The Great Circle Gang's drug trafficking and human smuggling was well known. It was considered their main occupation by most. However, there was another side of their illegal business empire that was not quite so violent or vicious, it was the distribution of counterfeit products. Everyone, at least in Paraguay and surrounding areas, was aware that the Chinese in Paraguay had a thriving business in fake "Rolex" watches. These watches, that at a casual glance were dead ringers for the real Rolex watches cost anywhere between $5 to $15 U.S. back in the 1980s. No one really thought much about it. However, the fake Rolex watches were just a scratch on the surface, there was a much larger and more insidious counterfeit operation that was run by the Triad. While the fake Rolex watches were somewhat shoddily made and could be easily spotted upon examination, there were other brand names that were much better made, much harder to detect as fakes! In most cases, parts were made and brought in from Hong Kong and assembled in Paraguay before distribution.
The primary market for these counterfeit products was the United States and the various fashion houses in New York and other large cities. Clothing was a big business. Expensive label clothes, both men's and women's were made in Paraguay with imported fabrics from Hong Kong. There were factories set up in Asuncion that made clothes with fancy labels and shipped to the United States. Those made in Paraguay were indistinguishable from those made in the U.S.A. but sold at a fraction of the cost. Expensive women's purses, shoes, Gucci, Channel, and half a dozen other brands were also made in Paraguay, using the same quality leather as the originals. They too were indistinguishable from the real versions. Those that ended up being somewhat "shoddy," the "seconds" of the counterfeit industry, ended up being sold on the streets not in the fashion houses.
I learned of this from the "horse's mouth," so to speak, someone who worked for the counterfeit fashion industry in Paraguay, who turned informant. When I interviewed him, he was dressed in a beautifully tailored Pierre Cardin suit that looked to be worth about three times what I was wearing! He also had on a beautiful pair of Gucci loafers and a beautiful brand name watch with a genuine lizard skin wrist band! He told me that everything that he had on was being sold in the U.S. through legitimate fashion houses as originals! He said that the cost price of everything he had on was around a $100, and it would sell for much, much more in the U.S.! According to him the Triad had contacts within various fashion houses who were buyers and sold them their counterfeit goods. "Johnny" Leung's ill-fated trip to New York was primarily to arrange for a wider distribution network for counterfeit goods!
Initially I thought that the profits from counterfeit goods would be a fraction of what the Triad earned in narcotics and human trafficking. But according to Luk Pong Ki, the accountant who was caught and was singing loudly, the counterfeit business earned as much for the Triad as the other businesses. It also became clear that the counterfeit business was in fact controlled by 14K who had a monopoly on it in Hong Kong. Those who have been to Hong Kong are aware how easy it was (and still is) to find counterfeit brand clothes, shoes, purses, whatever, in that city. Apparently, the 14K always controlled that business in Hong Kong and now was partnered with the Great Circle Gang for distribution of these goods into the United States, by way of Paraguay.
It didn't take long to gather information, both from informants and the Nationalist Chinese Embassy, to put together a comprehensive picture of what was going on with the Great Circle Gang as well as 14K in Paraguay. The main reason was that they had been operating so freely, had worked their way into all of the influential circles in Paraguay, that they feared no one and actually, in some cases, did not even try to hide their illegal activities. They were brazen in their activities and no doubt felt "bullet proof." After all, why shouldn't they? They had everyone in the government in their pockets, starting with the president Alfredo Stroessner!
A lengthy and complete report of the Triad activity in Paraguay, together with a comprehensive list of names of Triad members, was sent to Washington. At the same time, all Foreign Service posts were notified to be on the lookout for ethnic Chinese with Paraguayan Diplomatic passports. They were to be denied U.S. entry visas should they appear at the U.S. diplomatic missions in other countries.
Once word got out that we were interested in information about the Chinese Triad, informants began to appear, those who were disaffected by the Triad. A few Paraguayan government officials who had been on the take, had apparently been cut off, so they were willing to talk. But the more reliable sources were the Chinese themselves who were willing to inform for a variety of reasons, everything from revenge to personal gain. So, it was not surprising that within a short space of time, once we started gathering information on the Triad, the Triad found out about our interest. I was first told by my Nationalist Chinese Embassy friend Joseph that their intelligence found out about the Triad knowing about our interest in their activities. Shortly after that, I started receiving death threats. An armed guard (Paraguayan soldier) was posted in front of my house 24/7 and I was required to commute to work in an armored vehicle accompanied by armed body guards. An embassy roving patrol of armed guards came by my house every few hours, 24/7. After a few days I reverted to going to work in normal fashion. I felt that I was a bigger target riding around in a armored vehicle with body guards! So, that part was dropped, but the 24/7 armed guard and the roving patrol continued for over a year, for the rest of the time I was in Paraguay.
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