-count indictment for smuggling CFC-12 and violating the federal Clean Air Act. The indictment claims, they brought 288 tons of CFCs into Miami over a three-year period. They distributed the freon to auto repair shops throughout the US. If convicted, they face maximum penalties of more than 700 years in prison and fines in excess of $28 million.

While federal law-enforcement officials work to curb the illegal trade in CFCs, Congress may be headed in another direction.

The House Science Subcommittee on Energy and Environment recently held a hearing in whether scientists have overstated the case for damage to the ozone layer by CFCs. Rep. Tom DeLay (R) of Texas, has introduced legislation to repeal the ban on CFCs.

"Until that happens, the black market will continue to thrive, with Miami remaining the major smuggling center for CFCs," says Lou Bock, a Customs Service investigator. "It's a market driven by consumer demand, and with the deadline for production of CFCs fast approaching, it's only going to get worse."

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